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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
Page 1 of 6
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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 time. Notwithstanding any of the
foregoing, if at any time applicable laws
shall be changed so as to permit a
higher rate or amount of interest to be
charged than that permitted prior to
such change, then unless prohibi
