Document:

exh10-1_17154.htm

EXHIBIT 10.1

 

 

2011 AMENDMENT TO LOAN AGREEMENT

 

THIS 2011 AMENDMENT TO LOAN AGREEMENT, dated as of March 15, 2011 (the "2011 Amendment"), is made and entered into between and among GREYSTONE MANUFACTURING, L.L.C, an Oklahoma limited liability company ("Borrower" or "Greystone"), GLOG INVESTMENTS, L.L.C., an Oklahoma limited liability company ("Glog" and collectively with the Borrower, the "Loan Parties"), and THE F&M BANK & TRUST COMPANY, a state banking corporation (the "Bank").

 

WITNESSETH:

 

WHEREAS, Loan Parties and the Bank entered into that certain Loan Agreement dated as of March 4, 2005, as previously amended from time to time, including that certain February 2009 Amendment to Loan Agreement dated as of February 16, 2009 (collectively, the "Existing Loan Agreement"), pursuant to which the Bank (i) extended, a certain $5,500,000.00 term loan and $1,500,000.00 non-advancing revolving credit facilities to Borrower (the "Greystone Commitments") and (ii) extended a $5,000,000.00 term loan to Glog (the "Glog Commitment" and together with the Greystone Commitments, collectively the "Commitments"); and

 

WHEREAS, the Borrower desires the Bank to (i) renew, consolidate, modify, increase and extend unpaid balances of the notes evidencing the Greystone Commitments into a single term loan facility in the aggregate face principal amount of $6,097,776.21 until an extended final maturity date of March 13, 2014; and

 

WHEREAS, subject to the terms, provisions and conditions hereinafter set forth, the Bank is willing to (i) renew, consolidate, increase and extend the existing Greystone Commitments in the consolidated and aggregate principal amount of $6,097,776.21 until an extended final maturity date of March 13, 2014;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, receipt of which is acknowledged by the parties hereto, the parties agree to amend the Existing Loan Agreement as follows:

 

1.      Definition. Any capitalized term used herein (including in the recitals hereto) but not otherwise defined shall have the meaning given to such term in the Existing Loan Agreement. In addition, the following definitions in Section 1 of the Existing Loan Agreement are modified or added thereto to read in their entirety as follows:

 

"Base Rate" shall have the meaning assigned thereto in the Greystone Term Note subject to the Rate Floor.

 

"Financial Covenant Affiliates" shall mean, only for purposes of the calculation of the financial covenant of Sections 6.11 (Funded Debt to EBITDA) and 6.12 (Debt Service Coverage Ratio), Glog, Greystone Real Estate, LLC, Native American Plastics, L.L.C. and Warren F. Kruger, individually, and their successors and permitted assigns, insofar and only insofar as their Funded Debt owing to the Bank is concerned.

 

  

  

  

"Greystone Term Note" shall mean that certain Promissory Note (Term Note # 60071) from Borrower payable to the order of the Bank, dated March 15, 2011, in the stated principal face amount of $6,097,776.21, as amended, extended, renewed, replaced, rearranged, substituted, changed in form, consolidated or otherwise modified from time to time.

 

"Rate Floor" shall mean 4.50% per annum (prior to the occurrence of a Default or Event of Default).

 

"Prime Lending Rate of Interest" shall mean the Base Rate of the Bank (as defined in the Greystone Term Note).

 

2.  Greystone Commitment. The existing Commitments issued by the Bank to Greystone, as Borrower, are hereby consolidated, increased, modified, extended and renewed in the stated face principal amount of $6,097,776.21 as a three year term loan until the extended final maturity date of March 13, 2014, subject to the Borrowing Base provisions of the Existing Loan Agreement, and payable in accordance with the terms and provisions of the Greystone Term Note. All of the Indebtedness created pursuant thereto shall be evidenced by that certain replacement Promissory Note (Term Note # 60071) dated as of even date herewith from the Borrower payable to the order of the Bank in the face principal amount of $6,097,776.21 (the "Consolidated Term Note"). The revolving credit facility previously issued to the Borrower in the maximum amount of $1,500,000.00 is extinguished and terminated. All references in the Existing Loan Agreement to the Revolving Note or the Term Note previously issued by Greystone to the order of the Bank shall hereafter refer to the Consolidated Term Note.

 

3.  Interest Rate. All amounts outstanding on the Consolidated Term Note shall bear interest at a per annum rate equal to the Base Rate, which in no event shall be less than the then applicable Index Floor Rate.

 

4.  Financial Covenants. The following financial covenants shall be added to the Existing Loan Agreement (as accounting terms used in such financial covenants shall have the meaning assigned to them in and as calculated in accordance with GAAP):

 

6.11    Maximum Funded Debt to EBITDA. The maximum aggregate Funded Debt to EBITDA (net of (minus) pledged certificates of deposit by the Guarantors to the Bank and inclusive of the net income of Yorktown Management, L.L.C.'s ("Yorktown")) of Greystone and its Financial Covenant Affiliates shall be as follows calculated quarterly as of the end of each fiscal quarter of Greystone:

 

	
Maximum Ratio

	
Effective as of:

	 	 
	
8.0 to 1.0

	
May 31, 2011

	
5.5 to 1.0

	
May 31, 2012

	
4.0 to 1.0

	
May 31, 2013 and thereafter

 

6.12    Debt Service Coverage Ratio (DSCR). The minimum Debt Service Coverage Ratio (Greystone's and its Financial Covenant Affiliates' aggregate Net Operating Income (inclusive of the net operating income of Yorktown and, insofar and only insofar as

 

 

  

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Greystone is concerned, inclusive of its interest, depreciation and amortization) to principal and interest on the aggregate Funded Debt of Greystone and its Financial Covenant Affiliates' ratio) shall be as follows; calculated quarterly as of the end of each fiscal quarter of Greystone:

 

	
Minimum Ratio

	
Effective as of

	 	 
	
1.00 to 1.0

	
May 31, 2011

	
1.25 to 1.0

	
May 31, 2012

	
1.50 to 1.0

	
May 31, 2013 and thereafter

 

 

5.    Guaranty. Borrower shall cause each of the individual Guarantors (Warren Kruger and Robert B. Rosene, Jr. to execute and deliver to the Bank such guarantor ratifications dated effective as of even date herewith in form, scope and substance acceptable to the Bank increasing the maximum principal amount absolutely and unconditionally guaranteed each Guarantor to $4,450,000.00, or alternatively, at the Bank's request, to execute and deliver to the Bank such amended and restated guaranty agreements as may be deemed necessary or appropriate by the Bank in form, scope and substance acceptable to the Bank.

 

6.    Ratification. The remaining terms, provisions and conditions set forth in the Existing Loan Agreement shall remain in full force and effect for all purposes and are incorporated herein by reference. The Borrower restates, confirms, adopts and ratifies the warranties, covenants and representations set forth therein and further represents to the Bank that, as of the date hereof, no Default or Event of Default exists under the Existing Loan Agreement, as amended by this 2011 Amendment (collectively, the "Loan Agreement").

 

7.    Conditions Precedent.  The Bank's obligations hereunder are expressly conditioned on the satisfaction of the following conditions precedent:

 

(a)   Borrower shall execute and deliver, or cause to be executed and delivered to the Bank:

 

(i) this 2011 Amendment and the Consolidated Term Note;

 

(ii) a Closing Certificate of the Borrower in form, scope and content acceptable to the Bank;

 

(iii) the Ratification of Guarantor from each of the Guarantors; and

 

(iv)  such amendments to and/or supplements to the existing Security Agreement in form, scope and substance acceptable to the Bank as the Bank may deem appropriate or necessary in connection with the transactions contemplated by this 2011 Amendment.

 

8.    Additional Reporting Requirements. In addition to the reporting requirements set forth in the Existing Loan Agreement (Section 6.1 thereof), Borrower shall furnish to the Bank monthly no later than the 20th day of each successive calendar month, effective as of the close of 

 

 

  

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each calendar month, monthly balance sheets and income statements, accounts payable and accounts receivable listings (reasonably categorized by name of account creditor/account debtor, aging categories and amount) and updated current business projections, all in form, scope and detail reasonably acceptable to the Bank. On a quarterly basis, concurrent with the delivery of quarter end internally prepared financial statements required by Section 6.1(ii), Borrower shall submit to the Bank a quarterly compliance certificate in form, scope and substance reasonably acceptable to the Bank, including without limitation, the financial covenants of Sections 6.11 and 6.12, respectively, hereof.

 

9.      Collateral and Cross Collateralization and Cross Default. All of the Indebtedness of the Borrower to the Bank, including as evidenced by the Consolidated Term Note shall be secured in all respects by the Collateral described or defined in the Security Agreement described and defined in the Loan Agreement or any other Loan Document, including such amendment thereto or restatement thereof as may be deemed necessary or appropriate by the Bank. The Borrowers acknowledge and stipulate that the Collateral described and defined in the Loan Agreement and the Security Agreement and all items and types of collateral, whether real property, personal property or otherwise, granted from time to time, including, without limitation, now in existence, by any of Greystone Real Estate, L.L.C., Native American Plastics, L.L.C., Glog, and/or Warren F. Kruger, individually, as collateral or security for any and all debts, liabilities and obligations of any thereof, whether evidenced by promissory notes or otherwise, shall be and hereby are cross collateralized with each other to the fullest and maximum extent permitted by applicable law and each thereof is cross-defaulted with each of the other notes, security agreements, pledge agreements, mortgages, guaranties and loan agreements thereof for all purposes and in all respects. Notwithstanding the foregoing provisions, if and to the extent the Maximum Funded Debt to EBITDA ratio of Section 6.11 hereof is reduced to 4.0 to 1.0 for two (2) consecutive fiscal quarter ends, the Bank agrees to release the subordinated and junior mortgage liens against the respective properties leased by Greystone Real Estate LLC, as landlord, to Greystone, as tenant.

 

10.  CONSENT TO JURISDICTION AND VENUE. THE BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY OF THE LOCAL, STATE, AND FEDERAL COURTS LOCATED WITHIN TULSA COUNTY, OKLAHOMA, AND WAIVES ANY OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OR ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO IT AT THE ADDRESS SET FORTH IN THE EXISTING LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) BUSINESS DAYS AFTER MAILED OR DELIVERED BY MESSENGER.

 

11.  Fees and Expenses. Borrower agrees to pay to the Bank on demand all costs, fees and expenses (including, without limitation, reasonable attorneys fees and legal expenses) incurred or accrued by the Bank in connection with the preparation, execution, closing, delivery, and administration of this 2011 Amendment (including the Existing Loan Agreement) and the other Loan Documents, or any amendment, waiver, consent or modification thereto or thereof, or 

 

  

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any enforcement thereof. In any action to enforce or construe the provisions of the Loan Agreement or any of the Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys' fees and all costs and expenses related thereto.

 

12.  WAIVER OF JURY TRIAL. BORROWER FULLY, VOLUNTARILY AND EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS 2011 AMENDMENT, THE CONSOLIDATED TERM NOTE, THE LOAN AGREEMENT OR UNDER ANY AMENDMENT, ANY SECURITY INSTRUMENT, OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE LOAN AGREEMENT. BORROWER AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

13.  Counterparts. This 2011 Amendment may be executed in multiple counterparts, each of which, when so executed, shall constitute an original copy.

 

14.  Undefined Terms. Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Loan Agreement.

 

 

 

[Signature Pages Follow]

 

 

 

 

  

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IN WITNESS WHEREOF, Borrower has caused this 2011 Amendment to be delivered to Bank in Tulsa, Oklahoma, by its undersigned duly authorized corporate officer thereof effective for all purposes as of the day and year first above written.

 

 

 

GREYSTONE MANUFACTURING, L.L.C., an 

Oklahoma limited liability company

 

By /s/ Warren F. Kruger                    

      Warren F. Kruger, manager

 

        "Greystone"

 

 

 

GLOG INVESTMENT, L.L.C.

an Oklahoma limited liability company

 

By /s/ Warren F. Kruger                    

      Warren F. Kruger, manager

 

       "Glog"

 

By  /s/ Warren F. Kruger                    

Warren F. Kruger, individually (as to the cross pledge and cross default of his personal indebtedness to the Bank per paragraph 9 above)

 

 

  

  

  

 

 

 

THE F&M BANK & TRUST COMPANY, a

state banking corporation

 

By   /s/ Craig G. Huston                        

        Craig G. Huston

Senior Executive Vice President

 

       "Bank"exh10-2_17154.htm

EXHIBIT 10.2

 

 

PROMISSORY NOTE

 

(Term Note # 60071)

 

	$6,097,776.21	March 15, 2011
	 	Tulsa, Oklahoma

 

FOR VALUE RECEIVED, GREYSTONE MANUFACTURING, L.L.C., an Oklahoma limited liability company ("Borrower") hereby promises to pay to the order of THE F&M BANK & TRUST COMPANY, a state banking corporation (the "Bank"), at the Bank's principal offices in Tulsa, Oklahoma, in lawful money of the United States of America, the principal sum of SIX MILLION NINETY SEVEN THOUSAND SEVEN HUNDRED SEVENTY SIX AND 21/100 DOLLARS ($6,097,776.21), in monthly installments of principal in the amount of $72,592.57 each, due on the 13th day of each calendar month, commencing April 13, 2011, together with interest thereon from the date hereof on the unpaid balance of principal from time to time outstanding and on any past due interest, including accrued but unpaid interest from the Prior Term Note (as hereinafter defined), at the rate of interest hereinafter specified, which interest is due and payable as it accrues on the same day monthly principal installments are due and payable, commencing April 13, 2011, and at final maturity on March 13, 2014,

 

The unpaid principal amount hereof shall accrue interest at a variable per annum rate equal from day to day to the Bank's Base Rate (as herein defined), but in no event shall this Note accrue interest at a per annum contract rate (not Default Rate) less than four and one-half percentage points (4.50%) per annum or greater than the maximum rate allowable by applicable law. Any change in the Base Rate shall be effective with respect to this Note as of the date upon which any change in such rate of interest shall occur. Interest shall be computed on the basis of a year of 360 days but assessed for the actual number of days elapsed.

 

As used herein. "Base Rate" means a variable annual rate of interest established from time to time by the Bank and announced from time to time by the Bank and/or published on its website as the "F&M Prime Rate." The Base Rate may be adjusted throughout the term of the loan or loans governed or evidenced hereby, and any change in the Base Rate due to a change in such announced and/or published rate shall be effective on the day of the announced changed in such Base Rate. Such rate shall not necessarily be the Bank's "best" or lowest rate and the Bank may make loans from time to time based or priced on other rates or indices. Should the Base Rate become unavailable during the term of the loans evidenced by the Note(s) or should the Bank otherwise cease to publish or announce a prime rate, or should it be merged, consolidated, liquidated or dissolved in such a manner that it loses its separate corporate or banking identity, then the Base Rate shall be a substitute index selected and designated by the Bank and concerning which the Borrower is notified by the Bank.

 

This Note is an extension, increase and modification of the Term Note referred to in that certain Loan Agreement dated as of March 4, 2005, between and among, inter alia, Borrower, Glog Investment, L.L.C. and the Bank, as amended from time to time (as the same may be hereafter amended, restated, supplemented or otherwise modified from time to time, collectively 

 

 

  

  

  

the "Loan Agreement"). Capitalized terms used in this Note but not defined herein shall have the respective meanings assigned to them in the Loan Agreement.

 

This Note is a consolidation, extension and modification of the Notes issued pursuant to the Loan Agreement and is entitled to the benefits provided for in the Loan Agreement, the Loan Documents and the Security Agreement securing this Notes to the fullest extent permitted by applicable law and the security interests granted in such Security Agreement and other applicable Loan Documents between, inter alia, Borrower, as debtor, and the Bank, as secured party, are hereby granted, regranted, ratified, confirmed and continued in full force and effect for all purposes by Borrower in favor of the Bank in all respects as if fully restated herein verbatim.

 

The Loan Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events, for the voluntary prepayment hereof upon the terms and conditions specified therein, cross default and collateralization with the GLOG Note therein described and defined (as each or either thereof may have been or hereafter be extended, renewed, rearranged, replaced, substituted, consolidated or otherwise modified from time to time) and other terms, provisions, conditions and limitations relevant to this Note, including without limitation, application of the Default Rate.

 

Upon the occurrence of any Event of Default under the Loan Agreement, the Security Agreement or any of the other Loan Documents, the Bank shall have the right, immediately and without further action by it, to set off against this Note and the other Notes all money owed by the Bank in any capacity to the Borrower or any other person who is or might be liable for payment hereof, whether or not due, and also to set off against all other liabilities of the Borrower to the Bank all money owed by the Bank in any capacity to the Borrower; and the Bank shall be deemed to have exercised such right of set off and to have made a charge against such money immediately upon the occurrence of such Event of Default even though such charge is made or entered into the books of Bank subsequently thereto.

 

Should the indebtedness represented by this Note or any part thereof be collected at law or in equity or in bankruptcy, receivership or other court proceedings or this Note be placed in the hands of attorneys for collection after default, the Borrower agrees to pay hereunder, in addition to the principal and interest due and payable hereon, reasonable attorneys' fees, court costs and other collection expenses incurred by the holder hereof.

 

The Borrower hereby waives presentment for payment, demand, notice of nonpayment, protest and notice of protest with respect to any payment hereunder and agrees to any extension of time with respect to any payment due hereunder, to any substitution or release of the security or collateral described in the Loan Agreement or the Security Instruments and to the addition or release of any party liable hereunder. No delay on the part of the holder hereof in exercising any rights hereunder shall operate as a waiver of such rights.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OKLAHOMA. THIS NOTE IS CROSS DEFAULTED AND CROSS COLLATERALIZED WITH THE OTHER NOTES ISSUED FROM TIME TO TIME BY THE BORROWER TO THE BANK AND/OR PURSUANT TO THE LOAN AGREEMENT.

 

  

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This Note is a consolidation, extension, increase and modification of (i) that certain term note #60071 from Borrower payable to the order of the Bank and dated October 15, 2010, in the original principal amount of $4,650,625.58 (the "Prior Term Note") and (ii) that certain revolving note #57821 from Borrower payable to the order of the Bank and dated October 15, 2010, in the original principal amount of $1,386,000.00 (the "Prior Revolver Note") and this Note supersedes and replaces each of the Prior Term Note and the Prior Revolver Note.

 

The provisions of the Loan Agreement concerning jurisdiction, venue and waiver of jury trial are incorporated herein by reference and made a part hereof for all purposes to the fullest extent permitted by applicable law with the same force and effect as it fully set forth herein and repeated herein verbatim.

 

This Note (Term Note # 60071) is executed and delivered to the order of the Bank by the undersigned duly authorized manager of the Borrower, in Tulsa, Oklahoma, pursuant to all necessary consents, actions and approvals of the board of directors of the Borrower.

 

BORROWER:

 

GREYSTONE MANUFACTURING, L.L.C., 

an Oklahoma limited liability company

 

By:  /s/ Warren F. Kruger                            

        Warren F. Kruger, manager

 

 

 

 

Due: March 13, 2014

 

 

 

 

 

  

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