Exhibit 10.6
REVOLVING LINE OF CREDIT NOTE
$5,000,000.00 Denver, Colorado
February 18, 2005
FOR VALUE RECEIVED, the undersigned STAR SOLUTIONS OF DELAWARE, INC. ("Borrower)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (`Bank at
its office at 1740 Broadway, Denver, Colorado 80274, or at such other place as
the holder hereof may designate, in lawful money of the United States of America
and in immediately available funds, the principal sum of Five Million Dollars
($5,000,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
INTEREST:
(a) INTEREST. The outstanding principal balance of this Note shall bear
interest. (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum one and one half percent (1.50%) above the Prime Rate in effect
from time to time. See attached pricing grid. The "Prime Rate" is a base rate
that Bank from time to time establishes and which serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto. Each change in the rate of interest hereunder shall become effective on
the date each Prime Rate change is announced within Bank.
(b) PAYMENT OF INTEREST. Interest accrued on this Note shall be payable
on the first day of each month, commencing April 1, 2005.
(c) DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year; actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) BORROWING AND REPAYMENT. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay Its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereof
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on March 1, 2007.
(b) ADVANCES. Advances hereunder, to the total amount of the principal
sum stated above, may be made by the holder at the oral or written request of
(I) Thomas P. Sweeney. Ill, any one acting alone,: who are authorized to request
advances and direct the disposition of any advances until written notice of the
revocation of such authority is
received by the holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any deposit account of any
Borrower, which advances, when so deposited shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by any
Borrower.
(c) APPLICATION OF PAYMENTS. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of February 18, 2005, as amended from time to time (the "Credit Agreement"). Any
default in the payment or performance of any obligation under this Note, or any
defined event of default under the Credit Agreement, shall constitute an "Event
of Default' under this Note.
MISCELLANEOUS:
(a) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holders option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holders in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
(b) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.
(c) GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.
STAR SOLUTIONS OF DELAWARE, INC.
By: /s/ THOMAS P. SWEENEY III
---------------------------
Thomas P. Sweeney III
Chief Executive Officer
ADDENDUM TO PROMISSORY NOTE
(PRIME RATE PRICING ADJUSTMENTS)
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by STAR SOLUTIONS OF DELAWARE, INC. ("Borrower") and payable to
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of February
is, 2005, in the principal amount of Five Million Dollars ($5,000,000.00) (the
"Note").
The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:
INTEREST RATE ADJUSTMENTS:
(a) INITIAL PRIME RATE MARGIN. The initial Prime Rate margin applicable
to this Note shall be as set forth in the " paragraph herein.
(b) PRIME RATE ADJUSTMENTS. In addition to any interest rate
adjustments resulting from changes in the Prime Rate, Bank shall adjust the
Prime Rate margin applicable to Prime Rate options selected by Borrower under
this Note on a quarterly basis, commencing with Borrower's fiscal quarter ending
March 31, 2005, if required to reflect a change in Borrowers Tangible Net Worth
(as defined in the Credit Agreement referenced herein), in accordance with the
following grid:
APPLICABLE
PRIME RATE
TANGIBLE NET WORTH MARGIN
------------------ ------
Less than $1,500,000.0O +1.50%
Greater than $1,500,000.00 but
less than $2,000,000.00 +1.25%
Greater than $2,000,000.00 but
less than $2,500,000.00 +.75%
Greater than $2,500,000.00 +.25%
Each such adjustment shall be effective on the first Business bay of Borrower's
fiscal quarter following the quarter during which Bank receives and reviews
Borrower's most current fiscal quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.
IN WITNESS WHEREOF, this Addendum has been executed as of the same date as the
Note.
STAR SOLUTIONS OF DELAWARE, INC.
By: /s/ THOMAS P. SWEENEY III
--------------------------
Thomas P. Sweeney III
Chief Executive Officer