PROMISSORY NOTE EXTENSION AGREEMENT
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THIS PROMISSORY NOTE EXTENSION AGREEMENT ("Agreement") is made and
entered into effective as of June 28, 2006, by and among ▇▇▇▇▇▇▇ FOODS, INC., an
Oklahoma corporation ("Borrower"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
(collectively "Guarantors"), and BANK OF THE WEST, a California banking
corporation, successor by merger to Commercial Federal Bank, a Federal Savings
Bank ("Lender").
R E C I T A L S:
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A. Borrower and Lender are parties to a Promissory Note dated
June 29, 2005, in the original principal amount of Four Million Dollars
($4,000,000.00) ("Note"). By the terms of Unconditional Guaranties of Payment
dated June 29, 2005, Guarantors unconditionally guaranteed to Lender Borrower's
payment and performance under the Note.
B. The Note matured on June 28, 2006, and the parties hereto have
entered into this Agreement for purposes of extending the maturity date of the
Note.
NOW, THEREFORE, for valuable consideration, the parties hereto agree as
follows:
1. PRINCIPAL BALANCE. The outstanding principal amount due under
the Note is currently Two Million Eight Hundred Fourteen Thousand Two Hundred
Ninety-Three and 75/100 Dollars ($2,814,293.75). In addition, interest has
accrued and continues to accrue under the terms of the Note. Borrower shall
continue to pay monthly interest payments to Lender under the terms of the Note
until the Due Date, as amended hereby.
2. DUE DATE. The Due Date as defined in the Note is hereby
extended to October 31, 2006, on which date all principal and interest remaining
outstanding shall be paid in full without further notice or demand.
3. MISCELLANEOUS. Borrower covenants and agrees with Lender that
it has no defenses to the payment of the Note and the performance of Borrower's
obligations thereunder. Except as expressly modified herein, all other terms and
provisions of the Note shall remain in full force and effect.
▇▇▇▇▇▇▇ FOODS, INC., an Oklahoma
corporation, Borrower
Date: JULY 19, 2006 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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Date: JULY 19, 2006 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Guarantor
Date: JULY 19, 2006 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Guarantor
BANK OF THE WEST, a California
banking corporation, successor by
merger to Commercial Federal Bank, a
Federal Savings Bank, Lender
Date: JULY 21, 2006 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: BBC MANAGER
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PROMISSORY NOTE (REVOLVING) - ADJUSTABLE INTEREST RATE
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$4,000,000.00 Loan No. 3700692971
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1. BORROWER'S PROMISE TO PAY PRINCIPAL AND INTEREST. For value
received, the undersigned Maker ("Borrower"), promises to pay to COMMERCIAL
FEDERAL BANK, A FEDERAL SAVINGS BANK, its successors or assigns ("Lender"), at
its office at ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place as Lender may from time to time designate, without
offset or deduction, the principal sum of Four Million Dollars ($4,000,000.00)
or so much thereof as may be outstanding from time to time hereunder and under
the Loan and Security Agreement of even date herewith between Borrower and
Lender ("Loan Agreement"), with interest from the date hereof on the unpaid
principal balance at the initial interest rate of six and three-fourths percent
(6.75%) per annum, interest only payable monthly to Lender beginning on July 28,
2005, and continuing on the twenty-eighth (28th) day of each and every month
thereafter (subject to adjustment as provided hereafter) until June 28, 2006
("Due Date"), on which date any unpaid principal, interest and all other sums
due under this Note shall be paid in full. Advances of principal shall be made
in accordance with the terms of the Loan Agreement. This is a revolving line of
credit loan and Borrower shall be entitled to borrow, repay and reborrow
principal under this Note, subject to the terms of this Note and related
documents and agreements, including the "Borrowing Base" limitations contained
in the Loan Agreement.
Interest payable under this Note shall be calculated on the basis of a
three hundred sixty (360) day year with interest charged on a daily basis for
the actual number of days that principal is outstanding from the date of
disbursement until paid.
2. ADJUSTABLE INTEREST RATE PROVISIONS (MULTIPLE REQUIRED
ADJUSTMENTS). Borrower agrees that the interest rate on this Note shall be
adjusted on each Interest Rate Adjustment Date, as defined below, to be equal,
following such date until the next Interest Rate Adjustable Date, to the sum of
(i) the Prime Rate of interest quoted periodically by THE WALL STREET JOURNAL as
the base rate on corporate loans posted by at least seventy-five percent
(75.00%) of the nation's thirty (30) largest banks (such rate being hereafter
referred to as the "Index"); plus (ii) three-fourths of one percentage point
(0.75%) (or 75 basis points).
a. INTEREST RATE ADJUSTMENTS. Changes in the interest
rate on this Note will become effective on the date of any change in
the Index during the term of this Note, each of which dates is called
an "Interest Rate Adjustment Date."
b. NON-WAIVER OF ADJUSTMENTS. If Lender, due to delay or
oversight, does not give Borrower prompt notice of an interest rate
adjustment following an Interest Rate Adjustment Date, this will not
constitute a waiver of Lender's right and option to make an adjustment,
and Lender may still at any time within ninety (90) days following the
Interest Rate Adjustment Date notify Borrower of such adjustment. Any
interest rate adjustment made within ninety (90) days following the
Interest Rate Adjustment Date shall be effective retroactively to the
Interest Rate Adjustment Date, and Borrower agrees
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to reimburse Lender on demand for any interest and principal due as a
result of such retroactive adjustment.
c. ALTERNATIVE INDEX. If, at any time during the term of
this Note, the Index is no longer available or is otherwise
unpublished, Lender may select an alternative published index over
which Lender has no control, in which case such alternative index will
become the Index provided in this Note. The alternative index selected
by Lender shall be reasonably comparable to the former Index with
respect to rate levels and frequency of fluctuation.
d. NOTICES. Notice of any change in the interest rate
shall be deemed given by Lender when such notice is deposited in the
United States mail, postage prepaid, addressed to Borrower.
3. NOTICE. Except as may be otherwise specified in this Note, any
notices required to be given hereunder shall be given in the manner specified in
the Loan Agreement executed by Borrower and Lender on an even date herewith.
4. CREDITING OF PAYMENTS. Each installment payment in any amount
received by Lender shall be credited as of its date of receipt by Lender, first
to interest then due and the remainder to principal, and interest shall cease
upon the principal so credited as of the date that such credit is made.
5. DEFAULT BY BORROWER. Should Borrower fail to make payment of
any installment or other sum within ten (10) days after the date when due, or
should Borrower fail to perform any other provision or condition contained in
this Note or in any instrument securing this Note, within twenty (20) days after
written notice of default is given by Lender, this Note shall be in default, and
the whole sum of principal and interest shall become immediately due at the
option of Lender and regardless of any prior forbearance. Interest shall accrue
following any event of default hereunder at the rate set forth in this Note,
plus five percentage points (5.00%). As used in this Note and in the Loan
Documents (as hereinafter defined) an event of default shall include, but shall
not be limited to:
a. Any payment or sum required by this Note or the Loan
Documents is not received by Lender within ten (10) days after its due
date; or
b. Borrower fails to perform any other obligation
required under this Note or the Loan Documents, or does any act or
allows any condition to occur or exist which is prohibited under this
Note or the Loan Documents, which is not cured within twenty (20) days
after written notice of default by Lender; or
c. Borrower fails to comply with any other agreement in
any of the documents and agreements forming a part of the transaction
of which this Note is a part, including the Loan Documents, which is
not cured within twenty (20) days after written notice of default by
Lender; or
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d. Any representation or warranty made herein or in any
of the Loan Documents, or otherwise in connection with the application
for or making of this loan, proves to be untrue, or Borrower has
omitted or failed to disclose a material fact to Lender at any time
prior to the date of this Note which if disclosed would have had a
significant impact on Lender's decision whether to approve the loan
evidenced by this Note and the Loan Documents; or
e. The commencement by or against Borrower of any
proceedings under any bankruptcy or similar law for the relief of
debtors of the United States or any state or the appointment of any
receiver, trustee, assignee for the benefit of creditors, conservators
or similar parties for the Borrower or any of its property, which in
the case of proceedings commenced against the Borrower are not
dismissed within sixty (60) days after commencement; or
f. An assignment, transfer, conveyance, or
relinquishment by Borrower of any of the rights or obligations under
this Note; or
g. The Collateral (as defined in the Loan Agreement) is
impaired, pledged, or transferred in whole or in part such that the
first lien security of Lender in such Collateral, including, but not
limited to, the inventory, accounts receivable or general intangibles,
is diminished, altered, impaired or encumbered, such as by failure of
Borrower to pay any taxes and assessments prior to delinquency or the
filing of any lien which takes priority over any lien of Lender; or
h. A material adverse change occurs in Borrower's
financial condition, Lender believes the prospect of payment or
performance of this Note is impaired, or Lender in good faith believes
itself insecure;
i. Any of the preceding events occurs with respect to
any Guarantor of this Note, or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability
under, any guaranty of this Note;
j. A default occurs that is not cured within any
applicable notice and/or cure period under any other note, loan
agreement, or obligation of Borrower to Lender, whether now existing or
hereafter created, or to any of Borrower's affiliates, whether such
loan is now existing or hereafter created, including, but not limited
to a term loan made to Borrower on or about March 22, 2005, in the
original principal amount of Two Hundred Twenty-Four Thousand One
Hundred Dollars ($224,100.00) and known as Loan No. 3700692743, and any
renewal or replacement of such loan; or
k. The death of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, provided that Lender
will not exercise its right to declare this loan to be in default due
to such death provided that (a) at date of death, Borrower is not in
default of any of its payment and performance obligations of this Note,
(b) Borrower does not cause any Event of Default specified in (2)
through (i) inclusive above to occur, (c) within ninety (90) days
following such death, Borrower provides to Lender a detailed plan
for business succession and loan repayment, and (d)
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such plan is determined by Lender in its sole discretion to be
acceptable. If any of the foregoing conditions is not satisfied, then
the unpaid principal and all accrued interest and other charges under
this Note will automatically be fully due and payable, without written
notice or demand required of and by Lender.
6. LATE CHARGE. Borrower agrees: (a) to pay immediately to Lender
without demand in the event any installment or other payment or sum is not
actually received by Lender within ten (10) days after its due date, and without
regard to the date as of which such payment is credited, an amount equal to five
percent (5.00%) of the installment or other payment or sum due; (b) that it
would be impractical or extremely difficult to fix Lender's actual damages in
the event that any installment, payment or sum shall not be paid when due; and
(c) that such amount shall be presumed to be the amount of damages for such late
payment. This paragraph and the amount which it provides shall not limit
Lender's right under this Note, the Loan Agreement, or any instrument securing
this Note, or otherwise, to compel prompt performance hereunder and thereunder.
7. PREPAYMENT PRIVILEGE. This Note may be prepaid, in whole or in
part, at any time without penalty. Prepayments shall be applied against the
outstanding principal balance of the Note and shall not extend or postpone the
due date of any subsequent monthly installments or change the amount of such
installments, unless Lender shall agree otherwise in writing.
8. NOTE PAYABLE IN U.S. DOLLARS. Principal, interest, and all
charges are payable in lawful money of the United States.
9. OBLIGATIONS OF PERSONS UNDER THIS NOTE. In this Note, the
singular shall include the plural, and this Note shall be the joint and several
obligation of each Maker as Borrower, in the event that there is more than one
Maker.
10. SECURITY/ACCELERATION CLAUSE. This Note is secured by the Loan
Agreement, a Security Agreement, one or more Financing Statements, and other
instruments, agreements and documents or even date herewith which grant Lender
security interests in certain property (the foregoing are collectively referred
to as "Loan Documents" and the collateral encumbered by the Loan Documents is
referred to as the "Property" or the "Collateral"). The obligations, covenants
and agreements of each and every of the Loan Documents are hereby made a part of
this Note to the same extent and with the same effect as if they were fully set
forth herein, and Borrower does hereby agree to perform and keep each and every
obligation, covenant and agreement set forth in this Note and in the other Loan
Documents. This Note shall evidence, and the Loan Documents shall secure, the
indebtedness described herein, any future loans or advances that may be made to
or on behalf of Borrower by Lender at any time or times hereafter under the Loan
Documents, and any other amounts required to be paid by Borrower under the Loan
Documents, and any such loans, advances or amounts shall be added to the
indebtedness evidenced by this Note, and shall bear interest at the interest
rate then effective, unless a greater rate is expressly provided for in this
Note or the other Loan Documents.
11. ASSUMABILITY OF THIS NOTE. If this Note, any Loan Documents or
any Property encumbered by such Loan Documents is assumed, assigned or conveyed
by Borrower in whole
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or in part, or upon a sale, assignment or conveyance of any ownership interest
in Borrower, or upon a sale or conveyance (whether voluntary or involuntary) of
all or a portion of the Property described in the Loan Documents, or upon the
occurrence of any other transaction or event referenced and prohibited in the
Loan Agreement, or if any plan or attempt is made to do or perform any of the
foregoing, this Note shall automatically and without notice from Lender at
Lender's option be deemed to be in default, and Lender may declare all unpaid
principal, interest and other sums under this Note to be immediately due and
payable in full. The foregoing acceleration shall not be applicable in the case
of:
a. Transfers by devise or descent or by operation of law
upon the death of an individual owning a beneficial interest in
Borrower;
b. Sales of inventory in the ordinary course of
Borrower's business operations; and
c. Sales or transfers for fair market consideration of
fixtures or any routine personal property used in the operation of the
Borrower's business, provided that such sales or transfers are
incidental to the replacement of like fixtures and personal property of
newer and better quality and condition.
If Lender consents (which consent may be withheld in Lender's sole
discretion) to an assignment, conveyance or assumption of this Note, or to a
sale or conveyance of all or a portion of the Property, or to a transfer or
conveyance of any ownership interest in Borrower except as permitted above, said
consent shall be conditioned upon compliance with the following terms (and
others as determined by Lender in its sole discretion): (a) the ownership
entity, acquisition terms, financial condition, and credit and management
expertise of buyer or assignee are approved by Lender in Lender's sole
discretion; (b) buyer or assignee executes a written assumption agreement in
form and content as prepared by Lender; (c) buyer or assignee pays Lender an
assumption fee equal to one percent (1.00%) of the outstanding principal balance
of this Note as of the date of transfer; (d) Borrower, buyer or assignee pays to
Lender on demand all costs and expenses including, but not limited to, credit
report fees, recording fees and attorneys' fees incurred by Lender in connection
with the transaction; and (e) buyer or assignee complies with all other
requirements reasonably deemed necessary by Lender.
12. MAXIMUM INTEREST. In no event whatsoever shall the amount
paid, or agreed to be paid, to Lender for the use, forbearance or retention of
the money to be loaned hereunder ("Interest") exceed the maximum amount
permissible under applicable law. If the performance or fulfillment of any
provision hereof or of the Loan Agreement or any other Loan Documents or other
agreement between Lender and Borrower shall result in Interest exceeding the
limit for interest prescribed by law, then the amount of such Interest shall be
reduced to the maximum rate which may lawfully be charged or collected by
Lender. If, from any circumstances whatsoever, Lender should receive as Interest
an amount which would exceed the highest lawful rate, the amount which would be
excessive Interest shall be applied to the reduction of the principal balance
owing hereunder (or, at the option of Lender, be paid over to Borrower) and not
to the payment of Interest.
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13. COSTS OF COLLECTION AND/OR ENFORCEMENT. Borrower, together
with all sureties, endorsers, and guarantors of this Note, if any, jointly and
severally promise to pay: (a) all reasonable costs and expenses of enforcement
and/or collection, including without limitation, reasonable attorneys' fees, in
the event this Note or any portion of this Note after default is placed in the
hands of attorneys for enforcement and/or collection and such is effected with
or without suit; (b) reasonable attorneys' fees, as determined by the judge of
the court if such determination is required by law, and all other reasonable
costs, expenses and fees incurred by Lender in the event suit is instituted to
collect or enforce this Note or any portion of this Note; (c) all reasonable
costs and expenses provided for in the Loan Agreement and other Loan Documents,
or in any other instrument given as security for this Note and/or incurred by or
on behalf of Lender in connection with collecting or otherwise enforcing any
right of Lender under this Note, the Loan Agreement, the Loan Documents, or any
other instrument given as security for this Note; and (d) all reasonable costs
and expenses, including, without limitation, reasonable attorneys' fees incurred
by Lender in connection with any bankruptcy, insolvency or reorganization
proceeding or receivership in which Borrower is involved, including, without
limitation, reasonable attorneys' fees incurred in making any appearances in any
such proceeding or in seeking relief from any stay or injunction issued in or
arising out of any such proceeding.
14. CERTAIN WAIVERS. Except to the extent provided to the contrary
in this Note, Borrower and all co-makers, sureties and endorsers of this Note,
if any, jointly and severally waive diligence, grace, demand, presentment for
payment, exhibition of this Note, protest, notice of protest, notice of
dishonor, notice of demand, notice of nonpayment, and any and all exemption
rights against the indebtedness evidenced by this Note, and agree to any and all
extensions or renewals from time to time without notice and to any partial
payments of this Note made before or after maturity and that no such extension,
renewal or partial payment shall release any one or all of them from the
obligation of payment of this Note or any installment of this Note, and consent
to offsets of any sums owed to any one or all of them by Lender at any time.
15. EXERCISE OF RIGHTS. No single or partial exercise by Lender,
or delay or omission in the exercise by Lender, of any right or remedy under
this Note, Loan Agreement, or other Loan Documents or authorized by law shall
preclude, waive or limit the exercise thereof, any other or further exercise
thereof, or the exercise of any right or remedy. Lender shall at all times have
the right to proceed against Borrower and/or any portion of the Property
securing this Note in such manner as Lender may deem fit, without waiving any
other rights or remedies with respect to the Property, any portion thereof, or
interest therein.
16. NO MODIFICATIONS. This Note may not be changed, amended or
modified, except in a writing expressly intended for such purpose and executed
by Borrower and Lender.
17. GOVERNING LAW. The loan contract between the parties,
including this Note, the Loan Agreement and other Loan Documents, is made
pursuant to and shall be construed and governed by the laws of the United States
and the rules and regulations promulgated thereunder, and, to the extent the
laws of a state are applicable (including laws regarding usury), by the laws of
the State of Oklahoma.
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18. CONSTRUCTION. The words "Borrower" and "Lender" shall be
deemed to include the respective heirs, personal representatives, successors and
assigns of each, and shall denote and singular and/or plural, and the masculine
and/or feminine, and natural and/or artificial persons, whenever and wherever
the context so requires. The captions herein are inserted only for convenience
of reference and in no way define, limit or describe the scope or intent of this
Note or any particular paragraph or section hereof, or the proper construction
thereof.
19. TIME OF THE ESSENCE. Time shall be of the essence in this Note
with respect to all of Borrower's obligations hereunder.
20. CONSENT TO RELIEF FROM STAV. Borrower hereby agrees that in
the event on or before the date all sums under this Note are paid in full to
Lender, Borrower (by Borrower's own action or the action of any shareholders,
officers, directors or creditors), (i) files with any bankruptcy court of
competent jurisdiction or is the subject of any petition for relief under Title
11 of the U.S. Code, as amended, (ii) is the subject of any order for relief
issued under such Title 11 of the U.S. Code, as amended, (iii) files or is the
subject of any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors, (iv) seeks, consents to, or acquiesces in the appointment of
any trustee, receiver, conservator, or liquidator, or (v) is the subject of any
order, judgment, or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or relief for debtors, which in the case of an
involuntary proceeding brought against Borrower is not dismissed within sixty
(60) days after commencement, then all sums under this Note shall thereupon be
deemed to be immediately due and payable in full, and Lender shall thereupon be
entitled to relief from any automatic stay imposed by Section 362 and Title 11
of the U.S. Code, as amended, or otherwise, on or against the exercise of the
rights and remedies otherwise available to Lender as provided in this Note and
in all other documents made to secure the obligations under this Note, and as
otherwise provided by law, and Borrower hereby waives the benefits of such
automatic stay and consents and agrees to raise no objection to such relief.
21. SEVERABILITY. If any provision hereof should be held
unenforceable or void, then such provision shall be deemed separable from the
remaining provisions and shall in no way affect the validity of this Note,
except that if such provision relates to the payment of any monetary sum, then
Lender may, at is options, declare the indebtedness evidenced hereby immediately
due and payable.
EXECUTED this 29th day of June, 2005.
▇▇▇▇▇▇▇ FOODS, INC., an Oklahoma
corporation, Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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BORROWER'S ADDRESS:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
STATE OF OKLAHOMA )
)SS.
COUNTY OF OKLAHOMA )
The foregoing instrument was executed and acknowledged before me this
29th day of June, 2005, by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the President of ▇▇▇▇▇▇▇ FOODS,
INC., an Oklahoma corporation, Borrower, for and on behalf of Borrower.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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Notary Public
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▇▇▇▇ ▇▇▇▇▇▇
NOTARY PUBLIC
STATE OF OKLAHOMA
CLEVELAND COUNTY
COMMISSION NUMBER: 02020623
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My Commission Expires Dec. 19, 2006
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