Exhibit 10.28
BUSINESS LOAN AGREEMENT (ASSET BASED)
Borrower: ▇▇▇▇▇▇ Industries, Inc. Lender: Bank of America, N.A.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ c/o MD Commercial Loan Processing
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NC1-014-13-02
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated August 15, 2001, Is made and
executed between ▇▇▇▇▇▇ Industries, Inc. ("Borrower") and Bank of America, NA.
("Lender") on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations,. including those which may be described
on any exhibit or schedule attached to this Agreement ("Loan"). Borrower
understands and agrees that: (A) In granting, renewing, or extending any Loan,
Lender Is relying upon Borrower's representations, warranties, and agreements as
set forth In this Agreement, and (B) all such Loans shall be and remain subject
to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of August 15, 2001, and shall
continue in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid In full, including principal, interest, costs,
expenses, attorneys' fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.
LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows:
Conditions Precedent to Each Advance. Lender's obligation to make any
Advance to or for the account of Borrower under this Agreement is subject
to the following conditions precedent, with all documents, instruments,
opinions, reports, and other items required under this Agreement to be in
form and substance satisfactory to Lender:
(1) Lender shall have received evidence that this Agreement and all
Related Documents have been duly authorized, executed, and delivered
by Borrower to Lender.
(2) Lender shall have received such opinions of counsel, supplemental
opinions, and documents as Lender may request.
(3) The security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and shall
be in full force and effect.
(4) All guaranties required by Lender for the credit facility(ies)
shall have been executed by each Guarantor, delivered to Lender, and
be in full force and effect.
(5) Lender, at Its option and for its sole benefit, shall have
conducted an audit of Borrower's Accounts, Inventory, books, records,
and operations, and Lender shall be satisfied as to their condition.
(6) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then due
and payable.
(7) There shall not exist at the time of any Advance a condition
which would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for In the paragraph below titled "Compliance Certificate."
Making Loan Advances. Advances under this credit facility, as well as
directions for payment from Borrower's accounts, may be requested orally
or in writing by authorized persons. Lender may. but need not, require
that all oral requests be confirmed In writing. Each Advance shall be
conclusively deemed to have been made at the request of and for the
benefit of Borrower (1) when credited to any deposit account of Borrower
maintained with Lender or (2) when advanced in accordance with the
instructions of an authorized person. Lender, at its option, may set a
cutoff time, after which all requests for Advances will be treated as
having been requested on the next succeeding Business Day.
Mandatory Loan Repayments. if at any time the aggregate principal amount
of the outstanding Advances shall exceed the applicable Borrowing Base,
Borrower, immediately upon written or oral notice from Lender, shall pay
to Lender an amount equal to the difference between the outstanding
principal balance of the Advances and the Borrowing Base. On the
Expiration Date, Borrower shall pay to Lender in full the aggregate
unpaid principal amount of all Advances then outstanding and all accrued
unpaid interest, together with all other applicable fees, costs and
charges, if any, not yet paid.
Loan Account. Lender shall maintain on its books a record of account In
which Lender shall make entries for each Advance and such other debits
and credits as shall be appropriate in connection with the credit
facility. Lender shall provide Borrower with periodic statements of
Borrower's account, which statements shall be considered to be correct
and conclusively binding on Borrower unless Borrower notifies Lender to
the contrary within thirty (30) days after Borrower's receipt of any such
statement which Borrower deems to be Incorrect.
COLLATERAL. To secure payment of the Primary Credit Facility and performance of
all other Loan, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security interests in such property
and assets as Lender may require. Lender's Security interests In the Collateral
shall be continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any Insurance. With
respect to the Collateral, Borrower agrees and represents and warrants to
Lender~
Perfection of Security Interests. Borrower agrees to execute financing
statements and all documents perfecting Lender's Security Interest and to
take whatever other actions are requested by Lender to perfect and
continue Lender's Security interests in the Collateral. Upon request of
Lender, Borrower will deliver to Lender any and all of the documents
evidencing or constituting the Collateral, and Borrower will note
Lender's Interest upon any and all chattel paper and Instruments If not
delivered to Lender for possession by Lender. Contemporaneous with the
execution of this Agreement, Borrower will execute one or more UCC
financing statements and any similar statements as may be required by
applicable law, and Lender will file such financing statements and all
such similar statements In the appropriate location or locations.
Borrower hereby appoints Lender as Its Irrevocable attorney--In-4act for
the purpose of executing any documents necessary to perfect or to
continue any Security interest. Lender may at any time, and without
further authorization from Borrower, file a carbon, photograph,
facsimile, or other reproduction of any financing statement for use as a
financing statement. Borrower will reimburse Lender for all expenses for
the perfection, termination, and the continuation of the perfection of
Lender's security Interest in the Collateral. Borrower promptly will
notify Lender before any change In Borrower's name including any change
to the assumed business names of Borrower. Borrower also promptly will
notify Lender before any change In Borrower's Social Security Number or
Employer identification Number. Borrower further agrees to notify Lender
In writing prior to any change In address or location of Borrower's
principal governance office or should Borrower merge or consolidate with
any other entity.
Collateral Records. Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender's representative upon demand for
Inspection and copying at any reasonable time. With respect to the
Accounts, Borrower agrees to keep and maintain such records as Lender may
require, Including without limitation Information concerning Eligible
Accounts and Account balances and agings. Records related to Accounts
(Receivables) are or will be located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. With respect to the Inventory, Borrower agrees to keep
and maintain such records as Lender may require, Including without
limitation Information concerning Eligible Inventory and records
itemizing and describing the kind, type, quality, and quantity of
inventory, Borrower's Inventory costs and selling prices, and the daily
withdrawals and additions to Inventory. Records related to inventory are
or will be located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
above is an accurate and complete list of all locations at which Borrower
keeps or maintains business records concerning Borrower's collateral.
Collateral Schedules. Concurrently with the execution and delivery of
this Agreement, Borrower shall execute and deliver to Lender schedules of
Accounts and Inventory and schedules of Eligible Accounts and Eligible
Inventory in form and substance satisfactory to the Lender. Thereafter
supplemental schedules shall be delivered according to the following
schedule: With respect to Eligible Accounts, schedules shall be delivered
monthly, within 20 days of month end. With respect to Eligible Inventory,
schedules shall be delivered monthly, within 20 days of month end.
Representations and Warranties Concerning Accounts. With respect to the
Accounts, Borrower represents and warrants to Lender: (1) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account; (2) All Account Information listed on schedules delivered to
Lender will be true and correct, subject to immaterial variance; and (3)
Lender, Its assigns, or agents shall have the right at any time and at
Borrower's expense to Inspect, examine, and audit Borrower's records and
to confirm with Account Debtors the accuracy of such Accounts.
Representations and Warranties Concerning Inventory. With respect to the
Inventory, Borrower represents and warrants to Lender: (1) All Inventory
represented by Borrower to be Eligible inventory for purposes of this
Agreement conforms to the requirements of the definition of Eligible
Inventory (2) All Inventory values listed on schedules delivered to
Lender will be true and correct, subject to immaterial variance; (3) The
value of the Inventory will be determined on a consistent accounting
basis; (4) Except as agreed to the contrary by Lender In writing, all
Eligible Inventory Is now and at all times hereafter will be In
Borrower's physical possession and shall not be held by others on
consignment, sale on approval, or sale or return; (5) Except as reflected
In the inventory schedules delivered to Lender, all Eligible inventory Is
now and at all times hereafter will be of good and merchantable quality,
free from defects; (6) Eligible inventory is not now and will not at any
time hereafter be stored with a bailee, warehouseman, or similar party
without Lender's prior written consent, and, In such event, Borrower will
concurrently at the time of bailment cause any such bailee, warehouseman,
or similar party to Issue and deliver to Lender, in form acceptable to
Lender, warehouse receipts In Lender name evidencing the storage of
Inventory and (7) Lender, its assigns, or agents shall have the right at
any time and at Borrower's expense to inspect and examine the Inventory
and to check and test the same as to quality, quantify, value, and
condition.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the Initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and In the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents
for the Loan: (1) the Note; (2) Security Agreements granting to Lender
security interests In the Collateral; (3) financing statements and all
other documents perfecting Lender's Security interests; (4) evidence of
insurance as required below; (5) guaranties; (6) together with all such
Related Documents as Lender may require for the Loan; all in form and
substance satisfactory to Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents. in addition, Borrower shall have provided such other
resolutions, authorizations, documents and Instruments as Lender or its
counsel, may require.
Fees and Expenses Under This Agreement. Borrower shall have paid to Lender
all fees, costs, and expenses specified in this Agreement and the Related
Documents as are then due and payable.
Representations and Warranties. The representations and warranties set
forth In this Agreement, In the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement
or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Organization. Borrower Is a corporation for profit which is, and at all
times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of Borrower's state of incorporation.
Borrower is duly authorized to transact business In the State of Maryland
and all other states in which Borrower is doing business, having obtained
all necessary filings, governmental licenses and approvals for each state
in which Borrower is doing business. Specifically, Borrower is, and at all
limes shall be, duly qualified as a foreign corporation in all states In
which the failure to so qualify would have a material adverse effect on Its
business or financial condition. Borrower has the full power and authority
to own its properties and to transact the business In which It is presently
engaged or presently proposes to engage. Borrower maintains an office at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Unless Borrower has designated
otherwise in writing, the principal office is the office at which Borrower
keeps its books and records Including Its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location
of Borrower's state of organization or any change in Borrower's name.
Borrower shall do all things necessary to preserve and to keep In full
force and effect Its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable to
Borrower and Borrower's business activities.
Assumed Business Names. Borrower has filed or recorded all documents or
filings required by law relating to all assumed business names used by
Borrower. Excluding the name of Borrower, the following is a complete list
of all assumed business names under which Borrower does business: None.
Authorization. Borrower's execution, delivery, and performance of this
Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result In a
violation of, or constitute a default under (1) any provision of Borrower's
articles of Incorporation or organization, or bylaws, or any agreement or
other Instrument binding upon Borrower or (2) any law, governmental
regulation, court decree, or order applicable to Borrower or to Borrower's
properties.
Financial Information. Each of Borrower's financial statements supplied to
Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change In
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed In such financial statements.
Legal Effect. This Agreement constitutes, and any Instrument or agreement
Borrower Is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower In accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed In Borrower's financial statements or In writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not
presently due and payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled In Borrower's legal
name, and Borrower has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
Hazardous Substances. Except as disclosed to and acknowledged by Lender In
writing, Borrower represents and warrants that (1) During the period of
Borrower's ownership of Borrower's Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance by any person on, under,
about or from any of the Collateral. (2) Borrower has no knowledge of, or
reason to believe that there has been (a) any breach or violation of any
Environmental Laws: (b) any use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any Hazardous
Substance on, under, about or from the Collateral by any prior owners or
occupants of any of the Collateral; or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters.
(3) Neither Borrower nor any tenant, contractor, agent or other authorized
user of any of the Collateral shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted In
compliance with all applicable federal, state, and local laws, regulations,
and ordinances, Including without limitation all Environmental Laws.
Borrower authorizes Lender and Its agents to enter upon the Collateral to
make such Inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower's expense and for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any
other person. The representations and warranties contained herein are based
on Borrower's due diligence In Investigating the Collateral for hazardous
waste and Hazardous Substances. Borrower hereby (1) releases and waives any
future claims against Lender for Indemnity or contribution In the event
Borrower becomes liable for cleanup or other costs under any such laws, and
(2) agrees to Indemnify and hold harmless Lender against any and all
claims, losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from a breach of
this section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the Collateral. The provisions of this
section of the Agreement, including the obligation to Indemnity, shall
survive the payment of the indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender's
acquisition of any Interest In any of the Collateral, whether by
foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (Including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or
properties, other than litigation, claims, or other events, If any, that
have been disclosed to and acknowledged by Lender In writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns
and reports that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid In full,
except those presently being or to be contested by Borrower in good faith
In the ordinary course of business and for which adequate reserves have
been provided.
Lien Priority. Unless otherwise previously disclosed to Lender In writing,
Borrower has not entered Into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be
superior to Lender's Security Interests and rights in and to such
Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (If any),
and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally
enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains In effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1)
all material adverse changes In Borrower's financial condition, and (2) all
existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower
or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit
Borrower's books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
Annual Statements. As soon as available, but In no event later than
ninety (90) days after the end of each fiscal year, Borrower's balance
sheet and Income statement for the year ended, audited by a certified
public accountant satisfactory to Lender.
Additional Requirements. Basis of Financial Statements. The financial
statements required by this Agreement shall be prepared on a
consolidated basis.
Internally prepared accounts receivable aging reports of Borrower for
each month of each fiscal year of Borrower, within 20 days after the
close of each such period in form and content acceptable to Lender.
Eligible inventory schedules of Borrower for each month of each fiscal
year of Borrower, within 20 days after the close of each such period In
form and content acceptable to Lender.
All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and
certified by Borrower as being true and correct.
Additional information. Furnish such additional Information and statements,
as Lender may request from time to time.
Financial Covenants and Ratios. Comply with the following covenants and
ratios:
Working Capital Requirements.
Minimum Income and Cash Flow Requirements. Maintain not less than the
following Minimum Net Income level: N/A. Other Cash Flow requirements
are as follows: N/A.
Tangible Net Worth Requirements. Other Net Worth requirements are as
follows: N/A.
Operating Ratio Requirements. Borrower shall comply with the following
operating ratio requirements:
Expense Ratio Requirements. Borrower shall comply with the following
expense ratio requirements:
Other Requirements. Debt to Worth Ratio. Maintain on a consolidated basis a
ratio of Total Liabilities (excluding the non-current portion of
Subordinated Liabilities) to Tangible Net Worth not exceeding 3.25:1.0.
"Total Liabilities" means the sum of current liabilities plus long term
liabilities. "Tangible Net Worth" means the value of Borrower's total
assets (Including leaseholds and leasehold improvements and reserves
against assets but excluding goodwill, patents, trademarks, trade names,
organization expense, unamortized debt discount and expense, capitalized or
deferred research and development costs, deferred marketing expenses, and
other like intangibles, and monies due from affiliates, officers,
directors, employees, shareholders, members or managers of Borrower) less
total liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated Liabilities.
"Subordinated Liabilities" means liabilities subordinated to Borrower's
obligations to Lender in a manner acceptable to Lender, In Its sole
discretion.
Debt Service Coverage Ratio. Maintain on a consolidated basis a Debt
Service Coverage Ratio of at least 1.25:1.0. "Debt Service Coverage Ratio"
means the ratio of Cash Flow to the sum of the current portion of long term
debt and the current portion of capitalized lease obligations plus interest
expense on all obligations. "Cash Flow" is defined as (a) net income, after
income tax, (b) less income or plus loss from discontinued operations and
extraordinary items, (c) plus depreciation, depletion, amortization and
other non-cash charges, (d) plus interest expense on all obligations, and
(e) minus dividends, withdrawals, and other distributions. This ratio will
be calculated at the end of each reporting period for which Lender requires
financial statements from Borrower, using the results of the twelve-month
period ending with that reporting period. The current portion of long-term
liabilities will be measured as of the date 12 months prior to the current
financial statement.
Except as provided above, all computations made to determine compliance
with the requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies acceptable to Lender. Borrower, upon request of Lender,
will deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30)
days prior written notice to Lender. Each insurance policy also shall
include an endorsement providing that coverage in favor of Lender will not
be impaired In any way by any act, omission or default of Borrower or any
other person. In connection with all policies covering assets in which
Lender holds or is offered a security interest for the Loans, Borrower will
provide Lender with such lender's loss payable or other endorsements as
Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the
name of the insurer; (2) the risks insured; (3) the amount of the policy;
(4) the properties insured; (5) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (6) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value or replacement cost of any Collateral.
The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantor named
below, on Lender's forms, and in the amount and under the conditions set
forth in those guaranties.
Name of Guarantor Amount
▇▇▇▇▇▇ Corporation Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits.
Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower and
Lender. Borrower shall notify Lender immediately in writing of any default
in connection with any agreement.
Operations. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner.
Environmental Studies. Promptly conduct and complete, at Borrower's
expense, all such investigations, studies, samplings and testings as may be
requested by Lender or any governmental authority relative to any
substance, or any waste or by-product of any substance defined as toxic or
a hazardous substance under applicable federal, state, or local law, rule,
regulation, order or directive, at or affecting any property or any
facility owned, leased or used by Borrower.
Compliance with Governmental Requirements. Comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's
properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities
Act. Borrower may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Borrower has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Collateral are not jeopardized. Lender may require
Borrower to post adequate security or a surety bond, satisfactory to
Lender, to protect Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower's books, accounts, and
records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer
software programs for the generation of such records) in the possession of
a third party, Borrower, upon request of Lender, shall notify such party to
permit Lender free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at Borrower's
expense.
Compliance Certificates. Unless waived in writing by Lender, provide Lender
at least annually, with a certificate executed by Borrower's chief
financial officer, or other officer or person acceptable to Lender,
certifying that the representations and warranties set forth in this
Agreement are true and correct as of the date of the certificate and
further certifying that, as of the date of the certificate, no Event of
Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower's
part or on the part of any third party, on property owned and/or occupied
by Borrower, any environmental activity where damage may result to the
environment, unless such environmental activity is pursuant to and in
compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities; shall furnish to Lender
promptly and in any event within thirty (30) days after receipt thereof a
copy of any notice, summons, lien, citation, directive, letter or other
communication from any governmental agency or instrumentality concerning
any intentional or unintentional action or omission on Borrower's part in
connection with any environmental activity whether or not there is damage
to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender
or its attorneys may reasonably request to evidence and secure the Loans
and to perfect all Security Interests.
LENDER'S EXPENDITURES, If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the indebtedness and, at Lender's option, will (A) be payable on demand;
or (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term
of any applicable insurance policy; or (2) the remaining term of the Note.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness and Liens. (1) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money,
including capital leases, (2) sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower's assets
(except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower's accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently engaged,
(2) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change its name, dissolve or transfer or sell
Collateral out of the ordinary course of business, or (3) pay any dividends
on Borrower's stock (other than dividends payable in its stock), provided,
however that notwithstanding the foregoing, but only so long as no Event of
Default has occurred and is continuing or would result from the payment of
dividends, if Borrower is a "Subchapter S Corporation" (as defined in the
Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends
on its stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income tax
payments to satisfy their liabilities under federal and state law which
arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership of shares of Borrower's stock, or
purchase or retire any of Borrower's outstanding shares or alter or amend
Borrower's capital structure.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets, (2) purchase, create or acquire any interest in any other
enterprise or entity, or (3) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds If:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender~ (B) Borrower or any Guarantor dies, becomes
incompetent or becomes Insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, In the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure, even though no Event of Default shall have
occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open In the future.
However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
Payment Default. Borrower fails to make any payment when due under the
Loan.
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
Default In Favor of Third Parties. Borrower or any Grantor defaults under
any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's or any Grantor's property or
Borrower's or any Grantor's ability to repay the Loans or perform their
respective obligations under this Agreement or any of the Related
Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, or a trustee or receiver is appointed for Borrower or for
all or a substantial portion of the assets of Borrower, or Borrower makes a
general assignment for the benefit of Borrower's creditors, or Borrower
files for bankruptcy, or an involuntary bankruptcy petition is filed
against Borrower and such involuntary petition remains undismissed for
sixty (60) days.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the Loan. This includes
a garnishment of any of Borrower's accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the indebtedness.
Change in Ownership. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower.
Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower" as
used in this Agreement shall include all of Borrower's subsidiaries and
affiliates. Notwithstanding the foregoing however, under no circumstances
shall this Agreement be construed to require Lender to make any Loan or
other financial accommodation to any of Borrower's subsidiaries or
affiliates.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind Borrower's successors and assigns and shall
inure to the benefit of Lender and its successors and assigns. Borrower
shall not, however, have the right to assign Borrower's rights under this
Agreement or any interest therein, without the prior written consent of
Lender.
Survival of Representations and Warranties. Borrower understands and agrees
that in extending Loan Advances, Lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any
certificate or other instrument delivered by Borrower to Lender under this
Agreement or the Related Documents. Borrower further agrees that regardless
of any investigation made by Lender, all such representations, warranties
and covenants will survive the extension of Loan Advances and delivery to
Lender of the Related Documents, shall be continuing in nature, shall be
deemed made and redated by Borrower at the time each Loan Advance is made,
and shall remain in full force and effect until such time as Borrower's
indebtedness shall be paid in full, or until this Agreement shall be
terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:
Account. The word "Account" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Borrower (or to a third party grantor acceptable to
Lender).
Advance. The word "Advance" means a disbursement of Loan funds made, or to
be made, to Borrower or on Borrower's behalf under the terms and conditions
of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement (Asset
Based), as this Business Loan Agreement (Asset Based) may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Business Loan Agreement (Asset Based) from time to time.
Borrower. The word "Borrower" means ▇▇▇▇▇▇ Industries, Inc., and all other
persons and entities signing the Note in whatever capacity.
Borrowing Base. The words "Borrowing Base" mean, as determined by Lender
from time to time, the lesser of (1) $1,000,000.00 or (2) the sum of (a)
80.000% of the aggregate amount of Eligible Accounts (not to exceed in
corresponding Loan amount based on Eligible Accounts $1,000,000.00), plus
(b) 50.000% of the aggregate amount of Eligible Inventory (not to exceed in
corresponding Loan amount based on Eligible inventory $1,000,000.00).
Business Day. The words "Business Day" mean a day on which commercial banks
are open in the State of Maryland.
Collateral. The word "Collateral" means all properly and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law, contract, or
otherwise. The word Collateral also includes without limitation all
collateral described in the Collateral section of this Agreement.
Eligible Accounts. The words "Eligible Accounts" mean at any time, all of
Borrower's Accounts which contain selling terms and conditions acceptable to
Lender. The net amount of any Eligible Account against which Borrower may
borrow shall exclude all returns, discounts, credits, and offsets of any
nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts
do not include:
(1) Accounts with respect to which the Account Debtor is employee or agent
of Borrower.
(2) Accounts with respect to which the Account Debtor is a subsidiary of,
or affiliated with Borrower or its shareholders, officers, or
directors.
(3) Accounts with respect to which goods are placed on consignment,
guaranteed sale, or other terms by reason of which the payment by the
Account Debtor may be conditional.
(4) Accounts with respect to which Borrower is or may become liable to the
Account Debtor for goods sold or services rendered by the Account
Debtor to Borrower.
(5) Accounts which are subject to dispute, counterclaim, or setoff.
(6) Accounts with respect to which the goods have not been shipped or
delivered, or the services have not been rendered, to the Account
Debtor.
(7) Accounts with respect to which Lender, in its sale discretion, deems
the creditworthiness or financial condition of the Account Debtor to
be unsatisfactory.
(8) Accounts of any Account Debtor who has filed or has had filed against
it a petition in bankruptcy or an application for relief under any
provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts; or who has had appointed a trustee, custodian,
or receiver for the assets of such Account Debtor; or who has made an
assignment for the benefit of creditors or has become insolvent or
falls generally to pay its debts (including its payrolls) as such
debts become due.
(9) Accounts which have not been paid in full within 90 days from the
invoice date.
Eligible Inventory. The words "Eligible Inventory" mean at any time, all of
Borrower's inventory as defined below except:
(1) Inventory which is not owned by Borrower free and clear of all
security interests, liens, encumbrances, and claims of third parties.
(2) Inventory which Lender, in its sole discretion, deems to be obsolete,
unsalable, damaged, defective, or unfit for further processing.
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("▇▇▇▇"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of
default set forth in this Agreement in the default section of this
Agreement.
Expiration Date. The words "Expiration Date" mean the date of termination
of Lender's commitment to lend under this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, and their
personal representatives, successors and assigns.
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Loan.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws.
The term "Hazardous Substances" also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which
Borrower or Grantor or any other borrower, guarantor, pledgor, obligor or
accommodation party is responsible under this Agreement or under any of the
Related Documents, including any swap, option or forward obligations.
Inventory. The word "Inventory" means all of Borrower's raw materials, work
in process, finished goods, merchandise, parts and supplies, of every kind
and description, and goods held for sale or lease or furnished under
contracts of service in which Borrower now has or hereafter acquires any
right, whether held by Borrower or others, and all documents of title,
warehouse receipts, bills of lading, and all other documents of every type
covering all or any part of the foregoing. Inventory includes inventory
temporarily out of Borrower's custody or possession and all returns on
Accounts.
Lender. The word "Lender" means Bank of America, NA, its successors and
assigns.
Loan. The word "Loan" means any and all loans and financial accommodations
from Lender to Borrower whether now or hereafter existing, and however
evidenced, including without limitation those loans and financial
accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.
Note. The word "Note" means (i) the Note executed by Borrower in the
principal amount of $1,000,000.00 dated August 15. 2001. (ii) any other
promissory note, credit agreement or letter of credit agreement now or
hereafter executed by Borrower in favor of Lender with respect to the
Indebtedness, including without limitation those promissory notes, credit
agreements and letter of credit agreements described on any schedule or
exhibit attached to this Agreement from time to time, and (iii) any
renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for any of the foregoing.
Permitted Liens. The words "Permitted Liens" mean (1) liens and security
interests securing Indebtedness owed by Borrower to Lender; (2) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business
and securing obligations which are not yet delinquent; (4) purchase money
liens or purchase money security interests upon or in any property acquired
or held by Borrower in the ordinary course of business to secure
Indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled "Indebtedness and
Liens"; (5) Liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing;
and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to
the net value of Borrower's assets.
Primary Credit Facility. The words "Primary Credit Facility" mean the
credit facility described in the Line of Credit section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Loan.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The words "Security Interest" mean, without limitation,
any and all types of collateral security, present and future, whether in
the form of a lien, charge, encumbrance, mortgage, deed of trust, security
deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional sale,
trust receipt, lien or title retention contract, lease or consignment
Intended as a security device, or any other security or lien interest
whatsoever whether created by law, contract, or otherwise.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. This BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED AUGUST 16,2001. THIS AGREEMENT IS GIVEN UNDER
SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE
EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
BORROWER:
▇▇▇▇▇▇ INDUSTRIES, INC.
By: (Seal) By: (Seal)
------------------------------- ------------------------------
Of ▇▇▇▇▇▇ Industries, Inc. of ▇▇▇▇▇▇ Industries, Inc.
LENDER:
BANK OF AMERICA, NA.
By: (Seal)
----------------------------------------------------
Authorized Signer
COMMERCIAL SECURITY AGREEMENT
Grantor: ▇▇▇▇▇▇ Industries, Inc. Lender: Bank of America, NA.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ c/o MD Commercial Loan Processing
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NC1-014-13-02
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
THIS COMMERCIAL SECURITY AGREEMENT dated August 15, 2001, is made and executed
between ▇▇▇▇▇▇ Industries, Inc. ("Grantor") and Bank of America, NA. ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
indebtedness and performance of all other obligations under the Note and this
Agreement:
All Inventory and Accounts
In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements and additions to any of the collateral described herein,
whether added now or later.
(B) All products and produce of any of the property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral
section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's
insurer, whether due to judgment, settlement or other process.
(E) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth In Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until
such a notice is given.
CROSS--COLLATERALIZATION. In addition to the Note, this Agreement secures the
following described additional indebtedness: All obligations, debts and
liabilities, including any swap, option or forward obligations, plus interest
thereon, of Borrower to Lender, or any one or more of them, as well as all
claims by Lender against Borrower or any other party to this Agreement or any
one or more of them, whether now existing or hereafter arising, whether related
or unrelated to the purpose of the Note, whether voluntary or otherwise, whether
due or not due, direct or indirect, absolute or contingent, liquidated or
unliquidated and whether Borrower or any other party to this Agreement may be
liable individually or jointly with others, whether obligated as guarantor,
surety, accommodation party or otherwise, and whether recovery upon such amounts
may be or hereafter may become barred by any statute of limitations, and whether
the obligation to repay such amounts may be or hereafter may become otherwise
unenforceable.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:
Perfection of Security Interest. Grantor agrees to execute financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security Interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's Interest upon any and all chattel paper If not delivered to Lender
for possession by Lender. This Is a continuing Security Agreement and will
continue In effect even though all or any part of the indebtedness Is paid
In full and even though for a period of time Granter may not be indebted to
Lender.
Notices to Lender. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's name; (2)
change In Grantor's assumed business name(s); (3) change In the management
of the Corporation Grantor; (4) change In the authorized signer(s); (5)
change In Grantor's principal office address; (6) change In Grantor's state
of organization; (7) conversIon of Grantor to a new or different type of
business entity or (8) change In any other aspect of Grantor that directly
or Indirectly relates to any agreements between Grantor and Lender. No
change in Grantor's name or state of organization will take effect until
after Lender has received notice
No Violation. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor Is a party, and
Its certificate or articles of Incorporation and bylaws do not prohibit any
term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, as defined by the Uniform
Commercial Code, the Collateral is enforceable In accordance with its
terms, is genuine, and fully complies with all applicable laws and
regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear
to be on the Collateral. At the time any Account becomes subject to a
security interest in favor of Lender, the Account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery instructions or
previously shipped or delivered pursuant to a contract of sale, or for
services previously performed by Grantor with or for the account debtor. So
long as this Agreement remains in effect, Grantor shall not, without
Lender's prior written consent, compromise, settle, adjust, or extend
payment under or with regard to any such Accounts. There shall be no
setoffs or counterclaims against any of the Collateral, and no agreement
shall have been made under which any deductions or discounts may be claimed
concerning the Collateral except those disclosed to Lender in writing.
Location of the Collateral. Except in the ordinary course of Grantor's
business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general
intangibles, the records concerning the Collateral) at Grantor's address
shown above or at such other locations as are acceptable to Lender. Upon
Lender's request, Grantor will deliver to Lender in form satisfactory to
Lender a schedule of real properties and Collateral locations relating to
Grantor's operations, including without limitation the following: (1) all
real property Grantor owns or is purchasing; (2) all real property Grantor
is renting or leasing; (3) all storage facilities Grantor owns, rents,
leases, or uses; and (4) all other properties where Collateral is or may be
located.
Removal of the Collateral. Except in the ordinary course of Grantor's
business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing location without Lender's prior written
consent. To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which would
require application for certificates of title for the vehicles outside the
State of Maryland, without Lender's prior written consent. Grantor shall,
whenever requested, advise Lender of the exact location of the Collateral.
Transactions Involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, or as otherwise
provided for in this Agreement, Grantor shall not sell, offer to sell, or
otherwise transfer or dispose of the Collateral. While Grantor Is not in
default under this Agreement, Grantor may soil inventory, but only in the
ordinary course of its business and only to buyers who qualify as a buyer
in the ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer in partial or total
satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject to any
lien, security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written consent
of Lender. This includes security interests even if junior in right to the
security interests granted under this Agreement. Unless waived by Lender,
all proceeds from any disposition of the Collateral (for whatever reason)
shall be held in trust for Lender and shall not be commingled with any
other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds good
and marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than
those which reflect the security interest created by this Agreement or to
which Lender has specifically consented. Grantor shall defend Lender's
rights in the Collateral against the claims and demands of all other
persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause
others to keep and maintain, the Collateral in good order, repair and
condition at all times while this Agreement remains in effect. Grantor
further agrees to pay when due all claims for work done on, or services
rendered or material furnished in connection with the Collateral so that no
lien or encumbrance may ever attach to or be filed against the Collateral.
Inspection of Collateral. Lender and Lender's designated representatives
and agents shall have the right at all reasonable times to examine and
inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon this
Agreement, upon any promissory note or notes evidencing the indebtedness,
or upon any of the other Related Documents. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and
so long as Lender's interest in the Collateral is not jeopardized in
Lender's sole opinion. If the Collateral is subjected to a lien which is
not discharged within fifteen (15) days, Grantor shall deposit with Lender
cash, a sufficient corporate surety bond or other security satisfactory to
Lender in an amount adequate to provide for the discharge of the lien plus
any interest, costs, attorneys' fees or other charges that could accrue as
a result of foreclosure or sale of the Collateral. In any contest Grantor
shall defend itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings. Grantor further agrees to furnish Lender with evidence that
such taxes, assessments, and governmental and other charges have been paid
in full and in a timely manner. Grantor may withhold any such payment or
may elect to contest any lien if Grantor is in good faith conducting an
appropriate proceeding to contest the obligation to pay and so long as
Lender's interest in the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply promptly
with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Lender's
interest in the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien
on the Collateral, used in violation of any Environmental Laws or for the
generation, manufacture, storage, transportation, treatment, disposal,
release or threatened release of any Hazardous Substance. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Collateral for Hazardous Substances. Grantor
hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Grantor becomes liable for cleanup
or other costs under any Environmental Laws, and (2) agrees to indemnify
and hold harmless Lender against any and at claims and losses resulting
from a breach of this provision of this Agreement. This obligation to
indemnify shall survive the payment of the indebtedness and the
satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all
risks Insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with
respect to the Collateral, in form, amounts, coverages and basis acceptable
to Lender and issued by a company or companies acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time
the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished
without at least thirty (30) days' prior written notice to Lender and not
including any disclaimer of the Insurer's liability for failure to give
such a notice. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Grantor or any other person. In
connection with all policies covering assets in which Lender holds or is
offered a security interest, Grantor will provide Lender with such loss
payable or other endorsements as Lender may require. If Grantor at any time
falls to obtain or maintain any insurance as required under this Agreement,
Lender may (but shall not be obligated to) obtain such insurance as Lender
deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender of
any loss or damage to the Collateral. Lender may make proof of loss if
Grantor falls to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral,
Lender shall, upon satisfactory proof of expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration.
If Lender does not consent to repair or replacement of the Collateral,
Lender shall retain a sufficient amount of the proceeds to pay all of the
indebtedness, and shall pay the balance to Grantor. Any proceeds which have
not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as
Lender may reasonably request including the following: (1) the name of the
lnsurer; (2) the risks insured; (3) the amount of the policy; (4) the
property insured; (5) the then current value on the basis of which
insurance has been obtained and the manner of determining that value; and
(6) the expiration date of the policy. In addition, Grantor shall upon
request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security Interest given to secure the
Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor falls to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security Interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the indebtedness and, at Lender's option, will (A) be payable on demand; or
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note. The
Agreement also will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Lender may be entitled upon
Default.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
Payment Default. Grantor falls to make any payment when due under the
indebtedness.
Other Defaults. Grantor falls to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Grantor.
Default In Favor of Third Parties. Should Grantor or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Grantor's property or Grantor's or any
Grantor's ability to repay the indebtedness or perform their respective
obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this Agreement
or the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any collateral securing the indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, In an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to Guarantor of any of the indebtedness or Guarantor dies or becomes
incompetent or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Maryland Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice of any kind to Grantor.
Assemble Collateral. Lender may require Grantor to deliver to Lender all or
any portion of the Collateral and any and all Certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If the
Collateral contains other goods not covered by this Agreement at the time
of repossession, Grantor agrees Lender may take such other goods, provided
that Lender makes reasonable efforts to return them to Grantor after
repossession.
Sell the Collateral. Lender shall have full power to sell, lease, transfer,
or otherwise deal with the Collateral or proceeds thereof in Lender's own
name or that of Grantor. Lender may sell the Collateral at public auction
or private sale. Unless the Collateral threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Lender will
give Grantor, and other persons as required by law, reasonable notice of
the time and place of any public sale, or the time after which any private
sale or any other disposition of the Collateral is to be made. However, no
notice need be provided to any person who, after Event of Default occurs,
enters into and authenticates an agreement waiving that person's right to
notification of sale. The requirements of reasonable notice shall be met if
such notice is given at least ten (10) days before the time of the sale or
disposition. All expenses relating to the disposition of the Collateral,
including without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid.
Appoint Receiver. Without notice to Grantor, Lender shall have the right to
have a receiver appointed to take possession of all or any part of the
Collateral, with the power to protect and preserve the Collateral, to
operate the Collateral, and to collect the Rents from the Collateral and
apply the proceeds, over and above the cost of the receivership, against
the Indebtedness and Grantor hereby consents to the appointment of such a
receiver. The receiver may serve without bond if permitted by law. Lender's
right to the appointment of a receiver shall exist whether or not the
apparent value of the Collateral exceeds the Indebtedness by a substantial
amount and whether or not such receivership is incidental to a proposed
sale of the Collateral or otherwise. Employment by Lender shall not
disqualify a person from serving as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may at any time in Lender's discretion transfer any
Collateral into Lender's own name or that of Lender's nominee and receive
the payments, rents, income, and revenues therefrom and hold the same as
security for the Indebtedness or apply it to payment of the Indebtedness in
such order of preference as Lender may determine. Insofar as the Collateral
consists of accounts, general intangibles, insurance policies, instruments,
chattel paper, choses in action, or similar property, Lender may demand,
collect, receipt for, settle, compromise, adjust, ▇▇▇ for, foreclose, or
realize on the Collateral as Lender may determine, whether or not
Indebtedness or Collateral is then due. For these purposes, Lender may, on
behalf of and in the name of Grantor, receive, open and dispose of mail
addressed to Grantor; change any address to which mail and payments are to
be sent; and endorse notes, checks, drafts, money orders, documents of
title, Instruments and items pertaining to payment, shipment, or storage of
any Collateral. To facilitate collection, Lender may notify account debtors
and obligors on any Collateral to make payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining
on the Indebtedness due to Lender after application of all amounts received
from the exercise of the rights provided in this Agreement. Grantor shall
be liable for a deficiency even if the transaction described In this
subsection is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies of
a secured creditor under the provisions of the Uniform Commercial Code, as
may be amended from time to time. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at law,
in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law, all of
Lender's rights and remedies, whether evidenced by this Agreement, the
Related Documents, or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not affect
Lender's right to declare a default and exercise its remedies.
GRANTORS PLACE(S) OF BUSINESS AND LOCATION(S) COLLATERAL. All of Grantor's
place(s) of business and/or location(s) where collateral are or will be kept are
as follows: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ADDITIONAL DEFAULTS. Each of the following shall constitute an event of default
("Event of Default") under this Agreement:
Event of Default Under Related Documents. A default or event of default occurs
under the terms of any Related Document executed by Borrower or any guarantor,
pledgor, accommodation party or other obligor.
Revocation or Termination of Trust. If any Borrower, grantor, guarantor,
pledgor, accommodation party or other obligor on the indebtedness secured
hereunder or any of the related documents is a trust or the trustee(s) of a
trust, such trust is revoked or otherwise terminated or all or a substantial
part of such trust's assets are distributed or otherwise disposed of, or in the
case of a revocable trust, the grantor of such trust dies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Attorneys' Fees; Expenses. Grantor agrees that if Lender hires an attorney
to help enforce this Agreement, Grantor will pay, subject to any limits
under applicable law, Lender's attorneys' fees and all of Lender's other
collection expenses, whether or not there is a lawsuit and including
without limitation additional legal expenses for bankruptcy proceedings.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Governing Law. This Agreement will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Maryland. This
Agreement has been accepted by Lender in the State of Maryland.
Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
request to submit to the jurisdiction of the courts of the City of
Baltimore, State of Maryland.
No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by
Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Agreement, the granting of such consent by Lender In
any instance shall not constitute continuing Consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, if hand
delivered, when actually received by telefacsmile (unless otherwise
required by law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mall, as first
class, certified or registered and postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may change
its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. For notice purposes, Grantor agrees to keep
Lender informed at all times of Grantor's current address. Unless otherwise
provided or required by law, if there is more than one Grantor, any notice
given by Lender to any Grantor is deemed to be notice given to all
Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect, amend, or to continue the security interest granted in this
Agreement or to demand termination of filings of other secured parties.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest in the
Collateral.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance, if feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise required
by law, the illegality, invalidity, or unenforceability of any provision of
this Agreement shall not affect the legality, validity or enforceability of
any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this Agreement
on transfer of Grantor's interest, this Agreement shall be binding upon and
inure to the benefit of the parties, their heirs, personal representatives,
successors and assigns. If ownership of the Collateral becomes vested in a
person other than Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Agreement and the indebtedness
by way of forbearance or extension without releasing Grantor from the
obligations of this Agreement or liability under the indebtedness.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Agreement shall survive
the execution and delivery of this Agreement, shall be continuing in
nature, and shall remain in full force and effect until such time as
Grantor's indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:
Account. The word "Account" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Grantor (or to a third party grantor acceptable to
Lender).
Agreement. The word Agreement" means this Commercial Security Agreement, as
this Commercial Security Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this Commercial
Security Agreement from time to time.
Borrower. The word "Borrower" means ▇▇▇▇▇▇ Industries, Inc., and all other
persons and entities signing the Note in whatever capacity.
Collateral. The word "Collateral" means all of Grantor's right, title and
interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement
in the section titled "Default".
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L No. 99-499
("▇▇▇▇"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of
default set forth in this Agreement in the default section of this
Agreement.
Grantor. The word "Grantor" means ▇▇▇▇▇▇ Industries, Inc..
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the indebtedness.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws.
The term "Hazardous Substances" also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by
the Note or Related Documents, including all principal and interest
together with all other Indebtedness and costs and expenses for which
Borrower or Grantor or any other borrower, guarantor, pledgor, obligor or
accommodation party is responsible under this Agreement or under any of the
Related Documents, including any swap, option or forward obligations..
Lender. The word "Lender" means Bank of America, N.A., its successors and
assigns.
Note. The word "Note" means (i) the Note executed by Borrower in the
principal amount of $1,000,000.00 dated August 15. 2001, (ii) any other
promissory note, credit agreement or letter of credit agreement now or
hereafter executed by Borrower in favor of Lender with respect to the
Indebtedness, including without limitation those promissory notes, credit
agreements and letter of credit agreements described on any schedule or
exhibit attached to this Agreement from time to time, and (iii) any
renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for any of the foregoing.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AUGUST 15, 2001. THIS
AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
GRANTOR:
▇▇▇▇▇▇ INDUSTRIES, INC.
By: (Seal) By: (Seal)
------------------------------- -------------------------------
of ▇▇▇▇▇▇ Industries, Inc. of ▇▇▇▇▇▇ Industries, Inc.
PROMISSORY NOTE
Customer # _____
Date _________ [ ] New [ ] Renewal Amount ________ Maturity Date ____________
Lender: Borrower:
Bank of America, ▇.▇. ▇▇▇▇▇▇ Industries, Inc.
Banking Center: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Western Maryland Commercial
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
County: ▇▇▇▇▇▇▇▇▇ County, MD County: Washington County, MD
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and
jointly and severally, if more than one) promises to pay to the order of
Lender, its successors and assigns, without setoff, at its offices
indicated at the beginning of this Note, or at such other place as may
be designated by Lender, the principal amount of One Million and No/100
Dollars ($1,000,000.00), or so much thereof as may be advanced from time
to time in immediately available funds, together with interest computed
daily on the outstanding principal balance hereunder, at an annual
interest rate (the "Rate"), and in accordance with the payment schedule,
indicated below.
(This Note contains some provisions preceded by boxes. If a box is
marked, the provision applies to this transaction; if it is not marked,
the provision does not apply to this transaction.
1. Rate.
LIBOR Daily Floating Rate. The Rate per year shall be equal to the
LIBOR Daily Floating Rate, plus 320 basis points (that is, an
additional 3.2%), per annum. The "LIBOR Daily Floating Rate" is a
fluctuating rate of interest (rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the one month London interbank offered rate for deposits in
United States Dollars at approximately 11:00 am. (London time) on the
second preceding business day, as adjusted from time to time in
Lender's sole discretion for then-applicable reserve requirements,
deposits insurance assessment rates and other regulatory costs (the
"Index"). If for any reason such rate is not available, the term
"LIBOR Daily Floating Rate" shall mean the fluctuating rate of
interest (rounded upwards, if necessary to the nearest 1/100 of %)
appearing on Reuters Screen LIBO Page as the one month London
interbank offered rate for deposits in United States Dollars at
approximately 11:00 a.m. (London time) on the second preceding
business day, as adjusted from time to time in Lender's sole
discretion for then-applicable reserve requirements, deposits
insurance assessment rates and other regulatory costs; provided,
however, if more than one rate is specified on Reuters Screen LIBO
page, then applicable rate shall be the arithmetic mean of all such
rates. Any change in the rate will take effect on the date of such
change in the Index as indicated on Telerate Page 3750. Interest will
accrue on any non-banking date at the rate in effect on the
immediately preceding banking day.
Notwithstanding any provision of this Note, Lender does not intend to
charge and Borrower shall not be required to pay any amount of
interest or other charges in excess of the maximum permitted by the
applicable law of the State of Maryland; if any higher rate ceiling is
lawful, then that higher rate ceiling shall apply. Any payment in
excess of such maximum shall be refunded to Borrower or credited
against principal, at the option of Lender.
2. Accrual Method. Unless otherwise indicated, Interest at the Rate set
forth above, will be calculated by the 365/360 day method (a daily
amount of interest is computed for a hypothetical year of 360 days;
that amount is multiplied by the actual number of days for which any
principal is outstanding hereunder). If interest is not to be computed
using this method, the method shall be: N/A. ---
3. Rate Change Date. Any Rate based on a fluctuating index or base rate
will change, unless otherwise provided, each time and as of the date
that the index or base rate changes. If the Rate is to change on any
other date or at any other interval, the change shall be: N/A. In the
event any index is discontinued, Lender shall substitute an index
determined by Lender to be --- comparable, in its sole discretion.
4. Payment Schedule. All payments received hereunder shall be applied
first to the payment of any expense or charges payable hereunder or
under any other loan documents executed in connection with this Note,
then to interest due and payable, with the balance applied to
principal, or in such other order as Lender shall determine at its
option.
Monthly Interest Plus Principal Payments. Interest on the outstanding
principal balance hereunder, from and after the date of this Note,
shall be paid monthly, commencing on the ____day of _______,2002, and
continuing on the day of each successive month thereafter, with a
final payment of all unpaid interest at the stated maturity of this
Note. Payments of principal, in addition to the aforesaid interest
payments, shall be paid in consecutive monthly installments in the
amount of Five Thousand Five Hundred Fifty-Five Dollars and no/Dollars
($5,555.00) each, commencing on the ____ day of ____________, 2002,
and continuing on the ______ day of each successive month thereafter,
with a final payment of the entire principal balance and all unpaid
interest at the stated maturity of this Note.
Balloon Payment at Stated Maturity. Unless sooner paid, the entire
outstanding principal balance hereunder and all accrued interest
thereon, and all other sums owing hereunder and under the hereinafter
described Loan Documents shall be fully due and payable in the form of
a BALLOON payment on the ____ day of ________, 2006 (the "stated
maturity").
5. Revolving Feature. Not Applicable.
6. Automatic Payment.
[ ] Borrower has elected to authorize Lender to effect payment of sums
due under this Note by means of debiting Borrower's account number
__________. This authorization shall not affect the obligation of
Borrower to pay such sums when due, without notice, if there are
insufficient funds in such account to make such payment in full on the
due date thereof, or if Lender fails to debit the account.
7. Waivers, Consents and Covenants. Borrower, any indorser, or guarantor
hereof or any other party hereto (individually an `Obligor' and
collectively `Obligors") and each of them jointly and severally: (a)
waive presentment, demand, protest, notice of demand, notice of intent
to accelerate, notice of acceleration of maturity, notice of protest,
notice of nonpayment, notice of dishonor, and any other notice
required to be given under the law to any Obligor in connection with
the delivery, acceptance, performance, default or enforcement of this
Note, any indorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other note or other loan
documents now or hereafter executed in connection with any obligation
of Borrower to Lender, including, but not necessarily limited to, the
loan documents described in paragraph 17. below (the "Loan
Documents"); (b) consent to all delays, extensions, renewals or other
modifications of this Note or the Loan Documents, or waivers of any
term hereof or of the Loan Documents, or release or discharge by
Lender of any of Obligors, or release, substitution or exchange of any
security for the payment hereof, or the failure to act on the part of
Lender, or any indulgence shown by Lender without notice to or further
assent from any of Obligors). and agree that no such action, failure
to act or failure to exercise any right or remedy by Lender shall in
any way affect or impair the obligations of any Obligors or be
construed as a waiver by Lender of, or otherwise affect, any of
Lender's rights under this Note, under any indorsement or guaranty of
this Note or under any of the Loan Documents; and (c) agree to pay, on
demand, all costs and expenses of collection or de tense of this Note
or of any indorsement or guaranty hereof and/or the enforcement or
defense of Lender's rights with respect to, or the administration,
supervision, preservation, protection of, or realization upon, any
property securing payment hereof, including, without limitation,
reasonable attorney's fees, including fees related to any suit,
mediation or arbitration proceeding, out of court payment agreement,
trial, appeal, bankruptcy proceedings or other proceeding, in the
amount of 15% of the principal amount of this Note, or such greater
amount as may be determined reasonable by any arbitrator or court,
whichever is applicable.
8. Prepayments. Prepayments may be made in whole or in part at any time
on any principal amounts for which the interest rate is based on the
Prime Rate or any other fluctuating interest rate or index which may
change daily. All prepayments of principal shall be applied in the
inverse order of maturity, or in such other order as Lender shall
determine in its sole discretion. No prepayment of any other principal
amounts shall be permitted without the prior written consent of
Lender. Notwithstanding such prohibition, if there is a prepayment of
any such principal, whether by consent of Lender, or because of
acceleration or otherwise, the prepayment shall be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment
fee. The prepayment fee shall be in an amount sufficient to compensate
Lender for any loss, cost or expense incurred by it as a result of the
prepayment, including any loss of anticipated profits and any loss or
expense rising from the liquidation or reemployment of funds obtained
by it to maintain the credit or from fees payable to terminate the
deposits from which such funds were obtained. Borrower shall also pay
any customary administrative fees charged by Lender in connection with
the foregoing. For purposes of this paragraph, Lender shall be deemed
to have funded the credit by a matching deposit or other borrowing in
the applicable interbank market, whether or not the credit was in fact
so funded.
9. Delinquency Charge. To the extent permitted by law, a delinquency
charge may be imposed in an amount not to exceed four percent (4%) of
any payment that is more than fifteen days late.
10. Events of Default. The following are events of default hereunder: (a)
the failure to pay or perform any obligation, liability or
indebtedness of any Obligor to Lender, or to any affiliate or
subsidiary of Bank of America Corporation, whether under this Note or
any Loan Documents, as and when due (whether upon demand, at maturity
or by acceleration); (b) the failure to pay or perform any other
obligation, liability or indebtedness of any Obligor to any other
party; (c) the death of any Obligor (if an individual); (d) the
resignation or withdrawal of any partner or a material owner/guarantor
of Borrower, as determined by Lender in its sole discretion; (e) the
commencement of a proceeding against any Obligor for dissolution or
liquidation, the voluntary or involuntary termination or dissolution
of any Obligor or the merger or consolidation of anv Obligor with or
into another entity; (f) the insolvency of, the business failure of,
the appointment of a custodian, trustee, liquidator or receiver for or
for any of the property of, the assignment for the benefit of
creditors by, or the filing of a petition under bankruptcy, insolvency
or debtor's relief law or the filing of a petition for any adjustment
of indebtedness, composition or extension by or against any Obligor;
(g) the determination by Lender that any representation or warranty
made to Lender by any Obligor in any Loan Documents or otherwise is or
was, when it was made, untrue or materially misleading; (h) the
failure of any Obligor to timely deliver such financial tax returns,
other statements of condition or other information, as Lender shall
request from time to time; (i) the entry of a judgment against any
Obligor which Lender deems to be of a material nature in Lender's sole
discretion; (j) the seizure or forfeiture of, or the issuance of any
writ of possession, garnishment or attachment, or any turnover order
for any property of any Obligor; (k) the determination by Lender that
it is insecure for any reason; (l) the determination by Lender that a
material adverse change has occurred in the financial condition of any
Obligor; (m) the failure of Borrower's business to comply with any law
or regulation controlling its operation. As used in this Note, in
addition to the amounts evidenced by this Note, the term
"indebtedness" shall include, but shall not be limited to, all
obligations of the Borrower under any Swap Contract executed in
connection with the loan evidenced by this Note. "Swap Contract" means
any document, instrument or agreement between Borrower and the Lender
or any affiliate of the Lender, now existing or entered into in the
future, relating to an interest rate swap transaction, forward rate
transaction, interest rate cap, floor or collar transaction, any
similar transaction, any option to enter into any of the foregoing,
and any combination of the foregoing, which agreement may be oral or
in writing, including, without limitation, any master agreement
relating to or governing any or all of the foregoing and any related
schedule or confirmation, each as amended from time to time.
11. Remedies upon Default. Whenever there is a default under this Note (a)
the entire balance outstanding hereunder and all other obligations of
any Obligor to Lender (however acquired or evidenced) shall, at the
option of Lender, become immediately due and payable and any
obligation of Lender to permit further borrowing under this Note shall
immediately cease and terminate, and/or (b) to the extent permitted by
law, the Rate of interest on the unpaid principal shall be Increased
at Lender's discretion up to the maximum rate allowed by law, or if
none, 25% per annum (the "Default Rate"). The provisions herein for a
Default Rate shall not be deemed to extend the time for any payment
hereunder or to constitute a "grace period" giving Obligors a right to
cure any default. At Lender's option, any accrued and unpaid interest,
fees or charges may, for purposes of computing and accruing interest
on a daily basis after the due date of the Note or any installment
thereof, be deemed to be a part of the principal balance, and interest
shall accrue on a daily compounded basis after such date at the
Default Rate provided in this Note until the entire outstanding
balance of principal and interest is paid in full. Lender is hereby
authorized at any time to set off and charge against any deposit
accounts of any Obligor, as well as any money, instruments,
securities, documents, chattel paper, credits, claims, demands, income
and any other property, rights and interests of any Obligor which at
any time shall come into the possession or custody or under the
control of Lender or any of its agents, affiliates or correspondents,
without notice or demand, any and all obligations due hereunder.
Additionally. Lender shall have all rights and remedies available
under each of the Loan Documents, as well as all rights and remedies
available at law or in equity.
DEBTOR AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY CO!JRT
OF RECORD IN THE UNITED STATES TO APPEAR ON BEHALF OF DEBTOR IN ANY
COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR
PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST
DEBTOR IN FAVOR OF THE HOLDER OF THIS AGREEMENT IN THE FULL AMOUNT DUE
UNDER THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY
AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN
PERCENT (15%) OF THE AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR
NOTICE OR OPPORTUNITY OF DEBTOR FOR PRIOR HEARING. DEBTOR AGREES AND
CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT
COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE CITY,
MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MARYLAND. DEBTOR WAIVES THE BENEFIT OF ANY AND EVERY STATUTE,
ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING
UPON DEBTOR ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS,
STAY OF EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM
THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED
PROCEEDINGS ON A JUDGMENT. THE AUTHORITY AND POWER TO APPEAR FOR AND
ENTER JUDGMENT AGAINST DEBTOR SHALL NOT BE EXHAUSTED BY ONE OR MORE
EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT
BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH
AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM
TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS THE
HOLDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.
12. Non-waiver. The failure at any time of Lender to exercise any of its
options or any other rights hereunder shall not constitute a waiver
thereof, nor shall it be a bar to the exercise of any of its options
or rights at a later date. All rights and remedies of Lender shall be
cumulative and may be pursued singly, successively or together, at the
option of Lender. The acceptance by Lender of any partial payment
shall not constitute a waiver of any default or of any of Lender's
rights under this Note. No waiver of any of its rights hereunder, and
no modification or amendment of this Note, shall be deemed to be made
by Lender unless the same shall be in writing, duly signed on behalf
of Lender; each such waiver shall apply only with respect to the
specific instance involved, and shall in no way impair the rights of
Lender or the obligations of Obligor to Lender in any other respect at
any other time.
13. Applicable Law, Venue and Jurisdiction. This Note end the rights and
obligations of Borrower and Lender shall be governed by and
interpreted in accordance with the law of the State of Maryland. In
any litigation in connection with or to enforce this Note or any
indorsement or guaranty of this Note or any Loan Documents, Obligors,
and each of them, irrevocably consent to and confer personal
jurisdiction on the courts of the State of Maryland or the United
States located within the State of Maryland and expressly waive any
objections as to venue in any such courts. Nothing contained herein
shall, however, prevent Lender from bringing any action or exercising
any rights within any other state or jurisdiction or from obtaining
personal jurisdiction by any other means available under applicable
law.
14. Partial Invalidity. The unenforceability or invalidity of any
provision of this Note shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability
of any provision of this Note or of the Loan Documents to any person
or circumstance shall not affect the enforceability or validity of
such provision as It may apply to other persons or circumstances.
15. Waiver of Jury Trial. Obligors waive trial by jury in any action or
proceeding to which Obligors and Lender may be parties, arising out
of, in connection with or in any way pertaining to, this Note or the
Loan Documents. It is agreed and understood that this waiver
constitutes a waiver of trial by jury of all claims against all
parties to such action or proceedings, including claims against
parties who are not parties to this Note. This waiver is knowingly,
willingly and voluntarily made by Obligors.
16. Binding Effect. This Note shall be binding upon and inure to the
benefit of Borrower, Obligors and Lender and their respective
successors, assigns, heirs and personal representatives, provided,
however, that no obligations of Borrower or Obligors hereunder can be
assigned without prior written consent of Lender.
17. Loan Documents. This Note is secured by and is related to, guaranteed
by. and/or executed in connection with certain Loan Documents as
described above, including, but not necessarily limited to. the
following, all as the same may be amended, restated, supplemented, or
otherwise modified from time to time: (a) This Note; and
(b) A certain Deed of Trust, Assignment and Security Agreement of
even date herewith by the Borrower in favor-of PRLAP, Inc.,
Trustee for the Lender, to be recorded among the Land Records of
Washington County, Maryland, encumbering certain real property
owned by the Borrower, securing, among other things, payment of
this Note (the "Deed of Trust"); and
(c) A certain Continuing and Unconditional Guaranty of even date
herewith by ▇▇▇▇▇▇ Corporation, a New York corporation, in favor
of the Lender, guaranteeing, among other things, the payment of
this Note (the "Guaranty"); and
(d) Certain UCC-1 Financing Statements by the Borrower in favor
of the Lender, which are being filed with the Land Records of
Washington County, Maryland and the Financing Statement Records
of the Maryland State Department of Assessments and Taxation, in
order to perfect the Lender's security interest in certain
personal property of the Borrower being pledged under the Deed of
Trust (the "Financing Statements"); and
(e) Any other instrument, agreement, or document previously,
simultaneously, or hereafter executed and delivered by the
Borrower, any Obligor and/or any other person, singularly or
jointly with `any other person, evidencing, securing,
guaranteeing, or in connection with this Note or the principal
sum evidenced hereby.
Borrower represents to Lender that the proceeds of this loan are to be used
primarily for business, commercial or agricultural purposes. Borrower
acknowledges having read and understood, and agrees to be bound by all
terms and conditions of this Note, and hereby executes this Note intending
to create an instrument executed under seal.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS'THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS.
Corporate or Partnership Borrower
▇▇▇▇▇▇ INDUSTRIES INC.
By: (Seal)
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Chief Financial Officer
--------------------------------------
Attest (If Applicable)
(Corporate Seal)
The undersigned corporation, by the signature of its duly authorized
officer hereby sets forth its signature below, for the purpose of acknowledging
and agreeing to the terms and provisions set forth in this Note, as a guarantor
of the Note pursuant to the terms of the Guaranty described above, and hence, as
an "Obligor", as such term is defined in this Note.
Corporate or Partnership Guarantor
▇▇▇▇▇▇ CORPORATION
By: (Seal)
-------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Attest (If Applicable)
(Corporate Seal]
COMMERCIAL GUARANTY
Borrower: ▇▇▇▇▇▇ Industries, Inc. Lender: Bank of America, NA.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ c/o MD Commercial Loan Processing
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NC1-014-13-02
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Guarantor: ▇▇▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, ▇▇▇▇▇▇
Corporation ("Guarantor") absolutely and unconditionally guarantees and promises
to pay to Bank of America, NA. ("Lender") or its order, in legal tender of the
United States of America, the Indebtedness (as that term is defined below) of
▇▇▇▇▇▇ Industries, Inc. ("Borrower") to Lender on the terms and conditions set
forth in this Guaranty. Under this Guaranty, the liability of Guarantor is
unlimited and the obligations of Guarantor are continuing.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes
any and all of Borrower's indebtedness to Lender and is used in the most
comprehensive sense and means and includes any and all of Borrower's
liabilities, obligations and debts to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, other obligations, and liabilities of Borrower, or any of them, and
any present or future judgments against Borrower, or any of them; and whether
any such Indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined;
whether Borrower may be liable individually or jointly with others, or primarily
or secondarily, or as guarantor or surety; whether recovery on the Indebtedness
may be or may become barred or unenforceable against Borrower for any reason
whatsoever and whether the Indebtedness arises from transactions which may be
voidable on account of infancy, insanity, ultra ▇▇▇▇▇, or otherwise.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all of Guarantor's other obligations
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at Lender's
address listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new Indebtedness"
does not include Indebtedness which at the time of notice of revocation Is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all Indebtedness Incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new indebtedness. This Guaranty shall
bind Guarantor's estate as to Indebtedness created both before and after
Guarantor's death or Incapacity, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall not
affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of Indebtedness
covered by this Guaranty, and Guarantor specifically acknowledges and agrees
that reductions in the amount of indebtedness, even to zero dollars ($0.00),
prior to Guarantor's written revocation of this Guaranty shall not constitute a
termination of this Guaranty. This Guaranty is binding upon Guarantor and
Guarantor's heirs, successors and assigns so long as any of the guaranteed
Indebtedness remains unpaid and even though the Indebtedness guaranteed may from
time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (A) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the indebtedness;
(C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to ▇▇▇, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (E) to determine how, when and what application
of payments and credits shall be made on the Indebtedness (F) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(G) to sell, transfer, assign or grant participations in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (A) no representations or agreements of any kind have been made to
Guarantor which would limit or quality in any way the terms of this Guaranty (B)
this Guaranty is executed at Borrower's request and not at the request of
Lender; (C) Guarantor has full power, right and authority to enter into this
Guaranty (D) the provisions of this Guaranty do not conflict with or result in a
default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (E) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (F) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present Guarantor's financial condition as of
the dates the financial information is provided; (G) no material adverse change
has occurred in Guarantor's financial condition since the date of the most
recent financial statements provided to Lender and no event has occurred which
may materially adversely affect Guarantor's financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(I) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (J) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of Its relationship
with Borrower.
GUARANTOR'S FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the
following:
Annual Statements. As soon as available, but in no event later than ninety
(90) days after the end of each fiscal year, Guarantor's balance sheet and
income statement for the year ended, reviewed by a certified public
accountant satisfactory to Lender.
All financial reports required to be provided under this Guaranty shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified
by Guarantor as being true end correct.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (A) to continue lending money or to extend other
credit to Borrower; (B) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the indebtedness or in connection with the creation of new or
additional loans or obligations; (C) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (D) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (F) to pursue any other
remedy within Lender's power; or (G) to commit any act or omission of any kind,
or at any time, with respect to any matter whatsoever.
In addition to the waivers set forth above, if now or hereafter Borrower is or
shall become insolvent and the Indebtedness shall not at all times until paid be
fully secured by collateral pledged by Borrower, Guarantor hereby forever waives
and gives up in favor of Lender and Borrower, and Lender's and Borrower's
respective successors, any claim or right to payment Guarantor may now have or
hereafter have or acquire against Borrower, by subrogation or otherwise, so that
at no time shall Guarantor be or become a "creditor" of Borrower within the
meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal
bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (1)
any election of remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
indebtedness; (2) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the Indebtedness; (3) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any Collateral for the Indebtedness; or (4)
any statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced, there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations. Guarantor
acknowledges and agrees that Guarantor's obligations under this Guaranty shall
apply to and continue with respect to any amount paid to Lender which is
subsequently recovered from Lender for any reason whatsoever (including without
limitation as a result of bankruptcy, insolvency or fraudulent conveyance
proceeding), notwithstanding the fact that all or a part of the Indebtedness may
have been previously paid, or this Guaranty may have been terminated, or both.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.
Guarantor's Understanding With Respect To Waivers. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.
Right of Setoff. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Guarantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Guarantor holds
jointly with someone else and all accounts Guarantor may open in the future.
However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Guarantor authorizes Lender, to the
extent permitted by applicable law, to hold these funds if there is a default,
and Lender may apply the funds in these accounts to pay what Guarantor owes
under the terms of this Guaranty.
Subordination of Borrower's Debts to Guarantor. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be superior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which It may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
CONFESSED JUDGMENT, UPON THE OCCURRENCE OF A DEFAILT ON THE INDEBTEDNESS,
GUARANTOR HEREBY AUTHORIZES ANY ATTORNEY DESIGNATED BY LENDER OR ANY CLERK OF
ANY COURT OF RECORD TO APPEAR FOR GUARANTOR IN ANY COURT OF RECORD AND CONFESS
JUDGMENT WITHOUT PRIOR HEARING AGAINST GUARANTOR IN FAVOR OF LENDER FOR, AND IN
THE AMOUNT OF, THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY, ALL
INTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS PAYABLE BY GUARANTOR TO
LENDER UNDER THE TERMS OF THIS GUARANTY OR ANY OTHER AGREEMENT, DOCUMENTS,
INSTRUMENT EVIDENCING, SECURING OR GUARANTYING THE OBLIGATIONS EVIDENCED BY THIS
GUARANTY, COSTS OF SUIT, AND ATTORNEYS' FEES OF FIFTEEN PERCENT (15%) OF THE
UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY AND INTEREST THEN DUE
HEREUNDER.
Guarantor hereby releases, to the extent permitted by applicable law, all errors
and all rights of exemption, appeal, stay of execution, inquisition, and other
rights to which Borrower may otherwise be entitled under the laws of the United
States or of any state or possession of the United States now in force and which
may hereafter be enacted. The authority and power to appear for and enter
judgment against Guarantor shall not be exhausted by one or more exercises
thereof or by any imperfect exercise thereof and shall not be extinguished by
any judgment entered pursuant thereto. Such authority may be exercised on one or
more occasions or from time to time in the same or different jurisdictions as
often as Lender shall deem necessary or desirable, for all of which this
Guaranty shall be a sufficient warrant.
Miscellaneous Provisions. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty. No alteration of or amendment to this Guaranty
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Guarantor agrees that if Lender hires an
attorney to help enforce this Guaranty, Guarantor will pay, subject to any
limits under applicable law, Lender's attorneys' fees and all of Lender's
other collection expenses, whether or not there is a lawsuit and Including
without limitation additional legal expenses for bankruptcy proceedings.
Caption Headings. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Guaranty.
Governing Law. This Guaranty will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Maryland. This
Guaranty has been accepted by Lender in the State of Maryland.
Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's
request to submit to the jurisdiction of the courts of the City of
Baltimore, State of Maryland.
Integration. Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity
to be advised by Guarantor's attorney with respect to this Guaranty; the
Guaranty fully reflects Guarantor's intentions and parol evidence is not
required to Interpret the terms of this Guaranty. Guarantor hereby
indemnities and holds Lender harmless from all losses, claims, damages, and
costs (including Lender's attorneys' fees) suffered or incurred by Lender
as a result of any breach by Guarantor of the warranties, representations
and agreements of this paragraph.
Interpretation. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. If a court finds that any provision of this Guaranty is not
valid or should not be enforced, that fact by itself will not mean that the
rest of this Guaranty will not be valid or enforced. Therefore, a court
will enforce the rest of the provisions of this Guaranty even if a
provision of this Guaranty may be found to be invalid or unenforceable. If
any one or more of Borrower or Guarantor are corporations, partnerships,
limited liability companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the
officers, directors, partners, managers, or other agents acting or
purporting to act on their behalf, and any Loan indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed under this Guaranty.
Notices. Any notice required to be given under this Guaranty shall be given
in writing, and, except for revocation notices by Guarantor, shall be
effective when actually delivered, if hand delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Guaranty. All revocation notices by Guarantor shall be in
writing and shall be effective upon delivery to Lender as provided in the
section of this Guaranty entitled "DURATION OF GUARANTY." Any party may
change its address for notices under this Guaranty by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. For notice purposes, Guarantor agrees to
keep Lender informed at all times of Guarantor's current address. Unless
otherwise provided or required by law, if there is more than one Guarantor,
any notice given by Lender to any Guarantor is deemed to be notice given to
all Guarantors.
No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by
Lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Guaranty, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
Successors and Assigns. Subject to any limitations stated in this Guaranty
on transfer of Guarantor's interest, this Guaranty shall be binding upon
and inure to the benefit of the parties, their heirs, personal
representatives, successors and assigns.
Definitions. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:
Borrower. The word "Borrower" means ▇▇▇▇▇▇ industries, Inc., and all other
persons and entities signing the Note in whatever capacity.
GAAP. The word "GAAP" means generally accepted accounting principles.
Guarantor. The word "Guarantor" means each and every person or entity
signing this Guaranty, including without limitation ▇▇▇▇▇▇ Corporation.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
Indebtedness. The word Indebtedness means Borrower's indebtedness to Lender
as more particularly described In this Guaranty.
Lender. The word tender" means Bank of America, NA, its successors and
assigns.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other Instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
CONFESSED JUDGMENT. UPON THE OCCURRENCE OF A DEFALLT ON THE INDEBTEDNESS,
GUARANTOR HEREBY AUTHORIZES ANY ATTORNEY DESIGNATED BY LENDER OR ANY CLERK OF
ANY COURT OF RECORD TO APPEAR FOR GUARANTOR IN ANY COURT OF RECORD AND CONFESS
JUDGMENT WITHOUT PRIOR HEARING AGAINST GUARANTOR IN FAVOR OF LENDER FOR, AND IN
THE AMOUNT OF, THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY, AIL
INTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS PAYABLE BY GUARANTOR TO
LENDER UNDER THE TERMS OF THIS GUARANTY OR ANY OTHER AGREEMENT, DOCUMENTS,
INSTRUMENT EVIDENCING, SECURING OR GUARANTYING THE OBLIGATIONS EVIDENCED BY THIS
GUARANTY, COSTS OF SUIT, AND ATTORNEYS' FEES OF FIFTEEN PERCENT (15%) OF THE
UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY AND INTEREST THEN DUE
HEREUNDER.
Guarantor hereby releases, to the extent permitted by applicable law, all errors
and all rights of exemption, appeal, stay of execution, inquisition, and other
rights to which Borrower may otherwise be entitled under the laws of the United
States or of any state or possession of the United States now In force and which
may hereafter be enacted. The authority and power to appear for and enter
Judgment against Guarantor shall not be exhausted by one or more exercises
thereof or by any Imperfect exercise thereof and shall not be extinguished by
any Judgment entered pursuant thereto. Such authority may be exercised on one or
more occasions or from time to time in the same or different Jurisdictions as
often as Lender shall deem necessary or desirable, for all of which this
Guaranty shall be a sufficient warrant.
GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED
AUGUST 15, 2001. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS
GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT
ACCORDING TO LAW.
GUARANTOR:
▇▇▇▇▇▇ CORPORATION
By:_______________________________(Seal) _________________________(Seal)
------------------------------------ -------------------------------
of ▇▇▇▇▇▇ Corporation of ▇▇▇▇▇▇ Corporation
Corporate Acknowledgement
State of _____________________ )
)
County of ____________________ )
This instrument was acknowledged before me on ______________________________, by
________________________________, ______________ of ___________________________,
a ______________ corporation, on behalf of said corporation.
Notary Public in and for the State of _____________
-------------------------------------------
Notary Signature
-------------------------------------------
(Print Name of Notary)
------------------------------------------
My Commission Expires
DEED OF TRUST,
ASSIGNMENT AND SECURITY AGREEMENT
THIS DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT (hereinafter referred
to as "Deed of Trust") is made this ___ day of ___________, 2002, by ▇▇▇▇▇▇
Industries, Inc., a Maryland corporation (hereinafter referred to as "Grantor"),
to PRLAP, Inc., as Trustee (herein referred to as the "Trustee"), and Bank of
America, N.A., (herein referred to as the "Lender")
RECITALS
1. The Lender is making a certain term loan (the "Term Loan") to the
Grantor in the principal amount of ONE MILLION DOLLARS ($1,000,000.00). The Term
Loan shall be evidenced by a certain Promissory Note of even date herewith by
the Grantor in favor of the Lender in the original principal amount of ONE
MILLION DOLLARS ($1,000,000.00) ("Note #1").
2. The Lender is also providing a certain line of credit (the "Line of
Credit") to the Grantor in the maximum principal amount at any one time
outstanding of ONE MILLION DOLLARS ($1,000,000.00). The Line of Credit shall be
evidenced by a certain Promissory Note of even date herewith by the Grantor in
favor of the Lender in the face amount of ONE MILLION DOLLARS ($1,000,000.00)
("Note #2").
3. In consideration of the making by the Lender of the Loan and the
Line of Credit (with the Loan and the Line of Credit being hereinafter sometimes
collectively called the "Loans"), the Lender has required that the Grantor,
among other things, execute and deliver this Deed of Trust, Assignment and
Security Agreement as security for the payment and performance of all of the
Grantor's obligations to the Lender under Note #1 and Note #2 (collectively the
"Notes"), and the other Loan Documents described therein.
4. Upon default in any of the provisions set forth in the Notes or any
other document evidencing or securing the Loans and the failure of the Grantor
to cure the same pursuant to the terms of the Notes, this Deed of Trust,
Assignment and Security Agreement and the other Loan Documents, at the option of
the Lender, shall be deemed in default and shall be subject to foreclosure upon
the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantor agrees as follows:
Article I. Definitions, Rules of Construction.
----------------------------------
Section 1.01. Definitions. As used in this Deed of Trust, Assignment
and Security Agreement, the terms defined in the Preamble and Recitals hereto
shall have the respective meanings specified therein, and the following terms
shall have the meanings indicated:
"Accounts" means all accounts of the Grantor within the meaning of the
Uniform Commercial Code of the State derived from or arising out of the use,
occupancy or enjoyment of the Property or for services rendered therein or
thereon.
"Additions" means any and all alterations, additions, accessions and
improvements to property, substitutions thereof or, and renewals and
replacements thereof.
"Beneficiary" means the Lender and its successors and assigns.
"Casualty" means any act or occurrence of any kind or nature that results
in damage, loss or destruction to the Property.
"Claim" means any liability, suit, action, claim, demand, loss, expense,
penalty, fine, judgment or other cost of any kind or nature whatsoever,
including without limitation, fees, costs and expenses of attorneys,
consultants, contractors and experts.
"Condemnation" means any taking of title, of use, or of any other property
interest under the exercise of the power of eminent domain, whether temporarily
or permanently, by any Governmental Authority or by any Person acting under
Governmental Authority.
"Condemnation Awards" means any and all judgments, awards of damages
(including, but not limited to, severance and consequential damages), payments,
proceeds, settlements, amounts paid for a taking in lieu of Condemnation, or
other compensation heretofore or hereafter made, including interest thereon, and
the right to receive the same, as a result of, or in connection with, any
Condemnation or threatened Condemnation.
"Contracts of Sale" means any contracts for the sale of all or any part of
the Property or any interest therein, whether now or hereafter executed,
including, without limitation, all of the Proceeds thereof, any funds deposited
thereunder to secure performance by the purchasers of their obligations.
"Deed of Trust" means this Deed of Trust, Assignment and Security Agreement
executed by the Grantor for the benefit of the Beneficiary, as the same may from
time to time be extended, amended, restated, supplemented or otherwise modified.
"Default" means an event which, with the giving of Notice or lapse of time,
or both, could or would constitute an Event of Default under the provisions of
this Deed of Trust.
"Encumbrance" means any Lien, easement, right of way, roadway (public or
private), common area, condominium regime, cooperative housing regime,
restrictive covenant, Lease or other matter of any nature that would affect
title to the Property.
"Environmental Assessment" means a report of an environmental assessment of
the Property of such scope (including but not limited to the taking of soil
borings and air and groundwater samples and other above and below ground
testing) as the Beneficiary may request, prepared by a recognized environmental
consulting firm acceptable to the Beneficiary in all respects and sufficient in
detail to comply with the Beneficiary's established guidelines and the
guidelines of any appropriate Governmental Authority.
"Environmental Requirement" means any Law or other agreement or
restriction, whether public or private (including but not limited to any
condition or requirement imposed by any insurer or surety company), now existing
or hereafter created, issued or enacted and all amendments thereto,
modifications thereof and substitutions therefor, which in any way pertains to
human health, safety or welfare, Hazardous Materials, Hazardous Materials
Contamination or the environment (including but not limited to ground, air,
water or noise pollution or contamination, and underground or above ground
tanks) and shall include without limitation, the Resource Conservation and
Recovery Act (the Solid Waste Disposal Act), 42 ▇.▇.▇.▇▇. 6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
▇.▇.▇.▇▇. 9601 et seq. ("CERCLA"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"); the Hazardous Materials Transportation
Act, 49 ▇.▇.▇.▇▇. 1801 et seq.; the Federal Water Pollution Control Act, 33
U.S.C.ss.1251 et seq.; the Clean Air Act, 42 ▇.▇.▇.▇▇. 7401 et seq.; the Toxic
Substances Control Act, 15 U.S.C.ss.2601 et seq.; and the Safe Drinking Water
Act, 42 U.S.C.ss.300f et seq.
"Equipment" means all building materials, fixtures, equipment and other
tangible personal property of every kind and nature whatsoever (other than
consumable goods, and trade fixtures or other personal property owned by tenants
occupying the Improvements), now or hereafter located or contained in or upon,
or attached to, the Real Property, whether now owned or hereafter acquired by
the Grantor; together with all Additions to the Equipment and Proceeds thereof.
"Event of Default" means the occurrence of any one or more of the events
specified in Article VI of this Deed of Trust and the continuance of such event
beyond the applicable cure periods, if any, set forth in Article VI.
"Expenses" means all costs and expenses of any nature whatsoever incurred
at any time and from time to time (whether before or after an Event of Default)
by the Beneficiary or the Trustee in exercising or enforcing any rights, powers
and remedies provided in this Deed of Trust or any of the other Loan Documents,
including, without limitation, attorney's fees, court costs, receiver's fees,
management fees and costs incurred in the repair, maintenance and operation of,
or taking possession of, or selling, the Property.
"Governmental Authority" means any governmental or quasi-governmental
entity, including, without limitation, any department, commission, board,
bureau, agency, administration, service or other instrumentality of any
governmental entity.
"Hazardous Materials" means any and all hazardous or toxic substances,
wastes or materials which, because of their quantity, concentration, or
physical, chemical or infectious characteristics, may cause or pose a present or
potential hazard or nuisance to human health, safety or welfare or to the
environment when used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled, including without limitation, any substance,
waste or material which is or contains asbestos, radon, polychlorinated
biphenyls, urea formaldehyde, explosives, radioactive materials or petroleum
products.
"Hazardous Materials Contamination" means the contamination (whether
presently existing or occurring after the date of this Deed of Trust) of the
improvements, facilities, soil, ground water, air or other elements on, in or
constituting a part of, the Property by Hazardous Materials, or the
contamination of the buildings, facilities, soil, ground water, air or other
elements on, in or constituting a part of, any other property as a result of
Hazardous Materials at any time (whether before or after the date of this Deed
of Trust) emanating from the Property.
"Improvements" means all buildings, structures and other improvements now
or hereafter existing, erected or placed on the Land, or in any way used in
connection with the use, enjoyment, occupancy or operation of the Land.
"Land" means the land described in EXHIBIT A attached hereto, together with
(a) all estates, title interests, title reversion rights, increases, issues,
profits, rights of way or uses, additions, accretions, servitudes, gaps, gores,
liberties, privileges, water rights, water courses, alleys, streets, passages,
ways, vaults, licenses, tenements, franchises, hereditaments, appurtenances,
easements and other rights, now or hereafter owned by the Grantor and belonging
or appertaining to the Land, (b) all Claims whatsoever of the Grantor with
respect to the Land, either in law or in equity, in possession or in expectancy,
and (c) all estate, right, title and interest of the Grantor in and to all
streets, roads and public places, opened or proposed, now or hereafter adjoining
or appertaining to, the Land.
"Laws" means federal, state and local laws, statutes, rules, ordinances,
regulations, codes, licenses, authorizations, decisions, injunctions,
interpretations, orders or decrees of any court or other Governmental Authority
having jurisdiction as may be in effect from time to time.
"Leases" means all leases, license agreements and other occupancy or use
agreements (whether oral or written), now or hereafter existing, which cover or
relate to the Property, together with all options thereof or, amendments thereto
and renewals, modifications and guarantees thereof, including, without
limitation, any cash or securities deposited under the Leases to secure
performance by the tenants of their obligations under the Leases, whether such
cash or securities are to be held until the expiration of the terms of the
Leases or applied to one or more of the installments of rent coming due.
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, judgment, lien or charge of any kind, including, without limitation,
any conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of, or agreement to give, any financing statement under
the Uniform Commercial Code of any jurisdiction.
"Loan Documents" means this Deed of Trust, the Notes, and all of those
documents described as "Loan Documents" in the Notes, and any and all other
documents which the Grantor or any other party or parties have executed and
delivered, or may hereafter execute and deliver, to evidence, secure or
guarantee the Obligations, or any part thereof, as the same may from time to
time be extended, amended, restated, supplemented or otherwise modified.
"Net Proceeds", when used with respect to any Condemnation Awards or
insurance proceeds allocable to the Property, means the gross proceeds from any
Casualty or Condemnation remaining after payment of all expenses (including
attorneys' fees) incurred in the collection of such gross proceeds.
"Notice" means a written communication delivered by hand, or sent by
overnight courier, or by certified or registered mail, postage prepaid, return
receipt requested, to the Person to whom such communication is to be given, at
the following addresses:
Lender: Bank of America, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
Grantor: ▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trustee: PRLAP, Inc.
c/o ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other address as any party shall have notified the others of in the
manner set forth in this definition.
"Obligations" means all present and future debts, obligations and
liabilities of the Grantor to the Beneficiary and the Trustee arising pursuant
to, and/or on account of the provisions of this Deed of Trust, the Notes, any of
the other Loan Documents, including, without limitation, (a) the obligation to
pay all principal (including, again without limitation, any principal advanced
after the date of this Deed of Trust and any principal that is repaid and
re-advanced), interest, late charges and prepayment premiums (if any) due at any
time under the Notes, and (b) the obligation to pay all Expenses,
indemnification payments and other sums due at any time under this Deed of Trust
together with interest thereon as provided in Section 4.19, and (c) the
obligation to perform, observe and comply with all of the terms, covenants and
conditions, expressed or implied, which the Grantor is required by this Deed of
Trust and any of the other Loan Documents, to perform, observe or comply with,
and (d) any and all Hedge Obligations.
"Permitted Encumbrances" means (a) the Encumbrances set forth in the
Commitment for Title Insurance No. NB2-2043 issued on June 28, 2001, to the
Lender by Chicago Title Insurance Company, as updated to the date of this Deed
of Trust, (b) this Deed of Trust, (c) any Leases so long as such Leases are
subject and subordinate to this Deed of Trust and otherwise comply with the
terms of this Deed of Trust, (d) liens for Property Assessments which are either
(i) not delinquent, or (ii) being contested in accordance with the provisions of
Section 4.20, and (e) other liens in favor of Lender.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, a trust, an unincorporated association, any
Governmental Authority or any other entity.
"Personalty" means all of the Grantor's interest in personal property of
any kind or nature whatsoever, whether tangible or intangible and whether now
owned or hereafter acquired, which is used in the construction of, or is placed
upon, or is derived from or used in connection with the maintenance, use,
occupancy or enjoyment of, the Property, including, without limitation, (a) the
Equipment, (b) the Accounts, (c) any franchise or license agreements and
management agreements entered into with respect to the Property or the business
conducted therein (provided all of such agreements shall be subordinate to this
Deed of Trust, and the Beneficiary shall have no responsibility for the
performance of the Grantor's obligations thereunder), and (d) all plans and
specifications, contracts and subcontracts for the construction or repair of the
Improvements, sewer and water taps, allocations and agreements for utilities,
bonds, permits, licenses, guarantees, warranties, causes of action, judgments,
Claims, profits, security deposits, utility deposits, refunds of fees or
deposits paid to any Governmental Authority, letters of credit and policies of
insurance; together with all Additions to the Personalty and Proceeds thereof.
"Proceeds", when used with respect to any of the collateral described in
this Deed of Trust, means all proceeds within the meaning of the Uniform
Commercial Code of the State and shall also include the proceeds of any and all
insurance policies.
"Property" means the Land, the Improvements and the Personalty, and all
Additions to, and Proceeds of, all of the foregoing.
"Property Assessments" means all taxes, payments in lieu of taxes, water
rents, sewer rents, assessments, condominium charges, maintenance charges and
other governmental or municipal or public or private dues, charges and levies
and any Liens (including federal tax liens) which are or may be levied, imposed
or assessed upon the Property or any part thereof, or upon any Leases or any
Rents, whether levied directly or indirectly or as excise taxes, as income
taxes, or otherwise.
"Real Property" means the Land and the Improvements, and all Additions to,
and Proceeds of, each of the foregoing.
"Reimbursement Rate" means a rate of interest equal at all times to the
"Default Rate" set forth in the Notes. In the event the Notes do not contain a
Default Rate, then the Reimbursement Rate shall be rate of interest otherwise
set forth in the Notes, plus four percent (4%) per annum. If the Notes have
conflicting rates of interest, the highest such rate of interest shall be
applicable. Whenever this Deed of Trust provides for interest to be paid at the
Reimbursement Rate, the Reimbursement Rate shall be calculated on the basis of
the 365/360 day method (a daily amount of interest is computed for a
hypothetical year of 360 days; that amount is multiplied by the actual number of
days for which interest is accruing.
"Rents" means all of the rents, royalties, issues, profits, revenues,
earnings, income and other benefits of the Property, or arising from the use or
enjoyment of the Property, or from any Lease or other use or occupancy agreement
pertaining to the Property.
"Swap Contract" means any document instrument or agreement between Grantor
and Beneficiary or any affiliate of Beneficiary, now existing or entered into in
the future, relating to an interest rate swap transaction, forward rate
transaction, interest rate cap, floor or collar transaction, any similar
transaction, any option to enter into any of the foregoing, and any combination
of the foregoing, which agreement may be oral or in writing, including, without
limitation, any master agreement relating to or governing any or all of the
foregoing and any related schedule or confirmation, each as amended from time to
time.
"Swap Contract Obligations" means any and all obligations owing or incurred
by the Grantor under any Swap Contract with respect to which there is a writing
evidencing the parties' agreement that said Swap Contract shall be secured by
this Deed of Trust.
"State" means the State of Maryland.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Grantor or on any of its
properties or assets or any part thereof or in respect of any of its franchises,
businesses, income or profits.
"Transfer" means any direct or indirect sale, assignment, conveyance or
transfer, including, without limitation, any contract or agreement to sell,
assign, convey or transfer, whether made with or without consideration.
"Trustee" means PRLAP, Inc. or its successors in trust who may be acting
under and pursuant to this Deed of Trust from time to time.
Section 1.02. Rules of Construction. The words "hereof", "herein",
"hereunder", "hereto", and other words of-similar import refer to this Deed of
Trust in its entirety. The terms "agree" and "agreements" mean and include
"covenant" and "covenants". The headings of this Deed of Trust are for
convenience only and shall not define or limit the provisions hereof. All
references (a) made in the neuter, masculine or feminine gender shall be deemed
to have been made in all such genders, (b) made in the singular or plural number
shall be deemed to have been made, respectively, in the plural or singular
number as well, (c) to the Land, Improvements, Personalty, Real Property or
Property shall mean all or any portion of each of the foregoing, respectively,
and (d) to Section numbers are to the respective Sections contained in this Deed
of Trust unless expressly indicated otherwise. If the Grantor is two (2) or more
Persons, the term "Grantor" shall also refer to all of the Persons signing this
Deed of Trust as a Grantor, and to each of them, and all of them are jointly and
severally bound, obligated and liable hereunder. The Trustee or the Beneficiary
may release, compromise, modify or settle with any of the Grantor, in whole or
in part, without impairing, lessening or affecting the obligations and
liabilities of the others of the Grantor hereunder or under the Notes. Any of
the acts mentioned aforesaid may be done without `the approval or consent of, or
notice to, any of the Grantor.
Article II. Granting Clauses; Condition of Grant. In order to secure
the prompt payment and performance of the Obligations, the Grantor (a) grants,
bargains, sells and conveys the Real Property unto the Trustee in trust for the
benefit of the Beneficiary, to have and to hold the Real Property unto the
Trustee in fee simple forever; provided that, the Grantor may retain possession
of the Real Property until the occurrence of an Event of Default; and (b) grants
the Beneficiary a lien on, and security interest in, the Personalty; and (c)
unconditionally and absolutely assigns the Leases and Rents to the Beneficiary
(but subject to the license for collection of Rents described in Section 4.14
(b)); and (d) assigns to, and grants the Beneficiary a security interest in, any
Contracts of Sale; and (e) assigns to the Beneficiary all Condemnation Awards
and any insurance proceeds payable with respect to any Casualty. If and when the
Grantor has paid and performed all of the Obligations, the Trustee, upon request
by the Beneficiary, will provide a release of this Deed of Trust to the Grantor.
The Grantor shall be responsible for the recordation of such release and payment
of any recording costs.
Article III. Representations and Warranties. The Grantor makes the
following representations and warranties to the Beneficiary:
Section 3.01. Organization, Power and Authority of the Grantor: Loan
Documents. The Grantor (a) is a corporation duly organized, existing and in good
standing under the laws of the State, and is duly qualified to do business and
in good standing in all other states in which its properties are located (if
different from the state of its formation) and in any other state in which the
Grantor conducts business, and (b) has the power, authority and legal right to
own its property and carry on the business now being conducted by it and to
engage in the transactions contemplated by the Loan Documents. The execution and
delivery of, and the carrying out of the transactions contemplated by, the Loan
Documents executed by the Grantor, and the performance and observance of the
terms and conditions of such Loan Documents, have been duly authorized by all
necessary corporate action of the Grantor. The Loan Documents to which the
Grantor is a party constitute the valid and legally binding obligations of the
Grantor and are fully enforceable against the Grantor in accordance with their
respective terms.
Section 3.02. Other Documents; Laws. The execution and performance of the
Loan Documents executed by the Grantor and the consummation of the transactions
contemplated thereby will not conflict with, result in any breach of, or
constitute a default under, the bylaws of the Grantor or any contract, other
agreement, document or other instrument to which the Grantor is a party or by
which the Grantor may be bound or affected, and do not and will not violate or
contravene any Law to which the Grantor is subject.
Section 3.03. Taxes. The Grantor has filed all federal, state, county and
municipal Tax returns required to have been filed by the Grantor and has paid
all Taxes which have become due pursuant to such returns or pursuant to any Tax
assessments received by the Grantor.
Section 3.04. Legal Actions. There are no (a) Claims pending or, to the
best of the Grantor's knowledge and belief, threatened, against or affecting the
Grantor, the Grantor's business or the Property, or (b) investigations at law or
in equity, before or by any court or Governmental Authority, pending or, to the
best of the Grantor's knowledge and belief, threatened, against or affecting the
Grantor, the Grantor's business or the Property. The Grantor is not in default
with respect to any order, writ, injunction, decree or demand of any court or
any Governmental Authority affecting the Grantor or the Property.
Section 3.05. Nature of Loans: Usury; Disclosures. The Loans are being made
solely for the purpose of carrying on or acquiring a business or commercial
enterprise. The rate of interest charged on the Loans does not, and will not,
violate any usury Law or interest rate limitation. The Loans are not subject to
the federal Consumer Credit Protection Act (15 U.S.C.ss.1601 et. seq.) nor any
other federal or state disclosure or consumer protection laws. The Grantor
represents and warrants that this Deed of Trust is supported by valuable
consideration and that the Grantor will benefit from the making of the Loans.
Section 3.06. Trade Names. The Grantor engages in business under the name
set forth at the beginning of this Deed of Trust, and does not use any other
trade names.
Section 3.07. Warranty of Title. The Grantor is (a) the owner of the fee
simple legal title to the Real Property, (b) except for the Permitted
Encumbrances, the owner of all of the beneficial and/or equitable interest in
and to the Real Property, and (c) lawfully seized and possessed of the Real
Property. The Grantor has the right and authority to convey the Real Property
and does hereby warrant specially, and agrees to defend, the Real Property and
the title thereto, whether now owned or hereafter acquired, against all Claims
by any Person claiming by, through, or under the Grantor. The Real Property is
subject to no Encumbrances other than the Permitted Encumbrances.
Section 3.08. Property Assessments. The Real Property is assessed for
purposes of Property Assessments as a separate and distinct parcel from any
other property, such that the Real Property shall never become subject to the
Lien of any Property Assessments levied or assessed against any property other
than the Real Property.
Section 3.09. Independence of the Real Property. No building or other
improvements on property not covered by this Deed of Trust rely on the Real
Property or any interest therein to fulfill any requirement of any Governmental
Authority for the existence of such property, building or improvements; and none
of the Real Property relies, or will rely, on any property not covered by this
Deed of Trust or any interest therein to fulfill any requirement of any
Governmental Authority. The Real Property has been properly subdivided from all
other property in accordance with the requirements of any applicable
Governmental Authorities.
Section 3.10. Existing Improvements. Existing Improvements, if any, were
constructed, and are being maintained, in accordance with all applicable Laws,
including, without limitation, zoning Laws.
Section 3.11. Personaltv. The Grantor has good title to the Equipment, and
the Personalty is not subject to any Encumbrance other than the Permitted
Encumbrances.
Section 3.12. Leases, Rents, Contracts of Sale. The Leases, Rents and
Contracts of Sale are not subject to any Encumbrance other than the Permitted
Encumbrances.
Section 3.13. Presence of Hazardous Materials or Contamination: Compliance
With Environmental Requirements. To the best of the Grantor's knowledge and
belief, (a) no Hazardous Materials are currently located on the Property, nor is
the Property affected by any Hazardous Materials Contamination, (b) the Property
has never been used as a manufacturing, storage, treatment, processing,
recycling or disposal site for Hazardous Materials, and (c) no property in the
vicinity of the Real Property has ever been used as a manufacturing, storage,
treatment, processing, recycling or disposal site for Hazardous Materials, nor
is any such property affected by Hazardous Materials Contamination. The present
condition and uses of, and activities on, the Property do not violate any
Environmental Requirement and the uses of the Property which the Grantor and
each tenant and subtenant, if any, intend in the future to make of the Property
comply and will comply with all applicable Environmental Requirements. Neither
the Grantor, nor to the Grantor's knowledge, any tenant or subtenant, has
obtained or is required to obtain any permit or other authorization to
construct, occupy, operate, use or conduct any activity on, the Property by
reason of any Environmental Requirement. The Grantor has received no notice, and
is not aware, of any Claim involving a violation of any Environment Requirement
with respect to the Property or any parcel in the vicinity of the Real Property
or any operation conducted on the Property or on any parcel in the vicinity of
the Real Property. There is no Environmental Requirement which requires any
work, repair, construction, capital expenditure, or other remedial work of any
nature whatsoever to be undertaken with respect to the Property.
Section 3.14. Financial Statements. Any and all financial statements
heretofore delivered by the Grantor and any other party or parties to the
Beneficiary are true and correct in all respects, have been prepared in
accordance with generally accepted accounting principles consistently
applied, and fairly present the respective financial conditions of the
subjects thereof as of the respective dates thereof. No material adverse
change has occurred in the financial conditions reflected therein since the
respective dates thereof and no material additional liabilities have been
incurred by the Grantor or any such other party or parties since the date
thereof other than the borrowings contemplated herein or as approved in
writing by the Beneficiary.
Article IV. Affirmative Covenants.
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Section 4.01. Obligations. The Grantor agrees to promptly pay and/or
perform or cause to be paid and/or performed all of the Obligations, time
being of the essence in each case.
Section 4.02. Insurance. The Grantor shall maintain the following
insurance at its sole cost and expense:
(a) Insurance against Casualty to the Property under a policy or
policies covering such risks as are ordinarily insured against by
similar businesses, but in any event including fire, lightning,
windstorm, hail, explosion, damage from subsoil conditions, riot, riot
attending a strike, civil commotion, damage from aircraft, smoke,
vandalism and malicious mischief. Unless otherwise agreed in writing
by the Beneficiary, such insurance shall be for the greater of (i) the
full insurable value of the Property, or (ii) the full aggregate
principal amount of the Loans. The deductible amount under such policy
or policies shall not exceed $5,000. No policy of insurance shall be
written such that the proceeds thereof will produce less than the
minimum coverage required by this Section by reason of co-insurance
provisions or otherwise. The term "full insurable value" means the
actual replacement cost of the Property (excluding foundation and
excavation costs and costs of underground flues, pipes, drains and
other uninsurable items) . The "full insurable value" shall be
determined from time to time at the request of the Beneficiary (but
not more frequently than once every year except during the occurrence
of an Event of Default) by an appraiser or appraisal company or one of
the insurers, who shall be selected and paid for by the Grantor but
subject to the Beneficiary's approval.
(b) Comprehensive general public liability insurance for injuries
to Persons and damage to property, in limits of not less than
$1,000,000 for any one occurrence and $3,000,000 for the aggregate of
all occurrences during any given annual policy period. Such insurance
shall name the Beneficiary as an additional insured.
(c) Workers' compensation insurance for all employees of the
Grantor in such amount as is required by Law.
(d) During any period of construction upon the Property, the
Grantor shall maintain, or cause others to maintain, builder's risk
insurance (non-reporting form) of the type customarily carried in the
case of similar construction for the full replacement cost of work in
place and materials stored at or upon the Property.
(e) If at any time the Property is in an area that has been
identified as having special flood and mudslide hazards, and flood
insurance is available in such area, the Grantor shall purchase and
maintain a flood insurance policy in form and amount acceptable to the
Beneficiary. In the event that the Property is not in an area having
special flood and mudslide hazards, the Grantor shall deliver to the
Beneficiary upon request evidence satisfactory to the Beneficiary
stating that the Property is not in such a flood or mudslide hazard
area.
(f) Business interruption insurance in an amount acceptable to
the Beneficiary.
(g) The Grantor will obtain and keep in force such other and
further insurance as may be required from time to time by the
Beneficiary in order to comply with regular requirements and practices
of the Beneficiary in similar transactions. Each policy of insurance
shall (i) be issued by one or more recognized, financially sound and
responsible insurance companies approved by the Beneficiary and which
are qualified or authorized by the Laws of the State to assume the
risks covered by such policy, (ii) with respect to the insurance
described under the preceding subsections (a), (d), (e) and (f), have
attached thereto standard non-contributing, non-reporting mortgagee
clauses in favor of and entitling the Beneficiary without contribution
to collect any and all proceeds payable under such insurance, (iii)
provide that such policy shall not be cancelled or modified without at
least thirty (30) days prior written notice to the Beneficiary, and
(iv) provide that any loss otherwise payable thereunder shall be
payable notwithstanding any act or negligence of the Grantor which
might, absent such agreement, result in a forfeiture of all or a part
of such insurance payment. Unless an escrow account has been
established for insurance premiums pursuant to. Section 4.05, the
Grantor shall promptly pay all premiums when due on such insurance
and, not less than thirty (30) days prior to the expiration dates of
each such policy, the Grantor will deliver to the Beneficiary a
renewal policy or policies marked "premium paid" or accompanied by
other evidence of payment satisfactory to the Beneficiary. The Grantor
will immediately give the Beneficiary Notice of any cancellation of,
or change in, any insurance policy. The Beneficiary shall not, because
of accepting, rejecting, approving or obtaining insurance, incur any
liability for (i) the existence, nonexistence, form or legal
sufficiency thereof, (ii) the solvency of any insurer, or (iii) the
payment of losses.
Section 4.03. Adiustment of Condemnation and Insurance Claims. The Grantor
shall give prompt Notice to the Beneficiary of any Casualty or any Condemnation
or threatened Condemnation. The Beneficiary is authorized, at its sole option,
to commence, appear in and prosecute, in its own or the Grantor's name, any
action or proceeding relating to any Condemnation or Casualty, and to settle or
compromise any Claim in connection therewith. In such case, the Beneficiary may
also deduct from any payment all of its Expenses. The Beneficiary agrees,
however, that, so long as no Event of Default has occurred, it will not settle
or compromise any such Claim without the prior written consent of the Grantor,
which consent shall not be unreasonably withheld or delayed. If the Beneficiary
elects not to adjust a Claim, the Grantor agrees to promptly pursue the
settlement and compromise of the Claim subject to the Beneficiary's approval
which will not be unreasonably withheld or delayed. If, prior to the receipt by
the Beneficiary of any Condemnation Award or insurance proceeds, the Property
shall have been sold pursuant to the provisions of Section 7.02, the Beneficiary
shall have the right to receive such funds to the extent of (a) any deficiency
found to be due upon such sale with interest thereon (whether or not a
deficiency judgment on this Deed of Trust shall have been sought or recovered or
denied), and (b) necessary to reimburse the Beneficiary for its Expenses. The
Grantor agrees to execute and deliver from time to time, upon the request of the
Beneficiary, such further instruments or documents as may be requested by the
Beneficiary to confirm the grant and assignment to the Beneficiary of any
Condemnation Awards or insurance proceeds.
Section 4.04. Application of Net Proceeds. Net Proceeds must be applied to
either (a) the payment of the Obligations, or (b) the restoration of the
Property. The Beneficiary shall determine, in its sole discretion, the manner in
which Net Proceeds are to be applied. In the event that, and to the extent that,
Net Proceeds are to be applied to the restoration of the Property, each of the
following conditions must also be met and complied with:
(a) An escrow account shall have been established with the Beneficiary
composed of Net Proceeds, and, if necessary, additional deposits made by
the Grantor, which, in the sole judgment of the Beneficiary, is sufficient
to restore the Property to its use, value and condition immediately prior
to the Casualty or Condemnation. The Beneficiary shall be entitled, at the
expense of the Grantor, to consult such professionals as the Beneficiary
may deem necessary, in its sole discretion, to determine the total costs of
restoring the Property. No interest will be paid on funds in the escrow
account. The Grantor hereby assigns to, and grants the Beneficiary a
security interest in, such escrow account and the funds therein to secure
the payment and performance of the Obligations.
(b) All Leases must continue in full force and effect (subject to rent
abatement during restoration as may be provided in the Leases) or, if
terminated, the terminated Leases must have been replaced with Leases of
equal quality in the reasonable judgment of the Beneficiary. Any tenant
having the right to terminate its Lease due to the Casualty or
Condemnation, and which has not exercised that right, shall have confirmed
in writing to the Beneficiary its irrevocable waiver of such termination
right.
(c) Proceeds from rental loss or business interruption insurance, or
both, or other moneys of the Grantor, must be available to the Grantor in
such amounts as the Beneficiary, in its reasonable judgment, considers
sufficient to pay the debt service under the Notes, and all Property
Assessments, insurance premiums and other sums becoming due from the
Grantor pursuant to this Deed of Trust and the Notes during the time
required for restoration.
(d) All restoration will be conducted under the supervision of an
architect or engineer, or both, selected and paid for by the Grantor and
approved in advance by the Beneficiary, and by a general contractor who
shall be approved by the Beneficiary and shall have executed a fixed price
contract.
(e) The restoration will be performed pursuant to plans and
specifications approved by the Beneficiary.
(f) If required by the Beneficiary at its sole option, the contractor
or contractors responsible for the restoration shall have obtained payment
and performance bonds from a corporate surety acceptable to the Beneficiary
and naming the Beneficiary as dual obligee.
If any of the foregoing conditions are not satisfied, the Beneficiary may, in
its sole discretion, apply Net Proceeds to the payment of the Obligations.
If applied to restoration, Net Proceeds (and any other funds required
to be deposited with the Beneficiary) shall be disbursed from time to time in
accordance with the terms and conditions of the construction loan agreement most
commonly used by the Beneficiary at the time of the Casualty or Condemnation for
major commercial construction loans, and subject also to the following
conditions (which shall control in the event of any conflict with the provisions
of such construction loan agreement)
(a) Restoration shall commence within thirty (30) days following
receipt of the Net Proceeds by the Beneficiary and shall be completed
within such time as may be determined by the Beneficiary in view of the
extent of the Casualty or Condemnation but, in any event, shall be
completed within a reasonable period after the date the Net Proceeds are
received.
(b) At the time of each disbursement, no Default shall have occurred.
(c) Restoration shall be performed in accordance with the requirements
of Section 5.04.
(d) With respect to each disbursement and accompanying each request
thereof or, there shall be delivered to the Beneficiary (i) a certificate
addressed to the Beneficiary from the architect or engineer supervising the
restoration stating that such disbursement is to pay the cost of
restoration not paid previously by any prior disbursement, that all
restoration completed to the date of such certificate has been completed in
accordance with applicable Laws and the approved plans and specifications,
and that the amount of such disbursement, together with all other
disbursements, does not exceed ninety percent (90%) of the aggregate of all
costs incurred or paid on account of work, labor or services performed on,
and materials installed in, the Property at the date of such certificate,
and (ii) evidence satisfactory to the Beneficiary that all Claims then
existing for labor, services and materials have been paid in full or will
be paid in full from the proceeds of the disbursement requested.
(e) The final ten percent (10%) holdback shall be disbursed only upon
delivery to the Beneficiary, in addition to the items required in paragraph
(d) above, of the following:
(i) Final waivers of Liens from all contractors and
subcontractors.
(ii) A certificate of the architect or engineer stating that the
restoration has been completed in a good and workmanlike manner, in
accordance with the plans and specification approved by the
Beneficiary and in accordance with all applicable Laws.
(iii) An estoppel affidavit from each tenant occupying or leasing
space in the Property stating that its Lease is in full force and
effect.
(f) Immediately upon the occurrence of any Event of Default, the
Beneficiary may apply Net Proceeds and any other sums deposited with the
Beneficiary to the repayment of the Obligations.
Section 4.05. Property Assessments; Escrow. (a) Unless an escrow account
for payment of Property Assessments is created pursuant to subsection (C) below,
the Grantor will (i) promptly pay in full and discharge all Property
Assessments, and (ii) exhibit to the Beneficiary, upon demand, the receipted
bills for such Property Assessments prior to the day upon which the same shall
become delinquent. Property Assessments shall be considered delinquent as of the
first day any interest or penalties commence to accrue thereon.
(b) In the event of the passage of any Law subsequent to the date of
this Deed of Trust in any manner changing or modifying the Laws now in
force governing the taxation of deeds of trust or debts secured by deeds of
trust or the manner of collecting any such taxes so as to adversely affect
the Beneficiary (including, without limitation, a requirement that internal
revenue stamps be affixed to this Deed of Trust or any of the other Loan
Documents), the Grantor will promptly pay any such tax. If the Grantor
fails to make such prompt payment, or if any Law prohibits the Grantor from
making such payment or would penalize the Beneficiary if the Grantor makes
such payment, then the entire unpaid balance of the obligations shall,
without Notice, immediately become due and payable at the sole option of
the Beneficiary. In no event, however, shall any income taxes of the
Beneficiary or franchise taxes of the Beneficiary measured by income, or
taxes in lieu of such income taxes or franchise taxes, be required to be
paid by the Grantor.
(c) During the occurrence of an Event of Default hereunder, upon
demand by the Beneficiary, the Grantor shall pay to the Beneficiary
monthly, on any date selected by the Beneficiary, such amount as the
Beneficiary from time to time estimates will generate sufficient funds to
pay all Property Assessments and premiums for the insurance required by
Section 4.02 prior to the date such Property Assessments or insurance
premiums next become due. The Beneficiary's estimates shall be based on the
amounts actually payable or, if unknown, on the amounts actually paid for
the year preceding that for which such payments are being made. Any
deficiencies shall be promptly paid by the Grantor to the Beneficiary on
demand. The Grantor shall transmit bills for the Property Assessments and
insurance premiums to the Beneficiary as soon as received. When the
Beneficiary has received from the Grantor, or on its account, funds
sufficient to pay the same, the Beneficiary shall, except as provided
below, pay such bills. Payments for such purposes may be made by the
Beneficiary at its discretion even though subsequent owners of the Property
may benefit thereby. Upon foreclosure or release of this Deed of Trust or,
to the extent permitted by Law, upon the occurrence of an Event of Default,
the Beneficiary may apply any sums so deposited to the payment of the
Obligations. If from time to time funds are accumulated under the terms of
this Section in excess of the amount needed to pay the Property Assessments
and such insurance premiums, the Grantor at least annually shall be given
the option of (i) receiving a refund of the excess funds, (ii) applying the
excess funds to the payment of the Obligations (provided prepayment is then
permitted without penalty pursuant to the Notes), or (iii) permitting the
excess funds to remain in the escrow account established pursuant to this
Section. If the Grantor fails to give Notice to the Beneficiary of its
intent with respect to the application of the excess funds as provided in
this Section within sixty (60) days from the date the Beneficiary mailed
notice of the accumulation of the excess funds, the Beneficiary shall
promptly return the excess funds to the Grantor. Within sixty (60) days
after receipt from the Grantor of a Notice requesting a refund, the
Beneficiary shall also return excess funds to the Grantor.
Section 4.06. Compliance with Laws. The Grantor will comply with and not
violate, and cause to be complied with and not violated, all present and future
Laws applicable to the Property and its use and operation.
Section 4.07. Maintenance and Repair of the Property. The Grantor, at the
Grantor's sole expense, will (a) keep and maintain the Improvements and the
Equipment in good condition, working order and repair, and (b) make all
necessary or appropriate repairs and Additions to the Improvements and
Equipment, so that each part of the Improvements and all of the Equipment shall
at all times be in good condition and fit and proper for the respective purposes
for which they were originally intended, erected, or installed.
Section 4.08. Additions to Security. All right, title and interest of the
Grantor in and to all Improvements and Additions hereafter constructed or placed
on the Property and in and to any Equipment hereafter acquired shall, without
any further deed of trust, conveyance, assignment or other act by the Grantor,
become subject to the Lien of this Deed of Trust as fully and completely, and
with the same effect, as though now owned by the Grantor and specifically
described in the granting clauses hereof. The Grantor agrees, however, to
execute and deliver to the Trustee and/or the Beneficiary such further documents
as may be required pursuant to Section 9.02.
Section 4.09. Inspection. The Grantor will permit the Beneficiary, or any
Person authorized by the Beneficiary, to enter and make inspections of the
Property at all reasonable times and as often as may be requested by the
Beneficiary.
Section 4.10. Management. The Grantor at all times shall provide for the
competent and responsible management and operation of the Property. Any
management contract or contracts affecting the Property must be approved in
writing by the Beneficiary prior to the execution of the same.
Section 4.11. Books and Records. The Grantor will keep and maintain full
and accurate records and books administered in accordance with generally
accepted accounting principles, consistently applied, showing in detail the
earnings and expenses of the Property and the operation thereof. The Grantor
shall permit the Beneficiary, or any Person authorized by the Beneficiary, to
inspect and examine such records and books (regardless of where maintained) and
all supporting vouchers and data and to make copies and extracts therefrom at
all reasonable times and as often as may be requested by the Beneficiary.
Section 4.12. Estoppel Certificates. Within ten (10) days after any request
by the Beneficiary or a proposed assignee or purchaser of the Loans, the Grantor
shall certify in writing to the Beneficiary, or to such proposed assignee or
purchaser, the then unpaid balance of the Loans and whether the Grantor has any
right of defense or setoff to the payment or performance of any of the
Obligations.
Section 4.13. Subrogation. To the extent permitted by Law, the Beneficiary
shall be subrogated, notwithstanding its release of record, to any Lien now or
hereafter existing on the Property to the extent that such Lien is paid or
discharged by the Beneficiary whether or not from the proceeds of the Loans.
This Section shall not be deemed or construed, however, to obligate the
Beneficiary to pay or discharge any Lien.
Section 4.14. Leases. (a) The Beneficiary shall have the right to approve
any Lease executed after the date of this Deed of Trust as to form, content and
financial strength of the tenant. All such Leases shall be subordinate to the
operation and effect of this Deed of Trust and, at the Beneficiary's option,
shall include subordination provisions acceptable to the Beneficiary in its sole
and absolute discretion. At any time, within thirty (30) days after Notice from
the Beneficiary, the Grantor will deliver to the Beneficiary a written
description in such reasonable detail as the Beneficiary may request of all of
the Leases, including, without limitation, the names of all tenants, the terms
of all Leases and the Rents payable under all Leases and the current status of
such Rents, and, on demand, the Grantor will furnish to the Beneficiary fully
executed copies of any Leases and such subordination and attornment agreements
as the Beneficiary may request. If any Lease provides for the giving by the
tenant of certificates with respect to the status of such Lease, the Grantor
shall exercise its right to require such certificate within ten (10) days after
any request by the Beneficiary. Within thirty (30) days after any request by the
Beneficiary, the Grantor will notify all tenants under existing Leases, and
agrees to thereafter notify all tenants under future Leases, that (i) the
Grantor collects and receives all Rents pursuant to the license granted to it
hereunder, and (ii) upon Notice from the Beneficiary that such license has been
revoked, the tenant shall pay all unpaid Rent directly to the Beneficiary.
(b) So long as no Event of Default has occurred, the Grantor shall
have a license (which license shall terminate automatically and without
Notice upon the occurrence of an Event of Default) to collect upon, but not
prior to accrual, the Rents under the Leases and, where applicable,
subleases, such Rents to be held in trust for the Beneficiary. Each month,
provided no Event of Default has occurred, the Grantor may retain such
Rents as were collected that month and held in trust for the Beneficiary.
Upon revocation of such license and following notification to the tenants
under the Leases by the Beneficiary or the Trustee that Rents are to be
paid to the Beneficiary, all Rents shall be paid directly to the
Beneficiary and not through the Grantor. A demand by the Beneficiary on any
tenant for the payment of Rent shall be sufficient to warrant such tenant
to make future payments of Rent to the Beneficiary without the necessity of
further consent by the Grantor.
(c) The Grantor, at its sole cost and expense, will use its best
efforts to enforce or secure, or cause to be enforced or secured, the
performance of each and every obligation and undertaking of the respective
tenants under any Leases and will appear in and defend, at its sole cost
and expense, any action or proceeding arising under, or in any manner
connected with, such Leases.
(d) The Grantor will not assign the whole or any part of the Leases or
Rents without the prior written consent of the Beneficiary, and any
assignment without such consent shall be null and void.
(e) The Grantor will promptly perform all of its obligations under any
Leases. The Grantor will not, without the prior written consent of the
Beneficiary, (i) cancel, terminate, accept a surrender of, reduce the
payment of rent under, or accept any prepayment of rent for more than one
(1) month in advance under, any Lease, or (ii) permit a Lien on the
Property superior to any Lease, other than this Deed of Trust.
(f) All Leases, although subordinate to this Deed of Trust, shall be
subject to the condition (and this Deed of Trust so authorizes) that, in
the event of any sale of the Property pursuant to the provisions of Section
7.02, the Leases shall, at the sole option of the Beneficiary or any
purchaser at such sale, either (i) continue in full force and effect as set
forth in the required advertisement of sale, and the tenant or tenants
thereunder will, upon request, attorn to and acknowledge in writing the
purchaser or purchasers at such sale or sales as landlord thereunder, or
(ii) upon notice to such effect from the Beneficiary, the Trustee or any
purchaser or purchasers, terminate within ninety (90) days from the date of
sale. As to any Lease, neither the Beneficiary nor any purchaser or
purchasers at foreclosure shall be bound by any payment of rent for more
than one (1) month in advance or by any amendment or modification of the
Lease made without the prior written consent of the Beneficiary or,
subsequent to a foreclosure sale, such purchaser or purchasers.
(g) Neither the Trustee nor the Beneficiary shall be obligated to
perform or discharge any obligation of the Grantor under any Lease. This
assignment of the Leases in no manner places on the Beneficiary or the
Trustee any responsibility for (i) the control, care, management or repair
of the Property, (ii) the carrying out of any of the terms and conditions
of the Leases, (iii) any waste committed on the Property, or (iv) any
dangerous or defective condition on the Property (whether known or
unknown).. The Grantor agrees to indemnify the Trustee and the Beneficiary
for, and forever hold them harmless from, any and all Claims arising out
of, or in connection with, any Leases or any assignment thereof.
Section 4.15. Contracts of Sale. Each Contract of Sale covering the
Property or any portion thereof shall be in form and for a price reasonably
approved by the Beneficiary. The Grantor irrevocably authorizes the Beneficiary,
at its sole option, to collect, in the name of the Grantor or in its own name as
assignee, all payments due or to become due under any Contract of Sale. The
Grantor agrees that it will facilitate in every reasonable way the collection by
the Beneficiary of such payments, and will, upon written request by the
Beneficiary, execute a written notice and deliver the same to each purchaser
directing the purchaser to make such payments to the Beneficiary. In no event
shall the Beneficiary be accountable for more moneys than it actually receives
pursuant to a Contract of Sale, nor shall the Beneficiary be liable for any
failure to collect payments under any Contract of Sale. The right to determine
the method of collection and the extent to which the enforcement of collection
shall be prosecuted is reserved to the sole discretion of the Beneficiary. The
Grantor, without the prior written consent of the Beneficiary, will not execute
any further assignment of any Contract of Sale or the payments due thereunder.
The Grantor shall furnish to the Beneficiary, within ten (10) days after a
written request from the Beneficiary, a written certification containing the
names of all contract purchasers of the Property and shall attach to such
certification a copy of any Contract of Sale. Nothing contained in this Section
shall (a) be construed as a consent by the Beneficiary to any Transfer of the
Property, or (b) constitute a delegation to the Beneficiary of any of the
Grantor's duties or obligations under any Contract of Sale. The Grantor agrees
to indemnify the Beneficiary and the Trustee for, and forever hold them harmless
from, any Claim arising out of, or in connection with, any Contract of Sale.
Section 4.16. Taxes. The Grantor shall pay and discharge all Taxes prior to
the date on which penalties are attached thereto unless and to the extent only
that such Taxes are contested in accordance with Section 4.20.
Section 4.17. Hazardous Materials; Contamination. (a) The Grantor agrees to
(i) give Notice to the Beneficiary immediately upon the Grantor's acquiring
knowledge of the presence of any Hazardous Materials on the Property or of any
Hazardous Materials Contamination or of any Claim made or threatened against the
Grantor or the Property with respect to any Environmental Requirement with a
full description thereof; (ii) at the Grantor's sole cost and expense, promptly
comply with any and all Environmental Requirements relating to the Property or
such Hazardous Materials or Hazardous Materials Contamination and provide the
Beneficiary with satisfactory evidence of such compliance; (iii) provide the
Beneficiary, within thirty (30) days after a demand by the Beneficiary, with a
bond, letter of credit or similar financial assurance evidencing to the
Beneficiary's satisfaction that the necessary funds are available to pay the
cost of complying with such Environmental Requirements and removing, treating
and disposing of such Hazardous Materials or Hazardous Materials Contamination
and discharging any Lien which may be established on the Property as a result
thereof; and (iv) take whatever other action as the Beneficiary may deem
necessary or appropriate to restore to the Grantor the full use and benefit of
the Property as contemplated by the Loan Documents.
(b) In the event the Beneficiary ever has any reason to believe that
any Hazardous Materials are or may be located on, or may otherwise affect,
the Property, or if any Claim is made or threatened against the Grantor or
the Property with respect to any Environmental Requirement, or if a Default
or Event of Default shall have occurred hereunder or under any of the other
Loan Documents, the Grantor shall immediately upon the receipt of Notice
from the Beneficiary, which may be given at any time and from time to time
by the Beneficiary in its sole discretion, cause an Environmental
Assessment to be undertaken with respect to the Property and furnish the
same to the Beneficiary within thirty (30) days after the date of the
Beneficiary's request. The cost of any such Environmental Assessment shall
be borne exclusively by the Grantor. The Grantor shall cooperate with each
environmental consulting firm engaged to make any such Environmental
Assessment and shall supply to each such environmental consulting firm,
from time to time and promptly on request, all information available to the
Grantor to facilitate the completion of the Environmental Assessment.
Notwithstanding the foregoing, the Beneficiary shall be under no duty to
require the preparation of any Environmental Assessment of the Property,
and in no event shall any such Environmental Assessment by the Beneficiary
be or give rise to any representation or warranty by the Beneficiary that
Hazardous Materials are or are not present on the Property, or that there
has been compliance by the Grantor or any other Person with any
Environmental Requirement.
(c) The Grantor shall protect, indemnify, defend and hold the
Beneficiary, the Trustee, any Persons owned or controlled by, owning or
controlling, or under the common control of or affiliated with, the
Beneficiary and/or the Trustee, any participants in the Loans, the
directors, officers, employees and agents of the Beneficiary, and/or such
other Persons, and the heirs, personal representatives, successors and
assigns of each of the foregoing, harmless from and against any and all
Claims of any kind or nature whatsoever arising out of or in any way
connected with any investigative, enforcement, cleanup, removal,
containment, remedial or other private, governmental or regulatory action
at any time threatened, instituted or completed pursuant to any applicable
Environmental Requirement against the Grantor or the Beneficiary or against
or with respect to the Property or any condition, use or activity on the
Property or at any time threatened or made by any Person against the
Grantor or the Beneficiary or against or with respect to the Property or
any condition, use or activity on the Property relating to any damage,
contribution, cost recovery, compensation, loss or injury resulting from or
in any way arising in connection with any Hazardous Materials or Hazardous
Materials Contamination. Upon demand by the Beneficiary, the Grantor shall
diligently defend any such Claim which affects the Property or is made or
commenced against the Beneficiary, whether alone or together with the
Grantor or any other Person, all at the Grantor's sole cost and expense and
by counsel to be approved by the Beneficiary in the exercise of its
reasonable judgment. In the alternative, the Beneficiary may at any time
elect to conduct its own defense through counsel selected by the
Beneficiary and at the cost and expense of the Grantor.
Section 4.18. Right to Perform. If the Grantor fails to promptly pay or
perform any of the Obligations, the Beneficiary, without Notice to or demand
upon the Grantor, and without waiving or releasing any Obligation or Default,
may (but shall be under no obligation to) at any time thereafter make such
payment or perform such act for the account and at the expense of the Grantor.
The Beneficiary may enter upon the Property for that purpose and take all action
thereon as the Beneficiary considers necessary or appropriate. All Expenses
incurred by the Beneficiary pursuant to this Section, together with interest
thereon at the Reimbursement Rate, shall be paid by the Grantor to the
Beneficiary as provided in Section 4.19.
Section 4.19. Reimbursement; Interest. If the Beneficiary or the Trustee
shall incur any Expenses or pay any Claims to which the Beneficiary or the
Trustee become a party by reason of this Deed of Trust or the rights and
remedies provided hereunder (regardless of whether this Deed of Trust expressly
provides for an indemnification against such Claims by the Grantor), such
Expenses and Claims shall be (a) paid by the Grantor to the Beneficiary on
demand, together with interest thereon from the date incurred until paid in full
by the Grantor at the Reimbursement Rate, and (b) a part of the Obligations
secured by this Deed of Trust. Notwithstanding the foregoing, however, in any
action or proceeding to foreclose this Deed of Trust or to recover or collect
the Obligations, the provisions of Law governing the recovery of costs,
disbursements and allowances shall prevail unaffected by this Section.
Section 4.20. Permitted Contests. The Grantor shall not be required to pay
any of the Property Assessments, or to comply with any Law, so long as the
Grantor shall in good faith, and at its cost and expense, contest the amount or
validity thereof, or take other appropriate action with respect thereto, in good
faith and in an appropriate manner or by appropriate proceedings; provided that
(a) such proceedings operate to prevent the collection of, or other realization
upon, such Property Assessments or enforcement of the Law so contested, (b)
there will be no sale, forfeiture or loss of the Property during the contest,
(c) neither the Beneficiary nor the Trustee are subjected to any Claim, and (d)
the Grantor provides assurances satisfactory to the Beneficiary (including,
without limitation, the establishment of an appropriate reserve account with the
Beneficiary) of its ability to pay such Property Assessments or comply with such
Law in the event the Grantor is unsuccessful in its contest. Each such contest
shall be promptly prosecuted to final conclusion or settlement, and the Grantor
shall indemnify and save the Beneficiary and Trustee harmless against all Claims
in connection therewith. Promptly after the settlement or conclusion of such
contest or action, the Grantor shall comply with such Law and/or pay and
discharge the amounts which shall be levied, assessed or imposed or determined
to be payable, together with all penalties, fines, interests, costs and expenses
in connection therewith.
Section 4.21. Security Agreement. This Deed of Trust creates a security
interest in the Personalty, and, to the extent the Personalty is not real
property, this Deed of Trust constitutes a security agreement from the Grantor
to the Beneficiary under the Uniform Commercial Code of the State. The Grantor
hereby agrees to execute and deliver on demand, and hereby authorizes and
irrevocably constitutes and appoints the Beneficiary the attorney-in-fact of the
Grantor, to execute, deliver and, if appropriate, to file with the appropriate
filing office or offices, such financing statements or other instruments as the
Beneficiary may request or require in order to perfect the security interest
granted hereby or to continue the effectiveness of the same.
Section 4.22. Appraisals. The Beneficiary shall have the right to require
annual updated appraisals of the Property, which appraisals shall be prepared by
an appraiser or appraisers designated by the Beneficiary and shall be in all
respects acceptable to the Beneficiary. The Grantor shall reimburse the
Beneficiary upon demand for all costs and expenses incurred by the Beneficiary
with respect to the preparation and review of all future appraisals required
pursuant to the terms hereof.
Article V. Negative Covenants.
Section 5.01. Encumbrances. Without the prior written consent of the
Beneficiary, the Grantor will not permit the Real Property or the Personalty, or
the Leases, Rents and Contracts of Sale, to become subject to any Encumbrances
other than the Permitted Encumbrances. The Grantor shall give the Beneficiary
Notice of any default under any Lien and Notice of any f ore-closure or threat
of foreclosure.
Section 5.02. Transfer of the Propertv. The Grantor will not Transfer, or
contract to Transfer, all or any part of the Property or any legal or beneficial
interest therein (except for Transfers of the Equipment permitted by Section
5.03). The sale, pledge, encumbrance, assignment or transfer, voluntarily or
involuntarily, whether by operation of law or otherwise, of any interest in
Grantor (if Grantor is not a natural person but is a corporation, partnership,
limited liability company, trust or other legal entity), without the prior
written consent of Beneficiary (including, without limitation, it Grantor ~5 a
corporation, partnership, limited liability company or joint venture, the
withdrawal from or admission into it of any stockholder, member, general partner
or joint venturer) shall constitute a prohibited transfer under this Section
5.02.
Section 5.03. Removal. etc. of Equipment and Improvements. Except to the
extent permitted by the following sentence, none of the Improvements or
Equipment shall be removed, demolished or materially altered, without the prior
written consent of the Beneficiary. The Grantor may remove and dispose of, free
from the Lien of this Deed of Trust, such Equipment as from time to time becomes
worn out or obsolete, provided that, either (a) at the time of, or prior to,
such removal, any such Equipment is replaced with other Equipment which is free
from Liens other than Permitted Encumbrances and has a value at least equal to
that of the replaced Equipment (and by such removal and replacement the Grantor
shall be deemed to have subjected such Equipment to the Lien of this Deed of
Trust), or (b) so long as a prepayment may be made without penalty pursuant to
the Notes, such Equipment is sold at fair market value for cash and the net cash
proceeds received from such disposition are paid over promptly to the
Beneficiary to be applied to the prepayment of the principal of the Loans in any
reasonable manner as the Beneficiary shall determine.
Section 5.04. Additional Improvements. The Grantor will not construct any
Improvements other than those presently on the Land without the prior written
consent of the Beneficiary. The Grantor will complete and pay for, within a
reasonable time, any Improvements which the Grantor is permitted to construct on
the Land. The Grantor will construct and erect any permitted Improvements (a)
strictly in accordance with all applicable Laws and any private restrictive
covenants, (b) entirely on lots or parcels of the Land, (c) so as not to
encroach upon any easement or right of way or upon the land of others, and (d)
wholly within any building restriction lines applicable to the Land.
Section 5.05. Restrictive Covenants. Zoning. etc. Without the prior written
consent of the Beneficiary, the Grantor will not initiate, join in, or consent
to any change in, any restrictive covenant, easement, zoning ordinance, or other
public or private restrictions, limiting or defining the uses which may be made
of the Property. The Grantor will (a) promptly perform and observe, and cause to
be performed and observed, all of the terms and conditions of all agreements
affecting the Property, and (b) do or cause to be done all things necessary to
preserve intact and unimpaired any and all easements, appurtenances and other
interests and rights in favor of, or constituting any portion of, the Property.
Section 5.06. Prohibition on Hazardous Materials. The Grantor will not
cause, commit, permit or allow to continue any violation of any Environmental
Requirement by any Person on or with respect to the Property. The Grantor will
not place, install, store, spill, leak, dispose of or release, or cause, commit,
permit, or allow the placement, installation, storage, spilling, leaking,
disposal or release of, any Hazardous Materials on the Property and will keep
the Property free of all Hazardous Materials Contamination.
Article VI. Events of Default. The occurrence of any one or more of the
following shall constitute an "Event of Default" under this Deed of Trust:
Section 6.01. Accuracy of Information, Representations and Warranties. Any
information contained in any financial statement, schedule, report or any other
document delivered by the Grantor or any other party or parties to the
Beneficiary in connection with the Loans proves at any time to be not in all
respects true and accurate, or the Grantor or any such other party or parties
shall have failed to state any material fact or any fact necessary to make such
information not misleading, or any representation or warranty contained in this
Deed of Trust, or in any other document, certificate or opinion delivered to the
Beneficiary in connection with the Loans, proves at any time to be incorrect or
misleading in any material respect. Section 6.02. Payment Obligations. The
Grantor fails to promptly pay or cause to be paid any of the Obligations
when and as due and payable.
Section 6.03. Transfer of the Property; Encumbrances. The Grantor fails to
comply with Sections 5.01 or 5.02.
Section 6.04. Insurance Obligations. The Grantor fails to promptly perform
or comply with any of the terms and conditions set forth in Section 4.02.
Section 6.05. Hazardous Materials. The Grantor fails to promptly perform or
comply with any of the terms and conditions set forth in Sections 4.17 or 5.06.
Section 6.06. Other Obligations. The Grantor fails to promptly perform or
comply with any of the Obligations.
Section 6.07. Event of Default Under Other Loan Documents. An Event of
Default (as defined therein) occurs under any of the Loan Documents other than
this Deed of Trust.
Section 6.08. Change in Zoning or Public Restriction. Any change in any
zoning ordinance or regulation or any other public restriction is enacted,
adopted or implemented, that limits or defines the uses which may be made of the
Property such that the present or intended use of the Property, as specified in
the Loan Documents, would be in violation of such zoning ordinance or regulation
or public restriction, as changed.
Section 6.09. Default Under Other Lien Documents. A default occurs under
any other mortgage, deed of trust or security agreement covering all or any
portion of the Property, including, without limitation, any Permitted
Encumbrances.
Section 6.10. Voluntary Bankruptcy, etc. The Grantor or any guarantor of
the Notes (a) applies for, or consents in writing to, the appointment of a
receiver, trustee or liquidator of the Grantor or any such guarantor or the
Property or of all or substantially all of the Grantor's or any such guarantor's
other assets, or (b) files a voluntary petition in bankruptcy or admits in
writing its inability to pay its debts as they become due, or (C) makes a
general assignment for the benefit of creditors, or (d) files a petition or an
answer seeking a reorganization (other than a reorganization not involving the
liabilities of the Grantor) or an arrangement with creditors or takes advantage
of any bankruptcy or insolvency law, or (e) files an answer admitting the
material allegations of a petition filed against the Grantor or any such
guarantor in any bankruptcy, reorganization or insolvency proceeding.
Section 6.11. Involuntary Bankruptcy. etc. An order, judgment or decree is
entered by any court of competent jurisdiction on the application of a creditor
adjudicating the Grantor or any guarantor of the Notes as bankrupt or insolvent,
or appointing a receiver, trustee or liquidator of the Grantor or any such
guarantor or of the Property, or of all or substantially all of the Grantor's or
any such guarantor's other assets.
Section 6.12. Execution: Attachment. Any execution or attachment is levied
against the Property, and such execution or attachment is not set aside,
discharged or stayed within thirty (30) days after the same is levied.
Section 6.13. Judgment. The entry of a final judgment for the payment of
money against the Grantor or any guarantor of the Notes.
Section 6.14. Change in Business Status. Unless the written consent of the
Beneficiary is previously obtained, the sale of all or substantially all of the
assets of the Grantor or of any guarantor of the Notes.
Section 6.15. Default Under Other Indebtedness. The Grantor or any
guarantor of the Notes fails to pay any indebtedness of the Grantor or such
guarantor owing to the Beneficiary (other than the Loans) or to any other
creditor, when and as due and payable (whether by acceleration or otherwise).
Section 6.16. Default Under Swap Contract. An event occurs which gives the
Beneficiary the right or option to terminate any Swap Contract which is secured
by this Deed of Trust.
Article VII. Rights and Remedies. Upon the occurrence of any Event of
Default, the Beneficiary, or the Trustee at the direction of the Beneficiary,
may at any time thereafter exercise any of the following rights., powers or
remedies:
Section 7.01. Acceleration. The Beneficiary may declare (without Notice to
the Grantor and without presentment, demand, protest or notice of protest or of
dishonor, all of which the Grantor hereby waives) the Obligations to be
immediately due and payable.
Section 7.02. Foreclosure. The Trustee may take possession of and sell the
Property, or any part thereof requested by the Beneficiary to be sold, and in
connection therewith the Grantor hereby (a) assents to the passage of a decree
for the sale of the Property by the equity court having jurisdiction, and (b)
authorizes and empowers the Trustee to take possession of and sell (or in case
of the default of any purchaser to resell) the Property, or any part thereof,
all in accordance with the Laws or rules of court relating to deeds of trust,
including any amendments thereof, or additions thereto, which do not materially
change or impair the remedy. In connection with any foreclosure, the Beneficiary
and/or the Trustee may (a) procure such title reports, surveys, tax histories
and appraisals as they deem necessary, and (b) make such repairs and Additions
to the Property as they deem reasonably advisable, all of which shall constitute
Expenses. In case of any sale under this Deed of Trust, by virtue of judicial
proceedings or otherwise, the Property may be sold as an entirety or in parcels,
by one sale or by several sales, as may be deemed reasonably advisable by the
Trustee to be appropriate and without regard to any right of the Grantor or any
other Person to the marshalling of assets. Any sale hereunder may be made at
public auction, at such time or times, at such place or places, and upon such
terms and conditions and after such previous public notice as the Trustee shall
deem appropriate and advantageous and as required by Law. Upon the terms of such
sale being complied with, the Trustee shall convey to, and at the cost of, the
purchaser or purchasers the interest of the Grantor in the Property so sold,
free and discharged of and from all estate, title or interest of the Grantor, at
law or in equity, such purchaser or purchasers being hereby discharged from all
liability to see to the application of the purchase money. The proceeds of such
sale or sales under this Deed of Trust, whether under the assent to a decree,
the power of sale, or by equitable foreclosure, shall be held by the Trustee and
applied as follows: First, to pay (a) all Expenses incurred in connection with
such sale or in preparing the Property for such sale including, among other
things, a counsel fee of $6,500 to the attorneys representing the Beneficiary
and the Trustee for conducting the proceedings if without contest, but if legal
services be rendered to the Trustee and the Beneficiary in connection with any
contested matter in the proceedings, then such other counsel fees shall be
allowed and paid out of the `proceeds of such sale or sales as the court having
jurisdiction may deem proper, and (b) a Trustee' commission equal to the
commission allowed Trustee for making sales of property under decrees of the
equity court having jurisdiction; Second, to pay all of the Obligations and all
interest then due and accrued thereon, which shall include interest through the
date of ratification of the auditor's account; and Lastly, to pay the surplus,
if any, to the Grantor or any Person entitled thereto upon surrender and
delivery to the purchaser or purchasers of the Property, and less the Expenses,
if any, of obtaining possession. Immediately upon the filing of any foreclosure
under this Deed of Trust, there shall also become due and owing by the Grantor a
commission on the total amount of the Obligations then due equal to one-half of
the percentage allowed as commission to Trustee making sales under orders or
decrees of the equity court having jurisdiction, and no Person shall be required
to receive only the aggregate amount of the Obligations to the date of payment
unless the same is accompanied by a tender of such commission.
Section 7.03. Taking Possession or Control of the Property. As a matter of
right without regard to the adequacy of the security, and to the extent
permitted by law without Notice to the Grantor, the Beneficiary shall be
entitled, upon application to a court of competent jurisdiction, to the
immediate appointment of a receiver for all or any part of the Property and the
Rents, whether such receivership be incidental to a proposed sale of the
Property or otherwise, and the Grantor hereby consents to the appointment of
such a receiver. In addition, to the extent permitted by Law, and with or
without the appointment of a receiver, or an application therefor, the
Beneficiary may (a) enter upon, and take possession of (and the Grantor shall
surrender actual possession of), the Property or any part thereof, without
Notice to the Grantor and without bringing any legal action or proceeding, or,
if necessary by force, legal proceedings, ejectment or otherwise, and (b) remove
and exclude the Grantor and its agents and employees therefrom.
Section 7.04. Management of the Propertv. Upon obtaining possession of the
Property or upon the appointment of a receiver as described in Section 7.03, the
Beneficiary, the Trustee or the receiver, as the case may be, may, at their sole
option, (a) make all necessary or proper repairs and Additions to or upon the
Property, (b) operate, maintain, control, make secure and preserve the Property,
(c) receive all Rents, and (d) complete the construction of any unfinished
Improvements on the Property and, in connection therewith, continue any and all
outstanding contracts for the erection and completion of such Improvements and
make and enter into any further contracts which may be necessary, either in
their or its own name or in the name of the Grantor (the cost of completing the
Improvements shall be Expenses secured by this Deed of Trust and accrue interest
as set forth in Section 4.19) . In so doing, the Beneficiary, the Trustee or
such receiver shall have the right to manage the Property and to carry on the
business of the Grantor and may exercise all of the rights and powers of the
Grantor, either in the name of the Grantor, or otherwise, including, but without
limiting the generality of the foregoing, the right to lease the Property, to
cancel, modify, renew or extend any Lease or sub-lease of the Property and to
carry on any contracts entered into by the Grantor with respect to the Property.
The Beneficiary, the Trustee or such receiver shall be under no liability for,
or by reason of, any such taking of possession, entry, holding, removal,
maintaining, operation or management, except for gross negligence or willful
misconduct. Any Rents received shall be applied (a) first, to pay all Expenses,
and (b) the balance, if any, to payment of the other Obligations. The Grantor
shall pay on demand to the Beneficiary, the receiver or the Trustee (as the case
may be) the amount of any deficiency between (a) the Rents received by the
Beneficiary, the receiver or the Trustee, and (b) all Expenses incurred together
with interest thereon at the Reimbursement Rate as provided in Section 4.19. The
exercise of the remedies provided in this Section shall not cure or waive any
Event of Default, and the enforcement of such remedies, once commenced, shall
continue for so long as the Beneficiary shall elect, notwithstanding the fact
that the exercise of such remedies may have, for a time, cured the original
Event of Default.
Section 7.05. Uniform Commercial Code. The Beneficiary may proceed under
the Uniform Commercial Code of the State as to all or any part of the
Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial Code of
the State. Upon the occurrence of any Event of Default, the Grantor shall
assemble all of the Equipment and make the same available within the
Improvements. Any notification required by Section 9-504 of the Uniform
Commercial Code of the State shall be deemed reasonably and properly given if
sent in accordance with the Notice provision of this Deed of Trust at least ten
(10) days before any sale or other disposition of the Personalty. Disposition of
the Personalty shall be deemed commercially reasonable if made pursuant to a
public sale advertised at least twice in a newspaper of general circulation in
the community where the Property is located. Proceeds from any such sale shall
be applied as follows: (a) first, to pay all Expenses incurred in connection
with the sale, and (b) the balance, if any, to payment of the other Obligations.
Section 7.06. Swap Contracts. In addition to the rights and remedies set
forth in this Deed of Trust, upon the occurrence of an Event of Default,
Beneficiary may terminate any Swap Contract or exercise any rights provided
thereunder or in connection therewith.
Section 7.07. Other Remedies. The Beneficiary shall have the right from
time to time to enforce any legal or equitable remedy against the Grantor and to
▇▇▇ the Grantor for any sums (whether interest, damages for failure to pay
principal or any installments thereof, taxes, or any other sums required to be
paid under the terms of this Deed of Trust, as the same become due), without
regard to whether or not any other of the Obligations shall be due, and without
prejudice to the right of the Beneficiary thereafter to enforce any appropriate
remedy against the Grantor, including, without limitation, an action of
foreclosure or an action for specific performance, for a Default by the Grantor
existing at the time such earlier action was commenced.
Section 7.08. Remedies. etc. Cumulative. Each right, power and remedy of
the Beneficiary or the Trustee as provided for in this Deed of Trust, or in any
of the other Loan Documents or now or hereafter existing by Law, shall be
cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Deed of Trust, or in any of the other Loan
Documents or now or hereafter existing by Law, and the exercise or beginning of
the exercise by the Beneficiary or the Trustee of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Beneficiary or the Trustee of any or all such other rights, powers or
remedies.
Section 7.09. No Waiver by Beneficiary etc. No course of dealing or conduct
between the Beneficiary, the Trustee and the Grantor shall be effective to
amend, modify or change any provisions of this Deed of Trust or the other Loan
Documents. No failure or delay by the Beneficiary or the Trustee to insist upon
the strict performance of any term, covenant or agreement of this Deed of Trust
or of any of the other Loan Documents, or to exercise any right, power or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term,
covenant or agreement or of any such breach, or preclude the Beneficiary or the
Trustee from exercising any such right, power or remedy at any later time or
times. By accepting payment after the due date of any of the Obligations, the
Beneficiary or the Trustee shall not be deemed to waive the right either to
require prompt payment when due of all other Obligations, or to declare an Event
of Default for failure to make prompt payment of any such other Obligations.
Neither the Grantor nor any other Person now or hereafter obligated for the
payment of the whole or any part of the Obligations shall be relieved of such
liability by reason of (a) the failure of the Beneficiary to comply with any
request of the Grantor or of any other Person to take action to foreclose this
Deed of Trust or otherwise enforce any of the provisions of this Deed of Trust,
or (b) any agreement or stipulation between any subsequent owner or owners of
the Property and the Beneficiary, or (c) the Beneficiary extending the time of
payment or modifying the terms of this Deed of Trust or any of the other Loan
Documents without first having obtained the consent of the Grantor or such other
Person. Regardless of consideration, and without the necessity for any notice to
or consent by the holder of any subordinate Lien on the Property, the
Beneficiary may release any Person at any time liable for any of the Obligations
or any part of the security for the Obligations, and may extend the time of
payment or otherwise modify the terms of this Deed of Trust or any of the other
Loan Documents without in any way impairing or affecting the Lien of this Deed
of Trust or the priority of this Deed of Trust over any subordinate Lien. The
holder of any subordinate Lien shall have no right to terminate any Lease
regardless of whether or not such Lease is subordinate to this Deed of Trust.
The Beneficiary may resort to the security or collateral described in this Deed
of Trust or any of the other Loan Documents in such order and manner as the
Beneficiary may elect in its sole discretion.
Section 7.10. Waivers and Agreements Regarding Remedies. To the full extent
the Grantor may do so, the Grantor hereby:
(a) agrees that it will not at any time plead, claim or take advantage
of any Laws now or hereafter in force providing for any appraisement,
valuation, stay, extension or redemption, and waives and releases all
rights of redemption, valuation, appraisement, stay of execution, extension
and notice of election to accelerate the Obligations;
(b) waives all rights to a marshalling of the assets of the Grantor,
including without limitation, the Property, or to a sale in the inverse
order of alienation in the event of a foreclosure of the Property, and
agrees not to assert any right under any Law pertaining to the marshalling
of assets, the sale in inverse order of alienation, the exemption of
homestead, the administration of estates of decedents, or other matters
whatsoever to defeat, reduce or affect the right of the Beneficiary under
the terms of this Deed of Trust to a sale of the Property without any prior
or different resort for collection, or the right of the Beneficiary to the
payment of the Obligations out of the proceeds of sale of the Property in
preference to every other claimant whatsoever;
(c) waives any right to bring or utilize any defense, counterclaim or
setoff, other than one which denies the existence or sufficiency of the
facts upon which any foreclosure action is grounded. If any defense,
counterclaim or setoff, other than one permitted by the preceding clause,
is timely raised in a foreclosure action, such defense, counterclaim or
setoff shall be dismissed. If such defense, counterclaim or setoff is based
on a Claim which could be tried in an action for money damages, such Claim
may be brought in a separate action which shall not thereafter be
consolidated with the foreclosure action. The bringing of such separate
action for money damages shall not be deemed to afford any grounds for
staying the foreclosure action; and
(d) waives and relinquishes any and all rights and remedies which the
Grantor may have or be able to assert by reason of the provisions of any
Laws pertaining to the rights and remedies of sureties.
Section 7.11. Setoff. The Beneficiary may set off against and apply any
funds of the Grantor on deposit with, or under the control of, the Beneficiary
to the payment of the Obligations, without Notice and without resort to any
judicial proceeding.
Article VIII. The Trustee.
Section 8.01. Liability of the Trustee. The Trustee shall have no liability
or responsibility for, and make no warranties in connection with, the validity
or enforceability of any of the Loan Documents or the description, value or
status of title to the Property. The Trustee shall be protected in acting upon
any notice, request, consent, demand, statement, note or other paper or document
believed by them to be genuine and to have been signed by the party or parties
purporting to sign the same. The Trustee shall not be liable for any error of
judgment, nor for any act done or step taken or omitted, nor for any mistakes of
law or fact, nor for anything which the Trustee may do or refrain from doing in
good faith, nor generally shall the Trustee have any accountability hereunder
except for willful misconduct or gross negligence. The powers and duties of the
Trustee hereunder may be exercised through such attorneys, agents or servants as
the Trustee may appoint, and the Trustee shall have no liability or
responsibility for any act, failure to act, negligence or willful conduct of
such attorney, agent or servant, so long as they were selected with reasonable
care. In addition, the Trustee may consult with legal counsel selected by them
and the Trustee shall have no liability or responsibility by reason of any act
or failure to act in accordance with the opinions of such counsel. The Trustee
may act hereunder and may sell or otherwise dispose of the Property or any part
thereof as herein provided, although the Trustee have been, may now be or may
hereafter be, attorneys, officers, agents or employees of the Beneficiary, in
respect of any matter of business whatsoever. The Trustee, however, shall have
no obligation to sell all or any part of the Property following an Event of
Default or to take any other action authorized to be taken by them hereunder
except upon the demand of the Beneficiary.
Section 8.02. Substitution of Trustee. etc. The Beneficiary shall have, and
is hereby granted with warranty of further assurances, the irrevocable power to
appoint a new or replacement or substitute Trustee or Trustees. Such power may
be exercised at any time without notice, without cause and without specifying
any reason thereof or, by filing for record in the office where this Deed of
Trust is recorded a Deed of Appointment. The power of appointment of a successor
Trustee or Trustees may be exercised as often as and whenever the Beneficiary
may choose, and the exercise of the power of appointment, no matter how often,
shall not be an exhaustion thereof. Upon the recordation of such Deed or Deeds
of Appointment, the Trustee or Trustees so appointed shall thereupon, without
any further act or deed of conveyance, become fully vested with identically the
same title and estate in and to the Property and with all the rights, powers,
trusts and duties of their, his or its predecessor in the trust hereunder with
like effect as if originally named as Trustee or as one of the Trustees
hereunder. Whenever in this Deed of Trust reference is made to the Trustee, it
shall be- construed to mean the Trustee or Trustees for the time being, whether
original or successors or successor in trust. All title, estate, rights, powers,
trusts and duties hereunder given or appertaining to or devolving upon the
Trustee shall be in each of the Trustees then serving hereunder so that any
action hereunder or purporting to be hereunder of any one of the original or any
successor Trustee shall for all purposes be considered to be, and as effective
as, the action of all the Trustees.
Article IX. Miscellaneous.
Section 9.01. Application of Moneys. Whenever it is provided in this Deed
of Trust for any moneys to be applied to payment of the Obligations, and no
express order of payment is set forth, such moneys shall be applied to the
Obligations in such order and manner as the Beneficiary may determine in its
sole discretion.
Section 9.02. Further Assurances. At any time, and from time to time, upon
request by the Beneficiary, the Grantor will, at the Grantor's expense, (a)
correct any defect, error or omission which may be discovered in the form or
content of any of the Loan Documents, and (b) make, execute, deliver and record,
or cause to be made, executed, delivered and recorded, any and all further
instruments, certificates, and other documents as may, in the opinion of the
Beneficiary, be necessary or desirable in order to complete, perfect or continue
and preserve the Lien of this Deed of Trust. Upon any failure by the Grantor to
do so, the Beneficiary may make, execute and record any and all such
instruments, certificates and documents for and in the name of the Grantor, all
at the sole expense of the Grantor, and the Grantor hereby irrevocably appoints
the Beneficiary the agent and attorney-in-fact of the Grantor to do so, this
appointment being coupled with an interest.
Section 9.03. Notices. All Notices shall be deemed to have been received
when delivered by hand, when delivered to an overnight courier, or when
deposited in the mail in the manner provided for in the definition of Notices
set forth in Article I above.
Section 9.04. Successors and Assigns. All of the grants, covenants, terms,
provisions and conditions of this Deed of Trust shall run with the Land and
shall apply to and bind the successors and assigns of the Grantor (including any
permitted subsequent owner of the Property), and inure to the benefit of the
Beneficiary, its successors and assigns and to the successors in trust of the
Trustee.
Section 9.05. No Warranty by Beneficiary or Trustee. By inspecting the
Property or by accepting or approving anything required to be observed,
performed or fulfilled by the Grantor or to be given to the Beneficiary or the
Trustee pursuant to this Deed of Trust or any of the other Loan Documents, the
Beneficiary and the Trustee shall not be deemed to have warranted or represented
the condition, sufficiency, legality, effectiveness or legal effect of the same,
and such acceptance or approval shall not constitute any warranty or
representation with respect thereto by the Beneficiary or the Trustee.
Section 9.06. Amendments. This Deed of Trust may not be modified or amended
except by an agreement in writing, signed by the party against whom enforcement
of the change is sought.
Section 9.07. Illegality. If fulfillment of any provision of this Deed of
Trust or any transaction related hereto shall at any time involve transcending
the limit of validity prescribed by Law, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein contained, other than the provisions requiring the Grantor to
pay the Obligations, operates or would prospectively operate to invalidate this
Deed of Trust in whole or in part, then such clause or provision only shall be
void, as though not herein contained, and the remainder of this Deed of Trust
shall remain operative and in full force and effect; and if such clause or
provision requires the Grantor to pay any of the Obligations, then at the sole
option of the Beneficiary, all of the Obligations shall become due and payable.
Section 9.08. Governing Law. This Deed of Trust is being executed and
delivered in the State and shall be construed, governed and enforced in
accordance with the Laws in effect from time to time in the State.
IN WITNESS WHEREOF, the undersigned Grantor has hereto executed this
Deed of Trust under seal, as a specialty, on the day and year first above
written.
WITNESS/ATTEST: ▇▇▇▇▇▇ INDUSTRIES, INC., a Maryland
Corporation
___________________________ By:____________________________(Seal)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President and Chief Financial Officer
GRANTOR
STATE OF MARYLAND, COUNTY OF ______________________, TO WIT:
I HEREBY CERTIFY that on this ____ day of ______________, 2002, before me,
the subscriber, a Notary Public in and for the State and County aforesaid,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, the Vice President and Chief Financial
Officer of ▇▇▇▇▇▇ Industries, Inc., a Maryland corporation, known to me (or
satisfactorily proven to be the person whose name is subscribed to the within
instrument), and acknowledged that he executed the same in said capacity for the
purposes therein contained.
WITNESS my hand and Notarial Seal.
----------------------------------------
NOTARY PUBLIC
My Commission Expires:
---------------------------------------
I, the undersigned, an attorney duly admitted to practice law before the
Court of Appeals of Maryland, do hereby certify that the foregoing document was
prepared by me or under my supervision.
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
EXHIBIT A
All that tract or parcel of ground, together with all the rights, ways,
alleys, waters, privileges, appurtenances and advantages to the same belonging
or in anywise appertaining, situate along the East side of the right of way of
the Pennsylvania Railroad at its intersection with Nursery Road, in District No.
26, Washington County, Maryland, beginning at an iron pipe in the North marginal
line of York Road, said pipe being in the 11th line of the deed from ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and wife to ▇▇▇▇▇ ▇. ▇▇▇▇▇ dated January 16, 1908, and recorded in Liber
127, folio 499, one of the Land Records of Washington County, and running thence
abutting the end of York Road and binding on Homewood Development South
00(degree) .05' East 212.45 feet, thence leaving Homewood and running along the
existing fence line North 89(degree) 58' West 778.3 feet to the East marginal
line of the right of way of the Pennsylvania Railroad at its intersection with
Nursery Road, thence along said East marginal line North 33(degree) 59' East
1118.38 feet to intersect the South marginal line of Piper's Lane, thence
leaving the Railroad right of way and running along said South marginal line
North 80(degree) 25' East 335.33 feet to a post, thence leaving Piper's Lane and
running along the existing fence lines South 18(degree) 23' West 374.0 feet,
thence South 14(degree) 30' West 158.4 feet to a post, thence South 11(degree)
14' West 104.8 feet to a stake at or near the end of the 10th line of the
aforementioned deed and at the Northwest corner of the lands now or formerly of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and wife, thence with a portion corner of the lands now or
formerly of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and wife, thence with a portion of the 11th line of
said deed and binding on the lands of the said ▇▇▇▇▇, South 00(degree) 05' East
160.14 feet to the place of beginning, containing 11.03 acres of land, more or
less.
BEING all and the same real estate which was conveyed unto The ▇▇▇▇▇▇
Metal Works Company by a Deed from ▇▇▇ ▇▇▇▇▇▇, ▇▇., and ▇▇▇▇ ▇. ▇▇▇▇▇▇, his
wife, dated February 4, 1966, and recorded among the Land Records of Washington
County, Maryland, in Liber 444, folio 358; The ▇▇▇▇▇▇ Metal Works Company having
filed Articles of Amendment on November 22, 1995, at the Maryland State
Department of Assessments and Taxation, whereby its corporate name was changed
to ▇▇▇▇▇▇ Industries, Inc.
PROMISSORY NOTE
Borrower: ▇▇▇▇▇▇ Industries, Inc. Lender: Bank of America, N.A.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ c/o MD Commercial Loan Processing
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NC1-014-13-02
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Principal Amount: $1,000,000.00 Date of Note: August 15, 2001
PROMISE TO PAY. ▇▇▇▇▇▇ Industries, inc. ("Borrower") promises to pay to Bank of
America, NA. ("Lender"), or order, In lawful money of the United States of
America, the principal amount of One Million & 00/100 Dollars ($1,000,000.00) or
so much as may be outstanding, together with interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated from the date of
each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan In one payment of all outstanding principal
plus all accrued unpaid interest on March 31, 2002. In addition, Borrower will
pay regular monthly payments of all accrued unpaid Interest due as of each
payment date, beginning September 30, 2001, with all subsequent Interest
payments to be due on the last day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any
unpaid collection costs and any late charges, then to any unpaid interest, and
any remaining amount to principal. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
Interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance Is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note Is subject to change from
time to time based on changes in an independent index which is the 9.JBOR Daily
Floating Rate" which is the fluctuating rate of interest (rounded upwards, if
necessary to the nearest 1,100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the 1 month London interbank offered rate for deposits In
United States Dollars at approximately 11 .00 a.m. (London time) on the second
preceding business day, as adjusted from time to time in Lender's sole
discretion for then--applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs; if for any reason such rate is not
available, the term "L1BOR Daily Floating Rate" shall mean the fluctuating rate
of Interest equal to the rate of interest (rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBQ Page as the 1 month London
interbank offered rate far deposits in United States Dollars at approximately
11:00 a.m. (London time) on the second preceding day, as adjusted from time to
time In Lender's sale discretion for then--applicable reserve requirements,
deposit Insurance assessment rates and other regulatory costs; provided,
however, if more than one rate Is specified on Reuters Screen LIBO page, the
applicable rate shall be the arithmetic mean of all such rates (the "Index").
The Index Is not necessarily the lowest rate charged by Lender on Its loans.
lithe Index becomes unavailable during the term of this loan, Lender may
designate a substitute Index after notice to Borrower. Lender will tell Borrower
the current index rate upon Borrower's request. The Interest rate change will
not occur more often than each date of such change in the Index. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate to be applied to the unpaid principal balance of this Note will be
at a rate of 3.200 percentage points over the Index. NOTICE: Under no
circumstances will the Interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than It Is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid Interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment Instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or Imitations or as
full satisfaction of a disputed amount must be mailed or delivered to: Bank of
America, NA. NC1-014-13-02, ▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
4.000% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAUT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable Interest rate on this Note to 6.200 percentage points over
the Index. The interest rate will not exceed the maximum rate permitted by
applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower falls to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained In this Note or in any Of the
related documents or to comply with or to perform any term, obligation,
covenant or condition contained In any other agreement between Lender and
Borrower.
Default In Favor of Third Parties. Borrower or any Grantor defaults under
any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, In favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's ability
to repay this Note or perform Borrower's obligations under this Note or any
of the related documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note or
the related documents is false or misleading In any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, or a trustee or receiver is appointed for Borrower or for
all or a substantial portion of the assets of Borrower, or Borrower makes a
general assignment for the benefit of Borrower's creditors, or Borrower
flies for bankruptcy, or an Involuntary bankruptcy petition Is filed
against Borrower and such involuntary petition remains undismissed for
sixty (60) days.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This Includes
a garnishment of any of Borrower's accounts, Including deposit accounts,
with Lender. However, this Event of Default shall not apply if there Is a
good faith dispute by Borrower as to the validity or reasonableness of the
claim which Is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, In an amount determined by Lender, In
its sole discretion, as being an adequate reserve or bond for the dispute.