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EXHIBIT 4.1
TERM PROMISSORY NOTE
$5,000,000.00 Portland, Oregon
October 16, 2000
FOR VALUE RECEIVED, the undersigned, SUPERIOR UNIFORM GROUP, INC., a
Florida corporation ("Maker"), promises to pay to the order of FIRST UNION
NATIONAL BANK, a national banking association ("Lender"), in lawful money of the
United States of America, in immediately available funds, at FL0070, 214 North
Hogan Street, Jacksonville, Florida 32202 or at such other location as the
Lender may designate from time to time, the principal sum of FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00), or so much thereof as may be advanced and remain
outstanding, together with interest thereon, as described below.
This Term Promissory Note ("Note") is the Term Promissory Note referred
to in, and issued pursuant to, that certain Loan Agreement dated as of March 26,
1999 executed by and between Lender and Maker, as modified pursuant to the terms
of that certain First Amendment to Loan Agreement dated as of the date hereof
executed by and between Maker and Lender (as so amended, the "Loan Agreement"),
the terms of which are incorporated herein by reference. The Loan Agreement
contains a provision, among other things, for the acceleration of the stated
maturity of this Note upon the happening of certain events set forth therein.
Capitalized terms, unless otherwise defined herein, shall have the meaning given
such terms in the Loan Agreement.
1. INTEREST.
(a) Interest Rate. Interest shall accrue on the average
daily outstanding principal balance hereof from the date of advancement thereof
at a variable rate, based upon a year of 360 days and actual days elapsed, equal
to the Contract Rate, as hereinafter defined, subject to availability.
(b) Certain Defined Terms. As used herein, the following
terms shall have the following meanings:
(i) "Business Day" shall mean any day on which
the Lender's offices in Tampa, Florida, are open for business. Unless
specifically denoted "Business Days" herein, references to "days" shall mean
calendar days.
(ii) "Business Day Convention" shall mean the
convention for adjusting any relevant date if it would otherwise fall on a day
that is not a Business Day. If "Modified Following" is specified, that date will
be the first following day that is a Business Day unless that day falls in the
next calendar month, in which case that date will be the first preceding day
that is a Business Day.
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(iii) The "Contract Rate" shall mean the 1 Month
LIBOR Market Index Rate plus .80% (80 basis points).
(iv) A "LIBOR Period" shall mean a one month
period, but in no event shall exceed in duration the remainder of the term of
the loan evidenced hereby.
(v) The "1 Month LIBOR Market Index Rate"
shall mean for any day, the rate for one (1) month U.S. dollar deposits as
reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if
such day is not a London business day, then the immediately preceding London
business day (or if not so reported, then as determined by Bank from another
recognized source or interbank quotation).
(vi) The "Prime Rate" shall mean a variable
rate per annum which equals the rate of interest announced from time to time by
Lender as its prime rate, but which is not necessarily the lowest or best rate
offered thereby at any time, such interest rate to change automatically from
time to time, effective as of the effective date of each change in the prime
rate.
(c) Limitations on LIBOR; Compensation for Increased
Costs. If at any time prior to the proposed commencement of a LIBOR Period,
Lender shall have determined in good faith (which determination shall be
conclusive) and shall have given notice to Maker that it has become impractical
for Lender to continue to offer the Contract Rate to Maker or that Lender's
ability to continue to offer the Contract Rate to Maker has been materially
adversely affected because:
(i) by reason of circumstances affecting the
London Interbank Eurodollar Market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable during such LIBOR Period;
(ii) deposits in U.S. Dollars for the duration of
such LIBOR Period are not available to Lender in the London Interbank Eurodollar
Market in sufficient amounts in the ordinary course of business; or
(iii) the London Interbank Offered Rate will not
compensate Lender for the cost to Lender of the funds to be used by it to fund
the loan evidenced hereby during such LIBOR Period;
then, from after the date of such determination or at the end of such period as
Lender, in its discretion, shall have agreed, the entire outstanding principal
balance hereof shall accrue interest at the Prime Rate.
Notwithstanding anything herein contained, if at any time while any
principal remains outstanding hereunder, Lender determines in good faith (which
determination shall be conclusive) and notifies Maker that, by reason of any
law, regulation, treaty or official directive, or any change therein or in the
interpretation or application thereof, by the authority charged with the
administration thereof or by any court, it is unlawful or impracticable for
Lender to continue to maintain or offer the Contract Rate or to give effect to
any of its related obligations as contemplated hereby, Lender, by such notice,
may declare that the entire outstanding principal
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balance hereof, together with all accrued and unpaid interest thereon to the
date of repayment, shall forthwith or at the end of such period as Lender, in
its discretion, shall have agreed, accrue interest at the Prime Rate.
Maker shall reimburse Lender for all losses or expenses incurred by
Lender as a result of (i) Maker's failure to pay any sum due hereunder on its
due date, (ii) repayment of any portion of the loan evidenced hereby prior to
the end of the applicable LIBOR Period, or (iii) any acceleration of the due
date of the loan evidenced hereby pursuant hereto.
(d) Taxation, Capital Adequacy and Other Increases in
Cost of Maintaining LIBOR Rate. If there occurs any future law, regulation,
treaty or official directive (whether or not having the force of law) or any
change in applicable present or future law, regulation, treaty or directive
(whether or not having force of law) or in the interpretation or application
thereof by any court or by any governmental or other authority or entity charged
with the administration thereof which now or hereafter shall:
(i) subject Lender to any tax of any kind
whatsoever with respect to this Note or any outstanding principal hereunder, or
change the basis of taxation of payments to Lender of principal, interest, fees
or any other amount payable hereunder (except for changes in the rate of tax on
the capital or overall net income of Lender imposed by the laws of the United
States, or any state thereof, or taxing authority therein);
(ii) impose, modify or make applicable any
reserve, special deposit or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, or any other acquisition
of funds by, Lender; or
(iii) impose on Lender or the London Interbank
Eurodollar Market any other condition, restriction or limitation;
and the result of any of the foregoing is to increase the cost to Lender of
maintaining or offering the Contract Rate or to reduce any amount receivable
hereunder with respect thereto, then, in any such case, at Maker's election,
either (1) Maker shall promptly pay to Lender, upon demand such additional
amounts necessary to compensate Lender for such additional cost or reduced
amount received which Lender deems to be material as are determined in good
faith by Lender or (2) thereafter, all amounts outstanding under the loan
evidenced hereby shall commence accruing interest at the Prime Rate upon
expiration of each LIBOR Period then in effect with respect to any portion of
the loan evidenced hereby. If Lender becomes entitled to claim any additional
amounts pursuant to this clause, it shall promptly notify Maker of the event by
reason of which it has become so entitled. A certificate of Lender as to any
such additional amounts payable to it and containing reasonable details of the
calculation thereof shall be conclusive and binding in the absence of manifest
error.
(e) Maximum Amount of Interest. It is the intention of
Maker and Lender to conform strictly to the interest law applicable to this loan
transaction. Accordingly, it is agreed that notwithstanding any provisions to
the contrary in this Note, or in any of the documents securing payment hereof or
otherwise relating hereto, the aggregate of all interest and any other charges
or consideration constituting interest under the applicable interest law that is
taken,
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reserved, contracted for, charged or received under this Note or under any of
the other aforesaid agreements or otherwise in connection with this loan
transaction shall under no circumstances exceed the maximum amount of interest
allowed by the interest law applicable to this loan transaction. If any excess
of interest in such respect is provided for, in this Note or in any of the
documents securing payment hereof or otherwise relating hereto, then, in such
event, (i) the provisions of this paragraph shall govern and control, (ii)
neither Maker nor Maker's heirs, legal representatives, successors or assigns
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the maximum amount of interest allowed by the interest law
applicable to this loan transaction, (iii) any excess shall be deemed a mistake
and cancelled automatically and, if theretofore paid, shall be credited on this
Note by Lender (or if this Note shall have been paid in full, refunded to
Maker), and (iv) the effective rate of interest shall be automatically subject
to reduction to the maximum legal rate of interest allowed under such interest
law as now or hereafter construed by courts of appropriate jurisdiction. To the
extent permitted by the interest law applicable to this loan transaction, all
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the indebtedness evidenced hereby shall be amortized, prorated, allocated and
spread throughout the full term of this Note.
2. PAYMENT TERMS.
(a) The outstanding principal balance hereof shall be due
and payable as follows:
(i) commencing on December 1, 2000, and
continuing and the 1st day of each month thereafter through and including
October 1, 2005, monthly payments of principal in the amount of $83,333.34, plus
accrued interest thereon, shall be due and payable; and
(ii) a final payment of all outstanding principal
together with all unpaid and accrued interest thereon shall be due and payable
in full on November 1, 2005.
(b) Notwithstanding any term herein to the contrary or
any term of any Other Agreements, upon the occurrence of an Event of Default,
Lender shall have the right to demand immediate payment of the entire
outstanding principal balance hereof, together with all accrued and unpaid
interest and charges thereon and any cost, including breakage cost, associated
with any LIBOR contract.
3. PREPAYMENT. The principal amount of the Loan may be prepaid in
whole or in part at any time provided that Maker compensates Lender for any
costs or fees Lender incurs as a result of such prepayment.
4. CO-TERMINUS. Notwithstanding any term to the contrary herein,
or in any of the Other Agreements, Lender shall have the right to demand payment
of the entire remaining balance of this Note if, at any time:
(a) Term Loan A has been prepaid in whole or has
terminated pursuant to the terms of the Loan Agreement or the Other Agreements;
or
(b) the Revolving Credit Loan has:
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(i) terminated pursuant to the terms of the Loan
Agreement or the Other Agreements, including, without limitation, a termination
on March 26, 2002;
(ii) an offer was made by Lender, no earlier than
90 days before the maturity date of the Revolving Credit Note, to extend, renew
or replace at least $10,000,000 of the Revolving Credit Loan at an interest rate
equal to or lower than the rate specified in the Revolving Credit Note and on
terms (including without limitation fees) materially similar to the terms in the
Loan Agreement and the Other Agreements and other terms then required by Lender
for loans similar in size and risk to the Revolving Credit Loan; and
(iii) Borrower has either:
(A) failed to accept such offer within
ten (10) Business Days after the offer was made by Lender, or
(B) failed within ten (10) Business
Days after delivery of documents evidencing such extension, renewal or
replacement, to execute and deliver to lender such documents and to pay Lender
for its costs and fees incurred and due in connection therewith.
5. DEFAULT RATE. Upon any Event of Default, and continuing until
the Event of Default is cured, the outstanding principal of the loan and all
other indebtedness evidenced hereby shall bear interest at a rate per annum,
calculated on the basis of a 360-day year and days actually elapsed, equal to
the Contract Rate plus three percent (3.0%), payable on demand, which rate shall
apply as well before as after judgment.
6. MISCELLANEOUS.
(a) If any payment of principal or interest on this Note
shall become due on a Saturday, Sunday or on any other day on which banks in
Tampa, Florida, are not open for business, such payment shall be made on the
immediately preceding Business Day.
(b) All payments received by Lender hereunder shall be
applied first to unpaid interest and other charges and costs payable by Maker
and second to the principal balance hereof.
(c) Maker hereby waives presentment, demand, protest and
notice of any kind in connection with this Note.
(d) This Note shall bind Maker and its successors and
assigns, and the benefits hereof shall inure to the benefit of Lender and its
successors and assigns. All references herein to the "Maker" and "Lender" shall
be deemed to apply to the Maker and Lender, respectively, and their respective
successors and assigns.
(e) This Note, for all purposes, shall be governed by,
and construed in accordance with, the laws of the State of Florida. In the event
any provision of this Note shall be prohibited or invalid under applicable law,
such provision shall be ineffective to the extent of such
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prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Note.
7. ARBITRATION. All parties to this Note agree as follows:
(a) Upon demand of any party hereto, whether made before
or after institution of any judicial proceeding, any claim or controversy
arising out of, or relating to this Note between the parties hereto ("Dispute")
shall be resolved by binding arbitration conducted under and governed by the
Commercial Finance Disputes Arbitration Rules ("Arbitration Rules") of the
American Arbitration Association ("AAA") and the Federal Arbitration Act.
Disputes may include, without limitation, tort claims, counterclaims, disputes
as to whether a matter is subject to arbitration, claims brought as class
actions, or claims arising from documents executed in the future. A judgment
upon the award may be entered in any court having jurisdiction. Notwithstanding
the foregoing, this arbitration provision does not apply to disputes under or
related to swap agreements.
(b) All arbitration hearings shall be conducted in the
city in which the office of Lender is located. A hearing shall begin within 90
days of demand for arbitration, and all hearings shall be concluded within 120
days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein.
(c) All parties agree to preserve, without diminution,
certain remedies that any party may exercise before or after an arbitration
proceeding is brought. The parties shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies as applicable: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale or under applicable law
by judicial foreclosure including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Any claim or controversy with regard to any party's
entitlement to such remedies is a Dispute.
(d) Each party agrees that it shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby waive
any right or claim to punitive or exemplary damages they have now or which may
arise in the future in connection with any Dispute, whether the Dispute is
resolved by arbitration or judicially.
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IN WITNESS WHEREOF, Maker has executed this Note on the date first
above written.
SUPERIOR UNIFORM GROUP, INC., a
Florida corporation
By: /s/
---------------------------
Michael Benstock
Co-President
[CORPORATE SEAL]
STATE OF OREGON
COUNTY OF _____________
The foregoing instrument was acknowledged before me this 16th day of
October, 2000, by Michael Benstock, as Co-President of Superior Uniform Group,
Inc., a Florida corporation, on behalf of the corporation. He is personally
known to me or has produced ___________ (state) driver's license as
identification.
My Commission Expires: ------------------------------------------
Notary Public (Signature)
(AFFIX NOTARY SEAL) ------------------------------------------
(Printed Name)
Notary Public, State of __________
