AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
THIS AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT (as amended, restated and
supplemented from time to time, this "Agreement") by and between HANDY HARDWARE
WHOLESALE, INC. ("Borrower") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
("Bank") is dated as of April 30, 1996 (the "Effective Date").
PRELIMINARY STATEMENT
The Bank and the Borrower have entered into a Revolving Credit Loan Agreement
dated as of April 30, 1993 (the "Credit Agreement"). The Bank and the Borrower
have agreed to amend and restate and replace the Credit Agreement to the extent
set forth herein, in order to among other things, renew, modify, extend and
increase a revolving line
of credit to Borrower.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the Bank and the Borrower hereby agree to amend, restate and
replace the Credit Agreement to read and be as follows:
1. THE LOANS.
REVOLVING CREDIT NOTE 1.1
Subject to the terms and conditions hereof, Bank agrees to make loans ("Loan" or
"Loans") to Borrower from time to time before the Termination Date, not to
exceed at any one time outstanding $7,500,000.00 (the "Commitment"). Borrower
has the right to borrow, repay and reborrow. Each Loan must be at least the
minimum amount required in the Note or the balance of the Commitment, whichever
is less and each repayment must be at least the amount required in the Note or
the principal balance of the Note, whichever is less. The Loans may only be used
for working capital for Borrower and other financing needs of Borrower. Chapter
15 of the Texas Credit Code will not apply to this Agreement, the Note or any
Loan. The Loans will be evidenced by, and will bear interest and be payable as
provided in, the promissory note of Borrower dated the Effective Date (together
with any and all renewals, extensions, modifications and replacements thereof
and substitutions therefor, the "Note") which is given in renewal, extension,
modification and increase of that certain promissory note dated April 30, 1995,
in the original principal amount of $2,000,000.00 (including all prior notes of
which said note represents a renewal, extension, modification, increase,
substitution, rearrangement or replacement thereof, the "Renewed Note"). The
parties hereto agree that there is as of the Effective Date an outstanding
principal balance of $0.00 under the Note leaving a balance of $7,500,000.00
under the Commitment available for Loans on the Effective Date, subject to the
terms and conditions of this Agreement. The parties hereto further agree that
the first Loan under the Note shall be in the amount of $2,449,898.07 and shall
be for the purpose of paying off the principal of that certain term loan
evidenced by a promissory note dated March 30, 1993 in the original principal
amount of $3,670,868.49. "Termination Date" means the earlier of: (a) April 30,
1998; or (b) the date specified by Bank pursuant to Section 6.1 hereof.
COMMITMENT FEE 1.2
The Commitment is not subject to a commitment fee.
PAST DUE AMOUNTS 1.3
Each amount due to Bank in connection with the Loan Documents will bear interest
from its due date until paid at the rate set forth in the Note.
2. CONDITIONS PRECEDENT.
ALL LOANS 2.1
Bank is not obligated to make any Loan unless: (a) Bank has received the
following, duly executed and in Proper Form: (1) a Notice for Request for
Borrowing, substantially in the form of Exhibit A, not later than the times
required in the Note; provided however, Bank may accept and act upon verbal
advance requests received from Borrower's authorized representative reasonably
believed by Bank to be that person authorized to make such requests; and (2)
such other documents as Bank may reasonably require pursuant to the loan
documents; (b) no Event of Default exists; and (c) the making of the Loan is not
prohibited by, or subjects Bank to any penalty or onerous condition under any
Legal Requirement of the State of Texas or the United States of America. Bank
agrees to attempt to provide immediate notice to Borrower of any such legal
prohibition once it is known by Bank.
FIRST LOAN 2.2
In addition to the matters described in the preceding section, Bank will not be
obligated to make the first Loan unless Bank has received all of the Loan
Documents specified on Annex I in Proper Form.
3. REPRESENTATIONS AND WARRANTIES.
To induce Bank to enter into this Agreement and to make the Loans, Borrower
represents and warrants as of the Effective Date and the date of each request
for a Loan that each of the following statements is and shall remain true and
correct throughout the term of this Agreement:
ORGANIZATION AND STATUS 3.1
Borrower is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization; has all power and authority to conduct
its business as presently conducted, and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business conducted
by it makes such qualification desirable. Borrower has no Subsidiary.
FINANCIAL STATEMENTS 3.2
All financial statements delivered to Bank are complete and correct and fairly
present, in accordance with generally accepted accounting principles,
consistently applied ("GAAP"), the financial condition and the results of
operations of Borrower as at the dates and for the periods indicated. No
material adverse change has occurred in the assets, liabilities, financial
condition, business or affairs of Borrower since the dates of such financial
statements. Borrower is not subject to any instrument or agreement materially
and adversely affecting its financial condition, business or affairs.
ENFORCEABILITY 3.3
The Loan Documents are legal, valid and binding obligations of the Parties
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency and other similar laws affecting creditors' rights
generally. The execution, delivery and performance of the Loan Documents have
all been duly authorized by all necessary action; are within the power and
authority of the Parties; do not and will not violate any Legal Requirement, the
Organizational Documents of the Parties or any agreement or instrument binding
or affecting the Parties or any of their respective Property.
COMPLIANCE 3.4
Borrower has filed all applicable tax returns and paid all taxes shown thereon
to be due, except those for which extensions have been obtained and those which
are being contested in good faith and for which adequate reserves have been
established. Borrower is in substantial compliance with all applicable Legal
Requirements and manages and operates (and will continue to manage and operate)
its business in accordance with good industry practices (i.e. in a manner
similar to that followed by prudent business persons in the same or similar
industry). Borrower is not in material default in the payment of any other
indebtedness or under any agreement to which it is a party. The Parties have
obtained all consents of and registered with all Governmental Authorities or
other Persons required to execute, deliver and perform the Loan Documents.
LITIGATION 3.5
Except as previously disclosed to Bank in writing, there is no litigation or
administrative proceeding pending or, to the knowledge of Borrower, threatened
against, nor any outstanding judgment, order or decree materially affecting
Borrower before or by any Governmental Authority.
TITLE AND RIGHTS 3.6
Borrower has good and marketable title to its Property, free and clear of any
Lien except for Liens permitted by this Agreement and the other Loan Documents.
Borrower possesses all permits, licenses, patents, trademarks and copyrights
required to conduct its business. All easements, rights-of-way and other rights
necessary to maintain and operate Borrower's Property have been obtained and are
in full force and effect.
REGULATION U; BUSINESS PURPOSE 3.7
None of the proceeds of any Loan will be used to purchase or carry, directly or
indirectly, any margin stock or for any other purpose which would make this
credit a "purpose credit" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System. All Loans will be used for business,
commercial, investment or other similar purpose and not primarily for personal,
family, or household use or primarily for agricultural purposes as such terms
are used in Chapter One of the Texas Credit Code.
ENVIRONMENT 3.8
Borrower has not generated, handled, used, stored or disposed of any hazardous
or toxic waste or substance, on or off its premises (whether or not owned by
it), other than in accordance with applicable Legal Requirements. Except as
previously disclosed in writing to Bank, Borrower has no material contingent
liability for non-compliance with environmental or hazardous waste laws.
Borrower has not received any notice that it or any of its Property or
operations does not comply with, or that any Governmental Authority is
investigating its compliance with, any environmental or hazardous waste laws.
INVESTMENT COMPANY ACT/PUBLIC UTILITY HOLDING COMPANY ACT 3.9
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940 or a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
STATEMENTS BY OTHERS 3.10
All statements made by or on behalf of Borrower in connection with any Loan
Document constitute the representations and warranties of Borrower hereunder.
4. AFFIRMATIVE COVENANTS.
Borrower agrees to do, and if necessary cause to be done each of the following:
CORPORATE FUNDAMENTALS 4.1
a) Pay when due all taxes and governmental charges of every kind upon it or
against its income, profits or Property, unless and only to the extent that the
same shall be contested in good faith and adequate reserves have been
established therefor; (b) Renew and keep in full force and effect all of its
licenses, permits and franchises; (c) Do all things necessary to preserve its
corporate existence and its qualifications and rights in all jurisdictions where
such qualification is necessary or desirable; (d) substantially comply with all
applicable Legal Requirements; and (e) Protect, maintain and keep in good repair
its Property and make all replacements and additions to its Property as may be
reasonably necessary to conduct its business properly and efficiently.
INSURANCE 4.2
Maintain insurance with such reputable financially sound insurers, on such of
its Property and personnel, in such amounts and against such risks as is
customary with similar Persons or as may be reasonably required by the Bank, and
furnish the Bank satisfactory evidence thereof promptly upon request. Borrower
must provide Bank with copies of the policies of insurance and a certificate of
the insurer that the insurance required by this section may not be canceled,
reduced or affected in any manner without 30 days' prior written notice to Bank.
FINANCIAL INFORMATION 4.3
Furnish to Bank in Proper Form (i) the financial statements prepared in
conformity with GAAP on consolidated and consolidating bases and the other
information described in, and within the times required by, Exhibit B, Reporting
Requirements, Financial Covenants and Compliance Certificate attached hereto and
incorporated herein by reference; (ii) within the time required by Exhibit B,
Exhibit B signed and certified by the Borrower; (iii) promptly after such
request is submitted to the appropriate Governmental Authority, any request for
waiver of funding standards or extension of amortization periods with respect to
any employee benefit plan; (iv) copies of special audits, studies, reports and
analyses prepared for the management of Borrower by outside parties and (v) such
other information relating to the financial condition and affairs of Borrower
and as Bank may reasonably request from time to time.
MATTERS REQUIRING NOTICE 4.4
Notify Bank immediately, upon acquiring knowledge of (a) the institution or
threatened institution of any lawsuit or administrative proceeding which, if
adversely determined, might adversely affect Borrower; (b) any material adverse
change in the assets, liabilities, financial condition, business or affairs of
Borrower; (c) any Event of Default; or (d) any reportable event or any
prohibited transaction (as defined by ERISA) in connection with any employee
benefit plan.
INSPECTION 4.5
Permit the Bank and its affiliates to inspect and photograph Borrower's
Property, to examine and copy its files, books and records, and to discuss its
affairs with its officers and accountants, at such times and intervals and to
such extent as Bank reasonably desires; provided that Bank shall keep
confidential (except as Bank may be required to disclose pursuant to the
requirement of a governmental agency, operation of law or pursuant to subpoena
or other legal process or to Bank's examiners or its affiliates) all information
marked as confidential.
ASSURANCES 4.6
Promptly execute and deliver any and all further agreements, documents,
instruments, and other writings that Bank may reasonably request to cure any
defect in the execution and delivery of any Loan Document or more fully to
describe particular aspects of the agreements set forth or intended to be set
forth in the Loan Documents.
CERTAIN CHANGES 4.7
Notify the Bank at least 30 days prior to the date that any of the Parties
changes its name or the location of its chief executive office or principal
place of business or the place where it keeps its books and records.
5. NEGATIVE COVENANTS.
Borrower will not:
INDEBTEDNESS 5.1
Create, incur, or permit to exist, or assume or guarantee, directly or
indirectly, or become or remain liable with respect to, any Indebtedness,
contingent or otherwise unless there is a permitted amount set forth in Exhibit
B, except: (a) Indebtedness to the Bank, or secured by Liens permitted by this
Agreement, or otherwise approved in writing by Bank, and renewals and extensions
(but not increases) thereof; and (b) current accounts payable, other accrued
expenses, unsecured current liabilities not the result of borrowing, to vendors,
suppliers and Persons providing services, for expenditures for goods and
services normally required by it in the ordinary course of business and on
ordinary trade terms and secured capital leases.
LIENS 5.2
Create or permit to exist any Lien upon any of its Property now owned or
hereafter acquired, or acquire any Property upon any conditional sale or other
title retention device or arrangement or any purchase money security agreement;
or in any manner directly or indirectly sell, assign, pledge or otherwise
transfer any of its accounts or other Property, except: (a) Liens, not for
borrowed money, arising in the ordinary course of business (e.g. equipment,
vehicle, and truck purchases); (b) Liens for taxes not delinquent or being
contested in good faith by appropriate proceedings; (c) Liens in effect on the
date hereof and disclosed to Bank in writing, so long as neither the
indebtedness secured thereby nor the Property covered thereby increases; and (d)
Liens in favor of Bank, or otherwise approved in writing by Bank.
FINANCIAL AND OTHER COVENANTS 5.3
Fail to comply with the required financial covenants and other covenants
described, and calculated as set forth, in Exhibit B. Unless otherwise provided
on Exhibit B, all such amounts and ratios will be calculated: (a) on the basis
of GAAP; and (b) on a consolidated basis. Compliance with the requirements of
Exhibit B will be determined as of the dates of the financial statements to be
provided to Bank.
CORPORATE CHANGES 5.4
In any single transaction or series of transactions, directly or indirectly: (a)
liquidate or dissolve; (b) be a party to any merger or consolidation; (c) sell,
convey or lease all or any material part of its assets, except for sale of
inventory, furniture, fixtures, vehicles (including trucks) in the ordinary
course of business; or (d) permit any change in ownership of Borrower affecting
more than 51% of the total outstanding ownership of class A common stock as of
the Effective Date.
NATURE OF BUSINESS; MANAGEMENT 5.5
Change the nature of its business or enter into any business which is
substantially different from the business in which it is presently engaged, or
permit any material change in its management without prior notification to the
Bank.
SUBSIDIARIES/ AFFILIATES 5.6
Form, create or acquire any Subsidiary or Affiliate, without prior approval of
Bank.
LOANS AND INVESTMENTS 5.7
Unless otherwise provided on Exhibit B, make any advance, loan, extension of
credit, or capital contribution to or investment in, or purchase, any stock,
bonds, notes, debentures, or other securities of, any Person, except: (a)
readily marketable direct obligations of the United States of America or any
agency thereof with maturities of one year or less from the date of acquisition;
(b) fully insured certificates of deposit with maturities of one year or less
from the date of acquisition issued by any commercial bank operating in the
United States of America having capital and surplus in excess of $50,000,000.00;
(c) commercial paper of a domestic issuer if at the time of purchase such paper
is rated in one of the two highest rating categories of Standard and Poor's
Corporation or Xxxxx'x Investors Service; (d) investments in readily marketable
and liquid financial instruments; and (e) repurchase of Borrower's own
outstanding stocks.
6. EVENTS OF DEFAULT AND REMEDIES.
EVENTS OF DEFAULT 6.1
Each of the following is a "Default":
(a) Borrower fails to pay any principal of or interest on the Note or any other
Obligation under any Loan Document as and when due; or
(b) Borrower fails to pay at maturity, or within any applicable period of grace,
any principal of or interest on any other borrowed money obligation greater than
$5,000.00 or fails to observe or perform any material term, covenant or
agreement contained in any agreement or obligation by which it is bound; or
(c) Any representation or warranty made in connection with any Loan Document was
materially incorrect, false or misleading when made; or
(d) Borrower violates any covenant contained in any Loan Document; or
(e) A default occurs under any other Loan Document; or
(f) Final judgment for the payment of money is rendered against Borrower and
remains undischarged for a period of 30 days during which execution is not
effectively stayed; or
(g) The loss, theft, substantial damage, or destruction of any material portion
of Borrower's Property which is not covered by insurance; or
(h) Any order is entered in any proceeding against Borrower decreeing the
dissolution, liquidation or split-up thereof, and such order shall remain in
effect for 30 days; or
(i) Borrower makes a general assignment for the benefit of creditors or shall
petition or apply to any tribunal for the appointment of a trustee, custodian,
receiver or liquidator of all or any substantial part of its business, estate or
assets or shall commence any proceeding under any bankruptcy, insolvency,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in
effect; or any such petition or application shall be filed or any such
proceeding shall be commenced against Borrower and Borrower by any act or
omission shall indicate approval thereof, consent thereto or acquiescence
therein, or an order shall be entered appointing a trustee, custodian, receiver
or liquidator of all or any substantial part of the assets of Borrower or
granting relief to Borrower or approving the petition in any such proceeding,
and such order shall remain in effect for more than 30 days; or Borrower shall
fail generally to pay its debts as they become due or suffer any writ of
attachment or execution or any similar process to be issued or levied against it
or any substantial part of its property which is not released, stayed, bonded or
vacated within 30 days after its issue or levy; or
(j) Borrower conceals or removes any part of its Property, with intent to
hinder, delay or defraud any of its creditors, makes or permits a transfer of
any of its Property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or makes any transfer of its Property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid; or
(k) A material adverse change occurs in the assets, liabilities, financial
condition, business or affairs of Borrower; or
(l) Borrower dissolves.
AN "EVENT OF DEFAULT": IS (i) a failure to pay any Obligation which shall
continue uncured after ten (10) days from the date Bank shall have given written
notice to Borrower that Borrower has failed to pay any Obligation as and when
due or (ii) a non-monetary default occurs in connection with any Loan Document
which shall continue uncured after thirty (30) days from the date Bank shall
have given written notice to Borrower that such non-monetary default has
occurred, provided if the violation giving rise to the non-monetary default
shall reasonably require more than thirty (30) days to cure, and if Borrower
shall, within the thirty (30) day period, commence and thereafter diligently
pursue the curing of such non-monetary default, there shall not be an Event of
Default unless Borrower shall not successfully complete the curing within a
reasonable period of time, in which event, same shall be an Event of Default;
provided, however, that Bank shall have no obligation to make any Revolving Loan
hereunder to Borrower following any Default and during any cure period therefor.
After the occurrence of an Event of Default, Bank may do any or all of the
following: (1) declare the Obligations to be immediately due and payable without
notice of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to
Borrower, terminate the Commitment and accelerate the Termination Date; (3) set
off, in any order, against the indebtedness of Borrower under the Loan Documents
any debt owing by Bank to Borrower (whether such debt is owed individually or
jointly), including, but not limited to, any deposit account, which right is
hereby granted by Borrower to Bank; and (4) exercise any and all other rights
pursuant to the Loan Documents, at law, in equity or otherwise.
REMEDIES CUMULATIVE 6.2
No remedy, right or power of Bank is exclusive of any other remedy, right or
power now or hereafter existing by contract, at law, in equity, or otherwise,
and all remedies, rights and powers are cumulative.
7. MISCELLANEOUS.
NO WAIVER 7.1
No waiver of any default or Event of Default will be a waiver of any other
default or Event of Default. No failure to exercise or delay in exercising any
right or power under any Loan Document will be a waiver thereof, nor shall any
single or partial exercise of any such right or power preclude any further or
other exercise thereof or the exercise of any other right or power. The making
of any Loan during either the existence of any default or Event of Default, or
subsequent to the occurrence of an Event of Default will not be a waiver of any
such default or Event of Default. No amendment, modification or waiver of any
Loan Document will be effective unless the same is in writing and signed by the
Person against whom such amendment, modification or waiver is sought to be
enforced. No notice to or demand on any Person shall entitle any Person to any
other or further notice or demand in similar or other circumstances.
NOTICES 7.2
All notices required under the Loan Documents shall be in writing and either
delivered against receipt therefor, or mailed by registered or certified mail,
return receipt requested, in each case addressed to the address shown on the
signature page hereof or to such other address as a party may designate. Except
for the notices required by Section 2.1, which shall be given only upon actual
receipt by the Bank, notices shall be deemed to have been given when delivered
in person against written receipt therefor (or, if mailed, when received as
evidenced by written receipt therefor).
GOVERNING LAW/ARBITRATION 7.3
(a) UNLESS OTHERWISE SPECIFIED THEREIN, EACH LOAN DOCUMENT IS GOVERNED BY TEXAS
LAWS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. To the maximum
extent permitted by law, any controversy or claim arising out of or relating to
the Loans or any Loan Document, including but not limited to any claim based on
or arising from an alleged tort or an alleged breach of any agreement contained
in any of the Loan Documents, shall, at the request of any party to the Loan or
Loan Documents (either before or after the commencement of judicial
proceedings), be settled by mandatory and binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA Rules") and pursuant to Title 9 of the United States Code, or if Title 9
does not apply, the Texas General Arbitration Act. In any arbitration
proceeding: (i) all statutes of limitations which would otherwise be applicable
shall apply; and (ii) the proceeding shall be conducted in the city in which the
office of the Bank originating the Loans is located, by a single arbitrator if
the amount in controversy is $1 million or less, or by a panel of three
arbitrators if the amount in controversy (including but not limited to all
charges, principal, interest fees and expenses) is over $1 million. Arbitrators
are empowered to resolve any controversy by summary rulings substantially
similar to summary judgments and motions to dismiss. Arbitrators may order
discovery conducted in accordance with the Federal Rules of Civil Procedures.
All arbitrators will be selected by the process of appointment from a panel,
pursuant to the AAA Rules. Any award rendered in the arbitration proceeding will
be final and binding, and judgment upon any such award may be entered in any
court having jurisdiction.
(b) If any party to the Loan or Loan Documents files a proceeding in any court
to resolve any controversy or claim, such action will not constitute a waiver of
the right of such party or a bar to the right of any other party to seek
arbitration under the provisions of this Section or that of any other claim or
controversy, and the court shall, upon motion of any party to the proceeding,
direct that the controversy or claim be arbitrated in accordance with this
Section.
(c) No provision of, or the exercise of any rights under, this Section shall
limit or impair the right of any party to the Loan Documents before, during or
after any arbitration proceeding to: (i) exercise self-help remedies including
but not limited to setoff or repossession; or (ii) obtain relief from a court of
competent jurisdiction to prevent the dissipation, damage, destruction,
transfer, hypothecation, pledging or concealment of assets including, but not
limited to attachments, garnishments, sequestrations, appointments of receivers,
injunctions or other relief to preserve the status quo.
(d) To the maximum extent permitted by applicable law and the AAA Rules, neither
Bank nor Borrower or any Affiliate, officer, director, employee, attorney, or
agent of either shall have any liability with respect to, and Bank and Borrower
waives, releases, and agrees not to xxx any of them upon, any claim for any
special, indirect, incidental and consequential damages suffered or incurred by
such Person in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents. Each of Bank and Borrower waives,
releases, and agrees not to xxx each other or any of their Affiliates, officers,
directors, employees, attorneys, or agents for punitive damages in respect of
any claim in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. Nothing
contained herein, however, shall be construed as a waiver of Borrower's or the
Bank's right to compel arbitration of disputes pursuant to subparagraphs (a) and
(b), above.
(e) Nothing herein shall be considered a waiver of the right or protections
afforded Bank by 12 U.S.C. 91, Texas Banking Code Art. 342-609 or any similar
statute.
(f) Each party agrees that any other party may proceed against any other liable
Person, jointly or severally, or against one or more of them, less than all,
without impairing rights against any other liable Persons. A party shall not be
required to join the Borrower or any other liable Persons (e.g., sureties or
guarantors) in any proceeding against any Person. A party may release or settle
with one or more liable Persons as the party deems fit without releasing or
impairing right to proceed against any Persons not so released.
SURVIVAL; PARTIES BOUND; TERM OF AGREEMENT 7.4
All representations, warranties, covenants and agreements made by or on behalf
of Borrower in connection with the Loan Documents will survive the execution and
delivery of the Loan Documents; will not be affected by any investigation made
by any Person, and will bind Borrower and the successors, trustees, receivers
and assigns of Borrower and will benefit the successors and assigns of Bank;
provided that Bank's agreement to make Loans to the Borrower will not inure to
the benefit of any successor or assign of Borrower. Except as otherwise provided
herein, the term of this Agreement will be until the final maturity of the Note
and the full and final payment of all Obligations and all amounts due under the
Loan Documents.
DOCUMENTARY MATTERS 7.5
This Agreement may be executed in several identical counterparts, on separate
counterparts; each counterpart will constitute an original instrument, and all
separate counterparts will constitute but one and the same instrument. The
headings and captions in the Loan Documents have been included solely for
convenience and should not be considered in construing the Loan Documents. If
any provision of any Loan Document is invalid, illegal or unenforceable in any
respect under any applicable law, the remaining provisions will remain
effective. The Loans and all other obligations and indebtedness of Borrower to
Bank are entitled to the benefit of the Loan Documents.
EXPENSES AND FEES 7.6
Any provision to the contrary notwithstanding, and whether or not the
transactions contemplated by this Agreement are consummated, Borrower agrees to
pay on demand all principal and accrued interest on this Note and, following an
Event of Default, Borrower agrees to pay: (a) all reasonable costs and expenses
incurred by Bank and all owners and holders of this Note in collecting this Note
through probate, reorganization, bankruptcy or any other proceeding; and (b)
reasonable attorney's fees if and when this Note is placed in the hands of an
attorney for collection. The obligations of Borrower under this and the
following section will survive the termination of this Agreement.
USURY NOT INTENDED 7.7
Borrower and Bank intend to conform strictly to applicable usury laws.
Therefore, the total amount of interest (as defined under applicable law)
contracted for, charged or collected under this Agreement or any other Loan
Document will never exceed the Highest Lawful Rate. If Bank contracts for,
charges or receives any excess interest, it will be deemed a mistake. Bank will
automatically reform the Loan Document or charge to conform to applicable law,
and if excess interest has been received, Bank will either refund the excess to
Borrower or credit the excess on any unpaid principal amount of the Note or any
other Loan Document. All amounts constituting interest will be spread throughout
the full term of the Loan Document or applicable Note in determining whether
interest exceeds lawful amounts.
NO COURSE OF DEALING 7.8
NO COURSE OF DEALING BY BORROWER WITH BANK, NO COURSE OF PERFORMANCE AND NO
TRADE PRACTICES OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE MAY BE USED TO
CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS AGREEMENT.
8. DEFINITIONS. Unless the context otherwise requires, capitalized terms used in
Loan Documents and not defined elsewhere shall have the meanings provided by
GAAP, except as follows:
Affiliate means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person; or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means to possess, directly or indirectly, the power
to direct the management and policies of a Person, whether through the ownership
of voting securities, by contract, or otherwise. Bank is not under any
circumstances to be deemed an Affiliate of Borrower or any of its Subsidiaries.
Authority Documents means certificates of authority to transact business,
certificates of good standing, borrowing resolutions (with secretary's
certificate), secretary's certificates of incumbency, and other documents which
empower and enable Borrower or its representatives to enter into agreements
evidenced by Loan Documents or evidence such authority.
Business Day means a day: (i) on which the Bank and commercial banks in Houston
are generally open for business; and (ii) with respect to LIBOR Loans (as
defined in the Note), on which dealings in United States Dollar deposits are
carried out in the interbank markets.
Corporation means corporations, partnerships, limited liability companies, joint
ventures, joint stock associations, associations, banks, business trusts and
other business entities.
Governmental Authority means any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court or other tribunal having jurisdiction over Bank or Borrower or their
respective Property.
Highest Lawful Rate means the maximum nonusurious rate of interest from time to
time permitted by applicable law. If Texas law determines the Highest Lawful
Rate, Bank has elected the "indicated" (weekly) rate ceiling as defined in the
Texas Credit Code or any successor statute. Bank may from time to time, as to
current and future balances, elect and implement any other ceiling under such
Texas Credit Code and/or revise the index, formula or provisions of law used to
compute the rate on the open-end credit evidenced by the Note in the manner
provided in such Texas Credit Code.
Indebtedness means and include (a) all items which in accordance with GAAP would
be included on the liability side of a balance sheet on the date as of which
Indebtedness is to be determined (excluding capital stock, surplus, surplus
reserves and deferred credits); (b) all guaranties, endorsements and other
contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
indebtedness is being determined, in Property owned subject to such Lien,
whether or not the Indebtedness secured thereby has been assumed.
Intangible Assets means those assets of any Person which are (i) deferred
assets. other than prepaid insurance, prepaid taxes and deferred compensation,
(ii) patents, copyrights, trademarks, trade names, franchises, goodwill,
experimental expenses and other similar assets which would be classified as
intangible assets on a balance sheet of such Person, prepared in accordance with
GAAP, (iii) unamortized debt discount and expense, and (iv) assets located and
notes and receivables due from obligors domiciled outside of the United States
of America.
Legal Requirement means any law, ordinance, decree, requirement, order,
judgment, rule, regulation (or interpretation of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental Authority.
Lien shall mean any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment or other lien or material restriction of any kind, whether
based on common law, constitutional provision, statute or contract.
Loan Documents means this Agreement and the other writings identified by this
Agreement or listed on Annex I now or hereafter executed or delivered to the
Bank pursuant to any of the foregoing, and all amendments, modifications,
renewals, extensions, increases and rearrangements of, and substitutions for,
any of the foregoing.
Obligations means all principal, interest and other amounts which are or become
owing under this Agreement, the Notes or any other Loan Document.
Organizational Documents means, with respect to a corporation, the certificate
of incorporation, articles of incorporation and bylaws of such corporation; with
respect to a limited liability company, the articles of organization,
regulations and other documents establishing such entity, with respect to a
partnership, joint venture, or trust, the agreement, certificate or instrument
establishing such entity; in each case including all modifications and
supplements thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by Bank.
Parties means all Persons other than Bank executing any Loan Document.
Person means any individual, Corporation, trust, unincorporated organization,
Governmental Authority or any other form of entity.
Proper Form means in form and substance reasonably satisfactory to the Bank.
Property means any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.
Subsidiary means, as to a particular parent Corporation, any Corporation of
which 50% or more of the indicia of equity rights is at the time directly or
indirectly owned by such parent Corporation or by one or more Persons controlled
by, controlling or under common control with such parent Corporation.
Tangible Net Worth means as of any date, the total shareholder's equity
(including capital stock, additional paid in capital and retained earnings,
after deducting treasury stock) which would appear on a balance sheet of
Borrower prepared as of such date in accordance with GAAP, less the aggregate
book value of Intangible Assets shown on such balance sheet.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN BANK AND THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF BANK AND THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN BANK AND THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
BORROWER: HANDY HARDWARE WHOLESALE, INC.
/s/ Xxxxx X. Xxxxxx
By:----------------------------------
Name: Xxxxx X. Xxxxxx
Title: President - C.E.O.
Address: 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
/s/ Xxxx Xxxxx
By:-----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Address: 0000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000
EXHIBITS: ANNEXES:
A Notice for Request for Borrowing I Loan Documents
B Reporting Requirements, Financial
Covenants and Compliance Certificate
