Document:

d1145604_ex10-7.htm

Exhibit 10.7

Execution Version

 

 

FOURTH AMENDATORY AGREEMENT

 

FOURTH AMENDATORY AGREEMENT (this "Fourth Amendatory Agreement") is dated as of August 4, 2010 and made between:

 

	
(1)

	
EAGLE BULK SHIPPING INC., a corporation incorporated in the Republic of the Marshall Islands, as Borrower (the "Borrower");

 

	
(2)

	
THE SUBSIDIARIES of the Borrower party hereto as Guarantors (the "Guarantors");

 

	
(3)

	
THE BANKS AND FINANCIAL INSTITUTIONS whose names appear on the signature pages hereof as Lenders (the "Existing Lenders");  and

 

	
(4)

	
THE ROYAL BANK OF SCOTLAND plc as Mandated Lead Arranger, Bookrunner, Swap Bank, Agent and Security Trustee.

 

PRELIMINARY STATEMENTS:

 

	
(A)

	
The Borrower, the Guarantors, the Lenders described therein and The Royal Bank of Scotland plc acting in the several capacities as Mandated Lead Arranger, Bookrunner, Swap Bank, Agent and Security Trustee are parties to a Third Amended and Restated Credit Agreement dated as of October 19, 2007 as amended by an Amendatory Agreement dated as of July 3, 2008, a Second Amendatory Agreement dated as of December 17, 2008 and a Third Amendatory Agreement dated as of August 4, 2009 (the "Credit Agreement") providing for a secured reducing revolving credit facility for the purposes described therein.

 

	
(B)

	
Subject to the consent of the Lenders to the extent required under the Credit Agreement, the Borrower proposes to, among other things, establish a Subsidiary to market and commercially operate, individually or in a pool, dry bulk carriers owned by Obligors or other persons, to enter into contracts of affreightment, options and freight forward agreements solely for the purpose of securing fixed income in relation to dry bulk carriers chartered-in by such Subsidiary and hedging exposure to fluctuations in exchange rates and fuel prices in relation to dry bulk carriers chartered-in by such Subsidiary.

 

	
(C)

	
The Existing Lenders have agreed to consent to the transactions described in the preceding paragraph on the terms and conditions herein provided.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, it is agreed as follows:

 

	
1.

	
DEFINITIONS

 

Words and expressions defined in the Credit Agreement shall have the same meaning when used in this Fourth Amendatory Agreement unless the context otherwise requires.

 

	
2.

	
REPRESENTATIONS AND WARRANTIES

 

	
  

	
Each Obligor jointly and severally represents and warrants to each Finance Party that:

 

  

  

  

	
(a)

	
All of the representations and warranties contained in Clause 18 of the Credit Agreement are true and correct on and as of the date hereof as if made on and as of the date hereof.

 

	
(b)

	
No Default has occurred and is continuing on the date hereof.

 

	
(c)

	
The obligations expressed to be assumed by it in this Fourth Amendatory Agreement are, and, upon execution and delivery of this Fourth Amendatory Agreement and each of the other documents contemplated hereby to which it is to be a party, the obligations expressed to be assumed by it herein and in such other documents will be, legal, valid, binding and enforceable obligations, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of creditor's rights generally.

 

	
(d)

	
It has the power to enter into, perform and deliver, and has taken all necessary action to authorize its entry into, performance and delivery of, this Fourth Amendatory Agreement and the transactions contemplated by this Fourth Amendatory Agreement.

 

	
3.

	
AMENDMENTS TO CREDIT AGREEMENT

 

With effect from the date hereof:

 

	
3.01

	
Clause 1.1 of the Credit Agreement is amended by inserting in the appropriate alphabetical order the following new definition:

 

"Eagle Chartering"  means Eagle Bulk Pte. Ltd., a Singapore company and a direct Wholly-Owned Subsidiary of the Borrower.

 

	
3.02

	
Clause 19.1 (Financial Statements) of the Credit Agreement is amended by inserting a new sub-clause (c) as follows:

 

	
  

	
(c)

	
If requested by the Agent, management accounts to include (i) a balance sheet, (ii) an income statement, and (iii) a statement of changes in retained earnings (and any other financial information as requested by the Agent, acting on behalf of the Lenders, in a format acceptable to the Agent) for the Borrower for any Accounting Period prepared on a separate company basis (i.e., not consolidated).

 

	
3.03

	
Clause 22.4 (Disposals) of the Credit Agreement is amended by inserting a new sub-clause (c) as follows:

 

	
  

	
(c)

	
Anything contained in paragraph (b) above to the contrary notwithstanding, until the Minimum Required Security Cover Reinstatement Date shall have occurred no Obligor shall sell, lease, transfer of otherwise dispose of (except for charters in the ordinary course of its business) any Newbuilding or any Ship without the prior written consent of Majority Lenders, which consent shall not unreasonably be withheld.

 

	
3.04

	
Clause 22 (General Undertakings) of the Credit Agreement shall be amended by inserting a new Clause 22.23 as follows:

 

  

  

  

	
22.23

	
Eagle Chartering

 

Anything contained in this Agreement to the contrary notwithstanding:

 

	
  

	
(a)

	
Eagle Chartering may establish a commercial pool for the marketing and operation of (i) Ships which are charter-free or subject to time charters of less than one year, and (ii) at the option of Eagle Chartering, dry bulk carriers not owned by the Borrower or its Subsidiaries.

 

	
  

	
(b)

	
Eagle Chartering may charter-in dry bulk vessels on a voyage charter or time charter basis;  provided that the aggregate market exposure of Eagle Chartering in relation to vessels operated by it shall not exceed $10,000,000.  For the purpose of this Clause 22.23, the term "market exposure" means the difference between (i) charter hire payable by Eagle Chartering, and (ii) earnings contracted by way of physical contracts entered into by Eagle Chartering or by way of freight derivative contracts entered into by Eagle Chartering.

 

	
  

	
(c)

	
Eagle Chartering may enter into (i) contracts of affreightment, options and forward freight agreements, solely for the purpose of securing fixed income in relation to vessels chartered-in or to be chartered-in by Eagle Chartering, and (ii) contracts to hedge exposure to fluctuations in exchange rates and fuel prices in relation to vessels chartered-in by Eagle Chartering.

 

	
  

	
(d)

	
The Borrower shall supply to the Agent, (i) quarterly with each Compliance Certificate delivered pursuant to Clause 19.2 (Compliance Certificate), and (ii) on request of the Agent at any time, a certificate signed by the Borrower's chief financial officer setting out the aggregate market exposure of Eagle Chartering.

 

	
  

	
(e)

	
Any Ship which is charter-free or subject to a time charter of less than one year may be chartered or otherwise made available by the Guarantor who owns such Ship to Eagle Chartering for operation in a commercial pool established under Clause 22.23(a).

 

	
  

	
(f)

	
No Obligor shall make any loan or advance to, make any investment in, or enter into any working capital maintenance or similar agreement with respect to Eagle Chartering, whether by acquisition of stock or indebtedness, by loan, guarantee or otherwise (in this Clause 22.23(f), "financial assistance"), without the prior written consent of the Majority Lenders;  provided, however, the Borrower shall be permitted to acquire stock of Eagle Chartering, and to make contributions of capital and/or loans to Eagle Chartering, so long as (i) any such acquisition of stock, contributions or loans are made with cash in an aggregate amount not in excess of $10,000,000, and (ii) the management of the Borrower in good faith believe that, after giving effect to any such acquisition of stock, contribution or loan,

 

  

  

  

	
  

	
the Borrower shall be able to meet its payment obligations under this Agreement.  The Agent shall use its best endeavors to procure a decision by Majority Lenders within 48 hours of its receipt of any request for such consent.

 

	
  

	
(g)

	
The Borrower shall cause Eagle Chartering:

 

	
  

	
(i)

	
to have separate management distinct from the management of the Borrower or its other Affiliates, and not to have as a director, officer or employee any person who is a director, officer or employee of the Borrower or its other Affiliates (except that, so long as Eagle Chartering has not less than three directors, one of the directors of Eagle Chartering may be an officer and/or employee of Eagle Shipping International (USA) LLC);

 

	
  

	
(ii)

	
to have paid up share capital in an amount not less than $500,000;

 

	
  

	
(iii)

	
to maintain all of its books, records, financial statements and bank accounts separate from those of the Borrower and its other Affiliates;  provided, however, that financial statements of Eagle Chartering may be included in consolidated financial statements of the Borrower;

 

	
  

	
(iv)

	
to enter into contracts in its own name for its own account as principal and not as agent for the Borrower or its other Affiliates;  provided, however, that any contract entered between Eagle Chartering on the one hand and any of the Borrower and its other Affiliates on the hand shall be on terms which are fair and reasonable and substantially similar to those that would be available on an arms-length basis between unrelated persons;

 

	
  

	
(v)

	
to maintain its principal executive office in Singapore, and to utilize separate stationary, invoices and checks bearing its own name;

 

	
  

	
(vi)

	
to pay the salaries of its own employees from its own funds, and to maintain a sufficient number of employees to conduct the business contemplated by this Clause 22.23;

 

	
  

	
(vii)

	
to maintain insurance with responsible companies against such risks as is customarily carried by persons engaged in businesses similar to the business contemplated by this Clause 22.23;

 

	
  

	
(viii)

	
to discharge from its own funds and assets all obligations of any kind incurred by it to the extent such funds and assets are available for such discharge;  and

 

  

  

  

	
  

	
(ix)

	
to conduct in its own name the business contemplated by this Clause 22.23, and to hold itself out to the public as a legal entity separate and distinct from any other person (including the Borrower and any other Affiliate of the Borrower).

 

	
3.05

	
Each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import, and each reference to the "Credit Agreement" in any of the other Finance Documents, shall mean and refer to the Credit Agreement as amended hereby.

 

	
4

	
COSTS AND EXPENSES

 

The Borrower agrees that the provisions of Clause 16 (Costs and Expenses) of the Credit Agreement shall apply to this Fourth Amendatory Agreement.

 

	
5.

	
COUNTERPARTS

 

This Fourth Amendatory Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Fourth Amendatory Agreement.

 

6.           GOVERNING LAW

 

THIS FOURTH AMENDATORY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS APPLICABLE IN THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

 

7.           EFFECTIVENESS

 

This Fourth Amendatory Agreement shall become effective on the date when the Borrower, the Guarantors and Lenders constituting the Majority Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile or other electronic transmission) the same to Watson, Farley & Williams (New York) LLP, 1133 Avenue of the Americas, New York, NY 10036; Attention:  C. Gregory Chase (facsimile number: 212-922-1512 / email: cchase@wfw.com).

 

 

  

  

  

This Fourth Amendatory Agreement has been entered into as of the date stated at the beginning hereof.

 

SIGNATORIES

 

	  	
BORROWER:

 

EAGLE BULK SHIPPING INC.

 

 

 

By:    /s/ Alan Ginsberg                                                  

Alan Ginsberg

Chief Financial Officer

  

  

  

	  	
GUARANTORS:

 

CARDINAL SHIPPING LLC

CONDOR SHIPPING LLC

CRESTED EAGLE SHIPPING LLC

CROWNED EAGLE SHIPPING LLC

FALCON SHIPPING LLC

GOLDEN EAGLE SHIPPING LLC

GRIFFON SHIPPING LLC

HARRIER SHIPPING LLC

HAWK SHIPPING LLC

HERON SHIPPING LLC

IMPERIAL EAGLE SHIPPING LLC

JAEGER SHIPPING LLC

KESTREL SHIPPING LLC

KITE SHIPPING LLC

KITTIWAKE SHIPPING LLC

MERLIN SHIPPING LLC

OSPREY SHIPPING LLC

PEREGRINE SHIPPING LLC

SHRIKE SHIPPING LLC

SKUA SHIPPING LLC

SPARROW SHIPPING LLC

STELLAR EAGLE SHIPPING LLC

TERN SHIPPING LLC

PETREL SHIPPING LLC

PUFFIN SHIPPING LLC

RAPTOR SHIPPING LLC

ROADRUNNER SHIPPING LLC

SAKER SHIPPING LLC

SANDPIPER SHIPPING LLC

SNIPE SHIPPING LLC

SWIFT SHIPPING LLC

GOLDENEYE SHIPPING LLC

GOSHAWK SHIPPING LLC

FULMAR SHIPPING LLC

WREN SHIPPING LLC

BESRA SHIPPING LLC

CERNICALO SHIPPING LLC

REDWING SHIPPING LLC

WOODSTAR SHIPPING LLC

By:  Eagle Bulk Shipping Inc.,

as sole member

 

 

 

By:     /s/ Alan Ginsberg                                                   

Alan Ginsberg

Chief Financial Officer

	 	 

 

 

 

  

  

  

 

 

	  	
GUARANTORS:

 

BITTERN SHIPPING LLC

CANARY SHIPPING LLC

CRANE SHIPPING LLC

EGRET SHIPPING LLC

THRASHER SHIPPING LLC

AVOCET SHIPPING LLC

GANNET SHIPPING LLC

GREBE SHIPPING LLC

IBIS SHIPPING LLC

JAY SHIPPING LLC

KINGFISHER SHIPPING LLC

By:  Eagle Bulk Shipping Inc.,

as sole member

 

 

 

By:     /s/ Alan Ginsberg                                                 

Alan Ginsberg

Chief Financial Officer

  

  

  

	  	
GUARANTORS:

 

AGALI SHIPPING S.A.

AVLONA SHIPPING S.A.

DELFINI SHIPPING S.A.

DROSATO SHIPPING S.A.

FOUNTANA SHIPPING S.A.

KAMPIA SHIPPING S.A.

KOFINA SHIPPING S.A.

MARMARO SHIPPING S.A.

MESTA SHIPPING S.A.

MYLOS SHIPPING S.A.

NAGOS SHIPPING S.A.

NENITA SHIPPING S.A.

OLYMPI SHIPPING S.A.

PELINEO SHIPPING S.A.

PYRGI SHIPPING S.A.

RAHI SHIPPING S.A.

SIRIKARI SHIPPING S.A.

SPILIA SHIPPING S.A.

 

 

 

By:     /s/ Alan Ginsberg                                                 

Alan Ginsberg

Chief Financial Officer

 

  

  

  

 

 

 

	 	
LENDERS:

THE ROYAL BANK OF SCOTLAND PLC

By: /s/ Colin Manchester                                                        

Name:  Colin Manchester

Title:    Head of Shipping Coverage, Americas

 

  

  

  

 

 

 

	 	
WESTLB AG, LONDON BRANCH

By:  /s/ C Street    /s/ T. Kaiser                                                        

Name:   C Street     T. Kaiser

Title:     Director         MD

 

 

  

  

  

  

 

 

 

	 	
BANK OF CHINA LIMITED, LONDON BRANCH

By:                                                         

Name:

Title:

 

  

  

  

 

 

 

	 	
LLOYDS TSB BANK PLC

By:                                                         

Name:

Title:

 

 

  

  

  

 

 

 

	 	
ALLIANCE & LEICESTER COMMERCIAL FINANCE PLC

By: /s/ Mark M. Corith                                                        

Name:  Mark M. Corith

Title:    Head of Shipping

 

  

  

  

 

 

 

	 	
SUMITOMO MITSUI BANKING CORPORATION

By: /s/ Konstantinos Karabalis                                                        

Name:  Konstantinos Karabalis

Title:    Deputy General Manager

 

 

 

  

  

  

 

 

 

	 	
CRÉDIT INDUSTRIEL ET COMMERCIAL

By:  /s/ Andrew McKoin                                                        

Name:  Andrew McKoin

Title:    Vice President

CRÉDIT INDUSTRIEL ET COMMERCIAL

By:  /s/ Adrienne Molloy                                                       

Name:  Adrienne Molloy

Title:    Vice President

 

 

 

  

  

  

 

 

 

	 	
ARRANGER, BOOKRUNNER AND SWAP BANK:

THE ROYAL BANK OF SCOTLAND PLC

By:  /s/ Colin Manchester                                                        

Name:  Colin Manchester

Title     Head of Shipping Coverage, Americas

 

 

  

  

  

 

 

 

	 	
AGENT AND SECURITY TRUSTEE

THE ROYAL BANK OF SCOTLAND PLC

By:  /s/ Alexis Porter                                                     

Name:  Alexis Porter

Title     ManagerWebFilings | EDGAR view

 

PROMISSORY NOTE
										
	Principal
$15,000,000.00
	Loan Date
09-28-2010
	Maturity
09-27-2011
	Loan No
55120-0001
	Call / Coll
9A00 / AA
	Account
00000160370
	Officer
00456
	Initials

	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. 
Any item above containing “***” has been omitted due to text length limitations.

	Borrower:     Heartland Financial USA, Inc.
	Lender:      Bankers Trust Company

	1398 Central Avenue
	453 7th Street

	Dubuque, IA 52004
	P.O. Box 897

	 
	Des Moines, IA 50304-0897

	 
	(515)245-2863

 
		
	Principal Amount:  $15,000,000.00
	Date of Note: September 28, 2010

PROMISE TO PAY. Heartland Financial USA, Inc. (“Borrower”) promised to pay Bankers Trust Company (“Lender”), or order, in lawful money of the United States of America, the principal amount of Fifteen Million & 00/100 ($15,000,000.00) 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 in one payment of all outstanding principal plus all accrued unpaid interest on September 27, 2011. In addition, Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date, beginning December 28, 2010, with all subsequent interest payments to be due on the same day of each quarter after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs; then to any late charges; then to any accrued unpaid interest; and then to principal. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the Base Rate on Corporate Loans posted by at least 70% of the 10 largest U.S. banks known as the Wall Street Journal U.S. prime Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 3.250% per annum. Interest on the unpaid principal balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate equal to the Index, adjust if necessary for any minimum and maximum rate limitation described below, resulting in an initial rate of 4.500% per annum based on a year of 360 days. NOTICE: Under no circumstances will the interest rate on this Note be less than 4.500% per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.
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, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicated that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Bankers Trust Company, 453 7th Street, P.O. Box 897, Des Moines, IA 50304-0897.
LATE CHARGE. If a payment is 11 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $50.00, whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased to 21.000% per annum based on a year of 360 days. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under this Note:
	
	Payment Default. Borrower fails to make any payment when due under this Note.

	Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation covenant or condition contained in any other agreement between Lender and Borrower.

	False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

	Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against Borrower.

	Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This included a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

	Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

	Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

	Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is Impaired.

	Insecurity. Lender in good faith believe itself insecure.

 LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note end all accrued unpaid interest immediately due, and then Borrower will pay that amount.
ATTORNEY'S FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including without limitation all attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by law, Borrower also will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Polk County, State of Iowa.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves the right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower hold jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorized Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.
COLLATERAL. This loan is unsecured.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested 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. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instruction of any 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 believes itself insecure.
PURPOSE OF LOAN. The specific purpose of this loan is: Working Capital.
ADDITIONAL TERMS. This credit is subject to the terms and conditions of a Commitment letter dated September 11, 2009.
PRIOR NOTE. A Promissory Note dated September 28, 2009 in the original principal amount of $15,000,000.00 to mature on September 27, 2010.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate information about Borrower's account(s) to a consumer reporting agency. Borrower's written notice describing the specific inaccuracy(ies) should be sent to Lender at the following address: Bankers Trust Company 453 7th Street Des Moines, IA 50309.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. 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, 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. The obligations under this Note are joint and several.
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.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.
 
BORROWER:
HEARTLAND FINANCIAL USA, INC.
 
By: __/s/ John K. Schmidt____________________________
 John K. Schmidt, EVP, CFO of Heartland Financial USA, Inc.

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