EXHIBIT 10 (g)
WAIVER AND FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS WAIVER AND FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AGREEMENT (the "Amendment"), dated as of December 12, 1999, is
between PEERLESS MFG. CO. ("Borrower") and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION ("Bank").
RECITALS:
Borrower and Bank have entered into that certain Second Amended
and Restated Loan Agreement dated as of December 12, 1998 (as the same
may hereafter be amended or otherwise modified, the "Agreement").
Borrower and Bank now desire to amend the Agreement and waiver certain
Events of Default as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained
and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows
effective as of the date hereof unless otherwise indicated:
ARTICLE 1
Definitions
.1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in
the Agreement, as amended hereby.
ARTICLE 2
Amendments
.1 Amendment to Definitions of "Investment" and "Termination
Date." The definitions of the terms "Investment" and "Termination
Date" contained in Section 1 of the Agreement are each amended in their
respective entireties to read as follows:
"Investment" means, any acquisition of all or
substantially all assets of any Person, or any direct or
indirect purchase or other acquisition of, or a beneficial
interest in, capital stock or other securities of any other
Person, or any direct or indirect loan, advance (other than
advances to employees for moving and travel expenses, drawing
accounts, and similar expenditures in the ordinary course of
business), or capital contribution to or investment in any
other Person, including without limitation the incurrence or
sufferance of debt or accounts receivable of any other Person
that are not current assets or do not arise from sales to
that other Person in the ordinary course of business.
Notwithstanding the forgoing, (i) accounts receivable arising
from sales by Borrower to Subsidiaries in the ordinary course
of business which have been outstanding less than 120 days
shall not be included in the definition of Investments and
(ii) accounts receivable arising from sales by Borrower to
Subsidiaries which are not in the ordinary course of business
or which have been outstanding 120 days or more shall be
included in the definition of Investments.
"Termination Date" means, December 12, 2000.
.2 Amendment to Section 2.A iii. Section 2.A iii of the Agreement
is amended in its entirety to read as follows:
iii. Letter of Credit Subfeature. As a
subfeature under the Line, Bank may from time to
time up to and including the Termination Date,
issue letters of credit for the account of Borrower
(each such letter of credit and each letter of
credit issued by Bank for the account of Borrower
or one of its Subsidiaries under the Prior
Agreement which is outstanding on the date hereof,
a "Letter of Credit" and collectively, "Letters of
Credit"); provided, however, that the form and
substance of each Letter of Credit shall be subject
to approval by Bank in its sole discretion; and
provided further that the aggregate undrawn amount
of all outstanding Letters of Credit shall not at
any time exceed the difference between (a) the
Line, minus (b) the aggregate unpaid principal
amount of all Loans, minus (c) the amount of all
drawings under any Letter of Credit for which Bank
has not been reimbursed. No Letter of Credit shall
have an expiry subsequent to December 11, 2001 or
366 or more days after the issuance date; provided
Borrower may request that Bank issue Letters of
Credit having an expiry after December 11, 2001 or
an expiry 366 or more days after the issuance date
("Extended Expiry LC"), if (a) such Extended Expiry
LC does not have an expiry subsequent to June 11,
2003, (b) the undrawn amount of such Extended
Expiry LC plus the aggregate undrawn amount of all
other Extended Expiry LCs does not exceed $350,000
and (c) an amount equal to the undrawn amount of
such Extended Expiry LC plus the aggregate undrawn
amount of all other Extended Expiry LCs is on
deposit in the Collateral Account. Each draft paid
by Bank under a Letter of Credit shall be deemed an
advance under the Line and shall be repaid in
accordance with the terms of the Line; provided,
however, that if the Line is not available for any
reason whatsoever, at the time any draft is paid by
Bank, or if advances are not available under the
Line in such amount due to any limitation of
borrowing set forth herein, then the full amount of
such drafts shall be immediately due and payable,
together with interest thereon, from the date such
amount is paid by Bank to the date such amount is
fully repaid by Borrower, at that rate of interest
applicable to advances under the Line. In such
event, Borrower agrees that Bank, at Bank's sole
discretion may debit any Collateral Account or
Borrower's deposit accounts with Bank for the
amount of such draft. If at any time prior to the
Termination Date the sum of (a) the aggregate
unpaid principal of the Loans, plus (b) the
aggregate undrawn amount of all outstanding Letters
of Credit exceeds the Line, Borrower shall
immediately pay to Bank the amount of such excess,
together with accrued, unpaid interest on the
amount of such excess. If at any time after the
Termination Date the aggregate undrawn amount of
all Extended Expiry LCs exceeds the aggregate
amount on deposit in the Collateral Accounts, at
Bank's request, Borrower shall immediately deliver
to Bank, for deposit into a Collateral Account, an
amount in cash up to, but not to exceed, the amount
the aggregate undrawn amount of all the Extended
Expiry LCs exceeds the aggregate amount on deposit
in the Collateral Accounts at such time. Letters
of Credit shall be priced at a rate of 1.50% per
annum of the face amount of the Letter of Credit,
which fee is due and payable on issuance of the
Letters of Credit.
.3 Amendment to Section 5. A. ii of the Agreement. Section 5. A.
ii. of the Agreement is amended in its entirety to read as follows:
ii. As of the last day of each
calendar quarter, Borrower shall not permit Net
Income for the 12 month period then ended to be
less than $750,000.
.4 Amendment to Section 6.J. Section 6. J. of the Agreement is
amended in its entirety to read as follows:
J. Any Person or group (as defined in Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall become after December 12, 1999 the direct or
indirect beneficial owner (as defined in Rule 13(d)(3) under
the Securities Exchange Act of 1934, as amended) of more than
thirty percent (30%) of the total voting power of all the
classes of Capital Stock then outstanding of the Borrower
entitled (without regard to the occurrence of any
contingency) to vote in the election of directors of the
Borrower, or the Continuing Directors do not constitute a
majority of the Board of Directors of the Borrower. For
purposes of this Section 6. J., the term "Continuing
Director" means at any date a member of the Borrower's Board
of Directors (i) who was a member of such board on December
12, 1999 or (ii) who was nominated or elected by at least a
majority of the directors who were directors of the type
described in clause (i) at the time of such nomination or
election or whose election to the Borrower's Board of
Directors was recommended or endorsed by at least a majority
of such directors.
.5 Amendment to Exhibit B. Exhibit B to the Agreement is amended
to read in its entirety as set forth on Exhibit "B" hereto.
ARTICLE 3
Waiver of Certain Events of Default
.1 Waiver of Event of Default arising out of failure to comply
with Section 4.A (iii). Bank hereby waives the Event of Default
resulting from the Borrower's failure to furnish to Bank a Compliance
Certificate on or before November 14, 1999, which Compliance
Certificate was to be furnished to Bank concurrently with the
consolidated and consolidating financial statements of Borrower for the
fiscal quarter ended September 30, 1999 as required by Section 4.A(iii)
of the Agreement.
.2 Waiver of Event of Default arising out of failure to comply
with Section 5.B. Section 5.B of the Agreement provides that the
amount of Investments in existing Subsidiaries of Borrower shall at no
time exceed $2,500,000. During the fiscal quarters ended June 30, 1999
and September 30, 1999 Investments in such Subsidiaries exceeded
$2,500,000. Bank hereby waives the Event of Default resulting from the
Borrower's failure to comply with Section 5.B during the fiscal
quarters ended June 30, 1999 and September 30, 1999.
.3 Limitation of Waivers. The waivers contained in Section 3.1
and Section 3.2 of this Amendment shall be limited strictly as written
and shall not be deemed to constitute a waiver of, or any consent to
noncompliance with, any term or provision of the Agreement or any
other Loan Document except as expressly set forth herein. Further, the
waivers contained in Section 3.1 and Section 3.2 of this Amendment
shall not constitute a waiver of any future Event of Default that may
occur, including, without limitation, the Borrower's failure to keep,
perform or observe the covenants set forth in Section 4.A(iii) and
Section 5.B of the Agreement.
ARTICLE 4
Conditions Precedent
.1 Conditions. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent:
(a) Bank shall have received all of the following, each
dated (unless otherwise indicated) the date of this
Amendment, in form and substance satisfactory to Bank:
(i) Corporate Matters. Such evidence of the
Borrower's existence, good standing and authority
to execute, deliver and perform this Amendment and
the Loan Documents to which it is or is to be a
party hereunder;
(ii) Second Amended and Restated Promissory
Note. Borrower shall have executed and delivered
to Bank a Second Amended and Restated Promissory
Note in form and substance similar to Exhibit "A"
hereto;
(iii) Compliance Certificate. Borrower shall
have furnished to Bank the Compliance Certificate
that was to be furnished to Bank concurrently with
the consolidated and consolidating financial
statements of Borrower for the fiscal quarter ended
September 30, 1999 as required by Section 4.A(iii)
of the Agreement;
(iv) NationsBank Agreement. Copies of the
most recent amendments to the NationsBank
Agreement;
(v) Additional Information. Bank shall have
received such additional documentation and
information as Bank or its legal counsel, Jenkens &
Gilchrist, a Professional Corporation, may request;
and
(b) The representations and warranties contained herein
and in all other Loan Documents, as amended hereby, shall be
true and correct in all material respects as of the date
hereof as if made on the date hereof, except for such
representations and warranties limited by their terms to a
specific date;
(c) No Event of Default shall have occurred and be
continuing; and
(d) All proceedings taken in connection with the
transactions contemplated by this Amendment and all
documentation and other legal matters incident thereto shall
be satisfactory to Bank and its legal counsel, Jenkens &
Gilchrist, a Professional Corporation.
ARTICLE 5
Ratifications, Representations and Warranties
.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Agreement and except as expressly modified
and superseded by this Amendment, the terms and provisions of the
Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower and Bank agree that
the Agreement as amended hereby and the other Loan Documents shall
continue to be legal, valid, binding and enforceable in accordance with
their respective terms.
.2 Representations and Warranties. Borrower hereby represents and
warrants to Bank as follows: (a) after giving effect to this Amendment,
no Event of Default has occurred and is continuing; (b) after giving
effect to this Amendment, the representations and warranties set forth
in the Loan Documents are true and correct in all material respects on
and as of the date hereof with the same effect as though made on and as
of such date except with respect to any representations and warranties
limited by their terms to a specific date; (c) the execution, delivery
and performance of this Amendment has been duly authorized by all
necessary action on the part of Borrower and does not and will not:
(1) violate any provision of law applicable to Borrower, the
certificate of incorporation, bylaws, partnership agreement, membership
agreement, or other applicable governing document of Borrower or any
order, judgment, or decree of any court or agency of government binding
upon Borrower; (2) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation of Borrower; (3) result in or require the
creation or imposition of any material lien upon any of the assets of
Borrower; or (4) require any approval or consent of any Person under
any material contractual obligation of Borrower. IN ADDITION, TO
INDUCE BANK TO AGREE TO THE TERMS OF THIS AMENDMENT, BORROWER (BY IT
EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS
EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR
DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS
AND IN ACCORDANCE THEREWITH IT:
(a) WAIVER. WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS,
DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING
PRIOR TO THE DATE OF ITS EXECUTION OF THIS AMENDMENT AND
(b) RELEASE. RELEASES AND DISCHARGES BANK, AND ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS,
AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED
PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS,
LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS
WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED, IN LAW OR EQUITY, WHICH THE BORROWER EVER HAD,
NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED
PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
ARTICLE 6
Miscellaneous
.1 Survival of Representations and Warranties. All representations
and warranties made in this Amendment or any other Loan
Document including any Loan Document furnished in connection with this
Amendment shall survive the execution and delivery of this Amendment
and the other Loan Documents, and no investigation by Bank or any
closing shall affect the representations and warranties or the right of
Bank to rely upon them.
.2 Reference to Agreement. Each of the Loan Documents, including
the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Agreement as amended
hereby, are hereby amended so that any reference in such Loan Documents
to the Agreement shall mean a reference to the Agreement as amended
hereby.
.3 Expenses of Bank. As provided in the Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Bank in
connection with the preparation, negotiation, and execution of this
Amendment and the other Loan Documents executed pursuant hereto,
including without limitation, the costs and fees of Bank's legal
counsel.
.4 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.
.5 Applicable Law. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in
accordance with the laws of the State of Texas and the applicable laws
of the United States of America.
.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Bank and Borrower and their respective
successors and assigns, except Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written
consent of Bank.
.7 Counterparts. This Amendment may be executed in one or more
counterparts and on telecopy counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken
together shall constitute one and the same agreement.
.8 Effect of Waiver. No consent or waiver, express or implied, by
Bank to or for any breach of or deviation from any covenant, condition
or duty by Borrower shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
.9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING
TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF
THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Executed as of the date first written above.
BORROWER:
PEERLESS MFG. CO.
By:
Name: Sherrill Stone
Title: President & Chief
Executive Officer
BANK:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
David L. Howard
Vice President
Exhibit "A"
to
Peerless Mfg. Co,
Waiver and First Amendment to Second amended and Restated Loan
Agreement
SECOND AMENDED AND RESTATED PROMISSORY NOTE
Date: December 12, 1999
Amount: $3,500,000.00 Maturity Date: December 12, 2000
Bank: Borrower:
Chase Bank of Texas, Peerless Mfg. Co.
National Association 2819 Walnut Hill Lane
12875 Josey Lane Dallas, Texas 75229
Dallas, Texas 75234-6398
County: Dallas County: Dallas
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and
jointly and severally, if more than one) promises to pay to the order
of Bank, its successors and assigns, without setoff, at its offices
indicated at the beginning of this second amended and restated
promissory note ("Note"), or at such other place as may be designated
by Bank, the principal amount of Three Million Five Hundred Thousand
Dollars ($3,500,000.00), or so much thereof as may be advanced in
immediately available funds, together with interest computed daily on
the outstanding principal balance hereunder, at an annual interest
rate, and in accordance with the payment schedule, indicated below.
1. Loan Agreement. This Note is executed and delivered by Borrower
pursuant to the certain Second Amended and Restated Loan Agreement
dated as of December 12, 1998 between Borrower and Bank (as the same
may have been amended, hereinafter called the "Loan Agreement") and
is the Note as defined therein. All terms defined in the Loan
Agreement, wherever used herein, shall have the same meanings as are
prescribed by the Loan Agreement.
2. Rate. The unpaid principal from day to day outstanding under this
Note shall bear interest at the applicable rate prescribed for the
Loans as provided by the Loan Agreement. Bank's records shall be
conclusive proof of loans, payments and interest accruals hereunder,
absent proof by Borrower of error. Notwithstanding any provision of
this Note, Bank does not intend to charge and Borrower shall not be
required to pay any amount of interest or other charges in excess of
the maximum permitted by applicable law. Borrower agrees that
during the full term hereof, the maximum lawful interest rate for
this Note as determined under Texas law shall be the weekly rate
ceiling described in, and computed in accordance with the Texas
Finance Code. Further, to the extent that any other lawful rate
ceiling exceeds the rate ceiling so determined then the higher rate
ceiling shall apply. Any payment in excess of such maximum shall be
refunded to Borrower or credited against principal, at the option of
Bank.
3. Repayment. Subject to the terms of the Loan Agreement, all unpaid
principal and accrued interest under this Note shall be payable as
follows: Accrued interest shall be payable quarterly in arrears on
each Interest Payment Date beginning on January 31, 1999 and
continuing thereafter through the Termination Date, and all unpaid
principal hereunder and all other amounts payable hereunder relative
to the Loans, shall be due and payable to Bank in full, and the Line
shall terminate, on the Termination Date. To the extent that any
accrued interest is not paid on the date when due, as provided
herein, Bank may at its option (but with no obligation to do so),
add the amount of such accrued interest to the unpaid principal due
by Borrower under the Loans, in which event such amount will be
deemed paid and the aggregate amount thereof shall be treated as a
Loan.
4. Revolving Feature. Borrower may borrow, repay and reborrow
hereunder at any time, up to a maximum aggregate amount outstanding
at any one time equal to the principal amount of this Note, provided
that Borrower is not in default under any provision of this Note,
any other documents executed in connection with this Note, or any
other note or other loan documents now or hereafter executed in
connection with any other obligation of Borrower to Bank, and
provided that the borrowings hereunder do not exceed any borrowing
base or other limitation on borrowings by Borrower, including,
without limitation, those set forth in the Loan Agreement. Bank
shall incur no liability for its refusal to advance funds based upon
its determination that any conditions of such further advances have
not been met. Bank records of the amounts borrowed from time to
time shall be conclusive proof thereof.
5. Waivers, Consents and Covenants. Borrower, any indorser or
guarantor hereof, or any other party hereto (individually an
"Obligor" and collectively "Obligors") and each of them jointly and
severally: (a) waive presentment, demand, protest, notice of
demand, notice of intent to accelerate, notice of acceleration of
maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to
any Obligor in connection with the delivery, acceptance,
performance, default or enforcement of this Note, any indorsement or
guaranty of this Note or any other documents executed in connection
with this Note or any other note or other loan documents now or
hereafter executed in connection with any obligation of Borrower to
Bank (the "Loan Documents"); (b) consent to all delays, extensions,
renewals or other modifications of this Note or the Loan Documents,
or waivers of any term hereof or of the Loan Documents, or release
or discharge by Bank of any of Obligors, or release, substitution or
exchange of any security for the payment hereof, or the failure to
act on the part of Bank, or any indulgence shown by Bank (without
notice to or further assent from any of Obligors), and agree that no
such action, failure to act or failure to exercise any right or
remedy by Bank shall in any way affect or impair the obligations of
any Obligors or be construed as a waiver by Bank of, or otherwise
affect, any of Bank's rights under this Note, under any indorsement
or guaranty of this Note or under any of the Loan Documents; and
(c) agree to pay, on demand, all costs and expenses of collection or
defense of this Note or of any indorsement or guaranty hereof and/or
the enforcement or defense of Bank's rights with respect to, or the
administration, supervision, preservation, or protection of, or
realization upon, any property securing payment hereof, including,
without limitation, reasonable attorney's fees, including fees
related to any suit, mediation or arbitration proceeding, out of
court payment agreement, trial, appeal, bankruptcy proceedings or
other proceeding, in such amount as may be determined reasonable by
any arbitrator or court, whichever is applicable.
6. Prepayments. Any prepayments of the Loans outstanding under this
Note are subject to the terms contained in the Loan Agreement.
7. Events of Default. The following are events of default hereunder:
(a) any default under the Loan Agreement; (b) the commencement of a
proceeding against any Obligor for dissolution or liquidation, the
voluntary or involuntary termination or dissolution of any Obligor
or the merger or consolidation of any Obligor with or into another
entity; and (c) the insolvency of, the business failure of, the
appointment of a custodian, trustee, liquidator or receiver for or
for any of the property of, the assignment for the benefit of
creditors by, or the filing of a petition under bankruptcy,
insolvency or debtor's relief law or the filing of a petition for
any adjustment of indebtedness, composition or extension by or
against any Obligor.
8. Remedies Upon Default. Whenever there is a default under this Note
(a) the entire balance outstanding hereunder and all other
obligations of any Obligor to Bank (however acquired or evidenced)
shall, at the option of Bank, become immediately due and payable and
any obligation of Bank to permit further borrowing under this Note
shall immediately cease and terminate, and/or (b) to the extent
permitted by law, the Rate of interest on the unpaid principal shall
be increased at Bank's discretion up to the maximum rate allowed by
law, or if none, 25% per annum (the "Default Rate"). The provisions
herein for a Default Rate shall not be deemed to extend the time for
any payment hereunder or to constitute a "grace period" giving
Obligors a right to cure any default. At Bank's option, any accrued
and unpaid interest, fees or charges may, for purposes of computing
and accruing interest on a daily basis after the due date of the
Note or any installment thereof, be deemed to be a part of the
principal balance, and interest shall accrue on a daily compounded
basis after such date at the Default Rate provided in this Note
until the entire outstanding balance of principal and interest is
paid in full. Upon a default under this Note, Bank is hereby
authorized at any time, at its option and without notice or demand,
to set off and charge against any deposit accounts of any Obligor
(as well as any money, instruments, securities, documents, chattel
paper, credits, claims, demands, income and any other property,
rights and interests of any Obligor), which at any time shall come
into the possession or custody or under the control of Bank or any
of its agents, affiliates or correspondents, any and all obligations
due hereunder. Additionally, Bank shall have all rights and
remedies available under each of the Loan Documents (as defined in
the Loan Agreement), as well as all rights and remedies available at
law or in equity.
9. Non-Waiver. The failure at any time of Bank to exercise any of its
options or any other rights hereunder shall not constitute a waiver
thereof, nor shall it be a bar to the exercise of any of its options
or rights at a later date. All rights and remedies of Bank shall be
cumulative and may be pursued singly, successively or together, at
the option of Bank. The acceptance by Bank of any partial payment
shall not constitute a waiver of any default or of any of Bank's
rights under this Note. No waiver of any of its rights hereunder,
and no modification or amendment of this Note, shall be deemed to be
made by Bank unless the same shall be in writing, duly signed on
behalf of Bank; each such waiver shall apply only with respect to
the specific instance involved, and shall in no way impair the
rights of Bank or the obligations of Obligors to Bank in any other
respect at any other time.
10.Applicable Law, Venue and Jurisdiction. Borrower agrees that this
Note shall be deemed to have been made in the State of Texas at
Bank's address indicated at the beginning of this Note and shall be
governed by, and construed in accordance with, the laws of the State
of Texas and is performable in the City and County of Texas
indicated at the beginning of this Note. In any litigation in
connection with or to enforce this Note or any indorsement or
guaranty of this Note or any Loan Documents, Obligors, and each of
them, irrevocably consent to and confer personal jurisdiction on the
courts of the State of Texas or the United States courts located
within the State of Texas. Nothing contained herein shall, however,
prevent Bank from bringing any action or exercising any rights
within any other state or jurisdiction or from obtaining personal
jurisdiction by any other means available under applicable law.
11.Partial Invalidity. The unenforceability or invalidity of any
provision of this Note shall not affect the enforceability or
validity of any other provision herein and the invalidity or
unenforceability of any provision of this Note or of the Loan
Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to
other persons or circumstances.
12.Binding Effect. This Note shall be binding upon and inure to the
benefit of Borrower, Obligors and Bank and their respective
successors, assigns, heirs and personal representatives, provided,
however, that no obligations of Borrower or Obligors hereunder can
be assigned without prior written consent of Bank.
13.Amendment and Restatement of Previous Notes. This Note is in renewal
and extension of, and is issued in amendment and restatement of (but
not in extinguishment of) the indebtedness evidenced by the certain
Amended and Restated Promissory Note dated December 12, 1998,
previously executed and delivered by Borrower payable to the order
of Bank in the face amount of $3,500,000.00 (the "Amended and
Restated Note") which Amended and Restated Note was in renewal and
extension of, and issued in amendment and restatement of (but not in
extinguishment of) the indebtedness evidenced by the certain
Promissory Note dated January 12, 1998, previously executed and
delivered by Borrower payable to the order of Texas Commerce Bank
National Association (now known as "Chase Bank of Texas, National
Association"), in the face amount of $2,500,000.00 and all such
indebtedness hereafter shall be governed by and payable in
accordance with the terms hereof.
14.Controlling Document. To the extent that this Note conflicts with
or is in any way incompatible with any other document related
specifically to the loan evidenced by this Note, this Note shall
control over any other such document, and if this Note does not
address an issue, then each other such document shall control to the
extent that it deals most specifically with an issue.
15.ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED
INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF
NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./
ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT
HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION
OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR
LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION
HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR
UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY
WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR
(II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III)
LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST
ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A
COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED
TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON
SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT.
NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
Borrower represents to Bank that the proceeds of this loan are to be
used primarily for business, commercial or agricultural purposes.
Borrower acknowledges having read and understood, and agrees to be
bound by, all terms and conditions of this Note.
NOTICE OF FINAL AGREEMENT:
THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Bank: CHASE BANK OF TEXAS Borrower: PEERLESS MFG. CO.
NATIONAL ASSOCIATION
By: By:
David L. Howard Name: Sherrill Stone
Vice President Title: President & Chief
Executive Officer