1
EXHIBIT 10(d)
PROMISSORY NOTE
- -------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$2,000,000.00 08-31-1995 07-31-1996 00001 4A UN 185043 1094 [sig]
- -------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Borrower: ALLIED CAPITAL LENDING CORPORATION (TIN:
52-1081052)
1666 K STREET, NW SUITE 901
WASHINGTON, DC 20006
LENDER: THE RIGGS NATIONAL BANK OF WASHINGTON, D.C.
800 17TH STREET, N.W.
WASHINGTON, DC 20006
Principal Amount: $2,000,000.00 Initial Rate: 9.000% Date of Note: August 31, 1995
PROMISE TO PAY. ALLIED CAPITAL LENDING CORPORATION ("Borrower") promises to
pay to The Riggs National Bank of Washington, D.C. ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Two
Million & 00/100 Dollars ($2,000,000.00) or so much as may be outstanding,
together with Interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.
PAYMENT. Borrower will pay this loan on demand, or if no demand is made, in
one payment of all outstanding principal plus all accrued unpaid interest on
July 31, 1996. In addition, Borrower will pay regular monthly payments of
accrued unpaid interest beginning October 1, 1995, and all subsequent interest
payments are due on the same day of each month after that. Interest on this
Note is computed on a 365/365 simple interest basis; that is, by applying the
ratio of the annual interest rate over the number of days in a year, multiplied
by the outstanding principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in writing.
Unless otherwise agreed or required by applicable law, payments will be applied
first to any unpaid collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Prime Rate as
Published in The Wall Street Journal (the "Index"). The term "Prime Rate"
shall mean the rate reported in The Wall Street Journal newspaper in its "Money
Rates" column as the Prime Rate and, if more than one rate or a range of rates
are reported as the Prime Rate, then the highest such rate, changing as and when
such rate shall change (the "Wall Street Journal Prime Rate"). If The Wall
Street Journal shall cease to publish a Prime Rate, then "Prime Rate" shall
mean that rate announced from time to time by The Riggs National Bank of
Washington, D.C. ("Riggs") as its prime rate of interest, which rate may or may
not change from time to time in Riggs' sole discretion, Riggs having no
obligation to reset the rate at any time or for any reason (the "Riggs Prime
Rate"). The "Prime Rate," as determined by either method, is not necessarily
the lowest rate charged by the Lender on loans. The Borrower further
acknowledges that with respect to all matters relevant hereto, a certificate
signed by an officer of Lender setting forth the Prime Rate in effect on any
applicable date shall be conclusive and binding. The Borrower expressly
acknowledges and agrees that (i) the Wall Street Journal Prime Rate and the
Riggs Prime Rate are independent reference rates which may or may not change at
the same time, with the same frequency, or in the same amounts, and (ii) there
is no guaranty that by using the Wall Street Journal Prime Rate as a reference
rate the interest charged on the Promissory Note will always or at any time be
less than if the Riggs Prime Rate was used as the reference rate. Lender will
tell Borrower the current Index rate upon Borrower's request. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each day. The Index
currently is 8.750% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.250 percentage points
over the Index, resulting in an initial rate of 9.000% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any of the events described in this default section occurs
with respect to any guarantor of this Note. (h) A material adverse change
occurs in Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired. (i) Lender in good
faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest, together with all other
applicable fees, costs and charges, if any, immediately due and payable,
without notice, and then Borrower will pay that amount. Upon default,
including failure to pay upon final maturity, Lender, at its option, may also,
if permitted under applicable law, increase the variable interest rate on this
Note to 3.250 percentage points over the Index. The interest rate will not
exceed the maximum rate permitted by applicable law. This Note shall be
governed by, construed and enforced in accordance with the laws of the District
of Columbia. Lender and Borrower hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either party against the
other.
CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers
any attorney-at-law to appear in any court of record and to confess judgment
against Borrower for the unpaid amount of this Note as evidenced by an
affidavit signed by an officer of Lender setting forth the amount then due,
plus costs of suit, and to release all errors, and waive all rights of appeal.
If a copy of this Note, verified by an affidavit, shall have been filed in the
proceeding, it will not be necessary to file the original as a warrant of
attorney. Borrower waives the right to any stay of execution and the benefit
of all exemption laws now or hereafter in effect. No single exercise of the
foregoing warrant and power to confess judgment will be deemed to exhaust the
power, whether or not any such exercise shall be held by any court to be
invalid, voidable, or void; but the power will continue undiminished and may be
exercised from time to time as Lender may elect until all amounts owing on this
Note have been paid in full.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts hold jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, Keogh, and trust
accounts. Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on this Note against any and all such
accounts.
2
08-31-1995 PROMISSORY NOTE Page 2
(Continued)
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested either orally or in writing by Borrower or by
an authorized person. Lender may, but need not, require that all oral requests
be confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's office shown
above. The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address
shown above written notice of revocation of their authority: Katherine C.
Marien, President. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on this
Note or by Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (a)
Borrower or any guarantor is in default under the terms of this Note or any
agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (b) Borrower or any
guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized
by Lender, or (e) Lender in good faith deems itself insecure under this Note or
any other agreement between Lender and Borrower.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment of this Note on its demand. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
ALLIED CAPITAL LENDING CORPORATION
By: /s/ KATHERINE C. MARIEN (SEAL)
-----------------------------------
Katherine C. Marien, President
ATTEST:
/s/ THOMAS R. SALLEY
- --------------------- (Corporate Seal)
Secretary
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver.
3.20 (c) 1995 CFI ProServices, Inc. All rights reserved.[DC-D20 ALL
CAPLN.LN C1.OVL]
3
1995 REPLACEMENT PROMISSORY NOTE
$15,000,000.00 July 26, 1995
ALLIED CAPITAL LENDING CORPORATION, a corporation organized under the laws
of Maryland (the "Borrower"), for value received, hereby promises to pay to the
order of THE RIGGS NATIONAL BANK OF WASHINGTON, D.C. (the "Bank") at its
office, 800 17th Street, N.W., Washington, D.C. 20006, in lawful money of the
United States and in immediately available funds the principal sum of fifteen
million and no/100 dollars ($15,000,000.00) or, if less, the aggregate unpaid
principal amount of all loans advanced or re-advanced by the Bank to the
Borrower hereunder.
1. Payment of Principal and Interest; Prepayment; Etc.
(a) Principal Payments. The principal amount of each
loan hereunder and all other amounts due hereunder shall be due on July 31,
1996.
(b) Interest Rate; Interest Payments. This Note
shall bear interest on the unpaid principal balance hereof from its date until
maturity, payable on the first day of each month commencing with the first such
date after the date hereof, and at maturity, at a rate per annum (calculated on
the basis of a 360 day year for the actual number of days involved) for each
Rate Period (and shall be fixed for the duration of each Rate Period) equal to
two and two-tenths percent (2.20%) in excess of LIBOR for such Rate Period. As
used herein:
"Eurodollar Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the District of Columbia, or
London, England are generally authorized to close.
"Governmental Authority" includes, without limitation, any
department, commission, board, bureau, agency, administration,
service or other instrumentality of the United States of America or
any state, District of Columbia, municipality or any other
governmental entity.
"LIBOR" means, for each Rate Period, the rate per annum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) which is equal
to the London interbank offered rate at which deposits in U.S.
Dollars are offered by banks in London, England in the London
interbank Eurodollar market for a period of time equal to the Rate
Period as reported to the Bank by an On-Line Information Service at
approximately 10:00 a.m. (Washington, D.C. time) on the first
Eurodollar Business Day of the calendar week in which such Rate
Period commences. LIBOR is not necessarily the rate at which the
Bank offers or receives interbank deposits in the London interbank
Eurodollar market or elsewhere. If
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
4
for any reason the Bank is unable to access an On-Line Information
Service, or if none of the Bank's On-Line Information Services
reports a LIBOR, then the Bank shall use the comparable rate
published in the "Money Rates" column of The Wall Street Journal
newspaper. The Bank shall, promptly upon request, notify the
Borrower telephonically of LIBOR. The determination by the Bank of
LIBOR shall be final and conclusive and shall be binding upon the
parties hereto in the absence of manifest error.
"On-Line Information Service" means a textline or other on-line
information service provided to the Bank by any of Reuters
Information Services, Inc., Knight-Ridder Financial/Americas, Dow
Jones Telerate Inc. or Bloomberg Financial Markets News Services.
"Rate Period" means each 30-day period following the date hereof. If
any Rate Period would otherwise begin on a day which is not a
Eurodollar Business Day, such Rate Period shall begin on the next
preceding day which is a Eurodollar Business Day.
If (i) dollar deposits in the requested amount and for the applicable
rate period are not available in the applicable money market or are not
available in sufficient quantities for the Bank, in its sole discretion, to
ascertain the LIBOR, (ii) in the sole judgment of the Bank it becomes unlawful
or impracticable for the Bank to maintain loans based upon the LIBOR for any
reason, including, without limitation, the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof or compliance by the Bank with any request or directive
(whether or not having the force of law) of any such authority, or (iii) the
Bank, in good faith, determines that it is impracticable to maintain loans
based on the LIBOR because of increased taxes, regulatory costs, reserve
requirements, expenses or any other costs or charges that affect the LIBOR
rate, then upon the occurrence of any of the above events, the interest rate
hereunder shall be immediately (or at the option of the Bank, at the end of the
current Rate Period), without further action of the Borrower or the Bank,
converted to the rate which is equal to the Prime Rate (the "Prime Rate
Option"). Notwithstanding the foregoing, in the event any of the conditions
enumerated in subparagraphs (i) through (iii) occurs, the Bank agrees to
provide notice thereof to the Borrower. During the thirty (30) day period
following the receipt of such notice, the Bank and the Borrower shall negotiate
in good faith with a view toward modifying the terms of this Note to provide a
substitute basis for the LIBOR which is financially a substantial equivalent.
If during such thirty (30) day period the Bank and the Borrower shall agree in
writing upon such substitute basis, then such substitute basis shall be
retroactive to and effective from the date of such notice (or at the option of
Bank, at the end of the current Rate Period). If during such thirty (30) day
period the Bank and the Borrower shall not agree upon such substitute basis,
then the LIBOR rate shall be converted to the Prime Rate Option as set forth
above.
After maturity, whether by acceleration or otherwise, this Note shall
bear interest payable on demand at a rate per annum equal to 2% in excess of
the Prime Rate, changing as and when the Prime Rate shall change. To the
extent permitted by law, any payment of interest on this Note not made when due
shall bear interest from the date when due until payment is made payable on
demand, at a rate per annum equal to 2% in excess of the Prime Rate, changing
as and when the Prime Rate shall change.
2
5
"Prime Rate" means the rate reported in The Wall Street
Journal newspaper in its "Money Rates" column as the prime rate and, if more
than one rate or a range of rates is reported as the prime rate, then the
"Prime Rate" shall mean the higher or highest such rate. If The Wall Street
Journal shall cease to publish a Prime Rate, then "Prime Rate" shall mean that
rate announced from time to time by the Bank as its prime rate of interest,
which rate may or may not change from time to time in the Bank's sole
discretion, the Bank having no obligation to reset the rate at any time or for
any reason. The "Prime Rate" as determined by either method is used as a
reference rate for fixing the lending rates on certain commercial loans and is
not necessarily the lowest or most favorable rate of interest charged by the
Bank on loans. The Borrower acknowledges that with respect to all matters
relevant hereto a certificate signed by an officer of the Bank, setting forth
the "Prime Rate" in effect on any applicable date, shall be binding and
conclusive.
(c) Prepayment. This Note may be prepaid in whole at
any time, or in part from time to time, without premium or penalty. This Note
shall immediately be prepaid to the extent that the principal amount hereof at
any time exceeds the Maximum Amount (as defined in the Line of Credit, Security
and Pledge Agreement hereinafter defined).
(d) Advances; Evidence of Amounts Due. This Note is
held by the Bank as a master note against which loans may be advanced in lesser
amount(s) than the principal amount. The Borrower shall be liable only for so
much of the principal amount as shall be equal to the total of the amounts
advanced or re-advanced against this Note to or for the Borrower by the Bank
from time to time, less all payments made by or for the Borrower and applied by
the Bank to principal. The Borrower shall also be liable for interest on each
such advance or re-advance as shown on the Bank's books and records, provided
that the rate of such interest is in accordance with the applicable rate or
rates specified in this Note. The Borrower acknowledges that a statement
signed by an officer of the Bank setting forth the amount of principal and
interest owed hereon as reflected in such books and records shall be
presumptive evidence of the facts stated therein and shall, absent manifest
error, be conclusive and binding. Any statement of account delivered to the
Borrower shall be deemed correct and accepted unless a written statement of
exceptions thereto is delivered to the Bank within 30 days after mailing of
such statement of account. In making any advance or re-advance hereunder, the
Bank shall be entitled to rely upon any notice of borrowing or other
instructions, whether oral, written or by any form of telecommunication,
purporting to be made by a person designated to the Bank by the Borrower as an
Authorized Representative of the Borrower, and deposit of the proceeds of an
advance or re-advance hereunder in a deposit account in the name of the
Borrower or the remittance of any proceeds to persons designated in such
instructions shall conclusively establish that such loan was duly made
hereunder.
(e) Payments Due on Non-Business Days. A "Business
Day" means any day except a Saturday, Sunday or other day on which commercial
banks in the District of Columbia are generally authorized to close. If any
installment of principal on this Note becomes due and payable on a day which is
not a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension. If any payment of interest on any loan
evidenced by this Note becomes due and payable on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day, together
with interest accrued during such extension.
3
6
2. Use of Loans. The loans made hereunder shall be used for
the purpose of carrying on a business or commercial activity within the meaning
of the District of Columbia Code Sections 28-3301(d)(1)(B).
3. Events of Default, Remedies. The occurrence of any Event
of Default under the Line of Credit, Security and Pledge Agreement (hereinafter
defined) shall constitute an Event of Default hereunder. Upon the occurrence
of an Event of Default, the Bank is entitled to exercise the remedies set forth
in such Line of Credit Agreement.
4. Expenses. The Borrower agrees to pay all out-of-pocket
charges and expenses incurred by the Bank (including the reasonable fees and
expenses of its outside counsel and, in the case of salaried counsel employed
by the Bank, the cost (as determined by the Bank) of the services of such
counsel calculated on an hourly basis) in connection with the negotiation,
preparation and execution of this Note and any amendments, waivers,
modifications or supplements hereto, and the enforcement of any provision of
this Note or any amendment, waiver, modification or supplement hereto and the
collection of this Note.
5. Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default the Bank and any branch or affiliate acting
on its behalf is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set-off and apply any and all deposits
(general or special, time or demand, provisional or final, but excluding any
third party funds held in escrow or in trust by the Borrower, which funds are
not commingled with other funds in the Borrower's general account) at any time
held and other indebtedness at any time owing by the Bank or any branch or
affiliate of the Bank acting on its behalf to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Note or otherwise irrespective of whether the
Bank shall have made any demand under this Note and although such obligations
may be unmatured. The Bank agrees promptly to notify the Borrower after any
such set-off and application, provided, that, the failure to give such notice
shall not affect the validity of such set-off and application. Although the
Bank may in its discretion take any act to confirm, indicate, or otherwise
evidence a set-off, such act shall not be deemed to be necessary for an
effective set-off. The rights of the Bank under this paragraph 5 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Bank may have.
6. Waivers and Consents; Confession of Judgment. Except as
otherwise expressly set forth herein, the Borrower and all endorsers,
guarantors, and sureties of this Note (collectively the "Obligors") severally
(a) waive all applicable exemption rights, whether under the laws of the
District of Columbia or otherwise, and also waive demand, presentment for
payment, notice of nonpayment, protest, notice of protest, notice of
acceleration, and diligence in collecting this Note, (b) agree to the release
of any party primarily or secondarily liable hereon and agree that it will not
be necessary for any holder hereof, in order to enforce payment of this Note by
any party, to first institute suit against any other Obligor, and (c) consent
to any one or more extensions or postponements of time of payment of this Note
on any terms or any other indulgences with respect thereto. THE PLEADING OF
ANY STATUTE OF LIMITATIONS AS A DEFENSE TO ANY DEMAND AGAINST THE BORROWER OR
THE OBLIGORS, AND THE RIGHT OF THE BORROWER AND ANY OBLIGOR TO TRIAL BY JURY IN
ANY SUIT, ACTION OR PROCEEDING IN CONNECTION HEREWITH, ARE HEREBY EXPRESSLY
WAIVED. Any acknowledgment, waiver, new promise, payment of principal or
interest or otherwise by any
4
7
Obligor, with respect to the Obligations hereunder, shall be deemed to be made
as agent of each other Obligor for the purposes hereof, and shall, if the
statute of limitations in favor of any Obligor against the Bank shall have
commenced to run, toll the running of such statute of limitations, and if such
statute of limitations shall have expired, prevent the operation of such
statute. The Borrower hereby authorizes any Clerk of any Court of Record in
State of Maryland to enter judgment by confession against the Borrower in favor
of the holder of this Note for the full amount of the indebtedness due
hereunder, interest and cost, including attorney's fees of fifteen percent
(15%), waives summons and other process and does further consent to the
immediate execution of said judgment, expressly waiving the benefit of any
homestead or other exemption laws. If judgment is to be entered in the
Commonwealth of Virginia, the Borrower hereby duly constitutes and appoints
Linda A. Madrid or James P. Cooke (any of whom may act alone) the Borrower's
true and lawful attorney in fact, for the Borrower, in Borrower's name, place
and stead, and upon default of payment hereof as set forth herein to confess
judgment against the Borrower, in the Circuit Court of Arlington County,
Virginia or in any other Court of Record in the Commonwealth of Virginia, upon
such Obligation, including all costs of collection, attorney's fees of fifteen
percent (15%) and court costs, hereby ratifying and confirming the acts of
said attorney in fact as fully as if done by themselves, expressly waiving
benefit of any homestead or other exemption laws. If judgment is to be entered
in the District of Columbia, the Borrower authorizes, Linda A. Madrid or James
P. Cooke (any of whom may act alone), to appear in any court of record in the
District of Columbia, or any court of the United States, when the obligations
have become due and in accordance with applicable law, and confess judgment
against the Borrower in favor of the Bank, with interest, together with the
costs of suit, and thereupon to release all errors and waive all rights of
appeal. If and to the extent that the signature of an attorney for the
Borrower is required under any applicable rule or procedure for the entry of a
confession of judgment, the Borrower hereby appoints and constitutes all or any
of the aforesaid persons their attorney in fact and at law to execute and
deliver such confession of judgment on their behalf (any of whom may act alone
pursuant to this power of attorney), and further agrees that any conflict of
interest inherent in such arrangement is irrevocably waived, and agrees that
such power of attorney shall be deemed coupled with an interest and shall be
irrevocable. If any provision or term of this note is left blank or contains a
blank through oversight or by intent, the Borrower and each party consents to
and authorizes the bank to complete such provision or blank as appropriate at
any time.
7. Governing Law, Jurisdiction, Notice, Etc. This Note is
deemed to be a contract under the laws of the District of Columbia (except for
the conflict of law provisions thereof) and shall be governed by, and construed
in accordance with, the laws of such jurisdiction. Wherever possible each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note. If any
action arising out of this Note is commenced in any District of Columbia or
Federal court located in the District of Columbia, each party signatory hereto
hereby consents to the jurisdiction of any such court in any such action and to
the laying of venue in the District of Columbia. Any process in such action
shall be duly served if mailed by registered mail, postage prepaid, to the
Borrower at its address given herein or its last known business address, or if
otherwise served in acceptance with law. Any other notice or demand hereunder
may be made by hand delivery or certified or registered mail, return receipt
requested, to such address, with the same effect as if delivered in person.
5
8
8. Incorporated Provisions. This Note is the Note referred to
in a Line of Credit, Security and Pledge Agreement dated as of August 31, 1994,
as amended from time to time, between the Borrower and the Bank (the "Line of
Credit, Security and Pledge Agreement"), referred to herein above, and is
subject to payment and acceleration upon the terms specified therein, and
hereby incorporates by reference all of the provisions thereof.
ALLIED CAPITAL LENDING CORPORATION
By: /s/ KATHERINE C. MARIEN
---------------------------
Name: Katherine C. Marien
Title: President
6
9
EXHIBIT A
LIBOR PROVISIONS
This Exhibit A is attached to and forms a part of that certain 1995
Replacement Promissory Note (as amended, modified, supplemented or replaced
from time to time, the "Note"), dated July 26, 1995, in the principal amount
of $15,000,000.00, made by ALLIED CAPITAL LENDING CORPORATION, a Maryland
corporation (the "Borrower") and payable to the order of THE RIGGS NATIONAL
BANK OF WASHINGTON, D.C., a national banking association (the "Bank"). Terms
defined in the Note and not otherwise defined herein shall have the same
defined meanings when such terms are used herein.
1. "Governmental Authority" includes, without limitation, any
department, commission, board, bureau, agency, administration, service or other
instrumentality of the United States of America or any state, District of
Columbia, municipality or any other governmental entity.
2. Funding. The Bank shall be entitled, but not obligated, to
fund all or any portion of the principal amount of the Note in any manner it
may determine in its sole discretion, including, without limitation, in the
London interbank market and within the United States, but all calculations and
transactions hereunder shall be conducted as though the Bank actually funds the
total principal amount of the Note through the purchase in London of offshore
dollar deposits in maturities corresponding to the applicable Rate Period.
3. Taxes. All payments with respect to funds based on LIBOR
(including, without limitation, payments of principal and interest) are payable
free and clear of any and all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges (the
"Taxes"). If, as a result of any change in applicable law or regulation or in
the interpretation thereof by any Governmental Authority charged with the
administration thereof, or the introduction of any law or regulation, any Taxes
are required to be withheld or deducted from any amount payable to the Bank
with respect to funding based on LIBOR, the amount payable will be increased to
the amount which, after deduction from such increased amount of all Taxes
required to be withheld or deducted therefrom, will yield to the Bank the
amount stated to be payable with respect thereto. The Borrower will execute
the deliver to the Bank at its request such further instruments as may be
necessary or desirable to give full force and effect to any such increase,
including, but not limited to, a new Note to be issued in exchange for this
Note. The Borrower will also hold the Bank harmless and indemnify it for any
stamp or other taxes with respect to the preparation, execution, delivery,
performance or enforcement of this Note (all of which shall be included in
"Taxes"). The Borrower will, upon the request of the Bank, provide the Bank
with evidence satisfactory to it of the payment of any Taxes with respect to
the Bank's funding based on LIBOR. If any of the Taxes specified in this
Paragraph 3 are paid by the Bank, the Borrower will, upon demand of the Bank,
reimburse the Bank for such payments, together with any interest, penalties and
expenses in connection therewith, plus interest thereon at the default rate
specified in this Note (calculated as if such payments constituted overdue
amounts of principal) from the date such payment or payments are made to the
date of reimbursement by the Borrower.
4. Additional Costs. In the event that any time the Bank
shall be required to maintain reserves against "Eurocurrency Liabilities" under
Regulation D of the Board of Governors of the
7
10
Federal Reserve System or in the event that there shall occur any change in
applicable law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration thereof or the
introduction of any law or regulation subjects the Bank to any tax of any kind
whatsoever with respect to its funding based on LIBOR, or changes the basis of
taxation of payments to the Bank of principal of or interest payable with
respect to any funding based on LIBOR (except for changes in the rate of tax
based solely on the overall net income of the Bank) or imposes, modifies or
deems applicable any reserve, special deposit, capital ratio or similar
requirement against assets held by or deposits in or for the accounts of, or
loans by, the Bank or imposes on the Bank, directly or indirectly, any other
conditions affecting the funding based on LIBOR or the cost of U.S. dollar
deposits obtained by the Bank in the London Eurodollar interbank market, and
the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining loans based on LIBOR, then the Borrower will pay to the
Bank from time to time upon its demand the additional amount or amounts (a
certificate of an officer of the Bank setting forth the calculation of such
costs shall be conclusive and binding, absent manifest error) necessary to
compensate the Bank for such additional costs.
IN WITNESS WHEREOF, the Borrower has caused this Exhibit A to be duly
executed by its duly authorized representatives as of the date first above
written.
ALLIED CAPITAL LENDING CORPORATION
By: /s/ KATHERINE C. MARIEN
---------------------------
Name: Katherine C. Marien
Title: President
8