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EXHIBIT 10.32
February 9, 1995
Mr. Geoffrey A. Whynot
Treasurer
Kerr Group, Inc.
1840 Century Park East
Los Angeles, CA 90067
Dear Geoff:
This letter will confirm that we hold available for Kerr Group, Inc. a
$10,000,000 line of credit with a $2MM sublimit for standby letters of credit,
to extend through April 30, 1996. Borrowings shall be evidenced by a promissory
note in the form attached hereto. Interest on any borrowings under this
facility will be at our Base Rate, which is the higher of our announced Base
Rate or overnight Federal Funds rate plus 1/2%, and shall be payable in
accordance with the terms of the promissory note. Letters of credit will be 2%
per annum, invoiced quarterly in arrears with a minimum flat fee of $250.00.
You will execute the banks customary documents with respect to letters of
credit, as well as pay all standard fees and other charges as is customary with
respect to the issuance and maintenance of each letter of credit. Letters of
credit shall have such maturity as the bank and company mutually agree upon.
A fee equal to 3/4% per annum, on the total amount of the line will be invoiced
quarterly.
The availability of borrowings and standby letters of credit under this
facility is subject to our usual reservation that we continue to be satisfied
with the affairs of Kerr Group, Inc. and to any changes in government
regulations or monetary policy. As well, that no event of default shall have
occurred with respect to any term or condition of this line or to the $50MM
senior note agreement between Kerr Group, Inc. and its holders dated September
15, 1993.
If the foregoing satisfactorily sets forth the terms and conditions of this
line of credit, please execute and return the enclosed copy of this letter.
If you have any questions concerning this letter, please do not hesitate to
call.
Accepted: Sincerely yours,
Kerr Group, Inc. /s/ S. Karen Langstaff
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By: /s/ Geoffrey A. Whynot S. Karen Langstaff
---------------------------- Director
Title:
Date: 2/9/95
cc: Mr. D. Gordon Strickland
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COMMERCIAL PROMISSORY NOTE
$10,000,000.00 Boston, Massachusetts
February 1, 1995
FOR VALUE RECEIVED, the undersigned promises to pay to the order of THE
FIRST NATIONAL BANK OF BOSTON (together with any successors or assigns, the
"Bank"), a national banking association with its Head Office at 100 Federal
Street, Boston, Massachusetts 02110, the principal amount of ten million
Dollars ($10,000,000.00), on April 30, 1996 or, if less, the aggregate
principal amount advanced to the undersigned by the Bank under this Note and
unpaid on such date, with interest thereon at a floating rate equal to the Base
Rate plus 0%. As used herein, "Base Rate" means the rate per annum equal to the
greater of (i) the rate of interest announced from time to time by the Bank at
its Head Office as its Base Rate, and (ii) the rate equal to the weighted
average of the published rates on overnight Federal Funds transactions with
members of the Federal Reserve System plus 1/2%. The rate shall change as and
when the Base Rate changes and changes in the Base Rate shall take effect on
the day announced, unless otherwise specified in the announcement. Interest
shall be payable in arrears on July 31, 1994 and on the end of each quarter
thereafter. Interest shall be calculated on the basis of a 360-day year for
the actual number of days elapsed including holidays and days on which the Bank
is not open for the conduct of banking business.
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS; PREPAYMENTS. All payments hereunder shall be made by
the undersigned to the Bank in United States currency at the Bank's address
specified above (or at such other address as the Bank may specify), in
immediately available funds, on or before 2:00 p.m. (Boston, Massachusetts
time) on the due date thereof. Payments received by the Bank prior to the
occurrence of an Event of Default (as defined in Section 2) will be applied
first to fees, expenses and other amounts due hereunder (excluding principal
and interest); second, to accrued interest; and third to outstanding principal;
after the occurrence and during the continuance of an Event of Default,
payments will be applied to the Obligations under this Note as the Bank
determines in its sole discretion. Subject to Section 1.2, the undersigned may
pay all or a portion of the amount owed earlier than it is due without premium
or other charge.
1.2 DEFAULT RATE. To the extent permitted by applicable law, upon and
after the occurrence and during the continuance of an Event of Default (whether
or not the Bank has accelerated payment of this Note), interest on principal
and overdue interest shall, at the option of the Bank, be payable on demand at
a rate per annum equal to 2% above the greater of the rate of interest
otherwise payable hereunder or the Base Rate.
1.3 LATE PAYMENT CHARGE. If a payment of principal or interest
hereunder is not made within five business days of its due date, the
undersigned will pay on demand a late payment charge equal to the Base Rate
plus 2% of the amount of such payment. Nothing in the preceding sentence shall
affect the Bank's right to accelerate the maturity of this Note in the event of
any default in the payment of this Note.
SECTION 2. DEFAULTS AND REMEDIES.
2.1 DEFAULT. The occurrence of any of the following events or
conditions shall constitute an "EVENT OF DEFAULT" hereunder:
(a) (i) default in the payment when due of the principal of or
interest on this Note or (ii) any other default in the payment or
performance of this Note or of any other Obligation or (iii) default in
the payment or performance of any obligation of any Obligor to others for
borrowed money or in respect of any extension of credit or accommodation
or under any lease greater than $1,000,000.00 dollars; including, without
limitation, the occurrence of any event of default under a senior note
agreement dated September 15, 1993 by and between the undersigned and the
holders of its, 9.45% series A senior note and 8.99% Series B senior
note, collectively the "Senior Debt," holders.
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(b) failure of any representation or warranty herein or in any
agreement, instrument, document or financial statement delivered to the
Bank in connection herewith to be true and correct in any material
respect;
(c) default or breach of any condition under any mortgage,
security agreement, assignment of lease, or other agreement securing,
constituting or otherwise relating to any collateral for the Obligations;
(d) failure to furnish the Bank promptly on request with
financial information about, or to permit inspection by the Bank of any
books, records and properties of, any Obligor;
(e) merger, consolidation, sale of all or substantially all of
the assets or change in control of any Obligor; or
(f) any Obligor generally not paying its debts as they become
due; the death, dissolution, termination of existence or insolvency of
any Obligor; the appointment of a trustee, receiver, custodian,
liquidator or other similar official for such Obligor or any substantial
part of its property or the assignment for the benefit of creditors by
any Obligor; or the commencement of any proceedings under any bankruptcy
or insolvency laws by or against any Obligor.
(g) the failure of the undersigned to comply with any of the
terms, conditions and covenants set forth in the instruments, documents
and agreements evidenced by the Senior Debt, as if each of such terms,
conditions and covenants were set forth herein at length. For purposes of
this paragraph, the terms, conditions and covenants in effect as of the
date hereof shall be applicable to the within Note, notwithstanding any
future amendment, modification or termination of the Senior Debt.
As used herein, "OBLIGATION" means any obligation hereunder or otherwise
of any Obligor to the Bank or to any of its affiliates, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising; and "OBLIGOR" means the undersigned, any guarantor or any
other person primarily or secondarily liable hereunder or in respect hereof,
including any person or entity who has pledged or granted to the Bank a
security interest in, or other lien on, property on behalf of the undersigned
as collateral for the Obligations.
2.2 REMEDIES. Upon an Event of Default described in Section 2.1(f)
immediately and automatically, and upon or after the occurrence of any other
Event of Default at the option of the Bank, all Obligations of the undersigned
shall become immediately due and payable without notice or demand. All rights
and remedies of the Bank are cumulative and are exclusive of any rights or
remedies provided by law or in equity or any other agreement, and may be
exercised separately or concurrently.
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SECTION 3. MISCELLANEOUS.
3.1 WAIVER; AMENDMENT. No delay or omission on the part of the Bank
in exercising any right hereunder shall operate as a waiver of such right or of
any other right under this Note. No waiver of any right or any amendment
hereto shall be effective unless in writing and signed by the Bank, nor shall a
waiver on one occasion bar or waive the exercise of any such right on any
future occasion. Without limiting the generality of the foregoing, the
acceptance by the Bank of any late payment shall not be deemed to be a waiver
of the Event of Default arising as a consequence thereof. Each Obligor waives
presentment, demand, notice, protest, and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
of this Note or of any collateral for the Obligations, and assents to any
extensions or postponements of the time of payment and to any other indulgences
under this Note or with respect to any such collateral, to any substitutions,
exchanges or releases of any such collateral, and to any additions or releases
of any other parties or persons primarily or secondarily liable hereunder, that
from time to time may be granted by the Bank in connection herewith.
3.2 SECURITY; SET-OFF. The undersigned grants to the Bank, as
security for the full and punctual payment and performance of the Obligations,
a continuing lien on and security interest in all securities or other property
belonging to the undersigned now or hereafter held by the Bank and in all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from the Bank to the undersigned or subject to
withdrawal by the undersigned; and regardless of the adequacy of any collateral
or other means of obtaining repayment of the Obligations, the Bank is hereby
authorized at any time and from time to time, without notice to the undersigned
(any such notice being expressly waived by the undersigned) and to the fullest
extent permitted by law, to set off and apply such deposits and other sums
against the Obligations of the undersigned, although such Obligations may be
contingent or unmatured; provided however that the bank by accepting this Note
waives any security interest in and right of set off against the deposits of
the undersigned, with respect to funding A/C #54170704, any controlled
disbursement account or any master trust account established in connection with
the defined contribution plan of the undersigned.
3.3 TAXES. The undersigned agrees to indemnify the Bank and hold it
harmless from and against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution,
delivery, and performance of this Note or any collateral for the Obligations.
3.4 EXPENSES. The undersigned will pay on demand all expenses of the
Bank in connection with the preparation, administration, default, collection,
waiver or amendment of the Obligations or in connection with the Bank's
exercise, preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, fees of outside legal counsel or the
allocation costs of in-house legal counsel, accounting, consulting, brokerage
or other similar professional fees or expenses, and any fees or expenses
associated with any travel or other costs relating to any appraisals or
examinations conducted in connection with the Obligations and the amount of all
such expenses shall, until paid, bear interest at the rate applicable to
principal hereunder (including any default rate) and be an Obligation secured
by any such collateral.
3.5 BANK RECORDS. The entries on the records of the Bank (including
any appearing on this Note) shall be prima facie evidence of the aggregate
principal amount outstanding under this Note and interest accrued thereon.
3.6 INFORMATION. The undersigned shall furnish the Bank from time to
time with such financial statements and other information relating to any
Obligor or any collateral securing this Note as the Bank may require. All such
information shall be true and correct and fairly represent the financial
condition and the operating results of such Obligor as of the date and for the
periods for which the same are furnished. The undersigned shall permit
representatives of the Bank to inspect its properties and its books and
records, and to make copies or abstracts thereof. Each Obligor authorizes the
Bank to release and disclose to its affiliates, agents and contractors any
financial statements and other information relating to said Obligor provided to
or prepared by or for the Bank in connection with any Obligation. The
undersigned will notify the Bank promptly of the existence or upon the
occurrence of any Event of Default or event which, with the giving of notice or
the passage of time or both, would become an Event of Default.
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3.7 GOVERNING LAW; CONSENT TO JURISDICTION. This Note is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its conflicts of law rules. The undersigned agrees that any suit for the
enforcement of this Note may be brought in the courts of such state or any
Federal Court sitting in such state and consents to the non-exclusive
jurisdiction of each such court and to service of process in any such suit
being made upon the undersigned by mail at the address specified below. The
undersigned hereby waives any objection that it may now or hereafter have to
the venue of any such suit or any such court or that such suit was brought in
an inconvenient court.
3.8 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If
any provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The Bank is hereby authorized, without further
notice, to fill in any blank spaces on this Note, and to date this Note as of
the date funds are first advanced hereunder. Paragraph headings are for the
convenience of reference only and are not a part of this Note and shall not
affect its interpretation.
3.9 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A)
SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER ACTION
BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED INSTRUMENTS, ANY
COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR
(B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH SHALL
BE SUBJECT TO NO EXCEPTIONS. NEITHER THE BANK NOR THE UNDERSIGNED HAS AGREED
WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT
BE FULLY ENFORCED IN ALL INSTANCES.
Address:
1840 Century Park East Kerr Group, Inc.
------------------------------------ By: /s/ Geoffrey A. Whynot
(Type Name) Geoffrey A. Whynot
Los Angeles, CA 90067 Title: Vice President, Treasurer
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