FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (the "Agreement") is made this 30th day of
June, 2005, by and among UNITED BANK, a Virginia banking institution (the
"Bank" or "Lender"), and XXXXXXXX INDUSTRIES, INC., a Virginia corporation
with offices at 0000 X.X. Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000; INSURANCE
RISK MANAGEMENT GROUP, INC., a Virginia corporation; PIEDMONT METAL
PRODUCTS, INC., a Virginia corporation, XXXXXXXX BRIDGE COMPANY., a
Virginia corporation, WII REALTY MANAGEMENT, INC., a Virginia corporation,
XXXXXXXX STEEL ERECTION COMPANY, INC., a Virginia corporation, GREENWAY
CORPORATION, a Maryland corporation, XXXXXXXX EQUIPMENT CORPORATION, a
District of Columbia corporation (collectively, "Original Borrower") and
S.I.P., INC. OF DELAWARE, a Delaware corporation ("S.I.P."; collectively,
with "Original Borrower", the "Borrower"), with the consent of XXXXXXXX
FAMILY LIMITED PARTNERSHIP, a Virginia limited partnership ("WFLP") and
XXXXX X. XXXXXXXX, XX., individually.
RECITALS:
A. As more fully provided in the underlying loan documents, on or
about April 16, 1999, the Bank made a revolving loan to Original Borrower
in the original principal amount of $2,500,000, evidenced by Revolving
Credit Note No. 3 of even date therewith bearing initial interest at prime
plus 1.25%, as thereafter amended and restated, from time to time (the
Revolving Loan), secured by, among other things, business assets pledged
under a Revolving Credit and Term Loan Agreement and a related Security
Agreement of even date, as thereafter amended, from time to time, and is
also secured by land in Manassas and Bedford, Virginia pledged to the Bank
under deeds of trust on the respective properties (the "Manassas Deed of
Trust" and the "Bedford Deed of Trust", respectively). This loan is
further secured by common stock of S.I.P. Inc. of Delaware, a Delaware
corporation, under a Pledge Agreement dated August 31, 2000,. The sum of
$2,529,016.70 was due on the Revolving Loan at May 12, 2005, when the Bank
made demand for payment, plus legal fees and costs, which are additional.
Interest and other fees and charges continue to accrue thereafter, and as
of the date hereof. Borrower acknowledges that this loan is matured and is
now fully due and owing, without defense, offset or counterclaim.
B. As more fully provided in the underlying loan documents, on or
about April 16, 1999, the Bank made a draw term loan to Original Borrower,
due April 1, 2014, evidenced by Term Note No. 1 in the amount of $2,260,750
of even date, initially bearing interest at 8.7%, as amended, from time to
time, secured by, among other things, the same collateral as secures the
Revolving Loan. The sum of $1,848,996.42,833 was due and owing on this
loan (the "Term Loan No. 1") as of May 12, 2005, when demand for payment
was made by the Bank ,plus legal fees and costs, which are additional.
Interest and other charges continue to accrue thereafter and as of the date
hereof. Borrower acknowledges that this loan has now been accelerated by
the Bank and is now fully due and owing, without defense, offset or
counterclaim.
C. As more fully provided in the underlying loan documents, on or
about April 16, 1999, the Bank made a second term loan to Original Borrower
evidenced by a promissory note in the original principal amount of
$639,250, bearing interest at 8.7%, as amended, from time to time, which
loan (Term Loan No. 2), due April 1, 2009, secured by, among other things,
the same collateral as secures the Revolving Loan. The sum of $314,221.29
was due on this loan as of May 12, 2005, when notice of default and demand
for payment of this loan was made by the Bank, plus legal fees and costs,
which are additional. Interest and other charges continue to accrue
thereafter and as of the date hereof. Borrower acknowledges that this loan
has been accelerated by the Bank and is now fully due and owing, without
defense, offset or counterclaim.
D As more fully provided in the underlying loan documents, on or
about August 31, 2000, the Bank made a further term loan to Original
Borrower in the original principal amount of $250,000, evidenced by Term
Note No. 6 of even date, bearing interest at prime plus 1%, due September
1, 2005, (Term Loan No. 6), as amended, from time to time, which loan is
secured by, among other things, the same collateral which secures the
Revolving Loan. The sum of $35,369.14 was due on this loan as of May 12,
2005, when notice of default and demand for payment was made by the Bank,
plus legal fees and costs, which are additional. Interest and other
charges continue to accrue thereafter and as of the date hereof. Borrower
acknowledges that this loan has been accelerated by the Bank and is now
fully due and owing, without defense, offset or counterclaim.
E. As more fully provided in the underlying loan documents, on or
about May 1, 2001, the Bank made a further term loan to Original Borrower
in the original principal amount of $1,000,000, evidenced by a Term Note
No. 7 of even date, bearing interest at prime plus 1%, due May 1, 2006
(Term Loan No. 7), which loan is secured by, among other things, the same
collateral which secures the Revolving Loan. The sum of $211,111.83 was
due on this loan as of May 12, 2005, when notice of default and demand for
payment was made by the Bank, plus legal fees and costs, which are
additional. Interest and other charges continue to accrue thereafter and
as of the date hereof. Borrower acknowledges that this loan has been
accelerated by the Bank and is now fully due and owing, without defense,
offset or counterclaim.
F. On or about April 4, 2002, the Bank made a term loan to
Xxxxxxxx Industries, Inc. evidenced by a promissory note of even date in
the amount of $43,000, bearing interest at 7.5%, due April 4, 2005 (the
Xxxxxxxx Industries Loan), secured by equipment pledged under a Commercial
Security Agreement dated April 4, 2002. The sum of $3,060.29 was due on
this loan as of May 12, 2005, when the Bank gave notice of default and
demand for payment, plus legal fees and costs, which are additional.
Interest and other charges continue to accrue thereafter and as of the date
hereof. Borrower acknowledges that this loan has matured and is now fully
due and owing, without defense, offset or counterclaim.
G. On or about June 4, 2001, the Bank made a demand loan to
Xxxxxxxx Equipment Corporation (the Xxxxxxxx Equipment Loan), evidenced by
a promissory note of even date in the amount of $34,500, bearing interest
at 8.25%, due on demand and, if no demand is made, on June 4, 2006. The
sum of $11,483.75 was due on this loan as of May 12, 2005, when the Bank
gave notice of default and demand for payment, plus legal fees and costs,
which are additional. Interest and other charges continue to accrue
thereafter and as of the date hereof. Borrower acknowledges that this loan
has been accelerated by the Bank and is now fully due and owing, without
defense, offset or counterclaim.
H. On or about January 12, 2004, the Bank made a term loan to
Xxxxxxxx Steel Erection Co. evidenced by a promissory note of even date in
the amount of $31,083.86. bearing interest at 5.75%, due January 12, 2008
(the Xxxxxxxx Steel Erection Co. Loan), which loan is secured by a 2000
Ford F-250 pickup truck under a Commercial Security Agreement of even date.
The sum of $24,189.29 was due on this loan as of May 12, 2005, when the
Bank gave notice of default and demand for payment, plus legal fees and
costs, which are additional. Interest and other charges continue to accrue
thereafter and as of the date hereof. Borrower acknowledges that this loan
has been accelerated by the Bank and is now fully due and owing, without
defense, offset or counterclaim.
I. On or about June 29, 2000, the Bank made a term loan to
Xxxxxxxx Bridge Company in the original amount of $87,948, bearing interest
at 9.5%, secured by business assets, principally accounts and equipment,
pledged under a Commercial Loan and Security Agreement dated June 29, 2000,
due 29, 2005. The sum of $12,551.49 was due on this loan as of May 12,
2005, when the Bank gave notice of default and demand for payment, plus
legal fees and costs, which are additional. Interest and other charges
continue to accrue thereafter and as of the date hereof. Borrower
acknowledges that this loan has been accelerated by the Bank and is now
fully due and owing, without defense, offset or counterclaim.
J. On or about May 13, 2002, the Bank made a term loan to Borrower
(i.e., to S.I.P. Inc. of Delaware, and the others noted above) evidenced by
a promissory note of even date in the amount of $900,000, reduced to
$765,000 under a Change In Terms Agreement dated August 2, 2002, bearing
interest at prime plus .5%, due August 2, 2007 (the SIP Loan), which loan
is secured by business assets pledged under a Commercial Security Agreement
dated May 13, 2002. The sum of $332,247.05 was due on this Loan as of June
29, 2005, plus legal fees and costs, which are additional. Interest and
other charges continue to accrue. Borrower, by its signature below, agrees
to treat this loan as having been accelerated by the Bank, and as now fully
due and owing, without defense, offset or counterclaim.
X. Xxxxxxxx Industries, Inc. and other obligors are further
indebted to the Bank in the sum of $114,185 as of May 19, 2005, pursuant to
the terms of an Application and Agreement For Irrevocable Standby Letter of
Credit No. 2351666-5001 dated March 1, 2004, plus legal fees and costs,
which are additional. Borrower acknowledges that this obligation has been
declared due by the Bank and is now fully due and owing, without defense,
offset or counterclaim
L. The various obligations and indebtedness of Borrower, Original
Borrower, Xxxxxxxx Bridge Company, Xxxxxxxx Equipment Corporation and
Xxxxxxxx Steel Erection Company referred to in recitals A-K above is
hereinafter referred to, collectively, as the "Indebtedness." The
Indebtedness, and the other obligations and covenants and duties of the
Borrowers under the associated loan documents (the "Loan Documents"), are
hereinafter referred to, collectively, as the "Obligations".
M. Borrower, and each party hereto which is an obligor to the Bank
on the Indebtedness or any part thereof, together with Borrower's
principal, Xxxxx Xxxxxxxx, Jr. (the "Guarantor") have requested the Bank to
forbear from exercising its rights under the various loan documents which
evidence the Indebtedness (collectively, the "Loan Documents") and seek to
induce the Bank to enter into this Agreement by their covenants and
promises herein. The Guarantor likewise seeks to induce Bank to enter into
this Agreement, will benefit directly and indirectly from Bank's entry into
this Agreement and such benefit has a reasonably equivalent value to
liabilities and obligations incurred by Guarantor under his Guarantee
Agreement of even date herewith.
N. The Bank is willing to forbear from exercising its legal
remedies under the Loan Documents, under and on the terms and conditions
hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The recitals above are acknowledged to be true and
correct.
2. Definitions and Interpretation.
(a) Defined Terms. Capitalized terms used in this Agreement
but not defined in this Agreement shall have the meanings given to them in
the Loan Documents. Terms defined in the singular have corresponding
meanings in the plural, and vice versa. The word "including" means
"including without limitation".
(b) Interpretation. Unless otherwise indicated, references
to Sections, Exhibits and Schedules are to the Sections of, and Exhibits
and Schedules to, this Agreement. Unless the context clearly requires
otherwise, references in this Agreement to any other agreements, documents
or instruments shall be references to such agreements, documents and
instruments as amended, modified or supplemented from time to time, and
references in this Agreement to laws, statutes, rules, regulations or other
governmental restrictions, standards or requirements shall be references to
such laws, statutes, rules, regulations and other governmental
restrictions, standards or requirements as in effect from time to time.
Headings in this Agreement are for ease of reference only and shall not be
used to interpret the terms and conditions hereof.
3. Guaranty Agreement. To induce Bank to enter into this
Agreement, Xxxxx Xxxxxxx, Xx. (the "Guarantor") shall execute and deliver
his personal Guaranty, in the form attached hereto as Exhibit A (the
"Guaranty") on even date, and he shall deliver his most recent personal
financial statement to the Bank, dated as of the date hereof, by no later
than July 15, 2005.
4. S.I.P. Mortgage. S.I.P., in consideration of the Bank's entry
into this Agreement, and as security for all of the Indebtedness, agrees to
place a $750,000 first mortgage on the property shown in Exhibit B hereto
by no later than July 15, 2005. If the mortgage is not timely placed, or
if the subject parcels, collectively, does not appraise for the Bank, post-
Closing, with a fair market value of at $750,000, it shall be an event of
default under this Agreement unless the Guarantor forthwith delivers a
further guarantee in the amount of the shortfall. The Guarantor also fully
guarantees the extent, validity and priority of this Deed of Trust, and
shall pay the Bank $750,000 if this deed of trust is ever voided or set-
aside, or held to be invalid security for the Obligations, or any reason,
as more fully set forth in the Guaranty.
5. Increase to Welllington Deed of Trust. The existing Deed of
Trust dated July 19, 2000, held by the Bank, as successor to Century
National Bank, on 17.5 acres of real property owned by the Xxxxxxxx Family
Limited Partnership, a Virginia limited partnership, adjoining the
company's headquarters in Manassas, VA, at 0000 Xxxxxxxxxx Xxxx, the
property description for which is attached as Exhibit C, which deed of
trust secures indebtedness held by the Bank under that certain promissory
note from the Xxxxxxxx Family Limited Partnership in the original principal
amount of $500,000 to Century National Bank dated July 19, 2000, as amended
by an Allonge And Modification To Promissory Note dated July 19, 2003,
between the Bank and the Xxxxxxxx Family Limited Partnership, will be
raised from $400,000 to $1.4 million no later than July 15, 2005. In the
event that this property does not appraise for the Bank, post-Closing, such
that the Bank's lien of $1.4 million, as so increased, is supported by
equity of $1.4 million, on a fair market value basis, this shall be a
default under this Agreement unless the Guarantor delivers a further
guarantee in an amount equal to the shortfall. The Guarantor also fully
guarantees to the Bank the extent, validity and priority of this Deed of
Trust, and its security for the Indebtedness, and shall pay the Bank $1.0
million if this deed of trust is ever voided or set-aside, or held to be
invalid security for the Obligations, for any reason, as more fully set
forth in the Guaranty.
6. Pay-down at Closing on June 30, 2005. Bank to receive a
$308,204.63 cash payment at Closing, which shall be on June 30, 2005, no
later than noon. Of this sum, $216,452.36 shall come from sale of real
property in Bedford, VA on which the Bank has a first lien, with the
balance to be paid by check in the amount of $91,752.27.
7. Monthly payments Post-Closing. Borrower, in consideration of
the Bank's forbearance and entry into this Agreement, shall monthly make
payments to the Bank, after June 30, 2005, in the amounts shown on the
schedule attached hereto as Exhibit D, as-if the Indebtedness had not been
accelerated. By accepting these payments, the Bank does not waive its
prior acceleration of the Indebtedness or de-accelerate the Indebtedness.
8. Supplemental Pay-down. Bank to receive a further supplemental
principal pay-down of $750,000 by no later than September 30, 2005, such
pay-down to come from sources outside collateral presently pledged to the
Bank (including hereunder) or the products and proceeds thereof. Proof of
the source of this supplemental pay-down to be given to the Bank. The
Guarantor absolutely guarantees this obligation, which guarantee is a
guarantee of payment, not of collection.
To the extent, if any, that the $750,000 payment is funded by the
sale-leaseback of any property currently owned by any of the Borrowers,
rental payments by any one or more of the Borrowers to the purchaser-
landlord after the sale-leaseback will be subordinated to the payment of
the Indebtedness and other Obligations to the Bank, in full, provided that
reasonable monthly rent may be paid to the purchaser-landlord provided that
there is no default under the terms of this Agreement.
The Bank will advise the Borrowers which notes, letter of credit
obligations or other Obligations included within the Indebtedness will be
paid down with the proceeds of the $750,000 supplemental payment, in the
Bank's sole discretion. However, the Bank will give reasonable deference,
in making the Bank's ultimate decision, to the wishes of the Borrower
regarding which Obligations should be satisfied from this payment.
9. Cross-collateralization. Borrower agrees that all collateral
pledged to the Bank shall be cross-collateralized and serve as security for
any and all Indebtedness owed to the Bank.
10. Forbearance. Subject to the provisions of this Forbearance
Agreement and provided that there is no Forbearance Default hereunder, the
initial term of the Bank's forbearance shall be from the date hereof
through September 30, 2005, provided, however, that if there is no default
hereunder, and, without limitation, the Bank receives the supplemental pay-
down of $750,000 by September 30, 2005, as required by the terms hereof,
the term of the Bank's forbearance shall extend to February 28, 2006.
Each of the following shall constitute a "Forbearance Default":
(a) Any further Event of Default, beyond cure, under the
governing loan documents for the Indebtedness shall occur after the date
hereof;
(b) Borrower shall fail to observe or perform any monetary
covenant or obligation contained in this Agreement;
(c) Any party to this Agreement shall fail to observe or
perform any non-monetary covenant or obligation contained in this
Agreement, which default shall continue for five (5) business days after
notice thereof;
(d) Any representation or warranty of any party hereto or in
any document delivered pursuant to this Agreement shall prove to be
materially false, misleading or incorrect when made;
(e) Guarantor shall fail to observe or perform any of his
obligations or covenants under this Agreement or the Guaranty;
(f) Borrower or the Guarantor shall suffer
a material adverse change in financial position, as compared to the date
hereof, as determined by the Bank; or
(g) An involuntary bankruptcy petition shall be filed against
Borrower or any member or entity thereof;
(h) Borrower or any member or entity thereof shall make an
assignment for the benefit of creditors or file a voluntary bankruptcy
petition;
(i) Any action shall be taken, by any person, to challenge, void or set
aside the Bank's liens, or its rights under the Loan Documents, this
Agreement or under the Guarantee thereof by the Guarantor, which action is
not dismissed within ten (10) business days of the notice thereof.
(j) The Wilmington property pledged to the Bank hereunder does not
appraise for the Bank, on a market value basis, within sixty (60) days
post-Closing, to show equity of at least $750,000 supporting the Bank's
lien,;
(k) The Wellington property, whose deed of trust in favor of the Bank
is to be raised to $1.4 million under the terms of this Agreement, does not
appraise for the Bank, on a fair market value basis, within sixty (60) days
post-Closing, to show the Bank's lien as supported by equity of at least
$1.4 million.
Upon expiration of the Forbearance Period, the Lender may institute such
collection proceedings and such other remedies, contractual, legal or
equitable, against Borrower and/or the Guarantor, as the Lender, in its
sole discretion, may elect.
11. Accountant's Review. During the Forbearance Period the Lender
shall have the right to have a certified public accounting firm of its
choice complete a collateral audit of the Borrower and review the Borrower'
books and records. The Borrower shall cooperate fully with any such audit
or review and shall pay all reasonable costs associated therewith, within
thirty (30) days of demand for the same.
12. Legal Fees; Costs. Borrower shall pay all reasonable legal
fees and costs, and all appraisal and other costs, incurred by the Bank in
preparing and documenting and closing this Agreement and the obligations of
the parties hereunder, or that have been or may after the date of this
Agreement be incurred by the Bank in connection with the failure of
Borrower to timely satisfy its obligations under the Loan Documents,
including, without limitation, all reasonable legal fees and costs incurred
by the Bank in connection with the preparation and any enforcement of its
rights under this Agreement. All parties agree to consent to the
jurisdiction of the Circuit Courts for Fairfax and Prince Xxxxxxx County,
Virginia with respect to any dispute over the amount of such fees, and they
further consent to the jurisdiction of the Prince Xxxxxxx and Fairfax
County Circuit Courts for all purposes of this Agreement.
13. Representations and Warranties. To induce the Lender to enter
into this Agreement, Borrower, WFLP and the Guarantor represent and warrant
as follows:
(a) Incorporation, Good Standing and Qualification.
Borrower, and each member or entity thereof, is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, as set forth above, has the corporate
power and authority to own its assets and to transact the business in which
it is now engaged or in which it is proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the laws of
each other jurisdiction in which such qualification is required and in
which the failure to so qualify could have a material adverse effect on its
business, financial position, results of operations, property or prospects.
(b) Power and Authority. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
action on the part of each signatory hereto and do not and will not (i)
require the consent or approval of any third person or any further action
of Borrower, its shareholders, the Guarantor or the WFLP; (ii) result in a
material breach or constitute a default under any material agreement or
instrument to which such signatory is a party or by which such signatory is
bound or such signatory's properties may be affected; (iii) result in, or
require, the creation or imposition of any mortgage, pledge, assignment,
security interest, encumbrance, lien or charge of any kind, any conditional
sale or other title retention agreement or any lease in the nature thereof
or any agreement to give any of the foregoing (any of the foregoing a
"Lien") upon or with respect to any of the properties now or hereafter
owned or acquired by such signatory, except as specifically permitted under
the Loan Documents, the Guarantee Agreement from the Guarantor discussed
above or the terms hereof, or (iv) cause such signatory to be in default
under any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to it.
(c) Legally Enforceable Agreement. This Agreement is
enforceable against each signatory in accordance with its terms.
(d) Financial Condition. Neither Borrower, the WFLP or
Guarantor will be rendered insolvent or left with unreasonably small
capital as a result of its entry into this Agreement
(e) Full Disclosure. Neither this Agreement, nor any of the
Loan Documents nor any document, certificate or written statement delivered
to the Lender in connection with any of the foregoing or the transactions
contemplated thereby, including, without limitation, the mortgage, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements herein and therein not misleading in the
light of the circumstances under which such statements were made.
(f) No Defenses. Borrower, WFLP and the Guarantor have no
set-off or defenses to their respective obligations to Lender.
(g) Miscellaneous. Borrower, WFLP and the Guarantor each
represent, as to themselves, that (i) they have good title to their
respective assets; (iii) they are solvent on a balance sheet basis,
considering all their assets and liabilities at market value, and will
remain solvent, after their entry into this Agreement and the transactions
contemplated thereby; (iv) they are paying their respective debts as they
become due; (v) they have received fair consideration for their entry into
this Agreement; (vi) they have no intent nor any contemplation of filing
for bankruptcy within one (1) year from the date hereof, or at any time
thereafter; and (vii) they have not entered into this Agreement with actual
intent to hinder, delay or defraud any of their respective creditors.
14. Covenants. The Borrower covenants and agrees with the Lender
that, for the terms of this Agreement, or until Lender is paid in full, if
later:
(a) Accounts and Instruments. Borrower shall maintain all
bank and investment and security accounts only at the Bank, except that
Borrower may maintain local bank accounts for working capital at other
banks if Bank does not have a branch or office within ten (10) miles of
Borrower's business location, provided, however, that such accounts shall
be not exceed one (1) for each such location and each such local account
shall not have more than $50,000 on deposit therein, or as may otherwise be
agreed with the Bank, in writing.
(b) Transfers to Insiders. Borrower shall not (i) make any
loan or advance to any "insider", as that term is defined by the Bankruptcy
Code; (ii) make any payments on any existing insider loans; nor (iii) make
to any insider any payment of any kind, other than salary for current
services, at pay rates no greater than those which existed on June 30,
2005, or, if less, the fair value of such services, except for travel
expenses reimbursed at actual cost, not to exceed two thousand dollars per
month, in the aggregate.
(c) Compliance with Loan Documents. Except to the extent
expressly modified in this Agreement, Borrower shall observe and perform
all covenants and obligations to be observed or performed by it under the
Loan Documents.
15. No Novation, Waivers or Impairment. The parties hereto agree
that neither this Agreement nor any other document executed in accordance
herewith is intended to be a novation of any of the Loan Documents or of
any obligation thereunder. The parties further agree that,:
(a) Subject to Lender's duty to forbear under the terms of this
Agreement, nothing herein shall release or waive any of the Borrowers'
obligations under any of the Loan Documents, which remain in full force and
effect, or impair the validity, perfection or priority of any security
interest or collateral therefore, nor release the obligations of any
guarantee thereof, all of which obligations, security interests,
collateral, duties, rights and guarantees are hereby ratified and affirmed
by the Borrower and the Guarantor, without prejudice to their rights herein
or therein;
(b) Subject to the Lender's duty to forbear under the terms
of this Agreement, nothing herein shall waive or impair any rights, powers
or remedies of the Lender under the Loan Documents, including, without
limitation, any right or remedy of Lender against the Guarantor under his
Guaranty of even date;
(c) Nothing herein shall be construed to constitute an
agreement by the Lender or to require the Lender to extend the Forbearance
Period or grant additional forbearance periods, or to otherwise forbear,
except on the terms hereof;
(d) The Lender shall have the right at any time to take any
action at law or in equity with respect to the Loan Documents and/or the
Guaranty provided that such action is not inconsistent with the terms and
conditions of this Agreement and Lender's duty to forbear under the terms
and conditions hereof, including seeking the entry of such court orders and
judgments as the Lender in its sole discretion deems appropriate to enforce
the terms of this Agreement or to protect its security interests and rights
to repayment under the Loan Documents and the Guaranty.
16. Waivers. The Borrower and the Guarantor hereby renounce and
waive to the fullest extent permitted by law all rights that may be waived
under Article 9 of the Uniform Commercial Code as enacted in the
Commonwealth of Virginia. Without limiting the generality of the
foregoing, the Borrower and the Guarantor hereby renounce any right to
receive notices of any disposition by the Lender of any collateral upon
termination of the Forbearance Period, whether such disposition is by
public or private sale under the UCC or otherwise, and waives any right to
compulsory disposition of such collateral under the UCC. The Guarantor
hereby waives any and all homestead and other exemptions available under
the Code of Virginia, including, without limitation, _ 34-34 of the Code of
Virginia, which protect against or limit the ability of the Bank to seize
their personal assets to satisfy the obligations of the Guarantor to the
Bank.
17. Release of the Lender. In consideration of Lender's entry
into this Agreement, the Borrower and the Guarantor hereby release, remise,
acquit and forever discharge the Lender, the Lender's employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations and related corporate divisions (all of
the foregoing hereinafter called the "Released Parties") from any and all
actions and causes of action, judgments, executions, suits, debts, claims,
demands, liabilities, obligations, damages and expenses, breaches, rights
of setoff, counterclaims and statutory rights, of any and every character,
known or unknown, direct or indirect, liquidated or unliquidated,
contingent or non-contingent, at law or in equity, of every kind or nature,
including any which may arise in a bankruptcy or insolvency proceeding,
whether heretofore or hereafter arising, for or because of any manner of
things done, omitted or suffered to be done by any of the Released Parties
prior to and including the date of execution hereof, arising from or in any
way directly or indirectly related to this Agreement or any of the Loan
Documents or from the performance and payment by Borrower thereunder, or
from the Guarantees of Borrowers' obligations to Lender by the Guarantor,
and also from all other claims, rights, demands or causes of action of any
kind, in law or in equity against the Lender, except for Lenders duties
hereunder and Lender's duties under the Guarantee Agreements (all of the
foregoing hereinafter called, collectively, the "Released Matters").
Borrower and the Guarantor acknowledge that the agreements in this Section
are intended to be in full satisfaction of any and all alleged injuries or
damages arising in connection with the Released Matters, whether known or
unknown, at law or in equity, and that this release is a material
inducement to the Lender's entry into this Agreement. Each of the Borrower
and the Guarantor further represents and warrants to the Lender that it has
not transferred, assigned or otherwise conveyed, or purported to transfer,
assign or otherwise convey, any right, title or interest in the Released
Matters as to any Person and that the foregoing constitutes a full and
complete release of all Released Matters.
18. No Partnership. Nothing herein shall be construed to make the
Lender, the Borrower, WFLP or the Guarantor the agent, partner, or joint
venturer of the other, and the Borrower, WFLP and the Guarantor have no
relationship with Lender other than that of debtor and creditor.
19. Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof and
supersedes any prior or contemporaneous representations or agreements not
contained herein. In entering into this Agreement, each of Borrower, WFLP
and the Guarantor acknowledges that it is not relying on any statement,
representation, warranty, covenant or agreement of any kind made by the
Lender or by any agent or employee thereof, except for the agreements of
the Lender set forth herein. They further acknowledge that Lender will
only be bound by written instruments, duly executed by Lender, and that no
officer, agent or representative of Lender has authority to act in any
other manner.
20. Notices. All notices, demands or communications required or
permitted under this Agreement or under any of the Loan Document shall be
given in writing and delivered personally, by hand, or sent via Federal
Express or UPS, next business morning delivery, to:
If to the Lender:
United Bank
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attn. Xx. Xxxxxx Xxxxxx, Market President
Telephone: 000-000-0000
Facsimile: 000-000-0000
with copies to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxx & Green, P.C.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxx X.X. 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Borrower,
WFLP or to the Guarantor:
Xxxxxxxx Industries, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxxxx, III
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxx X. Xxxxxx, Esq.
X.X. Xxx 00
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
21. Construction. The parties acknowledge that all parties and
their counsel have reviewed this Agreement and any rule of construction to
the effect that any ambiguity should be construed against the drafting
party will not be employed in the interpretation of this Agreement or any
amendments hereto. All signatories to this Agreement acknowledge that it
has been negotiated at arms length and in good faith, and that each has
relied upon independent legal counsel of their choice.
22. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding on the parties and their successors and assigns;
provided, however, that this Agreement may not be assigned by any of the
Borrowers without the prior written consent of the Lender.
23. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties on different counterparts, each of
which shall constitute an original and all of which together shall
constitute one and the same agreement.
24. Time of the Essence. Time is of the essence under this
Agreement. Closing must occur by no later than noon on June 30, 2005, and
post-Closing obligations must thereafter timely occur.
25. No Further Encumbrances.. Without derogating from any right,
remedy or other provision contained in this Agreement or the Loan
Documents, Borrower will not pledge, lien or encumber any assets, other
than for purchase money financing or liens in favor of the Bank, until the
Indebtedness due to the Bank has been paid in full.
26. Severability. The unenforceability of any provision of this
Agreement shall not affect the validity, binding effect or enforceability
of any other provision of this Agreement; provided, however, that if any
provision of this Agreement is declared unenforceable against any of the
Borrower or the Guarantor, for any reason, by any court or governmental
body of competent jurisdiction, all agreements, consents and waivers of the
Lender set forth in this Agreement shall, at the option of the Lender, be
deemed null and void ab initio, and the Lender shall, at its election, be
restored to the position it would have occupied, with all rights available
to it, as though such agreements, consents and waivers had never been made.
Without limiting the generality of the foregoing, the Lender shall have all
rights and remedies under the Loan Documents and applicable law and all
rights under its Guarantee Agreement with the Guarantor.
27. Further Assurances, etc. Borrower, WFLP and the Guarantor
agree to take any actions and to execute and deliver any additional
documents which the Lender may reasonably request in order to obtain and
enjoy the full rights and benefits granted to the Lender by this Agreement
and the Loan Documents or guarantees thereof.
28. Specific Performance, Etc. Borrower, WFLP and the Guarantor
stipulates that the Lender's remedies at law, in the event of any default
or threatened default by Borrower, WFLP or by the Guarantor in the
performance of or compliance with any of the terms and provisions of this
Agreement or the Loan Documents or associated Guarantee Agreements to be
observed or performed, are not and will not be adequate, and that such
terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or therein or by an injunction against
the violation of any of the terms or provisions contained herein or therein
or other wise.
29. Jury Trial. Each party irrevocably waives all right to a
trial by jury in any suit, action or other proceeding in respect of its
obligations hereunder or the transactions contemplated hereby.
30. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Virginia, without giving effect to its conflict of laws principles.
31. No waivers. By entering into this Agreement it is agreed that
Lender does not waiver or limit any right it may have against Borrower,
WFLP or the Guarantor, except as may be expressly stated herein, all rights
and remedies of Lender being reserved.
32. Signatures. Faxed signatures shall be accepted for all
purposes, with originals to be provided within three (3) business days
thereafter. This Agreement may be signed in counterparts, each of which so
executed shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument.
33. Expiration. Upon termination or expiration of the Forbearance
Period, Lender is no longer obligated to forbear from exercising any of its
rights and remedies.
IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument as of the day and year set forth above.
ATTEST: UNITED BANK, a Virginia banking institution
___________________ By: __________________
Name: Name:
Title: Its:
ATTEST: XXXXXXXX INDUSTRIES, INCORPORATED,
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: INSURANCE RISK MANAGEMENT GROUP,
INC.,
___________________ By: __________________
Name: Name: : Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: PIEDMONT METAL PRODUCTS, INC.
___________________ By: __________________
Name: Name: : Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: XXXXXXXX BRIDGE COMPANY
___________________ By: __________________
Name: Name: : Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: WII REALTY MANAGEMENT, INC.
___________________ By: __________________
Name: Name: : Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: XXXXXXXX STEEL ERECTION COMPANY,
INC.,
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: GREENWAY CORPORATION
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: XXXXXXXX EQUIPMENT CORPORATION
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
ATTEST: S.I.P. INC. OF DELAWARE
___________________ By: __________________
Name: Name:Xxxxx X. Xxxxxxxx, III
Title: Its: Chairman
SEEN, CONSENTED AND AGREED TO:
ATTEST: XXXXX X. XXXXXXXX, XX., individually
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, Xx.
Title:
ATTEST: XXXXXXXX FAMILY LIMITED PARTNERSHIP
By XXXXXXXX FAMILY CORP., General Partner
___________________ By: __________________
Name: Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Its: President
Exhibit A
GUARANTY
THIS GUARANTY AGREEMENT ("Agreement"), dated June 30, 2005, made by
XXXXX X. XXXXXXXX, XX. ("Guarantor") in favor of UNITED BANK, a Virginia
banking institution ("Bank" or, variously, "Lender).
RECITALS:
A. The Guarantor is a direct or indirect shareholder, and a director
and officer of, among other entities, XXXXXXXX INDUSTRIES, INC., a Virginia
corporation with offices at 0000 X.X. Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000;
INSURANCE RISK MANAGEMENT GROUP, INC., a Virginia corporation; PIEDMONT
METAL PRODUCTS, INC., a Virginia corporation, XXXXXXXX BRIDGE COMPANY., a
Virginia corporation, WII REALTY MANAGEMENT, INC., a Virginia corporation,
XXXXXXXX STEEL ERECTION COMPANY, INC., a Virginia corporation, GREENWAY
CORPORATION, a Maryland corporation, XXXXXXXX EQUIPMENT CORPORATION, a
District of Columbia corporation (collectively, "Original Borrower") and
S.I.P., INC. OF DELAWARE, a Delaware corporation ("S.I.P."; collectively,
with "Original Borrower", the "Borrower").
B. Borrower and Guarantor seek to induce the Bank to enter into a
Forbearance Agreement of even date herewith.
C. Guarantor will derive substantial direct and indirect benefit from
the consummation of and entry by Borrower into the Forbearance Agreement
with the Bank.
C. This Agreement is made by Guarantor to, among other things, induce
the Bank to enter into the Forbearance Agreement.
D. Capitalized terms not otherwise defined herein shall have the
meanings given in the Forbearance Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally
bound, the Guarantor hereby covenants and agrees as follows:
Article I.
Guaranty
1.1 Guaranty. Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to the Bank the full and punctual performance by, and the
obligations, responsibilities and covenants of the following obligations of
Borrower in and under the Forbearance Agreement ("Guaranteed Obligations"):
a. The payment of $750,000, cash, to the Bank, as the supplemental pay-down
called for under _ 8 of the Forbearance Agreement, on or before September
30, 2005. Guarantor agrees to unconditionally pay to the Bank $750,000 if
this payment is not timely received by the Bank.
b. The validity, extent and priority, in favor of the Bank, as additional
security for the Indebtedness and Obligations of Borrower to the Bank, of
the $750,000 first mortgage given to the Bank under _ 4 of the Forbearance
Agreement by S.I.P. Inc. of Delaware, a Delaware corporation. Guarantor
agrees to unconditionally pay to the Bank $750,000 if this deed of trust
is not delivered timely as promised, or if it is ever voided or set-aside
or held to be invalid security for the Indebtedness and Obligations of
Borrower to the Bank, for any reason;
c. The validity, extent and priority, in favor of the Bank, as additional
security for the Indebtedness and Obligations of Borrower to the Bank, of
the deed of trust on the Wellington property granted by Xxxxxxxx Family
Limited Partnership, a Virginia limited partnership, which deed of trust is
raised from $400,000 to $1.4 million under _ 5 of the Forbearance
Agreement. Guarantor agrees to unconditionally pay to the Bank $1,000,000
if this amendment to the deed of trust is not delivered timely as promised,
or if the deed of trust, as so amended, is ever voided or set-aside or held
to be invalid security for the Indebtedness and Obligations of Borrower to
the Bank, for any reason.
1.2 Obligations Absolute. Guarantor agrees that the Guaranteed Obligations
will be performed strictly in accordance with the terms of the Forbearance
Agreement and this Agreement and that the obligations of Guarantor under
this Agreement shall be absolute, unconditional and irrevocable,
irrespective of any of the following:
(a) impossibility of performance on the part of Borrower of the
Guaranteed Obligations;
(b) the failure of Guarantor to receive any benefit from or as a result
of its execution, delivery and performance of this Agreement;
(c) any impairment of any corporation, partnership, joint venture, limited
liability company, limited liability partnership, organization, entity,
authority or natural person ("Person") of any recourse of Guarantor against
Borrower or Xxxxxxxx Family Limited Partnership; or
(d) any bankruptcy, insolvency, reorganization, dissolution or similar
proceedings with respect to, or any change, restructuring or termination of
the corporate or partnership structure or existence of Borrower, Guarantor
or any other Person;
1.3 No Stay. Without limitation of any other provision of this Agreement,
if the time for performance of any Guaranteed Obligations shall at any time
be stayed, enjoined or barred for any reason, Guarantor agrees that, for
purposes of this Agreement and Guarantor's obligations hereunder, the time
for performance of such Guaranteed Obligation shall be deemed to have
occurred.
1.4 Payments. Any payments to be made by Guarantor pursuant to this
Agreement shall be made to Bank without setoff, counterclaim, withholding
or other deduction of any nature.
1.5 Subrogation, etc. Guarantor hereby agrees that all claims it may have
(known and unknown, whether arising by operation of law, by agreement or
otherwise) against Borrower or the Xxxxxxxx Family Limited Partnership,
arising from the existence, payment, performance or enforcement of any of
the obligations of Guarantor under or in connection with this Agreement or
the Forbearance Agreement, shall be subordinate to any claims that Bank may
have against Borrower or against Xxxxxxxx Family Limited Partnership.
1.6 Continuing Agreement; Termination This Agreement is a continuing
guaranty and shall continue in full force and effect until final and
irrevocable performance and fulfillment in full of all Guaranteed
Obligations. Upon such fulfillment of the Guaranteed Obligations, this
Agreement shall terminate and be of no further force and effect.
1.7 Default. Upon Buyer's failure to perform, satisfy or fulfill any of
the Guaranteed Obligations, the obligations of Guarantor under this
Agreement shall be immediately due. Any violation by Guarantor of the
terms, conditions, representations, warranties and covenants set forth
herein, or any contest by Guarantor of the validity or enforcement hereof
or any denial of liability hereunder shall be an event of default under
this Agreement and Bank may, in its sole discretion, take any actions
permitted at law or in equity, or under this Agreement or the Forbearance
Agreement.
Article II.
Representations and Warranties and Additional Covenants
Guarantor represents, warrants and agrees as follows:
2.1 Validity and Enforceability of Guaranty. The execution and delivery of
this Agreement by Guarantor does not, and compliance by Guarantor with the
terms of this Agreement will not, conflict with or contravene any provision
of law or the provisions of any agreement to which Guarantor is a party or
by which he is bound. This Agreement constitutes a legal, valid, and
binding obligation of Guarantor, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditor's rights generally and except as such
enforceability may be limited by applicable equity principles.
2.2 Solvency. Guarantor is solvent and the execution and delivery of this
Agreement and the transactions contemplated hereby will not render
Guarantor insolvent.
2.3 Bankruptcy Intent. Guarantor has no intent (i) to file a voluntary
petition under the Bankruptcy Code or in any manner seek relief,
protection, reorganization, liquidation, dissolution or similar relief for
debtors under any other state, local, federal or other insolvency laws,
either at the present time or at any time hereafter, (ii) to directly or
indirectly cause any involuntary petition to be filed against Guarantor or
directly or indirectly cause the Guarantor to become the subject of any
proceedings pursuant to any state, federal or other insolvency law
providing for the relief of debtors, either at the present time or at any
time hereafter, or (iii) to directly or indirectly cause any interest of
Guarantor to become the subject of any state, federal or other bankruptcy,
dissolution, liquidation or insolvency proceedings, either at the present
time or at any time hereafter.
2.4 No Fraudulent Intent. Neither the execution and delivery of this
Agreement nor the performance of any actions required hereunder or
described herein is being consummated by Guarantor with or as a result of
any intent to hinder, delay, or defraud any person.
2.5 Review of Documents. Guarantor has, with the assistance of legal
counsel, read and reviewed this Agreement and the Forbearance Agreement as
Guarantor or its legal counsel deems necessary or desirable to read and
review.
2.6 Litigation. There is no litigation or governmental proceedings pending
or threatened against Guarantor the results of which might materially and
adversely affect the financial condition of Guarantor.
2.7 Governmental Approval. No authorization, consent or approval of any
governmental body, authority or regulatory body is required which has not
been obtained in connection with the execution, delivery and performance by
Guarantor of this Agreement.
Article III.
Miscellaneous
3.1 Amendments, etc. No amendment to or waiver of any provision of this
Agreement, and no consent to any departure by Guarantor herefrom, shall in
any event be effective unless in a writing signed by or on behalf of Bank
and Guarantor. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
3.2 No Implied Waiver; Remedies Cumulative. No delay or failure of Bank in
exercising any right or remedy under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
or remedy preclude any other or further exercise thereof or the exercise of
any other right or remedy. The rights and remedies of Bank under this
Agreement are cumulative and not exclusive of any other rights or remedies
available hereunder, under any other agreement, at law, or otherwise.
3.3 Notices. Except as otherwise expressly provided herein, all notices or
other communications, including notice of a change of address made under
this Agreement shall be in writing and shall be sent to the following
addresses by United States first class mail, by nationally-recognized
overnight courier, by personal delivery, or by facsimile transmission, in
all cases with charges prepaid:
If to Guarantor:
Xxxxx Xxxxxxxx, Jr.
c/x Xxxxxxxx Industries, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
X.X. Xxx 00
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
If to Bank: United Bank
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, XX00000
Attn. Xx. Xxxxxx Xxxxxx, Market President
Facsimile: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxx & Green, P.C.
0000 00xx Xxxxxx XX
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
All such notices shall be effective three (3) days after mailing or when
received, whichever is earlier.
3.4 Expenses. In the event that Bank is required to enforce its rights
with respect to any claim related to the enforcement of this Agreement,
Guarantor agrees to pay within ten (10) days of demand therefore by Bank
all reasonable expenses (including reasonable fees and expenses of counsel)
which Bank may incur arising from or relating to the enforcement of this
Agreement.
3.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same agreement.
3.6 Construction. Section and other headings in this Agreement are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. This Agreement has been fully negotiated between
the applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or
suretyships in favor of the guarantor or surety, nor any doctrine of
construction of ambiguities against the party controlling the drafting
shall apply to this Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous understandings and agreements.
3.7 Successors and Assigns. This Agreement shall be binding upon Guarantor
and his successors and assigns, provided, however that Guarantor is
prohibited from assigning his rights or obligations under this Agreement
without the express prior written consent of the Bank. Bank (and any
successive assignee or transferee thereof) may assign or otherwise transfer
all or any portion of its rights or obligations under this Agreement and
this Agreement shall inure to the benefit of and be enforceable by Bank and
its successors and assigns.
3.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, exclusive of
conflict of law principles.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, Guarantor has caused this Agreement to be duly executed
and delivered as of the date first above written.
XXXXX X. XXXXXXXX, XX.
_____________________________
By: Xxxxx X. Xxxxxxxx Xx., individually
