REVOLVING LINE OF
CREDIT NOTE
$5,000,000 Louisville, Kentucky
August 8, 1996
FOR VALUE RECEIVED, the undersigned, TUMBLEWEED, LLC, a Kentucky limited
liability company (the "Borrower"), hereby promises to pay, on December 31,
1999, upon the terms and provisions hereafter provided, to the order of
NATIONAL CITY BANK OF KENTUCKY, a national banking association with offices
at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, its successors and
assigns (the "Bank"), the principal sum of FIVE MILLION AND NO/100 DOLLARS
($5,000,000), or the aggregate principal amount of all advances made hereon
which shall be outstanding at the date of payment, whichever shall be less,
together with interest on the principal sums disbursed and outstanding hereon
from time to time in the manner and at the rates hereafter set forth.
IT IS UNDERSTOOD that the Borrower will request principal advances on
this revolving line of credit note (the "Note") from time to time. Bank
will honor such requests for advance in its discretion, provided that: no
default exists hereon or otherwise with regard to the loan evidenced hereby;
there is no default on any other loan now or hereafter owing bank by the
Borrower; and, the amount of the request will not cause the aggregate
principal amount owed on this Note to exceed the maximum principal amount
then available hereunder. The Borrower's indebtedness to the Bank on this
Note at any time shall be the total of all such advances plus accrued
interest, less payments received by Bank. The Bank may act on all matters,
including without limitation the making of advances, on the telephonic
instructions of any authorized manager designated by the Borrower, and may
rely thereon in doing and performing all actions which such manager shall
direct the Bank to perform. All telephonic instructions shall be confirmed
immediately in writing, should the Bank so require, but the failure of the
Bank to so require shall not affect the Borrower's liability to Bank hereon
or otherwise nor the right of Bank to rely on any such telephonic
instruction. The Bank may prescribe and may revise from time to time the form
that requests for advance hereon shall take.
PAYMENT OF THIS NOTE is secured by first mortgages and by assignments of
leases and rents encumbering real estate owned by the Borrower located in
Jefferson County, Kentucky and in Xxxxx County, Kentucky, more particularly
described in a loan agreement of even date between Borrower and Bank (the
"Loan Agreement").
THE LOAN evidenced by this Note is made by Bank and is accepted by
Borrower pursuant to the terms and provisions of the Loan Agreement.
INTEREST shall be payable by Borrower on the principal sums actually
disbursed and outstanding hereon from time to time at an annual rate equal to
one-half of one per cent (1/2%) above the Bank's prime rate of interest,
calculated on the basis of a 360 day year and the actual number of days or
portion thereof elapsed. Any change in said prime rate subsequent to the date
hereof shall become effective as to this Note immediately following a change
in the prime rate as quoted by the Bank. "Prime rate" shall mean the rate of
interest generally charged by Bank from time to time to is most substantial
and creditworthy commercial borrowers for 90-day unsecured loans, it being
understood and agreed, however, that such prime rate is the rate designated
by Bank as its "prime rate" and does not necessarily mean or imply that such
prime rate is the lowest rate then available from Bank on floating rate
loans to specific borrowers of the class described above. The first such
payment of interest only shall be due on or before September 1, 1996 and on
or before the first day of each month thereafter during the term hereof.
Simultaneously with each such monthly interest payment, the Borrower will
make a payment on principal to Bank in the amount of $30,000 per payment.
BORROWER AND BANK mutually consent, acknowledge and agree that effective
June 30, 1997, effective June 30, 1998 and effective June 30, 1999, the
maximum principal amount available to Borrower under this revolving credit
facility will be reduced to $4,640,000, to $4,280,000 and to $3,920,000,
respectively. Borrower will make, on or before each of said dates, payments
on principal in addition to regular monthly principal payments as may be
necessary to reduce the principal amount outstanding under this Note to such
amounts on or before said dates.
BORROWER shall repay Bank for advances made by Bank on this Note at the
times and in the amounts hereinabove set forth. Borrower may borrow, repay in
whole or in part at any time without premium or penalty, and reborrow
hereunder, subject to the terms hereof and subject to the terms of the Loan
Agreement.
THE COLLATERAL granted Bank to secure this Note and advances hereon
shall also secure payment of all renewals, extensions or modifications
hereof. Each request for advance hereon shall be a reaffirmation of all
collateral interests previously granted to the Bank and a reaffirmation of
all representations and warranties heretofore made to the Bank in the Loan
Agreement and made in all other documents securing or otherwise pertaining to
the subject revolving credit facility.
BORROWER shall pay to the holder hereof a late charge of five per cent
(5%) of any monthly installment of principal and/or interest not paid within
ten (10) days of the date same is due and payable.
IF DEFAULT is made in the payment of principal or interest hereof as and
when the same is or becomes due, or in the performance of any term, covenant
or condition required to be kept, observed or performed under this Note or
any other instrument executed in connection with this loan (including,
without limitation, the Loan Agreement, and (absent a specific contrary grace
or curative period) if same shall not be cured to the complete satisfaction
of the holder hereof within ten (10) days after any monetary default or
within thirty (30) days after the occurrence of any nonmonetary default on
the subject loan; or should Borrower default on any other indebtedness now or
hereafter owing Bank during the term hereof beyond any applicable grace or
curative period contained in any loan documents relative to such other
indebtedness; then the owner and holder of this Note may, without notice or
demand, declare all sums owning hereunder and under any of said other
instruments at once due and payable. If default is made
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in the payment of this Note at maturity (regardless of how same may be
brought about) Xxxxxxxx agrees, upon expiration of the aforesaid curative
periods, to pay to the owner and holder hereof interest at a default rate
equal to the annual rate for the principal hereof plus three per cent (3%)
until paid, together with all reasonable attorneys' fees and other costs of
collection occasioned by any of the foregoing.
BORROWER expressly waives demand and presentment for payment, notice of
nonpayment, protest, notice of protest, bringing of suit, and diligence in
taking any action to collect amounts called for hereunder and in the handling
of security at any time existing in connection therewith; and is and shall be
directly and primarily liable for the payment of all sums owing and to be
owing, regardless of and without any notice, diligence, act or omission or
with respect to the collection of any amount called for hereunder or in
connection with any right, lien, interest, or property at any and all times
had or existing as security for any amount called for hereunder or under any
other instrument executed in connection with the revolving line of credit
loan evidenced hereby.
XXXXXXXX HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT BORROWER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN OR ANY
AGREEMENT CONTEMPLATED TO BE MADE OR EXECUTED IN CONJUNCTION THEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
BANK'S MAKING THE LOAN EVIDENCED HEREBY.
IN THE EVENT of any inconsistency in the terms and provisions of this
Note or any other loan document as to the rights and remedies of the holder
hereof, or in the event of any such inconsistency as between or among any two
(2) or more loan documents, then in any such event the holder shall have the
right at its sole option to elect which of such provisions shall govern.
THIS NOTE and the respective rights and liabilities of Borrower and the
holder of this Note shall be governed by and shall be construed in accordance
with the laws of the Commonwealth of Kentucky.
BORROWER:
TUMBLEWEED, LLC
(a Kentucky limited liability company)
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
its manager
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LOAN AGREEMENT
By and between
TUMBLEWEED, LLC
(Borrower)
and
NATIONAL CITY BANK OF KENTUCKY
(Lender)
dated as of August 8, 1996
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement"), made and entered into as of
August 8, 1996, by and between TUMBLEWEED, LLC, a Kentucky limited liability
company with its principal office and place of business at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Borrower"), and NATIONAL CITY BANK
OF KENTUCKY, a national banking association with its principal office and
place of business at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the
"Lender").
W I T N E S S E T H:
Borrower and Xxxxxx recite and agree as follows, which recitations and
agreements constitute a part of this Agreement:
X. Xxxxxxxx engages in the business of owning, operating, developing
and franchising full service restaurants and food court restaurants, same
currently being located in Kentucky, Indiana, Ohio, Illinois and Wisconsin.
X. Xxxxxxxx has requested that Lender make available to Borrower a
$5,000,000 revolving line of credit to provide real estate financing for five
(5) of Borrower's full service restaurants and its commissary (the
"Commissary") in the approximate amount of $2,800,000, with the remaining
available amount to be used for the acquisition and development of additional
restaurant facilities.
X. Xxxxxx has agreed to make such credit facility available to Borrower
pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Xxxxxxxx and Lender agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings, unless the context otherwise requires.
"ADVANCE" shall mean a disbursement by Xxxxxx of any sum to
Borrower hereunder pursuant to a Funding Application.
"ASSIGNMENTS" shall mean the first assignments of leases and rents
of even date between Borrower and Lender relative to real estate and the
improvements thereon owned by Borrower located in Jefferson County, Kentucky
and in Xxxxx County, Kentucky.
"BORROWER" shall have the meaning ascribed to such term in the
preamble of this Agreement.
"BUSINESS DAY" shall mean a day on which Lender is open for
business.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" shall mean earnings before
payment of interest and taxes plus depreciation and amortization.
"COLLATERAL" shall mean the property and rights of the Borrower
more particularly described in Section 3.1 of this Agreement.
"COMMITMENT LETTER" shall mean the commitment letter dated June 13,
1996 from Xxxxxx to Borrower outlining the basic terms of the Credit Facility.
"COMPLIANCE CERTIFICATE" shall mean the form attached to this
Agreement as Exhibit A and incorporated herein by reference.
"CREDIT FACILITY" shall mean the aggregate principal amount
available from Lender to Borrower from time to time under this Agreement.
"EVENTS OF DEFAULT" shall mean any of the events specified in
Section 7.1 of this Agreement.
"FUNDING APPLICATION" shall mean Borrower's request for an Advance.
"GAAP" shall mean generally accepted accounting principles
consistently applied as in effect at the time of application of the
provisions hereof so as to properly reflect the financial condition, and the
results of operations and changes in financial position, of Borrower;
PROVIDED, that if in this Agreement principles of accounting different from
those required by generally accepted accounting principles are specified, the
principles of accounting specified in this Agreement shall govern.
"LENDER" shall have the meaning ascribed to such term in the
preamble of this Agreement.
"LOAN" shall mean at any time the aggregate outstanding principal
amount of all Advances made hereunder evidenced by the Note and unpaid
interest accrued thereon.
"LOAN DOCUMENTS" shall mean this Agreement, the Note, the
Assignments, the Mortgages and any and all other instruments now or hereafter
executed and delivered by Borrower in connection with the Credit Facility, as
any of such may be amended or supplemented from time to time.
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"LOAN YEAR" shall mean the following: the first Loan Year shall
expire on June 30, 1997; the second Loan Year shall expire on June 30, 1998;
the third Loan Year shall expire on June 30, 1999.
"MATERIAL ADVERSE EFFECT" shall mean any material adverse influence
on or change relative to (i) the validity or enforceability of this
Agreement, the Note or any other Loan Document, (ii) the business, operations
and assets of Borrower, (iii) the Collateral, or (iv) the Borrower's ability
to fulfill its obligations under this Agreement, the Note or the other Loan
Documents.
"MORTGAGES" shall mean the first mortgages of even date from
Borrower to Lender relative to real estate and the improvements thereon owned
by Borrower located in Jefferson County, Kentucky and in Xxxxx County,
Kentucky.
"NOTE" shall mean the revolving line of credit note delivered by
Borrower to Lender pursuant to this Agreement, and all renewals,
modifications and extensions of same.
"PARTIAL LOAN YEAR" shall mean that six (6) month period of time
commencing after the end of the third Loan Year until the Termination Date
(hereinafter defined).
"RESTAURANTS" shall include, collectively, when and as applicable,
full service restaurants, Borrower's Commissary and its food court restaurants.
"TERMINATION DATE" shall mean December 31, 1999, as such date may
be extended from time to time by mutual agreement of Xxxxxxxx and Xxxxxx.
1.2 OTHER DEFINITIONAL PROVISIONS. Defined terms used herein in the
singular shall import the plural and VICE VERSA and the gender used shall
include the other genders where appropriate.
ARTICLE II
TERMS OF THE CREDIT
2.1 COMMITMENT. Xxxxxx agrees to make Advances to Xxxxxxxx on a
revolving credit basis from time to time on any Business Day from the date of
this Agreement through the Termination Date in an outstanding amount not to
exceed at any one time the Credit Facility. The Credit Facility shall
initially be FIVE MILLION AND NO/100 DOLLARS ($5,000,000). PROVIDED, that
upon the expiration of each of the first Loan Year, the second Loan Year and
the third Loan Year the Credit Facility will be reduced by $360,000, such
that the Credit Facility will be $4,640,000 during the second Loan Year,
$4,280,000 during the third Loan Year and $3,920,000 during the Partial Loan
Year. Within the foregoing limits, Borrower may borrow, repay and reborrow.
AND PROVIDED FURTHER, that Lender shall not be obligated to make an Advance
if an Event of Default shall have occurred and is then existing hereunder or
under any other Loan Document, nor shall Lender be obligated to make an
Advance which, when added
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to the principal amount advanced and outstanding on the Note, would exceed
the principal amount available under the Credit Facility.
2.2 PURPOSE OF THE CREDIT FACILITY. Proceeds of the Credit Facility
and Advances made to Borrower by Lender under the Note shall be used by
Borrower to provide financing for five (5) of Borrower's Restaurants and its
Commissary and to provide additional capital for acquisition and development
of additional Restaurants.
2.3 NOTE. To evidence the Loan and the Credit Facility Borrower shall
execute and deliver the Note to Lender in the principal amount of the Credit
Facility and dated as of the date hereof. The Note shall be payable and bear
interest as set forth therein.
2.4 COMMITMENT FEE. A commitment fee in an amount of $12,500 shall be
due Lender from Borrower, payable at closing of the Loan.
2.5 LEGAL FEES. Xxxxxxxx agrees to pay all reasonable legal fees and
expenses of Xxxxxx incurred in connection with the closing of the Loan and
any modification, extension or renewal of same. Said fees and expenses shall
be due and payable upon Xxxxxxxx's receipt of a statement from Xxxxxx's
counsel.
2.6 SET-OFF. Borrower hereby authorizes Xxxxxx to set off the
liability of Borrower on the Note and the Loan, without notice, against all
deposits and credits of Borrower with Lender (other than balances in trust
accounts, escrow accounts, and other accounts not beneficially owned by
Xxxxxxxx).
ARTICLE III
COLLATERAL
3.1 COLLATERAL. To secure payment of the Note and all obligations of
Borrower to Lender under this Agreement and the other Loan Documents,
Xxxxxxxx shall execute and deliver the Mortgages and the Assignments to
Lender relative to Xxxxxxxx's Commissary located at 000 Xxxxxxxx Xxxxxx xx
Xxxxxxxxx Xxxxxx, Xxxxxxxx and Borrower's Restaurants located at 0000 Xxxxx
Xxxx, 1900-0000 Xxxxxxxx Xxxxxx, 00000 Xxxx Xxxxxxx Xxxx and 0000 Xxxxxxxx'x
Xxxx xx Xxxxxxxxx Xxxxxx, Xxxxxxxx and relative to Borrower's Restaurant at
0000 Xxxxxxx Xxxx xx Xxxxx Xxxxxx, Xxxxxxxx.
3.2 SURVEYS. Prior to closing the Borrower will provide Lender with
current engineer's surveys for the Collateral, certified to the Lender and
Xxxxxx's title insurer, showing all boundaries, easements, improvements and
any special details associated with the Collateral. The surveys should be
sufficient to eliminate any survey exceptions from the Lender's mortgagee
title insurance policy.
3.3 TITLE AND TITLE INSURANCE. Fee simple title to the Collateral
shall be vested in the Borrower. The Lender will be provided with mortgagee
title insurance in the
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principal amount of the Loan. The terms and conditions of the policy and the
title insurer must be acceptable to Lender and its counsel.
3.4 APPRAISALS. Lender must be provided with appraisals of the
Collateral by an appraiser acceptable to Lender. The amount, form and
content of the appraisals shall be acceptable to Lender, shall be addressed
to Lender and shall meet all FIRREA's requirements.
3.5 ENVIRONMENTAL ASSESSMENTS. Prior to closing the Lender must be
provided with environmental site assessments of the Collateral. The
conclusions, content and form of the site assessments, as well as the
engineering firm or firms performing the assessments, must be satisfactory to
the Lender in its sole discretion.
3.6 INSURANCE. Lender shall be provided with evidence that Borrower
has adequate insurance for all of the Restaurants, as required by subsection
(f) of Section 5.1 of this Agreement.
3.7 OTHER COMPLIANCE. Borrower shall provide such other information,
documents and data and perform all other acts reasonably deemed necessary by
Xxxxxx to close the Loan.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. Lender shall not be
obligated to make the initial Advance hereunder, unless Xxxxxx has received,
in addition to those items described in Article III, the following documents
and writings in form and substance acceptable to Lender and its counsel:
(a) RESOLUTIONS. Resolutions on behalf of the Borrower signed
either by Xxxx X. Xxxxxxx, Xx. or Xxxxx X. Xxxxxxxxx or by both of them or
their successors duly elected and appointed (individually, the "Manager", or
collectively, the "Managers") evidencing authorization and approval of the
execution and delivery of this Agreement and the other Loan Documents.
(b) ORGANIZATIONAL DOCUMENTS. Certified copies of the articles of
organization and the operating agreement of Borrower, with all amendments
thereto, and a Certificate of Existence issued by the Kentucky Secretary of
State.
(c) LEGAL OPINION. An opinion from counsel for Borrower
acceptable in form and content to Lender and its counsel.
(d) REPORT OF TAX LIEN SEARCHES. A report of federal and state
tax lien searches made in the appropriate public offices in the name of
Borrower.
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(e) CERTIFICATIONS AS TO REPRESENTATIONS AND WARRANTIES. Borrower
certifies that the representations and warranties of Borrower contained
herein are true and correct as of the date of this Agreement and the date of
the initial Advance to be made hereunder. Xxxxxxxx agrees that a request by
Borrower for each additional Advance shall constitute reaffirmation by
Borrower that (i) such representations and warranties are true and correct as
of the date each such Advance is to be made, (ii) that no default exists
relative to the Loan Documents or relative to any other credit facility of
Borrower, and (iii) that no material actions, suits, legal, equitable,
arbitration or administrative proceedings are pending or, to the best of
Xxxxxxxx's knowledge after due inquiry, threatened against Xxxxxxxx, the
adverse determination of which could have a Material Adverse Effect on the
Loan Documents, the business operation or financial condition of Borrower or
the ability of Borrower to fulfill its obligations under the Loan Documents.
(f) LOAN DOCUMENTS AND OTHER CONDITIONS. All Loan Documents shall
be duly executed and delivered to Lender; and such other documents as Lender
and its counsel may reasonably require shall be duly executed and delivered
to Lender; evidence shall be produced as is satisfactory to Lender and its
counsel as to the occurrence of any further conditions precedent to the
closing of the Loan.
(g) RELEASE AND SATISFACTION OF EXISTING LIENS AND DEBTS. All
debts secured by liens upon and security interests in the Collateral shall be
paid and provision made for the release of all such liens and security
interests, all of which shall be at Borrower's sole expense.
4.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES. Lender shall not be
obligated to make any Advance subsequent to the initial Advance hereunder if,
at the time such Advance is requested, an Event of Default shall have
occurred or if such Advance would exceed the amount of the Credit Facility
than available.
ARTICLE V
COVENANTS
5.1 AFFIRMATIVE COVENANTS. Until payment in full of the entire
principal balance of and all accrued interest on the Loan and the Note and
all other obligations relative thereto, Xxxxxxxx agrees that Xxxxxxxx will
observe and comply with all of the following covenants and agreements:
(a) PAYMENTS OF INDEBTEDNESS. Borrower shall make full and timely
payment of the principal of and accrued interest on the Loan and the Note and
on all other indebtedness of Borrower to Lender in accordance with their
respective terms.
(b) EXAMINATION OF LENDER. Borrower shall, at all reasonable
times, permit Xxxxxx to examine any or all of the Borrower's books and
financial records, to make excerpts therefrom and transcripts thereof, to
discuss the affairs, finances and accounts of
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Borrower with its Managers and to conduct any audit or similar examination
(including, without limitation, a collateral audit) deemed reasonably
necessary or appropriate by Lender at Borrower's cost and expense.
(c) FINANCIAL STATEMENTS AND REPORTS OF BORROWER. Borrower shall
furnish or shall cause the following to be furnished to Lender:
(i) QUARTERLY FINANCIAL STATEMENTS. Within forty-five (45)
days after the end of each fiscal quarter, an internally generated income
statement for Borrower for the period from the beginning of Borrower's
applicable fiscal year to the end of such fiscal quarter and a balance sheet
as of the end of each such fiscal quarter, all prepared in accordance with
GAAP and certified by the Managers or chief financial officer of Borrower as
being true and accurate.
(ii) ANNUAL AUDITED FINANCIAL STATEMENTS. Within one hundred
twenty (120) days after the end of each fiscal year of Borrower, an audited
income statement of Borrower for such fiscal year and an audited balance
sheet as of the end of such fiscal year, all in reasonable detail and
accompanied by a report and opinion of independent certified public
accountants reasonably satisfactory to Lender, which report and opinion shall
be prepared in accordance with GAAP relative to reporting.
(d) BOOKS AND RECORDS. Borrower shall at all times maintain
its books and records at its principal office at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000.
(e) CLOSING OF RESTAURANTS. Borrower shall notify Lender of
the closing of any Restaurants within ten (10) days of same.
(f) INSURANCE. Borrower shall obtain and maintain in full
force and effect insurance and liability insurance for all its Restaurants,
including without limitation those Restaurants as comprise part of the
Collateral, in such amounts and with such companies as are reasonably
satisfactory to Lender. Lender shall be scheduled mortgagee and certificate
holder as regards all fire and extended coverage insurance relative to the
Collateral, and shall be scheduled as additional insured and certificate
holder as to liability insurance relative to the Collateral. If and only as
applicable, Borrower shall maintain flood insurance, as more particularly
described in the Mortgages.
All such policies shall provide that Lender be given not less than ten
(10) days prior written notice before cancellation of any such insurance
becomes effective. Certified copies of all such policies or current
certificates of insurance shall be delivered to Lender when and as required
by Lender.
(g) COMPLIANCE WITH LAWS. Borrower shall comply with all
applicable governmental statutes, regulations and rules governing the conduct
of Borrower's business and ownership of property.
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(h) TAXES AND ASSESSMENTS. Borrower shall pay all taxes,
assessments and governmental charges and levies imposed upon Xxxxxxxx,
Xxxxxxxx's income or any property before same become delinquent; provided,
however, that no such tax, assessment, charge or levy need be paid so long as
the validity thereof shall be contested in good faith by appropriate
proceedings for which a bond or other security reasonably satisfactory to
Lender shall have been posted, and provided further that Borrower shall have
set aside on Xxxxxxxx's books adequate reserves therefor.
(i) EXISTENCE. Borrower shall preserve and maintain
Borrower's existence as a Kentucky limited liability company and its
qualification to do business in good standing in every jurisdiction in which
the nature of the business conducted by Borrower or the properties owned by
Borrower require such qualification.
(j) EVENTS OF DEFAULT AND NOTICE. Borrower shall, promptly
upon obtaining knowledge of the occurrence or existence of any Event of
Default, or of the occurrence or existence of a condition or event which,
with notice or the lapse of time, or both, would constitute an Event of
Default, deliver to Lender a certificate specifying the nature thereof, the
period of existence thereof, and what action Borrower has taken or proposes
to take with respect thereto.
(k) PAYMENT OF INDEBTEDNESS; COMPLIANCE WITH AGREEMENTS.
Borrower shall pay and discharge all of Borrower's debts and obligations in a
timely manner in accordance with their respective terms, and shall at all
times comply with each and every term and provision of the documents
evidencing and securing such debts and obligations, and with each and every
lease, contract, agreement or obligation Borrower may have or be a party to
with any person or as to which any of its properties may be subject.
(l) MANAGEMENT. Borrower shall notify Lender of any
substantial changes in the management of Borrower.
(m) ERISA. With respect to any Plan ("Plan" shall mean an
employee pension benefit plan or pension covered by XXXXX, hereafter defined,
which is guaranteed by the Pension Benefit Guaranty Corporation or any
successor thereto) maintained or adopted by Xxxxxxxx, Borrower shall (i) at
all times make prompt payments of contributions required to be made to meet
the minimum funding standards of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"); (ii) promptly, after the filing thereof,
furnish to Lender copies of all reports of prohibited transactions and
accumulated funding deficiencies required to be made pursuant to the
provisions of ERISA; and (iii) notify the Lender promptly of the occurrence
of any reportable event within the meaning of ERISA.
(n) OTHER ACTS. Xxxxxxxx agrees, upon the request of Xxxxxx,
to duly execute and deliver, or cause to be duly executed and delivered, such
further instruments, and do or cause to be done such further acts, as may be
necessary or proper in the reasonable opinion
8
of Lender to carry out more effectively the provisions of this Agreement and
the other Loan Documents.
(o) ADDITIONAL NOTIFICATION. Borrower will notify Lender of
significant events as to Borrower, its assets and its business, including
without limitation any event causing material loss or depreciation in value
of Borrower's properties or assets by reason of casualty or any other cause.
Further, Borrower will notify Lender of any change in its structure, the name
under which Borrower conducts its business or any material portion thereof,
or any change in the ownership of any material portion of Borrower's
business, properties or assets.
5.2 FINANCIAL COVENANTS. Until payment in full of the entire principal
balance of and all accrued interest on the Loan and the Note and all other
obligations relative thereto, Xxxxxxxx agrees that Xxxxxxxx will observe and
comply with all of the following financial covenants and agreements.
(a) TANGIBLE NET WORTH. Xxxxxxxx agrees to maintain a minimum
tangible net worth (defined in accordance with GAAP) in the following
amounts: during the first Loan Year, $9,500,000; during the second Loan Year,
$10,000,000; during the third Loan Year and thereafter, $10,500,000.
(b) DEBT COVERAGE RATIO. Borrower will maintain a ratio of (i)
Cash Flow Available for Debt Service to (ii) the current portion of long-term
debt and interest of at least 1.75 to 1.00 during the first Loan Year, and of
at least 2.00 to 1.00 for the second and third Loan Years and for the Partial
Loan Year commencing after October 31, 1997. Same shall be evaluated by
Xxxxxx as of June 30, September 30, December 31 and March 31, in respect of
the four (4) immediately preceding fiscal quarters ending as of the last day
of the most recently ended fiscal quarter.
(c) LEVERAGE. Xxxxxxxx agrees to maintain a ratio of its total
liabilities to tangible net worth of not more than 1 to 1.
(d) COMPLIANCE CERTIFICATE. Borrower will complete and deliver to
Lender, not later than forty-five (45) days after each fiscal quarter, a
Compliance Certificate in the form of that attached hereto as Exhibit A or in
such other form as Lender may prescribe from time to time.
5.3 NEGATIVE COVENANTS. Borrower shall at all times comply with the
covenants contained in this Section 5.3, from the date hereof and for so long
as the Credit Facility shall remain available to Borrower.
(a) NO MERGER. Without Xxxxxx's prior written consent, which will
not be unreasonably withheld, Borrower shall not merge or consolidate with or
into any partnership, corporation, or other entity.
9
(b) FISCAL YEAR, METHOD OF ACCOUNTING. Borrower shall not change
its fiscal year or method of accounting without thirty (30) days prior
written notice to Xxxxxx.
(c) LIQUIDATION AND DISPOSITIONS OF SUBSTANTIAL ASSETS. Without
Lender's prior written consent, which will not be unreasonably withheld,
Borrower shall not dissolve or liquidate or sell, lease or transfer, or
otherwise dispose of any material portion of its property or assets or
business.
(d) CONTRACTS. Borrower will not enter into any contract or
agreement which would materially and adversely affect its business, property,
ability to perform its obligations under the Note and this Agreement, or the
Collateral.
(e) TRANSACTIONS WITH RESPECT TO COLLATERAL. Borrower will not
enter into any transaction which materially and adversely affects the
Collateral or Borrower's ability to repay the Loan.
(f) DIVIDENDS. Borrower will not declare or pay dividends or
bonuses or make any distributions of Borrower's property or assets to any of
its members other than (i) to its members for the purpose of paying their
personal tax liabilities due by reason of income received from Borrower, (ii)
to its members, to enable them to make interest payments due on their line of
credit facility established with Bank One Kentucky, NA in the principal
amount of $7,034,375 and (iii) to the Managers pursuant to the management
agreements between the Borrower and each Manager.
(g) CHANGE IN OWNERSHIP. Borrower will not make, suffer or allow
a material change in the ownership of Borrower or the management of
Borrower's business.
ARTICLE VI
REPRESENTATION AND WARRANTIES
6.1 EXISTENCE. Borrower is a limited liability company duly organized
and validly existing under the laws of Kentucky; and is qualified to transact
business as a nonresident in every jurisdiction in which such qualification
is required.
6.2 NO RESTRICTIONS ON PERFORMANCE. Neither the execution or delivery
of this Agreement or any other Loan Document, the consummation of the
transactions contemplated hereby, nor the compliance with the terms and
conditions of this Agreement and the other Loan Documents:
(a) requires the consent or approval of, or registration with, any
federal, state, municipal or other governmental commission, board, agency,
bureau, authority, official or regulatory body;
10
(b) violates any provision of law, any order of any court or any
order, rule or regulation of any agency of government;
(c) conflicts with or results in a breach of any of the terms,
conditions or provisions of any restrictions or of any agreement or
instrument to which the Borrower is a party or by which Borrower or any of
Borrower's properties may be bound or affected; or
(d) results in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the Collateral except liens
and security interests in favor of Xxxxxx.
6.3 PROPER EXECUTION. The Manager executing and delivering this
Agreement and the other Loan Documents on behalf of Xxxxxxxx has been duly
authorized to do so, and this Agreement and the other Loan Documents are
legally binding upon Borrower in every respect in accordance with their
respective terms.
6.4 LEGAL PROCEEDINGS; TAXES. There are no actions, proceedings or
investigations pending, or to the knowledge of Borrower, threatened, before
any federal, state, municipal or other governmental department, commission,
board, agency, bureau, authority or official involving the likelihood of any
material judgment or liability against Borrower, or questioning or
threatening Borrower's right to carry on the business which Borrower
presently conducts or proposes to conduct, or which, if adversely determined,
would cause a Material Adverse Effect. All tax returns and reports of
Borrower required by law to be filed have been duly filed or will be filed in
a timely manner, and all taxes, assessments, withholdings, fees and other
governmental charges upon Borrower, Borrower's employees or upon any of
Borrower's assets, income or franchises, which are due and payable, have been
paid or will be paid in a timely manner.
6.5 ERISA. To the best of Xxxxxxxx's knowledge, no fact or
circumstance, including but not limited to any reportable event within the
meaning of ERISA, exists in connection with any Plan of the Borrower which
might constitute grounds for the termination of any such Plan by the Pension
Benefit Guaranty Corporation or for the appointment of a trustee to
administer any such Plan.
6.6 NO MISREPRESENTATIONS. This Agreement, the other Loan Documents,
the financial covenants referred to herein and the financial information
relative to Borrower heretofore submitted to Lender prior to the issuance of
the Commitment Letter do not contain any untrue statement of a material fact
nor omit to state a material fact necessary in order to make any statement
made not misleading.
6.7 INDUCEMENT TO LENDER. The foregoing representations and warranties
are an inducement to Lender's entering into this Agreement, and each and
every request for an Advance by Borrower shall constitute a reaffirmation and
reiteration of each and every representation and warranty of Borrower
contained in this Article VI.
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ARTICLE VII
DEFAULTS AND REMEDIES
7.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event
of Default hereunder:
(a) PAYMENTS. If Borrower fails to make any payment of principal
and/or interest on the Note, or payment of any fee, expense or other amount
due hereunder, under the Note or under any other Loan Document, and shall any
such payment of principal, interest, fee, expense or other sum remain unpaid
for a period of ten (10) days after any such payment is due.
(b) COVENANTS AND AGREEMENTS. If Borrower shall fail or omit to
perform or observe any covenant, agreement, condition or other provision
contained or referred to in this Agreement or in any other Loan Document
(other than monetary default), and such failure or omission shall not have
been fully corrected to the reasonable satisfaction of Lender within thirty
(30) days after occurrence thereof.
(c) ACCURACY OF STATEMENTS. If any representation or warranty or
other statement of fact contained in this Agreement, in any other Loan
Document or in any writing, certification, report or statement at any time
furnished to Lender pursuant to or in connection with this Agreement or in
connection with obtaining the Credit Facility or otherwise, shall have been
false or misleading in any material respect or omitted to state a material
fact as of the date such representation, warranty or statement of fact was
made.
(d) JUDGMENTS. If a final judgment for the payment of money in
excess of the sum of $100,000 in the aggregate shall be entered against
Borrower, and such judgment shall remain unsatisfied and in effect for a
period of thirty (30) consecutive days after the entry thereof, and shall not
have been discharged or execution thereof stayed pending appeal, or if so
stayed, within ten (10) days after the expiration of any such stay if such
judgment shall not have been discharged.
(e) BORROWER'S SOLVENCY. If Borrower shall: (i) make a general
assignment for the benefit of creditors; (ii) apply for or consent to the
appointment of, or if for any other reason, a receiver, trustee or liquidator
of all or a substantial part of the assets of Borrower is appointed; (iii) be
adjudicated a bankrupt or insolvent; (iv) file a voluntary petition in
bankruptcy or file a petition or any answer seeking reorganization or an
arrangement with creditors or seeking to take advantage of any other law
relating to relief of debtors, or admit (by answer, default or otherwise) the
material allegations of a petition filed against Borrower in any bankruptcy,
reorganization, insolvency or other proceedings relating to relief for
debtors; (v) suffer or permit to continue unstayed and in effect for thirty
(30) consecutive days any judgment, decree or order entered by a court or
governmental agency of competent jurisdiction, which assumes control of
Borrower, approves a petition seeking reorganization of Borrower or any other
judicial modification of the rights of Xxxxxxxx's creditors, or appoints a
receiver, trustee,
12
custodian or liquidator for Borrower of all or a substantial part of
Borrower's assets; or (vi) fail to pay Borrower's debts as and when the
same mature.
(f) TERMINATION OR SUSPENSION OF BUSINESS. If Borrower shall
terminate or suspend the transaction of business.
(g) MATERIAL ADVERSE CHANGE. If any material adverse change shall
occur in the condition of Borrower, financial or otherwise.
(h) CHANGE IN OWNERSHIP OR MANAGEMENT. If any change in the
control, ownership or management of Borrower shall occur, the result of which
could, in the reasonable judgment of Xxxxxx, have a Material Adverse Effect.
(i) LOAN DOCUMENTS. If any provision of this Agreement, the Note
or any other Loan Document shall for any reason cease to be in full force and
effect; or be declared null and void or unenforceable in whole or in part; or
the validity or enforceability of any such document shall be challenged or
denied.
(j) INSECURITY. If Lender shall in good faith and acting in a
commercially reasonable manner, deem itself to be insecure with respect to
Borrower's ability or intention (i) to make full and timely payment of each
and every installment of principal and/or interest on the Note, or (ii) to
perform any or all of the material agreements, obligations, covenants,
conditions, warranties or representations made or to be performed by Borrower
pursuant to the terms of this Agreement or any other Loan Document.
(k) DEFAULT ON OTHER INDEBTEDNESS. If Borrower shall default
beyond any applicable grace or curative period on any other credit facility
available to Borrower which exceeds $100,000, then same shall constitute a
default by Borrower under this Agreement.
7.2 REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default,
Lender may exercise any one or more of the following remedies:
(a) ACCELERATION. Demand payment in full of all principal of and
accrued interest on the Note and/or any and all of Borrower's other
indebtedness to Lender, whereupon all indebtedness of Borrower to Lender
shall become immediately due and payable in full without any presentment,
demand or notice of any kind, all of which are hereby expressly waived by the
Borrower.
(b) ADVANCES; TERMINATION OF AGREEMENT. Refuse to make any
further Advances, and at Xxxxxx's sole discretion terminate this Agreement.
(c) JUDGMENT. Reduce any claim to judgment.
13
(d) OFFSETS. If any state of facts or with the lapse of time or
the giving of notice, or both, would constitute an Event of Default, shall
occur or begin to exist, Lender shall have the right then, or at any time
thereafter, unless remedied to the reasonable satisfaction of Xxxxxx, to set
off against, and to appropriate and apply toward the payment of, first the
Note and then any other indebtedness then owed by Borrower to Lender, whether
or not such indebtedness shall have been matured or be due and payable and
whether or not Lender has declared the note evidencing such other
indebtedness in default, any and all deposit balances and other sums and
indebtedness then held or owed by Xxxxxx to or for the credit or account of
Borrower (other than balances in trust accounts, escrow accounts, and other
accounts not beneficially owned by Borrower), all without notice to or demand
upon Borrower or any other person, all such notices and demands being hereby
expressly waived.
(e) RIGHTS UNDER NOTE AND THIS AGREEMENT. Exercise all rights and
remedies granted Lender under any and all of the instruments now or hereafter
evidencing and securing the Credit Facility, including but not limited to the
Note and this Agreement.
(f) FORECLOSURE. Exercise all those rights and remedies allowed
to secured parties by all applicable laws, including without limitation
foreclosure of the liens of the Mortgages.
(g) POSSESSION. Enter upon the premises of Borrower and take
immediate possession of the Collateral, with or without legal process, either
personally or by means of a receiver appointed by a court of competent
jurisdiction.
(h) COLLECTION OF ACCOUNTS. Collect and receive all accounts,
rents, income, revenue, earnings, issues and profits from the Collateral.
(i) EXERCISE OF RIGHTS. Exercise, as Lender shall deem
appropriate, any and all other rights afforded by any applicable laws or by
this Agreement and the other Loan Documents, at law, in equity, or otherwise,
including, but not limited to, the rights to bring suits or other proceedings
before any tribunal or competent jurisdiction, either for specific
performance of any covenant or condition contained in the Loan Documents or
in aid of the exercise of any right granted to Lender under this Agreement.
(j) PERFORMANCE BY XXXXXX. Should Borrower fail to observe or
perform any covenant, duty or promise by it to be observed or performed under
the terms of this Agreement or the other Loan Documents, Lender may, but
shall not be obligated to, perform or attempt to perform, such covenant, duty
or promise on behalf of Borrower, and, in the event Lender shall do so,
Borrower shall immediately upon demand reimburse Lender for all expenses,
disbursements, fees and costs reasonably incurred by Lender in connection
therewith, with interest thereon at the rate specified in the Note. Lender
does not assume and shall never have, except by its express written consent,
any liability or responsibility for the performance of any covenant, duty or
promise of Borrower under this Agreement, the Mortgages or the Assignments.
14
7.3 RIGHTS CUMULATIVE. The rights and remedies of Xxxxxx xxxxxxxxx, in
the Note, and in the other Loan Documents are cumulative, may be exercised in
such sequence or combination as Lender may elect, and are not exclusive of
any rights or remedies otherwise provided by law.
ARTICLE VIII
MISCELLANEOUS
8.1 INTERPRETATION. No course of dealing in respect of, nor any
omission or delay in the exercise of, any right, power, or privilege by
Lender shall operate as a waiver thereof. Each right, power or privilege may
be exercised by Xxxxxx as often and in such order as Lender may deem
expedient. No waiver or consent granted by Xxxxxx in respect to this Agreement
or any related writing shall be binding upon Lender unless specifically
granted in writing, which right shall be strictly construed. Time shall be of
the essence in the performance of all Borrower's obligations under this
Agreement and the other Loan Documents. Borrower may not assign any of
Xxxxxxxx's rights under this Agreement, and any such attempted assignment
shall be wholly null and void.
8.2 NOTICES. All notices and other communications hereunder or under
the other Loan Documents shall be in writing and shall be mailed by first
class mail or express mail, postage prepaid, or sent by telex, telegram or
other similar form of rapid transmission confirmed by mailing (by first class
or express mail, postage prepaid) written confirmation at substantially the
same time as such rapid transmission, or personally delivered to an officer
of the receiving party. All such communications shall be mailed, sent or
delivered to the parties hereto at their respective addresses as follows:
If to Borrower: TUMBLEWEED, LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
With a copy to its counsel: Xxxx and Xxxxxx, P.S.C.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
If to Lender: NATIONAL CITY BANK OF KENTUCKY
8th Floor, National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxx
Any communication so addressed and mailed shall be deemed to be given
when so mailed, except that notices and requests related to Advances shall
not be effective until
15
actually received by Lender or Borrower, as the case may be; and any notice
so sent by rapid transmission shall be deemed to be given when receipt of
such transmission is acknowledged, and any communication so delivered in
person shall be deemed to be given when receipted for by, or actually
received by, an authorized officer of Borrower or Lender, as the case may be.
8.3 GOVERNING LAW. The laws of the Commonwealth of Kentucky shall
govern the construction of this Agreement and the rights, remedies and duties
of the parties hereto.
8.4 SECTION TITLES. The section titles of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
8.5 SEVERABILITY. The invalidity or unenforceability of any one (1) or
more phrases, sentences, clauses or paragraphs of this Agreement shall not
affect the validity or enforceability of the remaining portions of this
Agreement or of any part hereof.
8.6 INTEGRATION. The Loan Documents contain the entire agreement
between the parties relating to the Credit Facility. The Loan Documents
supersede any and all prior agreements and any and all contemporaneous oral
agreements between Xxxxxx and Borrower relative to the Credit Facility.
8.7 SUCCESSORS AND ASSIGNS. This Agreement shall bind each of Borrower
and Xxxxxx and their respective successors and assigns, and shall inure to
the benefit of Xxxxxx and Xxxxxxxx and their respective successors and
assigns.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
BORROWER:
TUMBLEWEED, LLC
(a Kentucky limited liability company)
/s/ Xxxxxx X. Xxxxxxxxx, Xx. By: /s/ Xxxxx Xxxxxxxxx
---------------------------- -------------------------------
Witness its Manager
LENDER:
NATIONAL CITY BANK OF KENTUCKY
(a national banking association)
/s/ Xxxxxx X. Xxxxxxxxx, Xx. By: /s/ Xxx Xxxx
--------------------------- -------------------------------
Witness its senior vice president
17
EXHIBIT A
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered to National City Bank of
Kentucky (the "Lender") pursuant to Section 5.2(d) of the loan agreement
dated as of August 8, 1996 between Tumbleweed, LLC (the "Borrower") and the
Lender (the "Loan Agreement"). All capitalized terms used herein not defined
herein shall have the meaning ascribed thereto in the Loan Agreement.
The Borrower hereby represents, warrants and certifies to the Lender the
following, as of the last day of the most recently ended fiscal quarter for
the Borrower:
X. Xxxxxxxx's minimum tangible net worth as of the last day of the most
recently ended fiscal quarter was $__________________.
B. The ratio of Xxxxxxxx's Cash Flow Available for Debt Service to the
current portion of long-term debt and interest in respect of the four (4)
immediately preceding fiscal quarters ending as of the last day of the most
recently ended fiscal quarter was __________________.
C. The ratio of Borrower's total liabilities to its tangible net worth
as of the last day of the most recently ended fiscal quarter was
__________________.
Xxxxxxxx's manager executing and delivering this Compliance Certificate
on behalf of Borrower further certifies to the Lender that the manager has
reviewed the Loan Agreement and the Note and has no knowledge of any event or
condition which constitutes an Event of Default under the Loan Agreement
other than -- (if any Event of Default has occurred, describe same, the
period of existence of such default and what action the Borrower has taken or
proposes to take with respect thereto).
IN WITNESS WHEREOF, the Borrower has executed this Compliance
Certificate this ___ day of _____________, 199_.
TUMBLEWEED, LLC
By: _______________________________
its manager
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (the "Agreement") made and entered into as
of June 30, 1997 by and between TUMBLEWEED, LLC, a Kentucky limited liability
company (hereafter "Mortgagor"), and NATIONAL CITY BANK OF KENTUCKY, a
national banking association with offices at 000 X. Xxxxx Xxxxxx xx
Xxxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxx 00000 (hereafter "Mortgagee");
WITNESSETH:
Mortgagor and Mortgagee recite and agree as follows, which recitations
and agreements constitute a part of this Agreement:
X. Xxxxxxxxx and Mortgagee have entered into a loan agreement dated as
of August 8, 1996 (the "Loan Agreement") pursuant to which Mortgagee agreed
to make available to Mortgagor, and Xxxxxxxxx agreed to accept, a revolving
line of credit facility in a principal amount not to exceed $5,000,000
outstanding at any time (the "Loan").
X. Xxxxxxxxx's obligation to repay the Loan is evidenced by
Xxxxxxxxx's revolving line of credit note payable to the order of Mortgagee
dated August 8, 1996 in a principal amount not to exceed $5,000,000
outstanding at any time (the "Note"), the Loan and the Note originally being
due and payable not later than December 31, 1999.
C. Payment of the Loan and the Note was and is secured by the
following, both relative to real property owned by Xxxxxxxxx located in
Jefferson County, Kentucky and both being dated as of August 8, 1996: first
mortgage from Mortgagor to Mortgagee recorded at Mortgage Book 4146, Page 330
in the Jefferson County Clerk's office; assignment of leases and rents
between Mortgagor and Mortgagee, recorded at Deed Book 6772, Page 517 in said
Clerk's office. (Said mortgage and said assignment of leases and rents are
hereinafter referred to as the "Jefferson County Collateral Documents").
D. Payment of the Loan and the Note was and is additionally secured by
the following, both relative to real property owned by Xxxxxxxxx located in
Xxxxx County, Kentucky and both being dated as of August 8, 1996: first
mortgage from Mortgagor to Mortgagee, recorded at Mortgage Book 1228, Page
143 in the Xxxxx County Clerk's office; assignment of leases and rents
between Mortgagor and Mortgagee, recorded at Deed Book 566, Page 9 in said
Clerk's office. (The aforesaid mortgage and assignment of leases and rents
are hereinafter referred to as the "Xxxxx County Collateral Documents").
E. The Loan Agreement, the Note, the Jefferson County Collateral
Documents, the Xxxxx County Collateral Documents and related instruments and
agreements are sometimes hereinafter collectively referred to as the "Loan
Documents."
X. Xxxxxxxxx and Mortgagee have agreed upon an extension of the final
maturity of the Loan and the Note and have agreed to amend certain other
terms and provisions governing repayment thereof, as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the covenants and promises
of the parties hereto, the receipt and sufficiency of which are acknowledged
by Xxxxxxxxx and Mortgagee, the parties covenant and agree as follows:
1. Xxxxxxxxx represents and warrants that Xxxxxxxxx was and is the
owner and holder of the real estate encumbered by the Jefferson County
Collateral Documents and by the Xxxxx County Collateral Documents, and hereby
acknowledges that there are no defenses or offsets to the Loan or the Loan
Documents evidencing, securing and otherwise relating to the Loan.
2. Mortgagor represents and warrants to Mortgagee that the Mortgagor
is not in default on the Loan or under the Loan Documents, nor does any
circumstance exist that with the giving of notice, the passage of time or
both would constitute such a default.
3. Mortgagor hereby ratifies and reaffirms its liability for payment
of the Loan and its obligation to pay and perform all sums and obligations
owing the Mortgagee under the Loan Agreement, the Note and the other Loan
Documents.
4. The final maturity date of the Loan and the Note is hereby extended
to December 31, 2000, and the Loan Documents shall be and hereby are modified
to reflect a maturity date of December 31, 2000.
5. Effective July 10, 1997 interest shall accrue on the principal
advanced and outstanding on the Loan and the Note at an annual rate equal to
one-quarter of one percent (1/4%) above the Mortgagee's prime rate of
interest (as "prime rate" is defined in and calculated under the Note) rather
than at one-half of one percent (1/2%) above said prime rate, and the Note
shall be and hereby is modified accordingly. Xxxxxxxxx will continue to make
principal payments on the Loan and Note at the times and in the amount
specified in the Note.
6. For and in consideration of the aforesaid extension of maturity and
adjustment of interest rate, the Mortgagor agrees to continue to pay the
principal of and interest on the Loan and the Note as specified in the Note
as amended hereby, and to otherwise continue to comply with all provisions of
the Loan Documents.
7. THE TOTAL PRINCIPAL AMOUNT EVIDENCED BY THE NOTE AND SECURED BY THE
JEFFERSON COUNTY COLLATERAL DOCUMENTS AND BY THE XXXXX COUNTY COLLATERAL
DOCUMENTS IS A PRINCIPAL AMOUNT NOT TO EXCEED FIVE MILLION AND NO/100 DOLLARS
($5,000,000) OUTSTANDING AT ANY TIME. THE FINAL PAYMENT OF INTEREST ON THE
LOAN AND NOTE, TOGETHER WITH ALL PRINCIPAL OF THE LOAN AND NOTE NOT
THERETOFORE PAID, ARE DUE MORTGAGEE FROM MORTGAGOR NOT LATER THAN DECEMBER
31, 2000.
2
8. To the extent the terms and provisions of this Agreement conflict
with the terms and provisions of the Loan Documents, the terms and provisions
of this Agreement shall govern. As so modified, all the Loan Documents are
ratified and readopted by Xxxxxxxxx and by Mortgagee in all respects.
9. This Agreement shall be binding upon and shall inure to the benefit
of the respective successors, representatives and assigns of the parties
hereto. In the event of the invalidity or unenforceability of any portion of
this Agreement, such invalidity or unenforceability shall not affect the
validity or enforceability of the remaining portions of this Agreement.
10. This Agreement shall be governed by and shall be interpreted in
accordance with the laws of the Commonwealth of Kentucky.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
original counterparts (each of which shall constitute one and the same
document) by the parties by their respective duly authorized representatives
as of the day, month and year hereinbefore written.
MORTGAGOR:
TUMBLEWEED, LLC
(A Kentucky limited liability company)
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
its manager
MORTGAGEE:
NATIONAL CITY BANK OF KENTUCKY
(a national banking association)
By: /s/ Xxx Xxxx
---------------------------------
its senior vice president
3
STATE OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
I, a Notary Public in and for the State and County aforesaid, do hereby
certify that on this date _________________, duly authorized manager of
TUMBLEWEED, LLC, appeared before me and before me acknowledged that he
executed and delivered the foregoing instrument as his free and voluntary act
and deed, and as the free and voluntary act and deed of TUMBLEWEED, LLC, a
Kentucky limited liability company.
Witness my hand this _____ day of ___________, 1997.
My Commission Expires: ___________________________________
_______________________________
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
STATE OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
I, a Notary Public in and for the State and County aforesaid, do hereby
certify that on this date Xxx Xxxx, duly authorized officer of NATIONAL CITY
BANK OF KENTUCKY, appeared before me and before me acknowledged that he
executed and delivered the foregoing instrument as his free and voluntary act
and deed, and as the free and voluntary act and deed of NATIONAL CITY BANK OF
KENTUCKY, a Kentucky banking association.
Witness my hand this 27th day of June, 1997.
Notary Public, State at Large, KY
My Commission Expires: My commission expires Aug. 5th, 1998
/s/ Xxxxxx X. Xxxxx
_______________________________
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
4
THIS INSTRUMENT PREPARED BY:
XXXXXX X. XXXXXXXXX, XX.
XXXXX, XXXXXXXXX, XXXXX & XXXXXXX
Suite 1450, Citizens Plaza
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
----------------------------
Attorney at Law
5
NATIONAL CITY NATIONAL CITY BANK, KENTUCKY
BANK P.O. Box 36000
Louisville, KY 40233-6000
000 000-0000
June 27, 1997
Xx. Xxxxx X. Xxxxxxxxx
Executive Vice President & CFO
Tumbleweed, LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: $5,000,000 REVOLVING LINE OF CREDIT
FACILITY (THE "LOAN") FROM NATIONAL
CITY BANK OF KENTUCKY (THE "BANK")
TO TUMBLEWEED, LLC (THE "BORROWER")
Dear Xxx:
The loan agreement between the Borrower and the Bank dated as of August
8, 1996 (the "Loan Agreement") and the Note executed pursuant to the Loan
Agreement provide that on June 30, 1997 and upon the expiration of each Loan
Year thereafter the Credit Facility will be reduced by $360,000, the
availability to be $4,640,000 during the second loan year, $4,280,000 during
the third loan year, and $3,920,000 during the Partial Loan Year.
(Capitalized terms used in this letter not otherwise defined shall have the
meaning given them in the Loan Agreement).
In accordance with the Borrower's request the Bank hereby agrees to
waive the reduction of the Credit Facility scheduled to occur on June 30,
1997. Accordingly, the maximum availability on the Loan will be $5,000,000
during the second Loan Year, $4,640,000 during the third Loan Year,
$4,280,000 for the fourth Loan Year, and $3,920,000 for the Partial Loan
Year. (The foregoing contemplates that Borrower and Bank will enter into a
modification agreement extending the Termination Date from December 31, 1999
to December 31, 2000 and that the Partial Loan Year will commence after the
end of the fourth Loan Year).
It is mutually understood by the Bank and by the Borrower that the Bank's
waiver set forth in this letter is strictly limited to the terms hereof, and
does not constitute a waiver of scheduled reduction of the Credit Facility or
any other term or provision of the Loan Documents.
Tumbleweed, LLC
Letter
Page 2
June 27, 1997
Bank and Xxxxxxxx mutually acknowledge that, to the extent the
provisions of this letter are inconsistent with the Bank's commitment letter
to the Borrower dated June 13, 1996, with paragraph 2.1 of the Loan Agreement
and with the first full paragraph on page 2 of the Note, the provisions of
this letter will govern. Borrower and Bank further mutually acknowledge and
agree that, except as amended by this letter and as modified by a
modification agreement between the parties of even date herewith, all other
terms and provisions of the Loan and the Loan Documents shall remain the same.
Should you have any questions regarding this letter, do not hesitate to
contact me. Please sign in the space provided below and return to me,
thereby acknowledging and agreeing to the terms and conditions of this letter
on behalf of the Borrower.
Yours truly,
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Xxx Xxxx
--------------------------------
Xxx Xxxx
Senior Vice President
Receipt of the foregoing is hereby acknowledged and the terms and
provisions thereof accepted.
TUMBLEWEED, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Executive Vice President & CFO
Date: June 27, 1997
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (the "Agreement") made and entered into as
of June 30, 1997 by and between TUMBLEWEED, LLC, a Kentucky limited liability
company (hereafter "Mortgagor"), and NATIONAL CITY BANK OF KENTUCKY, a
national banking association with offices at 000 X. Xxxxx Xxxxxx xx
Xxxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxx 00000 (hereafter "Mortgagee");
WITNESSETH:
Mortgagor and Mortgagee recite and agree as follows, which recitations
and agreements constitute a part of this Agreement:
X. Xxxxxxxxx and Mortgagee have entered into a loan agreement dated as
of August 8, 1996 (the "Loan Agreement") pursuant to which Mortgagee agreed
to make available to Mortgagor, and Xxxxxxxxx agreed to accept, a revolving
line of credit facility in a principal amount not to exceed $5,000,000
outstanding at any time (the "Loan").
X. Xxxxxxxxx's obligation to repay the Loan is evidenced by Xxxxxxxxx's
revolving line of credit note payable to the order of Mortgagee dated August
8, 1996 in a principal amount not to exceed $5,000,000 outstanding at any
time (the "Note"), the Loan and the Note originally being due and payable not
later than December 31, 1999.
C. Payment of the Loan and the Note was and is secured by the
following, both relative to real property owned by Xxxxxxxxx located in
Jefferson County, Kentucky and both being dated as of August 8, 1996: first
mortgage from Mortgagor to Mortgagee recorded at Mortgage Book 4146, Page 330
in the Jefferson County Clerk's office; assignment of leases and rents
between Mortgagor and Mortgagee, recorded at Deed Book 6772, Page 517 in said
Clerk's office. (Said mortgage and said assignment of leases and rents are
hereinafter referred to as the "Jefferson County Collateral Documents").
D. Payment of the Loan and the Note was and is additionally secured by
the following, both relative to real property owned by Xxxxxxxxx located in
Xxxxx County, Kentucky and both being dated as of August 8, 1996: first
mortgage from Mortgagor to Mortgagee, recorded at Mortgage Book 1228, Page 143
in the Xxxxx County Clerk's office; assignment of leases and rents between
Mortgagor and Mortgagee, recorded at Deed Book 566, Page 9 in said Clerk's
office. (The aforesaid mortgage and assignment of leases and rents are
hereinafter referred to as the "Xxxxx County Collateral Documents").
E. The Loan Agreement, the Note, the Jefferson County Collateral
Documents, the Xxxxx County Collateral Documents and related instruments and
agreements are sometimes hereinafter collectively referred to as the "Loan
Documents."
X. Xxxxxxxxx and Mortgagee have agreed upon an extension of the final
maturity of the Loan and the Note and have agreed to amend certain other
terms and provisions governing repayment thereof, as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the covenants and promises
of the parties hereto, the receipt and sufficiency of which are acknowledged
by Xxxxxxxxx and Mortgagee, the parties covenant and agree as follows:
1. Xxxxxxxxx represents and warrants that Xxxxxxxxx was and is the
owner and holder of the real estate encumbered by the Jefferson County
Collateral Documents and by the Xxxxx County Collateral Documents, and hereby
acknowledges that there are no defenses or offsets to the Loan or the Loan
Documents evidencing, securing and otherwise relating to the Loan.
2. Mortgagor represents and warrants to Mortgagee that the Mortgagor is
not in default on the Loan or under the Loan Documents, nor does any
circumstance exist that with the giving of notice, the passage of time or both
would constitute such a default.
3. Mortgagor hereby ratifies and reaffirms its liability for payment
of the Loan and its obligation to pay and perform all sums and obligations
owing the Mortgagee under the Loan Agreement, the Note and the other Loan
Documents.
4. The final maturity date of the Loan and the Note is hereby extended
to December 31, 2000, and the Loan Documents shall be and hereby are modified
to reflect a maturity date of December 31, 2000.
5. Effective July 10, 1997 interest shall accrue on the principal
advanced and outstanding on the Loan and the Note at an annual rate equal to
one-quarter of one percent (1/4%) above the Mortgagee's prime rate of
interest (as "prime rate" is defined in and calculated under the Note) rather
than at one-half of one percent (1/2%) above said prime rate, and the Note
shall be and hereby is modified accordingly. Xxxxxxxxx will continue to make
principal payments on the Loan and Note at the times and in the amount
specified in the Note.
6. For and in consideration of the aforesaid extension of maturity and
adjustment of interest rate, the Mortgagor agrees to continue to pay the
principal of and interest on the Loan and the Note as specified in the Note
as amended hereby, and to otherwise continue to comply with all provisions of
the Loan Documents.
7. THE TOTAL PRINCIPAL AMOUNT EVIDENCED BY THE NOTE AND SECURED BY THE
JEFFERSON COUNTY COLLATERAL DOCUMENTS AND BY THE XXXXX COUNTY COLLATERAL
DOCUMENTS IS A PRINCIPAL AMOUNT NOT TO EXCEED FIVE MILLION AND NO/100 DOLLARS
($5,000,000) OUTSTANDING AT ANY TIME. THE FINAL PAYMENT OF INTEREST ON THE
LOAN AND NOTE, TOGETHER WITH ALL PRINCIPAL OF THE LOAN AND NOTE NOT
THERETOFORE PAID, ARE DUE MORTGAGEE FROM MORTGAGOR NOT LATER THAN DECEMBER
31, 2000.
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8. To the extent the terms and provisions of this Agreement conflict
with the terms and provisions of the Loan Documents, the terms and provisions
of this Agreement shall govern. As so modified, all the Loan Documents are
ratified and readopted by Xxxxxxxxx and by Mortgagee in all respects.
9. This Agreement shall be binding upon and shall inure to the
benefit of the respective successors, representatives and assigns of the
parties hereto. In the event of the invalidity or unenforceability of any
portion of this Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining portions of this
Agreement.
10. This Agreement shall be governed by and shall be interpreted in
accordance with the laws of the Commonwealth of Kentucky.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
original counterparts (each of which shall constitute one and the same
document) by the parties by their respective duly authorized representatives
as of the day, month and year hereinbefore written.
MORTGAGOR:
TUMBLEWEED, LLC
(A Kentucky limited liability company)
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
its manager
MORTGAGEE:
NATIONAL CITY BANK OF KENTUCKY
(a national banking association)
By: /s/ Xxx Xxxx
--------------------------
its senior vice president
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STATE OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
I, a Notary Public in and for the State and County aforesaid, do hereby
certify that on this date _______________________, duly authorized manager of
TUMBLEWEED, LLC, appeared before me and before me acknowledged that he
executed and delivered the foregoing instrument as his free and voluntary act
and deed, and as the free and voluntary act and deed of TUMBLEWEED, LLC, a
Kentucky limited liability company.
Witness my hand this ____ day of ____________, 1997.
My Commission Expires: _____________________________
_______________________________________
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
STATE OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
I, a Notary Public in and for the State and County aforesaid, do hereby
certify that on this date Xxx Xxxx, duly authorized manager of NATIONAL CITY
BANK OF KENTUCKY, appeared before me and before me acknowledged that he
executed and delivered the foregoing instrument as his free and voluntary act
and deed, and as the free and voluntary act and deed of NATIONAL CITY BANK OF
KENTUCKY, a national banking association.
Witness my hand this 27th day of June, 1997.
My Commission Expires: Notary Public, State at Large, KY
My commission expires Aug. 5th, 1998
------------------------------------
/s/ Xxxxxx X. Xxxxx
-----------------------------
NOTARY PUBLIC
KENTUCKY STATE AT LARGE
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