1
EXHIBIT 10.7
EXECUTION
LOAN AGREEMENT
May 15, 1996
PMC Capital, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Loan Agreement (this "Loan Agreement") will serve to set forth
the terms of the financing transactions by and between PMC CAPITAL, INC., a
Florida corporation ("Borrower"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION
("Bank"):
1. CREDIT FACILITY. Subject to the terms and conditions set
forth in this Loan Agreement and the other agreements, instruments and
documents evidencing, governing, and/or pertaining to the Loan, as hereinafter
defined (collectively, together with this Loan Agreement, referred to
hereinafter as the "Loan Documents"), Bank hereby agrees to lend to Borrower,
on a revolving basis from time to time during the period commencing on the date
hereof and continuing through the Maturity Date, such amounts as Borrower may
request hereunder; provided, however, the total principal amount outstanding at
any time shall not exceed $15,000,000 (the "Revolving Line of Credit").
Subject to the terms and conditions hereof, Borrower may borrow, repay and
reborrow hereunder. The sums advanced under the Revolving Line of Credit shall
be used for the funding of Commercial Loans by Borrower or any of its
Subsidiaries. All advances under the Revolving Line of Credit shall be
collectively called the "Loan". Any request by Borrower of an advance
hereunder shall be received by Bank not later than 10:00 a.m., Dallas, Texas
time, on the requested date of such advance. Each request by Borrower for an
advance shall specify (i) the aggregate amount of such requested advance, and
(ii) the purpose for such advance if it is other than the funding of Commercial
Loans, with such requests to be in the form attached hereto as Exhibit A. Any
request for an advance received by Bank after 10:00 a.m., Dallas, Texas time
will be deemed to be a request for Bank to advance funds on the next following
Business Day.
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2. PROMISSORY NOTE. The Loan shall be evidenced by a promissory
note (together with any renewals, extensions and increases thereof, the "Note")
duly executed by Borrower and payable to the order of Bank, in the form
attached hereto as Exhibit A. Interest on the Note shall accrue at the rate
set forth therein. The principal of and interest on the Note shall be due and
payable in accordance with the terms and conditions set forth in the Note and
in this Loan Agreement.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants, and upon each request for an advance under the Revolving Line of
Credit further represents and warrants, to Bank as follows:
(a) Existence. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida and all other states where qualification is required, and has
all requisite power and authority to execute and deliver the Loan
Documents.
(b) Binding Obligations. The execution, delivery, and
performance of this Loan Agreement and all of the other Loan Documents
by Borrower have been duly authorized by all necessary action by
Borrower, and constitute legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws of general
application relating to the enforcement of creditors' rights and
except to the extent specific remedies may generally be limited by
equitable principles.
(c) No Consent. The execution, delivery and performance
of this Loan Agreement and the other Loan Documents, and the
consummation of the transactions contemplated hereby and thereby, do
not (i) conflict with, result in a violation of, or constitute a
default under (A) any provision of its articles or certificate of
incorporation or bylaws or any agreement or other instrument binding
upon Borrower, or (B) any law, governmental regulation, court decree
or order applicable to Borrower
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(including without limitation, the Investment Company Act of 1940, as
amended), or (ii) require the consent, approval or authorization of
any third party.
(d) Financial Condition. Each financial statement of
Borrower supplied to the Bank truly discloses and fairly presents
Borrower's Consolidated financial condition as of the date of each
such statement. There has been no material adverse change in such
financial condition or results of operations of Borrower subsequent to
the date of the most recent financial statement supplied to the Bank.
(e) Litigation. There are no actions, suits or
proceedings, pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or any Subsidiary of Borrower or their
properties, before any court or governmental department, commission or
board, which, if determined adversely to Borrower or such Subsidiary,
would have a material adverse effect on the financial condition,
properties, or operations of Borrower.
(f) Taxes; Governmental Charges. Borrower has filed all
federal, state and local tax reports and returns required by any law
or regulation to be filed by it and has either duly paid all taxes,
duties and charges indicated due on the basis of such returns and
reports, or made adequate provision for the payment thereof, and the
assessment of any material amount of additional taxes in excess of
those paid and reported is not reasonably expected.
4. CONDITIONS PRECEDENT TO ADVANCES. Bank's obligation to make
any advance under this Loan Agreement and the other Loan Documents shall be
subject to the conditions precedent that, as of the date of such advance and
after giving effect thereto (i) all representations and warranties made to Bank
in this Loan Agreement and the other Loan Documents shall be true and correct,
as of and as if made on such date, (ii) no material adverse change in the
individual or Consolidated financial condition of Borrower since the effective
date of the most recent financial statements furnished to Bank by Borrower
shall have occurred and
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May 15, 1996
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be continuing, (iii) no event has occurred and is continuing, or would result
from the requested advance, which with notice or lapse of time, or both, would
constitute an Event of Default, and (iv) Bank's receipt of all Loan Documents
appropriately executed by Borrower and all other proper parties.
5. AFFIRMATIVE COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) Bank has no further
commitment to lend hereunder, Borrower agrees and covenants that it will,
unless Bank shall otherwise consent in writing:
(a) Accounts and Records. Maintain its books and records
in accordance with generally accepted accounting principles.
(b) Right of Inspection. Permit Bank to visit its
properties and installations and to examine, audit and make and take
away copies or reproductions of Borrower's books and records, at all
reasonable times. Such examinations, audits and preparation of copies
will be paid by Bank.
(c) Right to Additional Information. Furnish Bank with
such additional information and statements, lists of assets and
liabilities, tax returns, and other reports with respect to Borrower's
individual and Consolidated financial condition and business
operations as Bank may request from time to time.
(d) Compliance with Laws. Conduct its business, and
cause its Subsidiaries to conduct their businesses, in an orderly and
efficient manner consistent with good business practices, and perform
and comply with all statutes (including without limitation, the
Investment Company Act of 1940, as amended), rules, regulations and/or
ordinances imposed by any governmental unit upon Borrower, its
Subsidiaries, their businesses, operations and properties (including
without limitation, all applicable environmental statutes, rules,
regulations and ordinances).
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(e) Taxes. Pay and discharge when due all of its
indebtedness and obligations, including without limitation, all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower, its Subsidiaries or their
properties, income, or profits, prior to the date on which penalties
would attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower's or any of its Subsidiaries'
properties, income, or profits; provided, however, Borrower will not
be required to pay and discharge any such assessment, tax, charge,
▇▇▇▇, ▇▇▇▇ or claim so long as (i) the legality of the same shall be
contested in good faith by appropriate judicial, administrative or
other legal proceedings, and (ii) Borrower shall have established on
its books adequate reserves with respect to such contested
assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim in accordance with
generally accepted accounting principles, consistently applied.
(f) Insurance. Maintain insurance with respect to its
properties and business against such contingencies and casualties, of
such types (including fire and casualty, public liability, larceny,
embezzlement, and other criminal misappropriation insurance) and in
such amounts and with such carriers as are acceptable to Bank.
(g) Notice of Indebtedness. Promptly inform Bank of the
creation, incurrence or assumption by Borrower of any actual or
contingent liabilities not permitted under this Loan Agreement.
(h) Notice of Litigation. Promptly after the
commencement thereof, notify Bank of all actions, suits and
proceedings before any court or any governmental department,
commission or board affecting Borrower, any of its Subsidiaries or any
of their properties in which an adverse decision could have a material
adverse effect upon Borrower's individual or Consolidated financial
conditions, businesses or operations.
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(i) Notice of Material Adverse Change. Promptly inform
Bank of (i) any and all material adverse changes in Borrower's
individual or Consolidated financial condition, and (ii) all claims
made against Borrower or any of its Subsidiaries which could
materially affect the individual or Consolidated financial condition
of Borrower.
(j) Additional Documentation. Execute and deliver, or
cause to be executed and delivered, any and all other agreements,
instruments or documents which Bank may reasonably request in order to
give effect to the transactions contemplated under this Loan Agreement
and the other Loan Documents.
(k) Repayment of Intercompany Debt. Cause each of its
Subsidiaries to apply all net proceeds from the sale of any Commercial
Loan to indebtedness then owed by such Subsidiary to Borrower,
provided that said repayment is not in conflict with any statutes,
rules and/or regulations imposed by any governmental unit upon
Borrower.
6. NEGATIVE COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will not, without the prior written
consent of Bank:
(a) Nature of Business. Make any material change in the
nature of its business as carried on as of the date hereof.
(b) Indebtedness. Create, incur or assume any
indebtedness for borrowed money or issue or assume any other note,
debenture, bond or other evidences of indebtedness, or guarantee any
such indebtedness or such evidences of indebtedness of others, other
than (i) borrowings from Bank, and (ii) borrowings outstanding on the
date hereof and disclosed in writing to Bank.
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(c) Liquidations, Mergers, Consolidations. Liquidate,
merge or consolidate with or into any other entity.
(d) Liens. Create or incur any lien or encumbrance on
any of its assets, other than (i) liens and security interest securing
indebtedness owing to Bank, (ii) liens for taxes, assessments or
similar charges which are (1) not yet due or (2) being contested in
good faith by appropriate proceedings and for which Borrower has
established adequate reserves, and (iii) liens and security interest
existing as of the date hereof which have been disclosed to and
approved by the Bank in writing.
(e) Transfer of Ownership. Permit the sale or other
disposition of all or substantially all of the outstanding capital
stock or property of Borrower.
(f) Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any
Affiliate (as hereinafter defined) of Borrower, except in the ordinary
course of and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms no less favorable to
Borrower than would be obtained in a comparable arm's-length
transaction with a person or entity not an Affiliate of Borrower.
7. FINANCIAL COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will maintain the following financial
covenants:
(a) Net Worth. Borrower will maintain, at all times, Net
Worth of not less than $63,000,000.
(b) Liabilities/Net Worth. Borrower will maintain, at
all times, a ratio of (i) total liabilities to (ii) Net Worth of not
greater than 2.0 to 1.0.
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(c) Maximum Delinquencies. Borrower will maintain, at
all times, a Delinquency Ratio (expressed as a percentage) not in
excess of nine percent (9%). The Delinquency Ratio shall be computed
by dividing (i) the aggregate outstanding principal amount of
Delinquent Loans owned by Borrower and its Subsidiaries by (ii) the
sum of (x) the aggregate outstanding principal amount of Commercial
Loans owned by Borrower and its Subsidiaries plus (y) assets acquired
by Borrower and its Subsidiaries in satisfaction of debt, including
any assets acquired through foreclosure, by deed-in-lieu of
foreclosure, liquidation or other similar actions.
(d) Asset Coverage Ratio. Borrower will maintain, at all
times, an Asset Coverage Ratio of not less than 1.75 to 1.0. "Asset
Coverage Ratio" means the ratio of (i) Borrower's cash and cash
equivalents plus the aggregate outstanding principal balance of
Performing Commercial Loans then owned by Borrower or its Subsidiaries
less the aggregate outstanding amount of "B pieces" to (ii) the
outstanding principal amount of Senior Debt. The Asset Coverage Ratio
shall be calculated on a Consolidated basis.
(e) Maximum Net Charge-offs. Borrower will maintain, as
of the end of each fiscal year, a Maximum Net Charge-Offs Ratio
(expressed as a percentage) of not greater than 2%. The Maximum Net
Charge-Offs Ratio shall be computed by dividing (i) the sum of (x) the
Net Amount of Charge-Offs plus (y) the change in unrealized
depreciation and amortization on Borrower's investments during such
fiscal year by (ii) the average of the outstanding principal balance
of the Commercial Loans owned by Borrower and its Subsidiaries during
such fiscal year.
8. REPORTING REQUIREMENTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will, unless Bank shall otherwise
consent in writing, furnish to Bank:
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(a) SEC Filings. As soon as available, and in any event
(i) within sixty days after the end of each of the first three fiscal
quarters of Borrower, a copy of Borrower's 10-Q, (ii) within 120 days
after the end of each fiscal year of Borrower, a copy of Borrower's
10-K, and (iii) promptly upon their becoming available, copies of all
registration statements, other periodic reports and statements and
schedules filed by Borrower with any securities exchange, the
Securities and Exchange Commission or any similar governmental
authority.
(b) Annual Financial Statements. As soon as available
and in any event within 120 days after the end of each fiscal year of
Borrower, a Consolidated and consolidating balance sheet and income
statement of Borrower as of the end of such fiscal year, in each case
audited by independent public accountants of recognized standing
acceptable to Bank.
(c) Compliance Certificate. A certificate signed by the
president, chief financial officer or executive vice president of
Borrower, within 60 days after the end of each fiscal quarter, stating
that Borrower is in full compliance with all of its obligations under
this Loan Agreement and all other Loan Documents and is not in default
of any term or provisions hereof or thereof, and demonstrating
compliance with all financial ratios and covenants set forth in this
Loan Agreement.
9. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" under this Loan Agreement:
(a) The failure, refusal or neglect of Borrower to pay
when due any part of the principal of, or interest on, the Note or any
other indebtedness or obligations owing to Bank by Borrower from time
to time and such failure continues for a period of fifteen (15) days
after notice of such failure is given by Lender to Borrower.
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(b) The failure of Borrower to timely and properly
observe, keep or perform any covenant, agreement, warranty or
condition required herein or in any of the other Loan Documents and
such failure remains unremedied for a period of fifteen (15) days
after notice of such failure is given by Lender to Borrower.
(c) The occurrence of an event of default under any of
the other Loan Documents or under any other agreement now existing or
hereafter arising between Bank and Borrower.
(d) Any representation contained herein or in any of the
other Loan Documents made by Borrower is false or misleading in any
material respect and remains unremedied after notice is given by
Lender to Borrower.
(e) The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Borrower to
any third party under any agreement or understanding.
(f) If Borrower: (i) becomes insolvent, or makes a
transfer in fraud of creditors, or makes an assignment for the benefit
of creditors, or admits in writing its inability to pay its debts as
they become due; (ii) generally is not paying its debts as such debts
become due; (iii) has a receiver, trustee or custodian appointed for,
or take possession of, all or substantially all of the assets of such
party, either in a proceeding brought by such party or in a proceeding
brought against such party and such appointment is not discharged or
such possession is not terminated within sixty (60) days after the
effective date thereof or such party consents to or acquiesces in such
appointment or possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future federal
or state insolvency, bankruptcy or similar laws (all of the foregoing
hereinafter collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party under any
Applicable Bankruptcy Law and such involuntary petition is not
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dismissed within sixty (60) days after the filing thereof, or an order
for relief naming such party is entered under any Applicable
Bankruptcy Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have discharged
within a period of thirty (30) days any attachment, sequestration or
similar writ levied upon any property of such party; or (vi) fails to
pay within thirty (30) days any final money judgment against such
party.
(g) The liquidation, dissolution, merger or consolidation
of Borrower.
(h) The entry of any judgment against Borrower or the
issuance or entry of any attachment or other lien against any of the
property of Borrower for an amount in excess of $200,000, if
undischarged, unbonded or undismissed within thirty (30) days after
such entry.
(i) Either ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ceases to hold the position of
Chief Executive Officer or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ceases to hold the position
of Chief Operating Officer.
Nothing contained in this Loan Agreement shall be construed to limit the events
of default enumerated in any of the other Loan Documents and all such events of
default shall be cumulative.
10. REMEDIES. Upon the occurrence of any one or more of the
foregoing Events of Default, (a) the entire unpaid balance of principal of the
Note, together with all accrued but unpaid interest thereon, and all other
indebtedness owing to Bank by Borrower at such time shall, at the option of
Bank, become immediately due and payable without further notice, demand,
presentation, notice of dishonor, notice of intent to accelerate, notice of
acceleration, protest or notice of protest of any kind, all of which are
expressly waived by Borrower, and (b) Bank may, at its option, cease further
advances under the Note; provided, however, concurrently and automatically with
the occurrence of an Event of Default under subparagraph (f) in the immediately
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preceding paragraph (i) further advances under the Note shall cease, and (ii)
the Note and all other indebtedness owing to Bank by Borrower at such time
shall, without any action by Bank, become due and payable, without further
notice, demand, presentation, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest or notice of protest of any kind, all
of which are expressly waived by Borrower. All rights and remedies of Bank set
forth in this Loan Agreement and in any of the other Loan Documents may also be
exercised by Bank, at its option to be exercised in its sole discretion, upon
the occurrence of an Event of Default.
11. DEFINITIONS. For purposes of this Loan Agreement, the
following terms have the meanings given below:
"Affiliate" means any individual or entity directly or
indirectly controlling, controlled by, or under common control with,
another individual or entity.
"B pieces" means that portion of Commercial Loans retained by
Borrower or its Subsidiaries out of Commercial Loans sold under an
asset securitization.
"Commercial Loans" means loans made by Borrower or any of its
Subsidiaries to any person other than an Affiliate of Borrower for
business or commercial purposes and not for family, consumer or
household use, which loans are secured by real property or personal
property.
"Consolidated" refers to the consolidation of any person or
entity, in accordance with generally accepted accounting principles,
with its properly consolidated subsidiaries.
"Delinquent Loans" means, at any time, the sum of (x) the
aggregate unpaid principal amount of Commercial Loans owned by
Borrower or any of its Subsidiaries which are thirty-one (31) or more
days delinquent (whether under the initial payment plan or a modified
payment plan established pursuant to a workout) plus (y) assets
acquired in
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satisfaction of debt, including any assets acquired through
foreclosure, by deed-in-lieu of foreclosure, liquidation or other
similar actions, plus (z) Commercial Loans then subject to any legal
suit, arbitration proceeding or other similar action or proceeding.
"Maturity Date" means May 15, 1998.
"Net Amount of Charge-Offs" means, for any fiscal year, the
aggregate amount of Commercial Loans charged-off (without reduction)
by Borrower or its Subsidiaries during such fiscal year minus the
aggregate amount of Commercial Loans previously charged-off by
Borrower or its Subsidiaries that is recovered during such fiscal
year.
"Net Worth" means with respect to Borrower, as of any date,
Borrower's total assets less total liabilities.
"Performing Commercial Loans" means a Commercial Loan with
respect to which (i) no payment of principal or interest is thirty-one
(31) days or more past due (whether under the initial payment plan or
a modified payment plan established pursuant to a workout), and (ii)
there is no claim of fraud in connection with the origination of such
Commercial Loan.
"Senior Debt" means (i) the Loan, (ii) all obligations of
Borrower issued to certain insurance companies per attached Schedule
1, (iii) all other obligations of Borrower for borrowed money and (iv)
all liabilities of Borrower under any guarantee or endorsement of the
type of debt described in the immediately preceding clause (iii).
"Subsidiary" means, with respect to any person or entity, any
corporation, association, partnership, joint venture or other business
or corporate entity, enterprise or organization which is directly or
indirectly (through one or more intermediaries) controlled by or owned
fifty percent or more by such person or entity.
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12. RIGHTS CUMULATIVE. All rights of Bank under the terms of this
Loan Agreement shall be cumulative of, and in addition to, the rights of Bank
under any and all other agreements between Borrower and Bank (including, but
not limited to, the other Loan Documents), and not in substitution or
diminution of any rights now or hereafter held by Bank under the terms of any
other agreement.
13. WAIVER AND AGREEMENT. Neither the failure nor any delay on
the part of Bank to exercise any right, power or privilege herein or under any
of the other Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of such right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No waiver of any provision in this Loan Agreement or in any of the
other Loan Documents and no departure by Borrower therefrom shall be effective
unless the same shall bein writing and signed by Bank, and then shall be
effective only in the specific instance and for the purpose for which given and
to the extent specified in such writing. No modification or amendment to this
Loan Agreement or to any of the other Loan Documents shall be valid or
effective unless the same is signed by the party against whom it is sought to
be enforced.
14. BENEFITS. This Loan Agreement shall be binding upon and inure
to the benefit of Bank and Borrower, and their respective successors and
assigns, provided, however, that Borrower may not, without the prior written
consent of Bank, assign any rights, powers, duties or obligations under this
Loan Agreement or any of the other Loan Documents.
15. NOTICES. All notices, requests, demands or other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and given by (i) personal delivery, (ii) expedited delivery
service with proof of delivery, or (iii) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent to the intended
addressee at the address set forth on the signature page hereof and shall be
deemed to have been received either, in the case of personal delivery, as of
the time of personal delivery, in the
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case of expedited delivery service, as of the date of first attempted delivery
at the address and in the manner provided herein, or in the case of mail, upon
deposit in a depository receptacle under the care and custody of the United
States Postal Service. Either party shall have the right to change its address
for notice hereunder to any other location within the continental United States
by notice to the other party of such new address at least thirty (30) days
prior to the effective date of such new address.
16. CONSTRUCTION. This Loan Agreement and the other Loan
Documents have been executed and delivered in the State of Texas, shall be
governed by and construed in accordance with the laws of the State of Texas,
and shall be performable by the parties hereto in the county in Texas where the
Bank's address set forth on the signature page hereof is located.
17. INVALID PROVISIONS. If any provision of this Loan Agreement
or any of the other Loan Documents is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully
severable and the remaining provisions of this Loan Agreement or any of the
other Loan Documents shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance.
18. EXPENSES. Borrower shall pay all costs and expenses
(including, without limitation, reasonable attorneys' fees) in connection with
(i) the preparation, negotiation and execution of this Loan Agreement and the
other Loan Documents, which costs and expenses shall not exceed $5,000, (ii)
any action required in the course of administration of the indebtedness and
obligations evidenced by the Loan Documents, and (iii) any action in the
enforcement of Bank's rights upon the occurrence of Event of Default.
19. PARTICIPATION OF THE LOAN. Borrower agrees that Bank may, at
its option, sell interests in the Loan and its rights under this Loan Agreement
to a financial institution or institutions and, in connection with each such
sale, Bank may
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May 15, 1996
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disclose any financial and other information available to Bank concerning
Borrower to each perspective purchaser.
20. ENTIRE AGREEMENT. This Loan Agreement (together with the
other Loan Documents) contains the entire agreement among the parties regarding
the subject matter hereof and supersedes all prior written and oral agreements
and understandings among the parties hereto regarding same.
21. CONFLICTS. In the event any term or provision hereof is
inconsistent with or conflicts with any provision of the other Loan Documents,
the terms and provisions contained in this Loan Agreement shall be controlling.
22. COUNTERPARTS. This Loan Agreement may be separately executed
in any number of counterparts, each of which shall be an original, but all of
which, taken together, shall be deemed to constitute one and the same
instrument.
23. RENEWAL AND EXTENSION. On or before April 15th of each
calendar year which occurs prior to the Maturity Date (as the same may have
been extended hereunder) but no sooner than thirty (30) days preceding such
date, Borrower may submit a request to Bank to extend the Maturity Date for an
additional calendar year (e.g., Borrower may submit, between March 15, 1997 and
April 15, 1997, the first of such requests to extend the Maturity Date to May
15, 1999, being one year after the original Maturity Date), by delivering to
Bank a written request to extend the Maturity Date. Bank may decline to grant
such extension for any reason in its sole and absolute discretion. IF BANK
DECLINES TO EXTEND THE MATURITY DATE, BORROWER SHALL BE REQUIRED TO REPAY THE
ENTIRE PRINCIPAL BALANCE OF THE OBLIGATIONS AND ALL ACCRUED UNPAID INTEREST ON
THE MATURITY DATE AS THE SAME MAY PREVIOUSLY HAVE BEEN EXTENDED IN ACCORDANCE
HEREWITH. BANK IS UNDER NO OBLIGATION TO EXTEND OR REFINANCE THE LOAN AT THAT
TIME. IF BANK AGREES TO EXTEND THE LOAN, BANK MAY, IN ITS SOLE DISCRETION,
SPECIFY THE CONDITIONS APPLICABLE TO SUCH EXTENSION WHICH MAY INCLUDE, WITHOUT
LIMITATION, THE DELIVERY TO BANK OF SUCH DOCUMENTS, INSTRUMENTS AND ASSURANCES
AS BANK MAY DEEM NECESSARY OR APPROPRIATE TO EVIDENCE SUCH EXTENSION.
17
PMC Capital, Inc.
May 15, 1996
Page 17
If the foregoing correctly sets forth our mutual agreement, please so
acknowledge by signing and returning this Loan Agreement to the undersigned.
Very truly yours,
BANK ONE, TEXAS, N.A.
By: \s\
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Bank's Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ACCEPTED as of the date first
written above.
BORROWER: Borrower's Address:
PMC CAPITAL, INC. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: \s\
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and CEO
18
EXHIBIT A
REQUEST FOR ADVANCE
Reference is made to that certain Loan Agreement dated as of May 15,
1996 (as from time to time amended, the "Agreement"), by and between PMC
CAPITAL, INC. ("Borrower"), and BANK ONE, TEXAS, N.A. ("Bank"). Terms which
are defined in the Agreement are used herein with the meanings given them in
the Agreement. Pursuant to the terms of the Agreement Borrower hereby requests
Bank to make an advance to Borrower in the principal amount of $__________
and specifies ____________, 19__, as the date Borrower desires for Bank to make
such advance and to deliver to Borrower the proceeds thereof.
To induce Bank to make such advance Borrower hereby represents,
warrants, acknowledges, and agrees that:
(a) The officer of Borrower signing this instrument is the
duly elected, qualified and acting officer as indicated below such
officer's signature hereto having all necessary authority to act for
Borrower in making the request herein contained.
(b) The representations and warranties of Borrower set forth
in the Agreement and the other Loan Documents are true and correct on
and as of the date hereof (except to the extent that the facts on
which such representations and warranties are based have been changed
by the extension of credit under the Agreement), with the same effect
as though such representations and warranties had been made on and as
of the date hereof.
(c) There does not exist on the date hereof any condition or
event which constitutes an Event of Default which has not been waived
in writing of the Agreement; nor will any such Event of Default exist
upon Borrower's receipt and application of the advance requested
hereby. Borrower will use the advance hereby requested for the
funding of Commercial Loans.
(d) Except to the extent waived in writing, Borrower has
performed and complied with all agreements and conditions in the
Agreement required to be performed or
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19
complied with by Borrower on or prior to the date hereof, and each of
the conditions precedent to advances contained in the Agreement
remains satisfied.
(e) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises or by any
course of dealing. The Agreement and the other Loan Documents are
hereby ratified, approved, and confirmed in all respects.
The officer signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgements, and agreements of Borrower are true, correct and complete.
IN WITNESS WHEREOF, this instrument is executed as of
____________, 1996.
PMC CAPITAL, INC.
By:
---------------------------
Name:
Title:
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