EXHIBIT 10.9 RENEWAL AND EXTENSION AGREEMENT

 

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                                                                    EXHIBIT 10.9

 

                           RENEWAL AND EXTENSION AGREEMENT

 

      THIS RENEWAL AND EXTENSION AGREEMENT ("Agreement") is entered into this

31st day of March, 2005, by and between THE FROST NATIONAL BANK, a national

banking association ("Lender"), and CRAFTMADE INTERNATIONAL, INC., a Delaware

corporation ("Borrower").

 

                                    RECITALS:

 

      A. Lender is the sole owner and holder of that one certain Promissory Note

(the "Note") dated February 25, 2005, executed by Borrower and payable to the

order of Lender in the original principal amount of Three Million and No/100

Dollars ($3,000,000.00).

 

      B. The Note is secured by a Security Agreement dated November 6, 2001,

between Borrower and Lender, covering certain collateral as more particularly

described therein; a Security Agreement dated November 6, 2001, between Trade

Source International, Inc., a Delaware corporation, and Lender, covering certain

collateral as more particularly described therein; a Security Agreement dated

November 6, 2001, between Durocraft International, Inc., a Texas corporation,

and Lender, covering certain collateral as more particularly described therein;

and a Security Agreement dated November 6,2001, between Design Trends, LLC, a

Delaware limited liability company, and Lender, covering certain collateral as

more particularly described therein (collectively, the "Security Agreements").

The Note, Security Agreements and all modifications, renewals and extensions

described below are hereafter collectively referred to as the "Loan Documents."

 

      C. The Note matured in accordance with its terms on March 31, 2005.

 

      D. Borrower has requested that Lender modify certain provisions of the

Note, all as hereinafter provided, and in consideration thereof Borrower has

made certain agreements with Lender as hereinafter more fully set forth.

 

      E. Lender has agreed to such requests, subject to the terms and conditions

set forth herein.

 

      NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other

good and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged and agreed, Borrower and Lender hereby agree as follows:

 

      1. Acknowledgment of Outstanding Balance. The parties hereto acknowledge

that the outstanding principal balance of the Note as of the date hereof is

THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).

 

      2. Renewal and Extension of Maturity. The Note is hereby renewed and the

maturity of the Note is hereby extended to May 31, 2005 (the "Revised Maturity

Date").

 

RENEWAL AND EXTENSION AGREEMENT

 

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      3. Required Payments. From and after the effective date of this Agreement,

principal and interest under the Note shall be due and payable as follows:

 

      Interest only on amounts outstanding hereunder shall be due and payable

      monthly as it accrues, on the last day of each and every calendar month,

      beginning April 30, 2005, and May 31, 2005, when the entire amount hereof,

      principal and interest then remaining unpaid, shall be then due and

      payable; interest being calculated on the unpaid principal each day

      principal is outstanding and all payments made credited to any collection

      costs and late charges, to the discharge of the interest accrued and to

      the reduction of the principal, in such order as Lender shall determine.

 

      4. Interest Rate. The annual interest rate provided for in the Note shall

continue to be charged from and after the effective date of this Agreement in

accordance with the Note.

 

      5. Usury. No provisions of this Agreement or the Loan Documents shall

require the payment or permit the collection, application or receipt of interest

in excess of the maximum permitted by applicable state or federal law. If any

excess of interest in such respect is herein or in any such other instrument

provided for, or shall be adjudicated to be so provided for herein or in any

such instrument, the provisions of this paragraph shall govern, and neither

Borrower nor any endorsers of the Note nor their respective successors, assigns

or personal representatives shall be obligated to pay the amount of such

interest to the extent it is in excess of the amount permitted by applicable

law. It is expressly stipulated and agreed to be the intent of Borrower and

Lender to at all times comply with the usury and other laws relating to the Loan

Documents and any subsequent revisions, repeals or judicial interpretations

thereof, to the extent applicable thereto. In the event Lender or other holder

of the Note ever receives, collects or applies as interest any such excess, such

amount which would be excessive interest shall be applied to the reduction of

the unpaid principal balance of the Note and, if upon such application the

principal balance of the Note is paid in full, any remaining excess shall be

forthwith paid to Borrower and the provisions of the Loan Documents shall

immediately be deemed reformed and the amounts thereafter collectible thereunder

reduced, without the necessity of execution of any new document, so as to comply

with the then applicable law, but so as to permit the recovery of the fullest

amount otherwise called for thereunder. In determining whether or not the

interest paid or payable under any specific contingency exceeds the maximum

interest allowed to be charged by applicable law, Borrower and Lender or other

holder hereof shall, to the maximum extent permitted under applicable law,

amortize, prorate, allocate and spread the total amount of interest throughout

the entire term of the Note so that the amount or rate of interest charged for

any and all periods of time during the term of the Note is to the greatest

extent possible less than the maximum amount or rate of interest allowed to be

charged by law during the relevant period of t