Small
Business Administration
U.S. Small Business Administration
AUTHORIZATION
(SBA GUARANTEED LOAN)
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SBA
Loan #
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PLP
3 09-109-4009
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SBA
Loan Name
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Crystal
Magic, Inc.
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Approval
Date
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7/29/99
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Lender: U.
S. Small Business Administration (SBA):
Liberty
National
Bank
North Florida District Office
502
N. Highway
17-92 7825
Baymeadows Way - Suite 100-B
Longwood,
FL
32750
Jacksonville, FL 32256-7504
SBA
approves, under Section 7(a) of the Small Business Act as
amended. Lender’s, application, received 7/27/99, for
SBA to guarantee 75% of a loan (“Loan”) in the
amount of $490,000.00 to assist;
Borrower;
1. Crystal
Magic, Inc.
2120 Hidden Pine
La.
Apopka, FL
32712
All
requirements in the Authorization which refer lo Borrower also
apply to any Co-Borrower.
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A.
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THE GUARANTEE FEE IS $11,612.50. Lender must pay the
guarantee fee within 90 days of the date of this Authorization. The
90-day deadline may not be extended. Lender must send the guarantee
fee to the Small Business Administration, Denver, CO 80259-0001.
The remittance check should show the Loan number. No part of the
guarantee fee is refundable if Lender has made any disbursement.
Lender may collect this fee from Borrower after initial
disbursement of Loan. Borrower may use Loan proceeds to reimburse
Lender for the guarantee fee.
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B.
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ONGOING SERVICING FEE - Lender agrees to pay an ongoing fee
equal to one-half of one percent per year of the guaranteed portion
of the outstanding balance. Lender may not charge this fee to
Borrower.
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C.
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IT IS LENDER’S SOLE RESPONSIBILITY TO :
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1.
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Close
the Loan in accordance with the terms and conditions of this
Authorization.
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2.
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Obtain
valid and enforceable Loan documents, including obtaining the
signature or written consent of any obligor’s spouse if such
consent or signature is necessary to bind the marital community or
create a valid lien on marital property.
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SBA
Loan Number: PLP
309-109-4009 Page
1
SBA
Loan Name: .Crystal Magic,
Inc. (7a
Wizard 2.3)
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3.
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Retain
all Loan closing documents. Lender must submit these documents,
along with other required documents, to SBA for review if Lender
requests SBA to honor its guarantee on the Loan, or at any time SBA
requests the documents for review.
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D.
REQUIRED
FORMS
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1.
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Lender
may use its own forms except as otherwise instructed in this
Authorization. Lender must use the following SBA forms for the
Loan:
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SBA
Form 147, Note
SBA
Form 1050, Settlement Sheet, for each
disbursement
SBA
Form 159, Compensation Agreement, for each
representative
SBA
Form 2004, Lender’s Certification
SBA
Form 722, Equal Opportunity Poster
SBA
Form 793, Notice to New Borrowers
SBA
Form 148, Guarantee
SBA
Form 148, Limited Guarantee (use 148L if
available)
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2.
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Lender
may use computer-generated versions of mandatory SBA Forms, as long
as these versions are exact reproductions.
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3.
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Lenders
must submit completed SBA Forms 159 and 2004 for non-PLP loans to
the SBA immediately after final disbursement.
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E.
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CONTINGENCIES - SBA issues this Authorization in reliance on
representations in the Loan application, including supporting
documents. The guarantee is contingent upon Lender:
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1.
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Having
and complying with a valid SBA Loan Guarantee Agreement (SBA Form
750 or SBA Form 750B for short-term loans) and any required
supplemental guarantee agreements, between Lender and
SBA;
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2.
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Complying
with the current SBA Standard Operating Procedures
(SOP);
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3.
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Making
initial disbursement of the Loan no later than 6 months, and
completing disbursement no later than 12 months, from the date of
this Authorization, unless SBA extends the time in
writing;
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4.
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Having
no evidence since the date of the Loan application, or any
preceding disbursement, of any unremedied adverse change in the
financial condition, organization, operations, or fixed assets of
Borrower which would warrant withholding or not making any further
disbursement, and;
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5.
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Satisfying
all of the conditions in this Authorization.
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SBA
Loan Number: PLP
309-109-4009 Page
2
SBA
Loan Name: .Crystal Magic,
Inc. (7a
Wizard 2.3)
F.
NOTE
TERMS:
1.
Maturity : This
Note will mature in 7 years from date of Note.
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2.
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Repayment Terms: Lender must insert onto SBA Note, Form 147,
to be executed by Borrower, the following repayment terms, without
modification. Lender must complete all blank terms on the Note at
time of closing:
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The
interest rate on this Note will fluctuate. The initial
interest rate is 10.50% per year. This initial rate is the
prime rate on the date SBA received the loan application, plus
2.50%.
Borrower
must pay three payments of interest only on the disbursed
principal balance one month from the month this Note is dated;
payment must be made on the first calendar day in the month it
is due.
Borrower
must pay principal and interest payments of $6,050.00 every
month, beginning four months from the month this Note is
dated; payments must be made on the first calendar day in the
months they are due.
Lender
will apply each installment payment first to pay interest
accrued to the day Lender receives the payment, then to bring
principal current, then to pay any late fees, and will apply
any remaining balance to reduce principal.
Lender
may adjust the interest rate for the first time no earlier
than the first calendar day of the first quarter after initial
disbursement. The interest rate will then be adjusted each
calendar quarter (the “change
period”).
The
“Prime Rate” is the prime rate in effect on the
first business day of the quarter in which a change occurs, as
published in the Wall Street
Journal on the next business day.
The
adjusted interest rate will be 2.50% above the Prime Rate.
Lender will adjust the interest rate on the first calendar day
of each change period. The change in interest rate is
effective on that day whether or not Lender gives Borrower
notice of the change.
Lender
must adjust the payment amount at least annually as needed to
amortize principal over the remaining term of the
note.
If
SBA purchases the guaranteed portion of the unpaid principal
balance, the interest rate becomes fixed at the rate in effect
at the time of the earliest uncured payment default. If there
is no uncured payment default, the rate becomes fixed at the
rate in effect at the time of purchase.
All
remaining principal and accrued interest is due and payable 7
years from date of Note.
Late
Charge: If a payment on this Note is more than 10 days late.
Lender may charge Borrower a late fee of up to 5% of the
unpaid portion of the regularly scheduled
payment.
G.
USE OF
PROCEEDS
1. $215,000.00
to purchase equipment.
2. $275,000.00
for working capital.
All
amounts listed above are approximate. Lender must document
that Borrower used the loan proceeds for the purposes stated
in this Authorization.
SBA
Loan Number: PLP
309-109-4009 Page
3
SBA
Loan Name: .Crystal Magic,
Inc. (7a
Wizard 2.3)
Lender
may not disburse Loan proceeds solely to pay the guarantee
fee. Lender may disburse to Borrower, as working capital only,
funds not spent for the listed purposes as long as these funds
do not exceed 10°/o of the specific purpose authorized or
$10,000.00, whichever is less. An Eligible Passive Company may
not receive working capital funds.
Lender
must complete SEA Form 1050, Settlement Sheet, for each
disbursement and retain these forms in its Loan
file.
H. COLLATERAL
CONDITIONS
Lender
must obtain a lien on 100% of the interests in the following
collateral and properly perfect all lien
positions:
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1.
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First Perfected Security Interest, subject to no other liens, in
the following personal property (including any proceeds and
products), whether now owned or later acquired, wherever located:
Equipment; Inventory; Accounts; Instruments; General
Intangibles;
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a.
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Lender
must obtain a written agreement from all Lessors (including
sublessors) agreeing to: (I) Subordinate to Lender Lessor’s
interest, if any, in this property; (2) Provide Lender written
notice of default and reasonable opportunity to cure the default;
and (3) Allow Lender the right to take possession and dispose of or
remove the collateral.
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b.
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Lender
must obtain a list of all equipment and fixtures that are
collateral for the Loan. For items with a unit value of $500 or
more, the list must include a description and serial number, if
applicable.
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c.
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Lender
must obtain an appropriate Uniform Commercial Code lien search
evidencing all required lien positions. If UCC search is not
available, another type of lien search may be
substituted.
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2.
Guarantee on
SBA Form 148 , by Steven M. Rhodes, resident in
Florida, Secured by:
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a.
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Second Mortgage on land and improvements located at 2120 Hidden
Pine La., Apopka, Fl. 32712. This property is
residential.
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(1)
Subject only to prior lien(s) as follows:
(a) First:
Bank of America in the amount of $119,400.00
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(2)
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Any
prior lien(s) that is (are) open ended as to future advances must
be closed, in writing, according to applicable state law. The
revolving line(s) of credit set out above, if any, must be limited
in writing to the amount stated.
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(3)
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Evidence
of title and priority of lien must be based upon:
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(a) Title
and/or Lien Search or other evidence of proper ownership and
lien position.
3.
Guarantee on
SBA Form 148 , by Steven M. Rhodes, resident in
Florida. Secured by
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a.
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Pledge of Corporate Stock : Pledge to
Lender by Steven M. Rhodes (shareholder) of 10,000 shares of stock
(but not voting rights) in Crystal Magic, Inc..
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SBA
Loan Number: PLP
309-109-4009 Page
4
SBA
Loan Name: .Crystal Magic,
Inc. (7a
Wizard 2.3)
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4.
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Limited Guarantee on SBA Form 148 (use 14SL if available),
by Vicki L. Rhodes, resident in Florida.
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COMMUNITY
PROPERTY OR SPOUSAL INTEREST LIMITATION: The Guarantee is
limited to Guarantor’s community property or spousal
interest in collateral pledged to secure the Note or any
guarantee.
Secured
by :
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a.
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Second Mortgage on laud and improvements located at 2120
Hidden Pine La., Apopka, FL. 32712. This property is
residential.
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(1) Subject
only to prior lien(s) as follows:
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(a)
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First:
Bank of America in the amount of $119,400.00
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(2)
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Any
prior lien(s) that is (are) open ended as to future advances must
be closed, in writing, according to applicable state law. The
revolving line(s) of credit set out above, if any, must be limited
in writing to the amount stated.
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(3)
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Evidence
of title and priority of lien must be based upon:
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(a)
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Title
and/or Lien Search or other evidence of proper ownership and lien
position.
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The following language must appear in all lien instruments
including Mortgages, Deeds of Trust, and Security
Agreements;
“The Loan secured by this lien was made under a United Stales
Small Business Administration (SBA) nationwide program which uses
tax dollars to assist small business owners. If the United States
is seeking to enforce this document, then under SBA
regulations”
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a)
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When SBA is the holder of the Note, this document and all documents
evidencing or securing this Loan will be construed in accordance
with federal law.
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b)
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Lender or SBA may use local or state procedures for purposes such
as filing papers, recording documents, giving notice, foreclosing
liens, and other purposes. By using these procedures, SBA does not
waive any federal immunity from local or state control, penalty,
tax or liability. No Borrower or Guarantor may claim or assert
against SBA any local or state law to deny any obligation of
Borrower, or defeat any claim of SBA with respect to this
Loan.
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Any clause in this document requiring arbitration is not
enforceable when SBA is the holder of the Note secured by this
instrument.”
SBA
Loan Number: PLP
309-109-4009 Page
5
S
