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Exhibit 10.4
SECOND AMENDED AND RESTATED MASTER BUSINESS LOAN NOTE
Due: May 31, 2003 $16,800,000
No.______________ Date: May 29, 1998
Promise to Pay: On or before May 31, 2003 (or such later date as may be provided
in the Loan Agreement (defined below)), for value received, the undersigned,
Rocky Shoes & Boots, Inc., an Ohio corporation, Five Star Enterprises Ltd., a
Cayman Islands corporation, and Lifestyle Footwear, Inc., a Delaware corporation
(collectively referred to as the "Borrower"), promise to pay, jointly and
severally, to The Huntington National Bank, a national banking association (the
"Bank"), or order, at the office of the Agent (defined below) located at 000
Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000-0000, or at such other address as the
Agent may give notice of to the Borrower, the sum of $16,800,000 or such lesser
sum as is indicated on the Bank's records, plus interest on the unpaid principal
balance from time to time outstanding hereunder until paid in full at the
rate(s) of interest determined in accordance with Loan Agreement referred to
herein.
In no event shall the interest rate exceed the maximum rate allowed by law; any
interest payment which would for any reason be deemed unlawful under applicable
law shall be applied to principal.
Interest will be computed on the unpaid principal balance from the date of each
borrowing until paid.
Such principal and interest shall be due and payable on the dates set forth in
the Loan Agreement.
The Borrower may only prepay this Note in accordance with the terms of the Loan
Agreement.
The Bank shall have the right to assess a late payment processing fee in the
amount of the greater of $50.00 or 5% of the scheduled payment in the event of a
default in payment that remains uncured for a period of five (5) days.
Master Note: The Bank has authorized a committed credit facility to the Borrower
in a principal amount not to exceed the face amount of this Note. The credit
facility is in the form of loans made from time to time by the Bank to the
Borrower. This Note evidences the Borrower's obligation to repay those loans.
The aggregate principal amount of debt evidenced by this Note shall be the
amount reflected from time to time in the records of the Bank, but shall not
exceed the face amount of this Note. This Note amends and restates in its
entirety the Amended and Restated Master Business Loan Note, dated April 18,
1997, in the original principal amount of $16,800,000 executed by the Borrower
and payable to the order of the Bank, which in turn had amended and restated in
its entirety the Master Business Loan Note, dated January 28, 1997, in the
original principal amount of $14,000,000 executed by the Borrower and payable to
the order
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of the Bank, and is the "HNB Note" identified in the Loan Agreement. This Note
evidences the continuing indebtedness under the Loan Agreement and such HNB Note
and is not to be construed as a satisfaction or refinancing of such
indebtedness.
Credit Agreement: This Note evidences a certain debt under the terms of a
Revolving Credit Loan Agreement between the Bank, the Borrower, Bank One, NA
(formerly known as Bank One, Columbus, NA) and Bank One, NA (formerly known as
Bank One, Columbus, NA), as Agent (the "Agent"), dated as of January 28, 1997,
as amended by a (i) Term Loan Agreement and First Amendment to Revolving Credit
Loan Agreement, dated as of April 18, 1997, and (ii) Second Amendment to
Revolving Credit Loan Agreement, dated as of May 29, 1998 (such agreement, as so
amended and as the same may be further amended, modified, supplemented, restated
or replaced from time to time, the "Loan Agreement"), Reference is made to the
Loan Agreement for additional provisions relating to the debt evidenced by this
Note.
Security: To secure the payment of this Note and other present and future
liabilities of the Borrower to the Bank, the Borrower has pledged and granted to
the Agent, for the ratable benefit of the Bank and Bank One, NA (formerly known
as Bank One, Columbus, NA), among other things, a continuing security interest
in certain assets of the Borrower pursuant to a Continuing Security Agreement
dated as of January 28, 1997, as the same may be amended, modified,
supplemented, restated or replaced from time to time. The Bank shall have the
right at any time to apply its own debt or liability to the Borrower or to any
other party liable on this Note in whole or partial payment of this Note or
other present or future liabilities, without any requirement for mutual
maturity.
Related Documents: The terms of any other documents executed as part of the loan
evidenced by this Note are incorporated herein by reference.
Representations by Borrower: Each Borrower represents that it is a corporation
duly organized and existing under the laws of its jurisdiction of formation, and
that the execution and delivery of this Note and the performance of the
obligations it imposes are within its corporate powers, have been duly
authorized by all necessary action of its directors and do not contravene the
terms of its articles (certificate) of incorporation and code of regulations
(by-laws). Each Borrower represents that the execution and delivery of this Note
and the performance of the obligations it imposes do not violate any law, do not
conflict with any agreement by which it is bound, do not require the consent or
approval of any governmental authority or any third party, and that this Note is
a valid and binding agreement, enforceable according to its terms, except as
enforcement of such terms may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or similar laws affecting
creditors' rights generally, provided, however, that each Borrower represents
and warrants that no such limitations currently exist as of the date of this
Note, or (ii) equitable principles which may limit the availability of the
remedy of specific performance or other equitable remedies. Each Borrower also
represents that this Note evidences a business loan exempt from the Federal
Truth In Lending Act (15 USC Section 1601, et seq.), and the Board of Governors
of the Federal Reserve System's Regulation Z (12 CFR Section 226, et seq.).
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Additional Terms and Conditions
Events of Default: If any of the following events (each an "Event of Default")
occurs:
1. Any Borrower fails to pay when due any amount payable under this
Note, and such failure continues for more than five (5) days after such payment
became due;
2. Any Borrower (a) fails to observe or perform any other term of this
Note, and such failure to observe or perform continues for more than fifteen
(15) days after such failure shall first become known to any officer of any
Borrower, provided, however, that such fifteen (15) day cure period shall not
apply to (i) any such failure which in the Bank's good faith opinion is
incapable of cure; and (ii) any such failure which has previously occurred; (b)
makes any materially incorrect or misleading representation, warranty, or
certificate to the Agent or the Bank; (c) makes any materially incorrect or
misleading representation in any financial statement or other information
delivered to the Agent or the Bank; or (d) defaults under the terms of any
agreement or instrument relating to any debt for borrowed money (other than the
debt evidenced by this Note) such that the creditor declares the debt due before
its maturity;
3. Any other default occurs under the terms of any loan agreement,
mortgage, security agreement, or any other document, including the Loan
Agreement, executed as part of the loan evidenced by this Note or any other
obligation or indebtedness of any Borrower owed to the Bank at any time, and
such default continues for more than fifteen (15) days after such default shall
first become known to any officer of any Borrower, provided, however that such
fifteen (15) day cure period shall not apply to (a) any default which in the
Bank's good faith opinion is incapable of cure; (b) any default which has
previously occurred; (c) any failure to maintain and keep in effect any
insurance required under the Loan Agreement; or (d) any failure to provide to
the Bank the financial statements, documents and information required to be
provided pursuant to Sections 7.1 (a), (b), and (c) of the Loan Agreement;
4. A "reportable event" (as defined in the Employee Retirement Income
Security Act of 1974, as amended) occurs that would permit the Pension Benefit
Guaranty Corporation to terminate any employee benefit plan of any Borrower or
any affiliate of any Borrower, or the occurrence of an "ERISA Event" (as defined
in the Loan Agreement) which shall not have been cured within thirty (30) days
after any officer of any Borrower has knowledge thereof;
5. Any Borrower becomes insolvent or unable to pay its debts as they
become due;
6. Any Borrower (a) makes an assignment for the benefit of creditors;
(b) consents to the appointment of a custodian, receiver, or trustee for itself
or for a substantial part of its assets; or (c) commences or consents to any
proceeding under any bankruptcy, reorganization, liquidation, insolvency or
similar laws of any jurisdiction;
7. A custodian, receiver or trustee is appointed for any Borrower or
for a substantial part of its assets without its consent and is not removed
within sixty (60) days after such appointment,
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8. Proceedings are commenced against any Borrower under any
bankruptcy, reorganization, liquidation, or similar laws of any jurisdiction,
and such proceedings remain undismissed for sixty (60) days after commencement;
9. Any judgment is entered against any Borrower, or any attachment,
levy or garnishment is issued against any property of any Borrower, in excess of
$250,000.00, and which judgment, attachment, levy or garnishment has not been
discharged or stayed within thirty (30) days after issuance, or for such longer
period as the Bank may agree to in writing;
10. Any Borrower, without the Bank's written consent, (a) is dissolved,
(b) merges or consolidates with any third party, (c) sells a material part of
its assets or business outside the ordinary course of its business, or (d)
agrees to do any of the foregoing;
11. There is a substantial change (other than with respect to changes
in the normal course of any Borrower's business, such as seasonal fluctuations)
in the existing or prospective financial condition of any Borrower which the
Bank in good faith determines to be materially adverse; or
12. The Bank in good xxxxx xxxxx itself insecure:
then this Note shall become due immediately, without notice, at the Bank's
option.
Remedies: If this Note is not paid at maturity, whether by demand, acceleration
or otherwise, the Agent and the Bank shall have all of the rights and remedies
provided by any law or agreement. Any requirement of reasonable notice shall be
met if the Agent or the Bank sends the notice to the Borrower at least seven (7)
days prior to the date of public or private sale, disposition or other event
giving rise to the required notice. Upon default, the Agent and the Bank are
authorized to cause all or any part of any collateral securing this Note to be
transferred to or registered in its (their) name(s) or in the name of any other
person, firm or corporation, with or without designation of the capacity of such
nominee. The Borrower shall be liable for any deficiency remaining after
disposition of any collateral securing this Note. The Borrower is liable to the
Agent and the Bank for all reasonable costs and expenses of every kind incurred
in the making or collection of this Note, including, without limitation,
reasonable attorneys' fees and court costs. These costs and expenses shall
include, without limitation, any reasonable costs or expenses incurred by the
Agent and the Bank in any bankruptcy, reorganization, insolvency or other
similar proceeding.
Waiver: Each endorser and any other party liable on this Note severally waives
demand, presentment, notice of dishonor and protest, and consents to any
extension or postponement of time of its payment without limit as to the number
or period, to any substitution, exchange or release of all or part of the
collateral securing this Note, to the addition of any party, and to the release
or discharge of, or suspension of any rights and remedies against, any person
who may be liable for the payment of this Note. No delay on the part of the Bank
in the exercise of any right or remedy shall operate as a waiver. No single or
partial exercise by the Bank of any right or remedy shall preclude any other
future exercise of it or the exercise of any other right or remedy.
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No waiver or indulgence by the Bank of any default shall be effective unless in
writing and signed by the Bank, nor shall a waiver on one occasion be construed
as a bar to or waiver of that right on any future occasion.
Miscellaneous: Each Borrower shall be jointly and severally liable under this
Note. This Note shall be binding on each Borrower and its successors, and shall
inure to the benefit of the Bank, its successors and assigns. Any reference to
the Bank shall include any holder of this Note. This Note is delivered in the
State of Ohio and governed by Ohio law. Section headings are for convenience of
reference only and shall not affect the interpretation of this Note. This Note
and all related loan documents embody the entire agreement between the Borrower
and the Bank regarding the terms of the loan evidenced by this Note, and
supersede all oral statements and prior writings relating to that loan.
WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT AND THE BANK, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE, THE LOAN AGREEMENT, OR ANY
RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN), OR ACTIONS OF ANY OF THEM. THIS WAIVER SHALL NOT IN ANY WAY AFFECT THE
BANKS OR THE AGENT'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF
JUDGMENT OR COGNOVIT PROVISION CONTAINED HEREIN, IN THE LOAN AGREEMENT OR ANY
RELATED INSTRUMENT OR AGREEMENT. NO BORROWER NOR THE BANK AND THE AGENT SHALL
SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED
IN ANY RESPECT OR RELINQUISHED BY THE BORROWER, THE AGENT OR THE BANK EXCEPT BY
A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
Each Borrower irrevocably authorizes any attorney-at-law, including any
attorney-at-law employed or retained by the Bank or the Agent, to appear for the
Borrower in any court of record in Franklin County, Ohio (which the Borrower
acknowledges to be the place where this Note was made) or any other state or
jurisdiction wherein the Borrower may then reside, to (i) waive the issuing and
service of process, (ii) confess judgment against the Borrower in favor of the
holder of this Note for the amount then due, together with costs of suit, (iii)
release all errors, and (iv) waive all rights of appeal. Each Borrower consents
to the jurisdiction and venue of that court. Each Borrower waives any conflict
of interest that any attorney-at-law employed or retained by the Bank or the
Agent may have in confessing judgment under this Note and consents to payment of
a legal fee to any attorney-at-law confessing judgment under the Note. After
judgment is entered against one or more of the Borrowers, the power conferred
may be exercised as to one or more of the other Borrowers.
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The undersigned have executed this Note in Columbus, Ohio, as of the date and
year first above written.
Rocky Shoes & Boots, Inc.,
an Ohio corporation
By: /s/ XXXXX XXXXXXXXX
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Title: Exec. V.P.
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WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
Five Star Enterprises Ltd., Lifestyle Footwear, Inc.,
a Cayman Islands corporation a Delaware corporation
By: /s/ XXXXX XXXXXXXXX By: /s/ XXXXX XXXXXXXXX
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Title: Exec. V.P. Title: Exec. V.P.
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