EXHIBIT 10(c)
-------------
PEOPLES BANCORP INC. ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1996
ORIGINAL TERM NOTE BETWEEN PEOPLES BANCORP INC. AND FIFTH THIRD BANK
Officer No. 90-New
$3,000,000.00 January 2, 1997
City- Cincinnati State - Ohio
- -------------------------------
On or before the Due Date below, the undersigned, a corporation,
for value received, and if more than one, jointly and severally,
promise to pay to the order of The Fifth Third Bank, 38 Fountain
Square Plaza, Cincinnati, Ohio (hereinafter referred to as
"Bank") the sum of Three million and 00/100 Dollars (hereinafter
referred to as the "Borrowing") plus interest per annum at a
rate of: 0% greater than the "Prime Rate" (the rate announced by
Bank from time to time). In the event of a change in said Prime
Rate, the rate on this note shall be changed immediately to a
rate which shall be greater than the new Prime Rate by the
amount stated herein. Interest shall be computed on a year of
360 days and charged for the actual number of days elapsed.
This note is payable as follows:
Principal shall be due and payable: In installments:
Installments in the amount of $150,000 shall be due on the 1st
day of each six months beginning January 2, 2003 of the
principal amount then owing plus all interest due thereon.
Interest shall be due and payable: On the 1st day of each six
months beginning July 1, 1997. Principal and interest payments
shall be made at the Bank's address above unless otherwise
designated by Bank in writing.
To secure repayment of this note and all modifications,
extensions and renewals thereof, and all other Obligations (as
herein defined) of the undersigned to Bank, the undersigned
grants Bank a security interest in all of the undersigned's now
owned or hereafter acquired interests in all property in which
Bank is, at any time, granted a lien for any Obligation, and all
property in possession of Bank including, without limitation,
money, securities, instruments, documents, letters of credit,
chattel paper, or other property delivered to Bank in transit,
for safekeeping, or for collection or exchange for other
property, all distributions, dividends, warrants, securities and
other rights in addition to such property, all rights to payment
from and claims against Bank and all proceeds thereof, and all
real and personal property described below ("Collateral"). The
undersigned agrees to immediately deliver such additional
dividends warrants, securities or other property or rights
thereto to Bank immediately upon receipt as additional
Collateral and until delivery to hold same in trust for Bank.
The undersigned agrees that the Bank may, at any time, call for
additional Collateral satisfactory to it. All documents
executed in connection with this note and all Collateral,
including without limitation the following, further secure the
Obligations:
16,000 shares of Common Stock of The First National Bank of
Southeastern Ohio.
- -----------------------------------------------------------
The Obligations secured by the Collateral (herein, the
"Obligations") shall include this note and each and every
liability of the undersigned jointly or severally to Bank and
all affiliates of Fifth Third Bancorp however created, direct or
contingent, due or to become due, whether now existing or
hereafter arising, participated in whole or in part, created by
trust agreement, lease, overdraft, agreement, or otherwise, in
any manner by the undersigned. The undersigned also grants Bank
a security interest in all of the Collateral as agent for all
affiliates of Fifth Third Bancorp for all Obligations of the
undersigned to such affiliates. Said security interest shall
not be enforced to the extent prohibited by the Truth in Lending
Act as implemented by Federal Reserve Regulation Z.
The undersigned certifies that the proceeds of this loan are to
be used for business purposes. If this note is a renewal, in
whole or in part, of a previous Obligation, the acceptance by
Bank of this note shall not effectuate a payment but rather a
continuation of the previous Obligation.
Bank may charge, and the undersigned agrees to pay, on the above
Effective Date, a note processing fee in the amount determined
by Bank.
EVENTS OF DEFAULT:
This note, and all other Obligations of the undersigned to Bank,
shall be and become immediately due and payable at the option of
the Bank, without any demand or notice whatsoever, upon the
occurrence of any of the following described events, each of
which shall constitute an Event of Default:
1) Any failure to make any payment when due of the principal or
interest on this note, the occurrence of any event of
default as therein defined on any other Obligation of the
undersigned, or a default in the Obligations under any
security documents.
2) The death or dissolution of the undersigned, of any endorser
or guarantor, or if the undersigned is a partnership, the
death or dissolution of a general partner.
3) Any failure to submit to Bank current financial information
upon request.
4) The creation of any lien (except a lien to Bank) or the
issuance of an attachment against or seizure of any of
the property of, or the entry of a judgment against, the
undersigned.
5) In the Judgment of Bank, any adverse change occurs in the
ability of the undersigned to repay the Obligations, or
the Bank deems itself insecure.
6) An assignment for the benefit of the creditors of, or the
commencement of any bankruptcy, receivership, insolvency,
reorganization, or liquidation proceedings by or against
the undersigned or any endorser or guarantor hereof.
7) The institution of any garnishment proceedings by
attachment, levy or otherwise, against any Collateral, any
deposit balance maintained or any property deposited with the
Bank by the undersigned or any endorser or guarantor hereof.
8) Bank has called for additional security and the undersigned
has not furnished satisfactory additional security on demand.
Upon the occurrence of an Event of Default herein described,
Bank may, as its option, declare this note and all other
Obligations of the undersigned to be fully due and payable in
their aggregate amount together with accrued interest plus any
applicable prepayment premiums, fees, and charges.
In addition to any other remedy permitted by law, the Bank may
at any time, without notice, apply the Collateral to this note
or such other Obligations, whether due or not, and Bank may, at
its option, proceed to enforce and protect its rights by an
action at law or in equity or by any other appropriate
proceedings. Notwithstanding any other legal or equitable
rights of Bank, Bank, in the Event of Default, is (a) hereby
irrevocably appointed and constituted attorney-in-fact, with
full power of substitution, to exercise all rights of ownership
with respect to Collateral including, but not limited to, the
right to collect all income of other distributions arising
therefrom and to exercise all voting rights connected with
Collateral: and (b) is hereby given full power to collect, sell,
assign, transfer and deliver all of said Collateral or any part
thereof, or any substitutes therefor, or any additions thereto,
through any private or public sale without either demand or
notice to the undersigned, or any advertisement, the same being
hereby expressly waived, at which sale Bank is authorized to
purchase said property or any part thereof, free from any right
of redemption on the part of the undersigned which is hereby
expressly waived and released. In case of sale for any cause,
after deducting all costs and expenses of every kind, Bank may
apply, as it shall deem proper, the residue of the proceeds of
such sale toward the payment of any one or more or all of the
Obligations of the undersigned, whether due or not due, to bank:
after such application and the return of any surplus the
undersigned agrees to be and remains liable to Bank for any and
every deficiency after application as aforesaid upon this and
any other Obligation. the undersigned shall pay all costs of
collection incurred by Bank, including its attorney's fees, if
this note is referred to an attorney for collection, whether or
not payment is obtained before entry of judgment, which costs
and fees are Obligations secured by the Collateral.
If any payment is not paid when due (whether by acceleration or
otherwise) or within 10 days thereafter, the undersigned agrees
to pay to Bank a late payment fee as provided for in any loan
agreement or 5% of the payment amount, whichever is greater,
with a minimum fee of $20.00. After an Event of Default, the
undersigned agrees to pay to Bank a fixed charge of $25.00, or
the undersigned agree that Bank may, without notice, increase
the above stated interest rate by 6%, whichever is greater.
Under no circumstances shall said interest rate be raised to a
rate which shall be in excess of the maximum rate of interest
allowable under the state and/or federal usury laws in force at
the time of such change.
The undersigned may prepay all or part of this note, which
prepaid amounts shall be applied to the amounts due in reverse
order of their due dates. Upon such prepayments, including
involuntary prepayment by acceleration, the undersigned shall
pay a premium of 2% of the maximum principal amount permitted
under this note. Partial prepayments shall not excuse any
subsequent payment due.
ENTIRE AGREEMENT: The undersigned agrees that there are no
conditions or understandings which are not expressed in this
note and the documents referred to herein.
WAIVER: No failure on the part of Bank to exercise any of its
rights hereunder shall be deemed a waiver of any such rights or
of any default. Demand, presentment, protest, notice of
dishonor, notice of protest, and notice of default are hereby
waived. Each of the undersigned, including but not limited to
all co-makers and accommodation makers of this note, hereby
waives all suretyship defenses including but not limited to all
defenses based upon impairment of collateral and all suretyship
defenses described in Section 3-605 of the Uniform Commercial
Code, as revised in 1990 (the "UCC"). Such waiver is entered to
the full extent permitted by Section 3-605 (i) of the UCC.
JURY WAIVER: THE UNDERSIGNED, AND ANY ENDORSER OR GUARANTOR
HEREOF, WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY MATTERS
ARISING OUT OF THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
The declaration of invalidity of any provision of this note
shall not affect any part of the remainder of the provisions.
This note is supplemented by the terms and conditions of a loan
agreement dated January 7, 1997 between the undersigned and Bank.
Warrant of attorney: The undersigned, jointly and severally,
authorize any attorney-at-law to appear in any court of record
after maturity of this note, whether by acceleration or
otherwise, to waive the issuance and service of process and to
confess judgment against them in favor of the Bank for the
principal sum due hereon together with interest, charges, court
costs and attorney's fees, and to waive and release all errors,
rights of appeal, exemptions and stays of execution. The
undersigned also agrees that the attorney acting for the
undersigned as set forth in this paragraph may be compensated by
Bank for such services, and the undersigned waive any conflict
of interest caused by such representation and compensation
arrangement. This warrant of attorney to confess judgment shall
be construed under the laws of the State of Ohio.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT
JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE
AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO
COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
Due Date January 2, 2003 Peoples Bancorp Inc.
Address 138 Putnam Street /s/ JOHN W. CONLON
Marietta, OH 45750 John W. Conlon
Its Chief Financial Officer
ADDENDUM
TO TERM NOTE
FROM
PEOPLES BANCORP INC.
TO
THE FIFTH THIRD BANK
(dated 1/7/97)
THIS ADDENDUM is intended to be attached to, and the provisions
hereof are hereby incorporated into that certain Term Note,
dated January 7, 1997, in the principal amount of $3,000,000
(the "Note"), executed by PEOPLES BANCORP INC., an Ohio
corporation (the "Borrower") and made payable to THE FIFTH THIRD
BANK, and Ohio corporation (the "Bank").
1.1 Term Loan. (a) Bank agrees, subject to the terms
and conditions hereinafter set forth, to make a term loan (the
"Term Loan") to Borrower on the date of this Note in the amount
of Three Million Dollars ($3,000,000).
(b) The principal amount of the Term Note will
be payable in ten (10) semi-annual installments of principal
which will be due on January 2, 1998 and on the first (1st)
business day of each July and January thereafter during the term
hereof. The final payment of principal will be due on January
2, 2003. The first nine (9) semi-annual installments of
principal will be in the amount of $150,000 and the final
installment of principal will be in the amount of the entire
unpaid balance of the Term Loan, plus all accrued and unpaid
interest and any other charges, advances and fees, if any,
outstanding under the Term Loan.
(c) Borrower will pay interest to Bank on the
outstanding principal amount of the Term Loan at rate per annum
equal to the interest rate set forth in the Term Note. Interest
will be payable in immediately available funds at the principal
office of Bank on the first (1st) day of each calendar month
during the term hereof. Any principal amount not paid when due
(at maturity, by acceleration or otherwise) will bear interest
thereafter until paid at the Default Rate; this provision does
not constitute waiver of any Events of Default or an agreement
by Bank to permit any late payments whatsoever.
(d) The proceeds of the Term Loan will be used for
general working capital and to fund a portion of the purchase
price of acquisitions of the assets or stock of banks and/or
savings and loan associations.
1.2 Prepayment. Borrower may prepay any portion of any
of the Loan in whole or in increments of $300,000 at any time
without premium or penalty. Any prepayments in advance of any
amortized payments will be applies to reduce the outstanding
principal amount of such Loan in the inverse chronological order
of maturity.
1.4 Fee. On July 1, 1997, Borrower agrees to pay to Bank
a one-time, non refundable loan fee in an amount equal to an
amount equal to the product of (a) .00125% multiplied by (b) the
positive difference between the outstanding principal balance of
the Term Loan as of July 1, 1997 minus $1,430,000.
Section 2. Representations And Warranties.
-------------------------------
Borrower hereby warrants and represents to Bank the following:
2.1 Organization and Qualifications. Borrower is a duly
organized, validly existing corporation in good standing under
the laws of the State of Ohio, its state of incorporation, has
the power and authority (corporate and otherwise) to carry on
its business and to enter into and perform this Note and the
other Loan Documents, is qualified and licensed to do business
in each jurisdiction in which such qualifications or licensing
is required. All information provided to Bank with respect to
Borrower and its operations is true and correct.
2.2 Due Authorization. The execution, delivery and
performance by Borrower of the Pledge Agreement, the Note and
the other Loan Documents have been duly authorized by all
necessary corporate action, and will not contravene any law or
any government rule or order binding on Borrower, or the
articles of incorporation, code of regulations or bylaws of
Borrower, nor violate any agreement or instrument by which
Borrower is bound nor result in the creation of Lien on any
assets of Borrower except the Lien granted to Bank herein.
Borrower has duly executed and delivered this Note, the Pledged
Agreement and the other Loan Documents and they are valid and
binding obligations of Borrower enforceable according to their
respective terms except as limited by equitable principles and
by bankruptcy, insolvency or similar laws affecting the rights
of creditors generally. No notice to or consent by any
governmental body is needed in connection with this transaction.
2.3 Litigation. There are no suits or proceedings
pending or threatened against of effecting Borrower, and no
proceeding before any governmental body are pending or
threatened against Borrower.
2.4 Margin Stock. No part of the Loan will be used to
purchase or carry, or to reduce or retire or refinance any
credit incurred to purchase or carry, any margin stock (within
the meaning of Regulations U and X of the Board of Governors of
the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying any margin stock. If
requested by Bank, Borrower will furnish to Bank statements in
conformity with the requirements of Federal Reserve Form U-1.
2.5 Business. Borrower is not a party to or subject to
any agreement or restriction which in the opinion of Borrower's
management is so unusual or burdensome that it might have a
material adverse effect on Borrower's business, properties or
prospects.
2.6 Licenses, etc. Borrower has obtained any and all
licenses, permits, franchises, governmental authorizations,
patents, trademarks, copyrights or other necessary for the
ownership of its properties and the advantageous conduct of its
business. Borrower possesses adequate licenses, patents, patent
applications, copyrights, trademarks, trademark applications,
and trade names to continue to conduct its business as
heretofore conducted by it, without ant conflict with the rights
of any other person or entity. All of the foregoing are in full
force and effect and none of the foregoing are in known conflict
with the rights of others.
2.7 Laws and Taxes. Borrower is in compliance with all
laws, regulations, rulings, orders, injunctions, decrees,
conditions or other requirements applicable to or imposed upon
Borrower by any law or by any governmental authority, court or
agency. Borrower has filed all required tax returns and reports
that are now required to be filed by it in connection with any
federal, state and local tax, duty or charge levied, assessed or
imposed upon Borrower or its assets, including unemployment,
social security, and real estate taxes. Borrower has paid all
taxes which are now due and payable. No taxing authority has
asserted or assessed any additional tax liabilities against
Borrower which are outstanding on the date of this Note, and
Borrower has not filed for any extension of time for the payment
of any tax or the filing of any tax return or report.
2.8 Financial Condition. All financial information
relating to Borrower which has been or may hereafter be
delivered by Borrower or on its behalf to Bank is true and
correct and has been prepared in accordance with generally
accepted accounting principles consistently applied. Borrower
has no material obligations or liabilities of any kind not
disclosed in that financial information, and there has been no
material adverse change in the financial condition of Borrower
nor has Borrower suffered any damage, destruction or loss which
adversely affected its business or assets since the submission
of the most recent financial information to Bank.
2.9 Defaults. Borrower is in compliance with all
material agreements applicable to it and there does not now
exist any default or violation by Borrower of or under any of
the terms, conditions or obligations of (a) its Articles of
Incorporation or Regulations/Bylaws, or (b) any indenture,
mortgage, deed of trust, franchise, permit, contract, agreement
or other instrument to which Borrower is a party or by which it
is bound, and the consummation of the transactions contemplated
by this Note will not result in such default or violation.
Section 3. Negative Covenants.
-------------------
3.1 Merger; Disposition of Assets. Borrower will not,
without the prior written consent of Bank, which consent shall
not be unreasonably withheld, (a) change its capital structure,
(b) merge of consolidate with any corporation, (c) amend or
change its Articles of Incorporation or Code of Regulations or
(d) sell, transfer or otherwise dispose of all or any substantial
part of its assets, whether now owned or hereafter acquired.
3.2 Minimum Tangible Net Worth. Borrower will not
permit its Tangible Net Worth, on a consolidated basis, to be
less than $50,000,000 as of the date hereof which shall be
increased as of the first day of each fiscal quarter (commencing
with the first fiscal quarter commencing subsequent to the date
of this Note) by an amount equal to 40% of Borrower's cumulative
earnings for each prior fiscal quarter of Borrower.
3.3 Loan Loss Reserve to Non-Performing Assets.
Borrower will not permit the ratio of (a) its Minimum Loan Loss
Reserve, on a consolidated basis (as shown on Borrower's
quarterly and annual financial statements delivered to Bank), to
(b) its Non-Performing Assets (as shown on Borrower's quarterly
and annual financial statements delivered to Bank) to be less
than 1.75 to 1.00 at any time during the term hereof.
3.4 Adequate Capitalization. Borrower will not permit
its Capitalization Ratios as required by 12 U.S.C. Section 1831
(and any regulations issued thereunder) to be less that the
minimums required by such statute at any time during the term
hereof.
Section 4. Definitions.
------------
4.1 "Collateral" shall mean all shares of common capital
stock of First National Bank of Southeastern Ohio.
4.2 "Default Rate" means six percent (6%0 in excess of
the interest rate otherwise in effect under amounts outstanding
under the Note. In no vent will the interest rate accruing
under such Note be increased to be in excess of the maximum
interest rate permitted by applicable state or federal usury
laws then in effect.
4.3 "Lien" means any security interest, mortgage, pledge,
assignment, lien or other encumbrance of any kind, including
interests of vendors or lessors under conditional sale contracts
and capitalized leases.
4.4 "Loan Document" means this Note, the Pledged
Agreement, and every other document or agreement executed by any
party evidencing, guarantying or securing any of the
Obligations; and "Loan Document" means any one of the Loan
Documents.
4.5 "Obligation(s)" means all loans, advances,
indebtedness, liabilities and obligations of Borrower owed to
each of Bank and the Affiliates of Fifth Third Bancorp of every
kind and description whether now existing or hereafter arising
including without limitation, those owed by Borrower to others
and acquired by Bank or any Affiliate of Fifth Third Bancorp, by
purchase, assignment or otherwise, and whether direct or
indirect, primary or as guarantor or surety, absolute or
contingent, liquidated or unliquidated, matured or unmatured,
whether or not secured by additional collateral, and including
without limitation all liabilities, obligations and indebtedness
arising under this Note and the other Loan Documents, all
obligations to perform or forbear from performing acts, all
amounts represented by letters of credit now or hereafter issued
by Bank for the benefit of or at the request of Borrower, and
all expenses and attorneys' fees incurred by Bank and any
Affiliates of Fifth third Bancorp under this Note or any other
document or instrument related to any of the foregoing.
4.6 "Pledged Agreement" means the Pledged Agreement of
even date herewith between Borrower and Bank, securing the
Obligations.
4.5 "Prime Rate" means the rate of interest per annum
announced to be its prime rate from time to time by Bank at its
principal office in Cincinnati, Ohio whether or not Bank will at
times lend to borrowers at lower rates of interest or, if there
is no such prime rate, then its base rate or such other rate as
may be substituted by Bank for the prime rate.
4.6 "Tangible Net Worth" means the total of the capital
stock (less treasury stock), paid-in surplus, general
contingency reserves and retained earnings (deficit) of
Borrower and any Subsidiary as determined on a consolidated
basis in accordance with generally accepted accounting
principles, after eliminating all inter-company items and all
amounts properly attributable to minority interests, if any, in
the stock and surplus of any Subsidiary, minus the following
items (without duplication of deductions) if any, appearing on
the consolidated balance sheet of Borrower:
(i) all deferred charges (less amortization, unamortized debt
discount and expense and corporate organization expenses);
(ii) the book amount of all assets which would be treated as
intangibles under generally accepted accounting principles,
including, without limitation, such items as good-will,
trademark applications, trade names, service marks, brand
names, copyrights, patents, patent applications and
licenses, and rights with respect to the foregoing;
(iii) the amount by which aggregate inventories or aggregate
securities appearing on the asset side of such consolidated
balance sheet exceed the lower of cost or market value (at the
date of such balance sheet) therefor; and
(iv) any subsequent write-up in the book amount of any asset
resulting from a revaluation thereof from the book amount
entered upon acquisition of such asset.
IN WITNESS WHEREOF, this Addendum to Term Note was executed on
the 8th day of April, 1994.
WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE
AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY
BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE
POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF
ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO
COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
PEOPLES BANCORP INC.
By: /s/ JOHN W. CONLON
John W. Conlon
Its: Chief Financial Officer
ADDENDUM
TO TERM NOTE
FROM
PEOPLES BANCORP INC.
TO
THE FIFTH THIRD BANK
(dated 2/7/97)
THIS ADDENDUM is intended to be attached to, and the provisions
hereof are hereby incorporated into that certain Term Note,
dated February 7, 1997, in the principal amount of $3,000,000
(the "Note"), executed by PEOPLES BANCORP INC., an Ohio
corporation (the "Borrower") and made payable to THE FIFTH THIRD
BANK, and Ohio corporation (the "Bank").
1.1 Term Loan. (a) Bank agrees, subject to the terms
and conditions hereinafter set forth, to make a term loan (the
"Term Loan") to Borrower on the date of this Note in the amount
of Three Million Dollars ($3,000,000).
(b) The principal amount of the Term Note will
be payable in ten (10) semi-annual installments of principal
which will be due on January 2, 1998 and on the first (1st)
business day of each July and January thereafter during the term
hereof. The final payment of principal will be due on January
2, 2003. The first nine (9) semi-annual installments of
principal will be in the amount of $150,000 and the final
installment of principal will be in the amount of the entire
unpaid balance of the Term Loan, plus all accrued and unpaid
interest and any other charges, advances and fees, if any,
outstanding under the Term Loan.
(c) Borrower will pay interest to Bank on the
outstanding principal amount of the Term Loan at rate per annum
equal to the interest rate set forth in the Term Note. Interest
will be payable in immediately available funds at the principal
office of Bank on July 1, 1997 and on the first (1st) business
day of each July and January thereafter during the term hereof.
Any principal amount not paid when due (at maturity, by
acceleration or otherwise) will bear interest thereafter until
paid at the Default Rate; this provision does not constitute
waiver of any Events of Default or an agreement by Bank to
permit any late payments whatsoever.
(d) The proceeds of the Term Loan will be
used for general working capital and to fund a portion of the
purchase price of acquisitions of the assets or stock of banks
and/or savings and loan associations.
1.2 Prepayment. Borrower may prepay any portion of any
of the Loan in whole or in increments of $300,000 at any time
without premium or penalty. Any prepayments in advance of any
amortized payments will be applies to reduce the outstanding
principal amount of such Loan in the inverse chronological order
of maturity.
1.4 Fee. On July 1, 1997, Borrower agrees to pay to Bank
a one-time, non refundable loan fee in an amount equal to an
amount equal to the product of (a) .00125% multiplied by (b) the
positive difference between the outstanding principal balance of
the Term Loan as of July 1, 1997 minus $1,430,000.
Section 2. Representations And Warranties.
-------------------------------
Borrower hereby warrants and represents to Bank the following:
2.1 Organization and Qualifications. Borrower is a duly
organized, validly existing corporation in good standing under
the laws of the State of Ohio, its state of incorporation, has
the power and authority (corporate and otherwise) to carry on
its business and to enter into and perform this Note and the
other Loan Documents, is qualified and licensed to do business
in each jurisdiction in which such qualifications or licensing
is required. All information provided to Bank with respect to
Borrower and its operations is true and correct.