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EXHIBIT 6.5
TERM PROMISSORY NOTE
(FIXED RATE)
$3,765,000.00 Houston, Texas August 10, 1998
FOR VALUE RECEIVED, the undersigned, XXXXXXX X. XxXXXXX, individually
and JOYVER INVESTMENTS, L.L.C., a Texas limited liability company ("Borrowers"),
hereby promise to pay to the order of COMPASS BANK, a Texas state chartered
banking association ("Bank"; Bank and any subsequent holder hereof being
hereinafter referred to as "Holder"), without grace at its office at 00 Xxxxxxxx
Xxxxx, X.X. Box 4444, Houston, Texas 77210-4444, or such other place as Holder
may direct, in lawful money of the United States of America, with interest, the
principal amount of THREE MILLION SEVEN HUNDRED SIXTY-FIVE THOUSAND AND NO/100
DOLLARS ($3,765,000.00), together with interest accruing thereon in accordance
with the terms hereof. Payment of principal and interest shall be in accordance
with the following provisions:
1. Payments. Borrowers promise to pay this Term Promissory Note (this
"Term Note") in one hundred eighty (180) installments, the first one hundred
seventy-nine (179) of which being in the amount of Twenty Thousand Nine Hundred
Sixteen and 67/100 Dollars ($20,916.67), plus accrued interest each, and the one
hundred eightieth (180th) and final installment being in the amount of the
balance of principal and accrued interest then due hereon. The first such
installment is due and payable September 10, 1998, and the remaining
installments are due and payable in consecutive order on the same day of each
and every succeeding calendar month thereafter until August 10, 2013.
Notwithstanding the foregoing terms and provisions of this Term Note,
Borrowers agree that Bank shall have the right, at its option, to be exercised
from time to time in its sole and absolute discretion at any time after the five
(5) year anniversary date of this Term Note, to either (i) demand and require
payment in full of the then unpaid principal balance of this Term Note together
with all accrued unpaid interest thereon, or (i) modify and alter the terms and
provisions of this Term Note, including, but not limited to increasing the
Applicable Rate, modifying the prepayment penalty hereunder or otherwise
modifying the terms of payment of this Term Note, all as Bank shall in exercise
of its sole and absolute discretion, deem to be proper or necessary; provided
however, in no event shall the Applicable Rate be increased to such a rate as
would cause interest payment hereunder together with any and all other amounts
paid by Bank under the terms hereof of any documents relating hereto which
constitute interest, to exceed the Maximum Rate of interest allowed by
applicable law. In the event Bank elects to exercise its rights under (i) or
(ii) above, then it shall so notify Borrowers in writing at least thirty (30)
days prior to the effect date of the final maturity hereof or of any such
changes or modifications to the terms and provisions hereof
Should any payment become due and payable on any day other than a
Business Day (as such term is hereinafter defined), the date of such payment
shall be extended to the next succeeding Business
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Day, and, in the case of a payment of principal or past due interest or any
installment of either thereof, interest shall accrue and be payable thereon for
the period of such extension at the applicable rate or rates specified herein.
The term "BUSINESS DAY" shall mean a day (other than Saturday or Sunday) when
Bank is open for conducting all of its customary commercial banking activities.
2. Interest. Except for purposes of computing the Maximum Rate (as.
defined below), interest shall be calculated on the basis of a 360-day year
applied to the actual number of days upon which principal is outstanding by
multiplying the principal amount outstanding hereunder by the applicable per
annum rate, multiplying the product thereof by the actual number of days
elapsed, and dividing the product so obtained by three hundred sixty (360).
Except as hereinabove expressly provided, Borrowers shall pay interest on the
principal amount outstanding from time to time at a per annum interest rate
equal to the lesser of (i) eight and one-half percent (8.5%) and (ii) the
Maximum Rate (the "APPLICABLE RATE"). Following the occurrence and during the
continuance of an Event of Default (as hereinafter defined), or after maturity,
all amounts outstanding hereunder, to the extent permitted by applicable law,
shall, at the option of Bank, bear interest at the Default Rate. The term
"DEFAULT RATE" shall mean a per annum rate equal to the Applicable Rate plus 5%
but in no event to exceed the Maximum Rate.
3. Security Instruments. The indebtedness evidenced hereby is secured
by, among other things, the Deed of Trust with Security Agreement and Assignment
of Rents and Leases executed and delivered to the Lender by Xxxxxxxx on even
date herewith and the liens and security interests granted thereby and in the
Security Instruments (the "SECURITY INSTRUMENTS") (as defined in the Loan
Agreement dated March ___, 1998, as amended by that certain First Amendment to
Loan Agreement of even date herewith, between Total Building Systems, Inc. and
Bank (the "LOAN AGREEMENT"). This Term Note is included in the indebtedness
referred to in the Security Instruments and is entitled to the benefits of those
documents, but neither this reference to those documents nor any provisions
thereof shall affect or impair the absolute and unconditional obligation of
Borrowers to pay the principal of and interest on this Term Note when due.
4. Events of Default. In case of the happening of any one or more of
the following events (each an "EVENT OF DEFAULT"):
(a) The failure to pay the principal of or interest on this Term
Note or the Revolving Note or on any of the Obligations as such terms are
defined in the Loan Agreement, as and when due and payable;
(b) Failure by Borrowers to pay any other loan obligation to Holder;
(c) Failure by Borrowers to observe any covenant or obligation
contained in the Security Instruments or in any other instrument executed
in connection with or securing this Term Note or the Revolving Note or on
any of the Obligations as such terms are defined in the Loan Agreement, as
and when due and payable; or
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(d) The occurrence of an Event of Default under and as
defined in the Loan Agreement or of any other event of default
specified in any of the other Security Instruments or in any other
document, agreement or instrument now or hereafter executed by
Borrowers or in connection with or securing this Term Note or the
Revolving Note or on any of the Obligations as such terms are defined
in the Loan Agreement, as and when due and payable,
then or at any time thereafter during the continuance of any such event, Bank,
at its option and without any notice of intent to accelerate, notice of
acceleration, or other notice or demand, may declare the entire principal amount
of this Term Note then outstanding and the interest accrued thereon immediately
due and payable, and the said entire principal, interest and all other amounts
owing thereunder shall thereupon become immediately due and payable without
presentment, demand, protest, notice of protest or other notice of default or
dishonor of any kind, all of which are hereby expressly waived by Borrowers.
Reference is made to the Loan Agreement for a statement of the terms and
conditions under which the term loan represented by this Term Note is being made
available to Borrowers and of additional terms and conditions under which this
Term Note may be accelerated.
5. Waivers. Borrowers and each guarantor, accommodation party, surety,
endorser or other person or entity liable for the payment or collection of this
Term Note expressly waive demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, notice of intent to
accelerate, notice of acceleration, all other notices, bringing of suit and
diligence in taking any action to collect amounts called for hereunder or
enforcing any security or guaranty, and agree to any substitution, exchange or
release of any security, with or without consideration, now or hereafter given
for this Term Note or the release of any party primarily or secondarily liable
hereon. Borrowers and each guarantor, accommodation party, surety, endorser or
any other person or entity liable for the payment or collection of this Term
Note further agree that it will not be necessary for the owner or Holder hereof,
in order to enforce payment of this Term Note, to first institute or exhaust its
remedies against any maker or other party liable herefor or to enforce its
rights against any security or guaranty for this Term Note, and hereby consent
to the renewal and extension from time to time of this Term Note, and any other
indulgence with respect hereto without notice of any such renewal, extension or
indulgence.
6. Attorneys' Fees and Costs. Borrowers agree to pay reasonable
attorneys' fees and costs incurred by Xxxxxx in collecting or attempting to
collect this Term Note, whether by suit or otherwise.
7. Limitations on Interest (a) It is the intention of Bank and
Borrowers to conform strictly to any applicable usury laws. Accordingly, if the
transactions contemplated hereby would be usurious under any applicable law,
then, in that event, notwithstanding anything to the contrary in this Term Note,
the Loan Agreement, the Security Instruments or any other agreement entered into
in connection with or as security for or guaranteeing the Loan Agreement or this
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Term Note, it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received by Bank under this Term Note, the Loan Agreement,
the Security Instruments or under any other agreement entered into in connection
with or as security for or guaranteeing the Loan Agreement or this Term Note
shall under no circumstances exceed the Maximum Rate, and any excess shall be
canceled automatically and, if theretofore paid, shall, at the option of Bank,
be credited by Bank on the principal amount of any indebtedness owed to Bank by
Borrowers or refunded by Bank to Borrowers, and (ii) in the event that the
maturity of this Term Note is accelerated or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to Bank may never include more than the Maximum Rate and excess
interest, if any, provided for in this Term Note, the Loan Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall, at the option of Bank, be credited
by Bank on the principal amount of any indebtedness owed to Bank by Borrowers or
refunded by Bank to Borrowers.
(b) Notwithstanding anything herein to the contrary, in no event will
interest payable to Bank exceed the maximum amount permitted by the law
applicable to Bank (after taking into account all charges payable to Bank which
constitute interest under such applicable law.), but if any amount referred to
in this Term Note which would be payable to Bank but for the applicability of
usury or other laws limiting the consideration payable to Bank is not paid to
Bank as a result of the applicability of such laws, then interest on the
outstanding principal balance of this Term Note payable to Bank shall, to the
extent permitted by the law, accrue at the maximum rate of interest permitted by
applicable law (after taking into account all charges payable to Bank which
constitute interest under applicable law) until the total amount received by
Bank equals the amount it would have received had no such laws been applicable.
(c) As used herein, "MAXIMUM RATE" means mean the maximum nonusurious
rate of interest per annum permitted by whichever of applicable United States
federal law or Texas law permits the higher interest rate, including to the
extent permitted by applicable law, any amendments thereof hereafter or any new
law hereafter coming into effect to the extent a higher Maximum Lawful Rate is
permitted thereby. For purposes of determining the Maximum Lawful Rate under the
applicable Laws of the State of Texas, the applicable rate ceiling shall be the
"weekly ceiling" as defined in and computed in accordance with Chapter 1 D of
Subtitle 1 of Title 79 of the Texas Revised Civil Statutes, as hereafter amended
or supplemented. The Maximum Lawful Rate shall be applied by taking into account
all amounts characterized by applicable law as interest on the debt evidenced by
the Note, so that the aggregate of all interest does not exceed the maximum
nonusurious amount permitted by applicable law.
8. Applicable Law; Assigns. This Note shall be governed by, and
construed in accordance with, the laws of the State of Texas (except that
Chapter 15 of Subtitle 3, Title 79 of the Texas Revised Civil Statutes, as
amended, which regulates certain revolving credit loan accounts and revolving
triparty accounts, shall not apply to this Term Note or any transaction
contemplated hereby), subject, however, to the effect of applicable federal law.
Unless changed in
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accordance with law, the applicable rate under Texas law shall be the indicated
(weekly) rate ceiling from time to time in effect as provided in Chapter 1D of
Subtitle 1 of Title 79 of the Texas Revised Civil Statutes, as amended. As used
herein, the terms "Borrowers", "Bank" and "Holder" shall be deemed to include
their respective successors, legal representatives, and assigns, whether by
voluntary action of the parties or by operation of law.
9. Right to Prepay. Subject to a prepayment penalty of one percent (1%)
of the then outstanding principal and accrued interest if prepaid within three
(3) years after the date hereof, Borrowers shall have the right to prepay, at
any time and from time to time prior to maturity all or any part of the unpaid
principal balance of this Term Note and/or all or any part of the unpaid
interest accrued to the date of such prepayment, provided that any such
principal thus paid is accompanied by accrued interest on such principal.
IN WITNESS WHEREOF, Borrowers have caused this Term Note to be duly
executed and delivered as of the date first above written.
By:
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Xxxxxxx X. XxXxxxx
Individually
JOYVER INVESTMENTS, L.L.C.,
A Texas limited liability company
By: Xxxxxxx X. XxXxxxx
Member
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