FOURTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
FOURTH
AMENDMENT TO REVOLVING
CREDIT
THIS
FOURTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (“Amendment”) is
made effective this 27th day of November, 2007, by and between ADDVANTAGE TECHNOLOGIES
GROUP,
INC., an Oklahoma corporation (“Borrower”) and BANK OF OKLAHOMA,
N.A.
(“Lender”).
RECITALS
A. Reference
is made to the Revolving Credit and Term Loan Agreement between Borrower
and
Lender dated September 30, 2004, and amended September 30, 2005, September
30,
2006, and November 20, 2006 (as amended, the “Credit Agreement”), pursuant to
which exists a $7,000,000 Revolving Line, an $8,000,000 Term Loan with an
outstanding balance of $4,300,000 as of the date hereof, and a $2,760,000
Term
Loan with an outstanding balance of $2,591,326 as of the date
hereof. Terms used herein shall have the meanings ascribed to them in
the Credit Agreement unless otherwise defined herein.
B. Borrower
has requested that Lender (i) extend the maturity of the $7,000,000 Revolving
Line and (ii) extend the maturity of and increase the $8,000,000 Term Loan
to
$16,300,000, with the additional proceeds to be used for the purpose of purchase
of the remaining $12,000,000 preferred stock owned by Xxx and Xxxxx Xxxxxxx;
and
Lender is willing to accommodate such requests pursuant to the terms and
conditions set forth in this Amendment.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, Borrower
and Lender do hereby agree as follows:
1. AMENDMENTS
TO THE CREDIT
AGREEMENT.
1.1. Section
1.30 (Letter of Credit Fee) is hereby amended to reflect that the Letter
of
Credit Fee, formerly “one and one-half percent (1.50%) per annum” shall now be
“one and four
tenths
percent
(1.40%) per annum”.
1.2. Section
1.39 (Note Rate) is hereby deleted and replaced with the following:
“1.38. ‘Note
Rate’ shall mean
the LIBOR Rate plus
one and
four tenths percent (1.40%) per annum.”
1.3. Section
2.1 ($8,000,000 Term Loan) is hereby amended to reflect that the principal
amount of said loan is being increased to $16,300,000. All references
throughout the Credit
Agreement
and other
Loan Documents to the “$8,000,000 Term Loan” and the “$8,000,000 Term Note”
shall now mean and read “$16,300,000 Term Loan” and
“$16,300,000
Term
Note”, respectively.
1.4. A
new
Section 2.4 is hereby added, as follows:
“2.4. Interest
Credit. Lender shall attempt to provide Borrower $300,000 in
Oklahoma state income tax credits each year (“Tax Credits”), commencing with the
calendar year ending
December
31, 2008 and
ending with the calendar year ending December 31, 2012. For any said
calendar year in which Lender is not able to provide the Tax Credits, Lender
shall
provide an
interest credit to Borrower in an amount equal to fifteen hundredths of one
percent (0.15%) of the average outstanding balance under the Revolving Credit
and
Term
Loan Agreement
(including the $7,000,000 Revolving Line, the $16,300,000 Term Loan, and
the
$2,760,000 Term Loan) during that year, effective for the first interest
payment
due in the
following calendar year.”
1.5. A
new
Section 3.3 is hereby added, as follows:
“3.3. Key
Man Life
Insurance. As additional security for the Loan, Borrower shall
maintain a life insurance policy on the life of Xxxxx Xxxxxxx in an amount
of
not less than $5,000,000,
the
proceeds of which
shall be assigned to Lender pursuant to the Assignment of Life Insurance
Policy
as Collateral, in form and content as set forth on Schedule ‘3.3’
hereto.”
1.6. Section
7.11 (Dividends, Stock Redemptions) is hereby deleted and replaced with the
following:
“7.11. Dividends,
Stock
Redemptions. Directly or indirectly declare or pay any
dividend on, or make any other distribution with respect to (whether by
reduction of capital or otherwise),
any
shares of its
capital stock or make any advances or loans to stockholders; provided, however,
that this covenant shall terminate upon the earlier to occur of (i) the payment
in
full of all
Obligations under the $16,300,000 Term Loan, or (ii) Borrower’s maintaining a
Leverage Ratio of less than 1.5 to 1.0 for four (4) consecutive
quarters.”
1.7. Section
8.3 (Effective Net Worth) is hereby deleted in its entirety.
1
2. CONDITIONS
PRECEDENT. This Amendment and Lender's commitments under the
Credit Agreement as amended hereby are conditioned upon satisfaction of the
following at or before closing:
2.1. Borrower
shall execute and /or deliver to Lender the following:
2.1.1. This
Amendment;
2.1.2. The
$7,000,000 promissory Note in form and content set forth on Schedule “2.1.2” to
this Amendment;
2.1.3. The
$16,300,000 promissory Note in form and content set forth on Schedule “2.1.3” to
this Amendment;
2.1.4. The
Assignment of Life Insurance Policy as Collateral in form and content set
forth
on Schedule
“2.1.4” to this
Amendment;
2.1.5. Certificates
of Good Standing from the Borrower and each of the Guarantors; and
2.1.6. any
other
instruments, documents or agreements reasonably requested by Lender in
connection herewith.
3. Representations. As
inducement for Lender to agree to this Amendment, the Borrower represents
and
warrants to Lender as follows: (i) all representations and warranties set
forth
in the Credit Agreement and other Loan Documents remain true and correct
as of
the date hereof, and all schedules remain true and correct; (ii) no Initial
Default or Matured Default exists under the Credit Agreement or any other
Loan
Documents, and none shall arise as a result of the execution and performance
under this Amendment and/or any documents executed and/or delivered by Borrower
in connection herewith.
4. Ratification
of and
Amendment to Documents. Borrower hereby ratifies and confirms
the Credit Agreement, together with all security agreements, financing
statements, instruments, documents and/or agreements executed and/or delivered
by Borrowers to Lender in connection therewith (ALoan
Documents@),
and Borrower acknowledges, agrees, represents and warrants that the Loan
Documents are in full force and effect, binding and enforceable in accordance
with their terms.
5. Ratification
of
Guaranty. Each Guarantor, by execution of the ratification
following the signature page hereof, hereby agrees to the renewal of the
$7,000,000 Revolving Line and the increase of the $8,000,000 Term Loan to
$16,300,000, and hereby ratifies and confirms its Guaranty Agreement; and
further confirms that, after giving effect to the amendments provided for
herein, the Guaranty Agreement shall continue in full force and effect, and
that
each representation and warranty set forth therein remains true and correct
as
of the date hereof, and that the guaranteed indebtedness additionally includes
the $16,300,000 Promissory Note, together with extensions and renewals
thereto.
6. Governing
Law and Binding
Effect. This Amendment shall be governed by and construed in
accordance with the laws of the State of Oklahoma, and it, together with
all
documents executed and delivered in connection herewith, shall be binding
upon
the parties hereto, their respective successors and assigns.
7. USA
Patriot Act
Notification. IMPORTANT INFORMATION ABOUT PROCEDURES FOR
OPENING A NEW ACCOUNT. To help the government fight the funding of
terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies each
person or entity that opens an account, including any deposit account, treasury
management account, loan, other extension of credit, or other financial services
product. What this means for Borrower: When Borrower opens
an account, if Borrower is an individual, Lender will ask for Borrower's
name,
taxpayer identification number, residential address, date of birth, and other
information that will allow Lender to identify Borrower, and, if Borrower
is not
an individual, Lender will ask for Borrower's name, taxpayer identification
number, business address, and other information that will allow Lender to
identify Borrower. Lender may also ask, if Borrower is an individual,
to see Borrower's driver’s license or other identifying documents, and, if
Borrower is not an individual, to see Borrower's legal organizational documents
or other identifying documents.
8. Fees. Borrower
shall not be obligated to pay the attorney fees incurred by Bank in connection
with the preparation of this Amendment.
2
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by
their respective officers thereunto duly authorized, as of the date first
above
written.
"Borrower"
ADDVANTAGE
TECHNOLOGIES GROUP,
INC., an Oklahoma corporation
By
/s/
Xxx
Xxxxxxx
Xxx
Xxxxxxx, President and Chief
Executive
Officer
“Lender"
BANK
OF OKLAHOMA,
N.A.
By
/s/
W. Xxxx
Xxxxxx
W.
Xxxx Xxxxxx, Vice President
RATIFICATION
OF
GUARANTY
As
inducement for the Lender to enter into the Fourth Amendment to Revolving
Credit
and Term Loan Agreement (“Amendment”) dated effective November 27, 2007, to
which this Ratification is affixed, the undersigned Guarantors each hereby
agree
to Section 5 of the Amendment and further hereby ratifies and confirms its
Guaranty Agreement.
Tulsat
Corporation, an
Oklahoma corporation
By
/s/
Xxxxx
Chymaik
Xxxxx
Xxxxxxx, President
ADDvantage
Technologies Group of
Missouri, Inc., a Missouri corporation
By
/s/
Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx, Vice President
ADDvantage
Technologies Group of
Nebraska, Inc., a Nebraska corporation
By
/s/
Xxx
Xxxxxxx
Xxx
Xxxxxxx, Vice President
ADDvantage
Technologies Group of
Texas, Inc., a Texas corporation
By
/s/
Xxx
Xxxxxxx
Xxx
Xxxxxxx, Vice President
NCS
Industries, Inc., a
Pennsylvania corporation
By
/s/
Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx, President
Tulsat-Atlanta,
L.L.C., an
Oklahoma limited liability company
(a
subsidiary of Tulsat Corporation)
By: ADDvantage
Technologies Group, Inc.,
Its
sole member and Manager
By
/s/
Xxxxx
Chymaik
Xxxxx
Xxxxxxx, Chairman of the Board
3
Schedule
"2.1.2"
PROMISSORY
NOTE
$7,000,000 November
27, 2007
Tulsa,
Oklahoma
FOR
VALUE
RECEIVED, the undersigned, ADDVANTAGE TECHNOLOGIES
GROUP,
INC., an Oklahoma corporation ("Maker"), promises to pay to the order
of
BANK OF OKLAHOMA, N.A.
("Lender"), at its offices in Tulsa, Oklahoma, the principal sum of SEVEN
MILLION AND NO/100 DOLLARS ($7,000,000.00) or, if less, the aggregate sum
of
advances made by Lender to Maker under the Revolving Credit and Term Loan
Agreement between Maker and Lender dated September 30, 2004 (as amended,
the
“Credit Agreement”), payable as follows:
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a.
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Principal. Principal
shall be payable on November 30,
2010.
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b.
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Interest. Interest
shall be payable quarterly on the last day of each February, May,
August,
and November, commencing February 29, 2008, and at
maturity. Interest shall accrue on the principal balance
outstanding hereunder and on any past due interest hereunder at
a rate at
all times equal to the Note Rate (defined in the Credit
Agreement).
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If
any
payment shall be due on a Saturday or Sunday or upon any other day on which
state or national banks in the State of Oklahoma are closed for business
by
virtue of a legal holiday for such banks, such payment shall be due and payable
on the next succeeding banking day and interest shall accrue to such
day. All interest due hereon shall be computed on the actual number
of days elapsed (365 or 366) based upon a 360-day year.
Such
installment payments are to be applied first to the payment of interest on
the
principal balance from time to time remaining unpaid at the aforesaid rate,
and
any balance shall be used to reduce the principal balance; except that if
any
advances made by the holder hereof under the terms of any instrument, document
or agreement executed by Maker in connection herewith have not been repaid,
any
monies received may, at the option of holder, be applied first to repay such
advances and interest thereon, and the balance, if any, applied to any
installment then due. Any prepayments shall be applied to
installments in the inverse order of occurrence.
All
payments under this Note shall be made in legal tender of the United States
of
America or in other immediately available funds at Lender's office described
above, and no credit shall be given for any payment received by check, draft
or
other instrument or item until such time as the holder hereof shall have
received credit therefor from the holder's collecting agent or, in the event
no
collecting agent is used, from the bank or other financial institution upon
which said check, draft or other instrument or item is drawn.
From
time
to time the maturity date of this Note may be extended or this Note may be
renewed, in whole or in part, or a new note of different form may be substituted
for this Note and/or the rate of interest may be changed, or changes may
be made
in consideration of loan extensions, and the holder, from time to time, may
waive or surrender, either in whole or in part, any rights, guarantees, security
interests or liens given for the benefit of the holder in connection herewith;
but no such occurrences shall in any manner affect, limit, modify or otherwise
impair any rights, guarantees or security of the holder not specifically
waived,
released or surrendered in writing, nor shall any maker, guarantor, endorser
or
any person who is or might be liable hereon, either primarily or contingently,
be released from such liability by reason of the occurrence of any such
event. The holder hereof, from time to time, shall have the unlimited
right to release any person who might be liable hereon; and such release
shall
not affect or discharge the liability of any other person who is or might
be
liable hereon.
If
any
payment required by this Note to be made is not made within five (5) days
of
when due, or if any default occurs under any loan agreement or under the
provisions of any mortgage, security agreement, assignment, pledge or other
document or agreement which provides security for the indebtedness evidenced
by
this Note, the holder hereof may, at its option, without notice or demand,
declare this Note in default and all indebtedness due and owing hereunder
immediately due and payable. Interest from the date of default on
such principal balance and on any past due interest hereunder shall accrue
at
the rate of two percent (2%) per annum above the nondefault interest rate
accruing hereunder. The Maker and any endorsers, guarantors and
sureties hereby severally waive protest, presentment, demand, and notice
of
protest and nonpayment in case this Note or any payment due hereunder is
not
paid when due; and they agree to any renewal, extension, acceleration,
postponement of the time of payment, substitution, exchange or release of
collateral and to the release of any party or person primarily or contingently
liable without prejudice to the holder and without notice to the Maker or
any
endorser, guarantor or surety. Maker and any guarantor, endorser,
surety or any other person who is or may become liable hereon will, on demand,
pay all costs of collection, including reasonable attorney fees of the holder
hereof in attempting to enforce payment of this Note and reasonable attorney
fees for defending the validity of any document securing this Note as a valid
first and prior lien.
Upon
the
occurrence of any default hereunder, Lender shall have the right, immediately
and without further action by it, to set off against this Note all money
owed by
Lender in any capacity to the Maker or any guarantor, endorser or other person
who is or might be liable for payment hereof, whether or not due, and also
to
set off against all other liabilities of Maker to Lender all money owed by
Lender in any capacity to Maker; and Lender shall be deemed to have exercised
such right of setoff and to have made a charge against such money immediately
upon the occurrence of such default even though such charge is made or entered
into the books of Lender subsequently thereto.
The
holder of this Note may collect a late charge not to exceed an amount equal
to
five percent (5%) of the amount of any payment which is not paid within ten
(10)
days from the due date thereof, for the purposes of covering the extra expenses
involved in handling delinquent payments. This late charge provision
shall not be applicable in the event the holder hereof, at its option, elects
to
receive interest at the increased rate as provided hereunder in the event
of
default.
This
Note
is given for an actual loan of money for business purposes and not for personal,
agricultural or residential purposes, and is executed and delivered in the
State
of Oklahoma and shall be governed by and construed in accordance with the
laws
of the State of Oklahoma.
This
Note
constitutes an extension of the $7,000,000 Promissory Note from Maker to
Lender
dated November 20, 2006.
[Signature
page follows.]
[Signature
Page to $7,000,000 Promissory Note]
ADDVANTAGE
TECHNOLOGIES GROUP,
INC., an Oklahoma corporation
By
/s/
Xxx
Xxxxxxx
Xxx
Xxxxxxx, President and Chief
Executive
Officer
4
Schedule
"2.1.3"
PROMISSORY
NOTE
$16,300,000 November
27, 2007
Tulsa,
Oklahoma
FOR
VALUE
RECEIVED, the undersigned, ADDVANTAGE TECHNOLOGIES
GROUP,
INC., an Oklahoma corporation ("Maker"), promises to pay to the order
of
BANK OF OKLAHOMA, N.A.
("Lender"), at its offices in Tulsa, Oklahoma, the principal sum of SIXTEEN
MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($16,300,000.00) pursuant
to
the terms of the Revolving Credit and Term Loan Agreement between Maker and
Lender dated September 30, 2004, and amended of even date herewith (as amended,
the “Credit Agreement”). Payments shall be due quarterly, on the last
day of each February, May, August, and November, commencing February 28,
2009,
with the last payment, due November 30, 2012, equal to the outstanding balance
of principal and interest hereunder. Each payment shall consist of
principal payments of $407,500 plus
accrued
interest. Interest shall accrue on the principal balance outstanding
hereunder and on any past due interest hereunder at a rate at all times equal
to
the Note Rate (defined in the Credit Agreement).
If
any
payment shall be due on a Saturday or Sunday or upon any other day on which
state or national banks in the State of Oklahoma are closed for business
by
virtue of a legal holiday for such banks, such payment shall be due and payable
on the next succeeding banking day and interest shall accrue to such
day. All interest due hereon shall be computed on the actual number
of days elapsed (365 or 366) based upon a 360-day year.
All
payments under this Note shall be made in legal tender of the United States
of
America or in other immediately available funds at Lender's office described
above, and no credit shall be given for any payment received by check, draft
or
other instrument or item until such time as the holder hereof shall have
received credit therefor from the holder's collecting agent or, in the event
no
collecting agent is used, from the bank or other financial institution upon
which said check, draft or other instrument or item is drawn.
From
time
to time the maturity date of this Note may be extended or this Note may be
renewed, in whole or in part, or a new note of different form may be substituted
for this Note and/or the rate of interest may be changed, or changes may
be made
in consideration of loan extensions, and the holder, from time to time, may
waive or surrender, either in whole or in part, any rights, guarantees, security
interests or liens given for the benefit of the holder in connection herewith;
but no such occurrences shall in any manner affect, limit, modify or otherwise
impair any rights, guarantees or security of the holder not specifically
waived,
released or surrendered in writing, nor shall any maker, guarantor, endorser
or
any person who is or might be liable hereon, either primarily or contingently,
be released from such liability by reason of the occurrence of any such
event. The holder hereof, from time to time, shall have the unlimited
right to release any person who might be liable hereon; and such release
shall
not affect or discharge the liability of any other person who is or might
be
liable hereon.
If
any
payment required by this Note to be made is not made within five (5) days
of
when due, or if any default occurs under any loan agreement or under the
provisions of any mortgage, security agreement, assignment, pledge or other
document or agreement which provides security for the indebtedness evidenced
by
this Note, the holder hereof may, at its option, without notice or demand,
declare this Note in default and all indebtedness due and owing hereunder
immediately due and payable. Interest from the date of default on
such principal balance and on any past due interest hereunder shall accrue
at
the rate of two percent (2%) per annum above the nondefault interest rate
accruing hereunder. The Maker and any endorsers, guarantors and
sureties hereby severally waive protest, presentment, demand, and notice
of
protest and nonpayment in case this Note or any payment due hereunder is
not
paid when due; and they agree to any renewal, extension, acceleration,
postponement of the time of payment, substitution, exchange or release of
collateral and to the release of any party or person primarily or contingently
liable without prejudice to the holder and without notice to the Maker or
any endorser, guarantor or surety. Maker and any
guarantor, endorser, surety or any other person who is or may become liable
hereon will, on demand, pay all costs of collection, including reasonable
attorney fees of the holder hereof in attempting to enforce payment of this
Note
and reasonable attorney fees for defending the validity of any document securing
this Note as a valid first and prior lien.
Upon
the
occurrence of any default hereunder, Lender shall have the right, immediately
and without further action by it, to set off against this Note all money
owed by
Lender in any capacity to the Maker or any guarantor, endorser or other person
who is or might be liable for payment hereof, whether or not due, and also
to
set off against all other liabilities of Maker to Lender all money owed by
Lender in any capacity to Maker; and Lender shall be deemed to have exercised
such right of setoff and to have made a charge against such money immediately
upon the occurrence of such default even though such charge is made or entered
into the books of Lender subsequently thereto.
The
holder of this Note may collect a late charge not to exceed an amount equal
to
five percent (5%) of the amount of any payment which is not paid within ten
(10)
days from the due date thereof, for the purposes of covering the extra expenses
involved in handling delinquent payments. This late charge provision
shall not be applicable in the event the holder hereof, at its option, elects
to
receive interest at the increased rate as provided hereunder in the event
of
default.
This
Note
is given for an actual loan of money for business purposes and not for personal,
agricultural or residential purposes, and is executed and delivered in the
State
of Oklahoma and shall be governed by and construed in accordance with the
laws
of the State of Oklahoma.
This
Note
constitutes an increase and extension of the $8,000,000 Promissory Note from
Maker to Lender dated September 30, 2004.
[Signature
Page to Follow]
[Signature
Page to $16,300,000 Promissory Note]
ADDVANTAGE
TECHNOLOGIES GROUP,
INC., an Oklahoma corporation
By
/s/
Xxx
Xxxxxxx
Xxx
Xxxxxxx, President and Chief
Executive
Officer
5
Schedule
"2.1.4"
ASSIGNMENT
OF LIFE INSURANCE POLICY
AS COLLATERAL
"Insured" "Bank"
Xxxxx
Xxxxxxx
______________________
______________________
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BANK
OF OKLAHOMA, N.A.
X.X.
Xxx 0000
Xxxxx,
XX 00000
Attn:
W. Xxxx Xxxxxx
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"Insurer"
Policy
Number: _______________________
_____________________________
_____________________________ Date
of Assignment:
A. For
value received, and as of the Date shown above, the undersigned hereby assign,
transfer and set over to the Bank named herein, its successors and assigns
(herein called the "Assignee") the Life Insurance Policy numbered above issued
by the Insurer shown above (herein called the "Insurer") and any supplementary
contracts issued in connection therewith (said Policy and contracts being
herein
called the "Policy") upon the life of the above named Insured and all claims,
options, privileges, rights, title and interest therein and thereunder (except
as provided in Paragraph C hereof), subject to all the terms and conditions
of
the Policy and to all superior liens, if any, which may exist against the
Policy. The undersigned by this instrument jointly and severally
agree and the Assignee by the acceptance of this Assignment agrees to the
conditions and provisions herein set forth.
B. It
is expressly agreed that, without detracting from the generality of the
foregoing, the following specific rights are included in this Assignment
and
pass by virtue hereof:
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1.
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The
sole right to collect from the Insurer the net proceeds of the
Policy when
it becomes a claim by death or
maturity;
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2.
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The
sole right to surrender the Policy and receive the surrender value
thereof
at any time provided by the terms of the Policy and at such other
times as
the Insurer may allow;
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3.
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The
sole right to obtain one or more loans or advances on the Policy,
either
from the Insurer or, at any time, from other persons, and to pledge
or
assign the Policy as security for such loans or
advances;
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4.
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The
sole right to collect and receive all distributions or shares of
surplus,
dividend deposits or additions to the Policy now or hereafter made
or
apportioned thereto, and to exercise any and all options contained
in the
Policy with respect thereto; provided, that unless and until the
Assignee
shall notify the Insurer in writing to the contrary, the distributions
or
share of surplus, dividend deposits and additions shall continue
on the
plan in force at the time of this Assignment;
and
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5.
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The
sole right to exercise all nonforfeiture rights permitted by the
terms of
the Policy or allowed by the Insurer and to receive all benefits
and
advantages derived therefrom.
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C. It
is expressly agreed that the following specific rights, so long as the Policy
has not been surrendered, are reserved and excluded from this Assignment
and do
not pass by virtue hereof:
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1.
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The
right to collect from the Insurer any disability benefit payable
in cash
that does not reduce the amount of
insurance;
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2.
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The
right to designate and change the
beneficiary;
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3.
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The
right to elect any optional mode of settlement permitted by the
Policy or
allowed by the Insurer;
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but
the
reservation of these rights shall in no way impair the right of the Assignee
to
surrender the Policy completely with all its incidents or impair any other
right
of the Assignee hereunder, and any designation or change of beneficiary or
election of a mode of settlement shall be made subject to this Assignment
and to
the rights of the Assignee hereunder.
D. This
Assignment is made and the Policy is to be held as collateral security for
any
and all liabilities of the undersigned, or any of them, to the Assignee,
either
now existing or that may hereafter arise between any of the undersigned and
the
Assignee (all of which liabilities secured or to become secured are herein
called "Liabilities").
E. The
Assignee covenants and agrees with the undersigned as follows:
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1.
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That
any balance of sums received hereunder from the Insurer remaining
after
payment of the then existing Liabilities, matured or unmatured,
shall be
paid by the Assignee to the persons entitled thereto under the
terms of
the policy had this Assignment not been
executed;
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2.
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That
the Assignee will not exercise either the right to surrender the
Policy or
(except for the purpose of paying premiums) the right to obtain
policy
loans from the Insurer, until there has been default in any of
the
Liabilities or a failure to pay any premium when due, nor until
twenty
days after the Assignee shall have mailed, by first-class mail,
to the
undersigned at the addresses last supplied in writing to the Assignee
specifically referring to this Assignment, notice of intention
to exercise
such right; and
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3.
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That
the Assignee will upon request forward without reasonable delay
to the
Insurer the Policy for endorsement of any designation or change
of
beneficiary or any election of an optional mode of
settlement.
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6
F. The
Insurer is hereby authorized to recognize the Assignee's claims to rights
hereunder without investigating the reason for any action taken by the Assignee,
or the validity or the amount of the Liabilities or the existence of any
default
therein, or the giving of any notice under Paragraph E(2) above or otherwise,
or
the application to be made by the Assignee of any amounts to be paid to the
Assignee. The sole signature of the Assignee shall be sufficient for
the exercise of any rights under the Policy assigned hereby and the sole
receipt
of the Assignee for any sums received shall be a full discharge and release
therefor to the Insurer. Checks for all or any part of the sums
payable under the Policy and assigned herein, shall be drawn to the exclusive
order of the Assignee if, when, and in such amounts as may be required by
the
Assignee.
G. The
Assignee shall be under no obligation to pay any premium, or the principal
of or
interest on any loans or advances on the Policy whether or not obtained by
the
Assignee, or any other charges on the Policy, but any such amounts so paid
by
the Assignee from its own funds, shall become a part of the Liabilities hereby
secured, shall be due immediately, and shall draw interest at a rate fixed
by
the Assignee from time to time not exceeding the maximum allowed by
law.
H. The
exercise of any right, option, privilege or power given herein to the Assignee
shall be at the option of the Assignee, but (except as restricted by Paragraph
E(2) above) the Assignee may exercise any such right, option, privilege or
power
without notice to, or assent by, or affecting the liability of, or releasing
any
interest hereby assigned by the undersigned, or any of them.
I. The
Assignee may take or release other security, may release any party primarily
or
secondarily liable for any of the Liabilities, may grant extensions, renewals
or
indulgences with respect to the Liabilities, or may apply to the Liabilities
in
such order as the Assignee shall determine, the proceeds of the Policy hereby
assigned or any amount received on account of the Policy by the exercise
of any
right permitted under this Assignment, without resorting to other
security.
J. In
the event of any conflict between the provisions of this Assignment and
provisions of the note or other evidence of any Liability, with respect to
the
Policy or rights of collateral security therein, the provisions of this
Assignment shall prevail.
K. Each
of the undersigned declares that no proceedings in bankruptcy are pending
against him and that his property is not subject to any assignment for the
benefit of creditors.
[Signature
Page Follows]
WITNESSES:
______________________________
______________________________
______________________________
|
SIGNATURES:
____________________________________
OWNER
____________________________________
OWNER
____________________________________
BENEFICIARY
____________________________________
BENEFICIARY
|
|
ACKNOWLEDGEMENT
STATE
OF )
)
ss.
COUNTY
OF
________________ )
The
foregoing instrument was acknowledged before me this ______ day of November,
2007, by ________________________________________.
My
Commission Expires:
____________________________________
Notary
Public