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LOAN AGREEMENT
DATED AS OF _________________
BETWEEN
GDI COMPANY, INC.
AS LENDER
AND
XXXXXXXX'X INC.
GRS HOLDING COMPANY, INC.
AND
GRS REALTY COMPANY, INC.
AS BORROWERS
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made as of February , 1997, between
Xxxxxxxx'x Inc., a Delaware corporation ("Xxxxxxxx'x"), having its principal
place of business at 00 Xxx Xxxx, Xxxxxx, XX 00000 and GRS Holding
Company, Inc., a Delaware corporation ("Holding Company"), and GRS Realty
Company, Inc., a Delaware corporation ("Realty Company"), each having its
principal place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX, 00000,
(collectively "Borrowers" and individually, a "Borrower") and GDI Company,
Inc. an Oregon corporation ("Lender"), with its principal place of business at
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, XX 00000.
1. INTRODUCTION
The following are facts relating to this Agreement which, to the extent
that the same relate to the ownership interests or the conduct of Borrowers,
shall be treated as representations of fact by Borrowers to the Lender:
1.1 Realty Company and Xxxxxxxx'x are the owners of the real estate
properties (collectively the "Properties" and singularly, a "Property") as
listed on Exhibit 1.1 annexed hereto and certain fixtures thereon ("Fixtures").
1.2 Realty Company is a wholly-owned subsidiary of Holding
Company. Holding Company is a wholly-owned subsidiary of Xxxxxxxx'x.
1.3 Xxxxxxxx'x is a retailer of lumber, hardware and home
improvement goods and operates from stores, some of which constitute a
portion of the Properties. Xxxxxxxx'x leases the Properties from Realty
Company pursuant to a Master Lease dated April 4, 1996 ("Master Lease").
Xxxxxxxx'x is presently in default under the Master Lease.
1.4 Xxxxxxxx'x, Holding Company and Realty Company are affiliated
entities and the only income sources for Realty Company are the rental
payments under the Master Lease, the lease on the property in Torrington,
Connecticut and the proceeds of the sale of real estate. Borrowers' have
requested the Loan and other accommodations contemplated by this
Agreement to operate their respective businesses.
1.5 The Borrowers have explained, and the Lender understands, that
the proceeds of the Loan, to the extent initially made to either the Realty
Company or the Holding Company, will be distributed by such Borrowers to
Xxxxxxxx'x for use as working capital. Borrowers acknowledge that the Loan
and the distribution of them, pursuant to the preceding sentence, constitutes
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adequate consideration for the obligations incurred by each Borrower under
this Agreement and the Loan Documents.
1.6 Lender is a wholly-owned subsidiary of JELD-WEN, inc. ("Jeld-
Wen"). Jeld-Wen is a trade creditor of Xxxxxxxx'x having supplied door and
window products to Xxxxxxxx'x.
2. DEFINITIONS AND RULES OF INTERPRETATION
2.1 Definitions. As used herein, the following terms shall have the
following meanings:
"Advance" shall mean any monies advanced by Lender under the terms
of the Note.
"Affiliate" means with reference to any Person (including an individual, a
corporation, a partnership, a limited liability company and a trust), (i) any
director, or officer of that Person, (ii) any other Person controlling,
controlled by or under direct or indirect common control of that Person, (iii)
any other Person directly or indirectly holding ten percent (10%) or more of
the legal or beneficial ownership or membership interests in that Person
(including partnership or membership interests, classes of capital stock or
other equity interests, options, warrants, convertible securities and similar
rights) and (iv) any other Person ten percent (10%) or more of whose legal or
beneficial ownership or membership interests is held directly or indirectly by
that Person.
"Agreement" means this Loan Agreement, including the schedules and
exhibits attached hereto, as the same may hereafter be amended, modified,
supplemented and/or restated from time to time.
"Assignment of Leases" means with respect to any of the Properties,
that certain Assignment of Rents and Leases from Realty Company to Lender
for such Property, as the same may hereafter be amended, modified,
supplemented and/or restated from time to time.
"Attornment and Subordination Agreement" mean, for the Master Lease,
the Attornment and Subordination Agreement among Xxxxxxxx'x, as Master
Tenant, Realty Company, as landlord, and Lender as lender, as the same may
hereafter be amended, modified, supplemented and/or restated from time to
time.
"Borrowers" are defined in the preamble hereto and include their
respective successors and assigns permitted hereunder.
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"Business Day" means a day of the year on which banks are not
required or authorized to close in the state of Oregon.
"Closing Date" means the date on which all conditions to Lender's
obligations to fund the Loan have been satisfied or have been waived or
deferred by Lender but in no event later than February _____, 1997.
"Code" means The Internal Revenue Code of 1986, as amended from
time to time.
"Combined Investors" means Combined Investors, L.L.C., a Delaware
limited liability company.
"Combined Investors Loan" means that certain loan between Realty
Company, as borrower, and Combined Investors, as lender, with an
approximate remaining principal balance of $4,000,000 which is secured by
mortgages on real property owned by Realty Company of which approximately
$1,300,000 of cash is held by Combined Investors.
"Common Stock" means the common stock of Xxxxxxxx'x.
"Congress Financial" means Congress Financial Corporation (New
England), a Massachusetts corporation.
"Congress Loan Agreement" means that certain Loan and Security
Agreement between Congress Financial, as Lender, and Xxxxxxxx'x as
Borrower, dated May 2, 1996, as amended and in effect from time to time.
"Default" means any condition or occurrence which with notice and/or
the passage of time would be an Event of Default.
"Default Rate" is defined in Section 3.1.
"Distribution" means with respect to any Borrower, the declaration or
payment of any dividend on or in respect of any shares of any class of capital
stock of such Borrower, or any other distribution on or in respect of or
buybacks of any shares of any class of capital stock of any Borrower or the
making of payment on any loan to an Affiliate of any such Borrower.
"Environmental Indemnity" means that certain Independent Certificate
and Indemnity Regarding Hazardous Substances from Borrowers to Lender for
each Property, as the same may hereafter be amended, modified,
supplemented and/or restated from time to time.
"Environmental Claims" is defined in Section 4.4.
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"Environmental Laws" is defined in Section 4.1(i).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended and in effect from time to time.
"ERISA Affiliate" means any Person which is treated as a single
employer with Borrowers under 414 of the Code.
"Event of Default" is defined in Section 7.1 hereof.
"Fixed Interest" is defined in Section 3.3 and refers to a ten percent
(10%) per annum rate of interest.
"Fixtures" is defined in Section 1.1.
"Future Mortgages" is defined in Section 4.13.
"GAAP" means generally accepted accounting principals as used in the
United States and which are consistently applied.
"Xxxxxxxx'x" is defined in the preamble and includes its permitted
successors and assigns.
"Guaranteed Pension Plan" means any employee pension benefit plan
within the meaning of 3(2) of ERISA maintained or contributed to by
Borrowers or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
"Hazardous Substances" is defined in Section 4.1(i)(2).
"Holder" shall mean initially the Lender or any successor or assign of
Lender to the Note or any portion of the Note.
"Holding Company" is defined in the preamble and includes its permitted
successors and assigns.
"Indebtedness" shall mean all obligations, contingent and otherwise,
including intercompany debts and advances, that in accordance with GAAP
should be classified upon the obligor's balance sheet as liabilities, or to
which reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect; (b) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property
owned or acquired subject thereto, whether or not the liability secured thereby
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shall have been assumed; and (c) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of indebtedness of
others, including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness, or to assure
the owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment
of the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
"Indemnitees" is defined in Section 4.4.
"Insolvent" or "Insolvency" means that there shall have occurred one or
more of the following events with respect to a Person: death; dissolution;
termination of existence; insolvency within the meaning of the United States
Bankruptcy Code or any other federal bankruptcy or insolvency, fraudulent
transfer or fraudulent conveyance statute or such comparable statute of any
state in which a Borrower conducts business or holds property; such Person's
inability to pay its debts as they come due; the appointment of a receiver for
any part of the property of such Person, or execution of a trust mortgage or an
assignment for the benefit of creditors of any part of the property of such
Person; the offering of a plan to creditors for reorganization, restructuring,
composition or extension; the filing of a petition in bankruptcy by such Person,
or the commencement by such Person of any proceedings under any federal or
state bankruptcy or insolvency laws, or any laws relating to the relief of
debtors, the readjustment of indebtedness or the reorganization of debtors; or
the filing of an involuntary petition in bankruptcy against such Person or the
commencement of any proceedings with respect to such Person under any
federal or state bankruptcy or insolvency laws, or any laws relating to the
relief of debtors, readjustment of indebtedness or reorganization of debtors.
"Investments" mean all expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of
any Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings
on such Investment, whether as dividends, interest or otherwise, except that
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accrued interest included as provided in the foregoing clause (b) may be
deducted when paid and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
"Jeld-Wen" is defined in Section 1.6.
"Lender" is defined in the preamble and includes its successors and
assigns.
"Lender Expenses" means all costs, fees and expenses, including its
attorneys' and consultants' fees and costs incurred and to be incurred until the
Loan and the Obligations have been paid in full, including without limitation,
all costs, fees and expenses incurred in connection with the origination and
funding of the loan, insuring the mortgages as a lien on the Properties,
administering and servicing the Loan.
"Loan" is defined in Section 3.1.
"Loan Documents" means, collectively, this Agreement, the Mortgages,
the Note, the UCC Financing Statements, the Environmental Indemnity and all
other agreements, instruments and documents now or hereafter executed and
delivered in connection with the Loan, all as the same may hereafter be
amended, modified, supplemented and/or restated from time to time.
"Master Lease" means that certain Master Lease dated April 4, 1996
between GRS and Xxxxxxxx'x for the Properties, as the same may hereafter
be amended, modified, supplemented and/or restated from time to time but
only with the consent of Lender.
"Master Tenant" means Xxxxxxxx'x or any successor tenant approved
in writing by Lender.
"Maturity Date" means July 1, 1997 (and such four (4) one-month
extensions as the Lender may exercise pursuant to Section 3.1).
"Mortgage" means with respect to each of the Properties the mortgage
or deed of trust recorded incident or subsequent hereto for such Property. The
term "Mortgages" shall refer to all such mortgages and refers to each
Mortgage granted concurrently herewith as well as all mortgages subsequently
granted pursuant to Section 4.13. References to Mortgage or Mortgages shall
include such instruments as the same may hereafter be amended from time to
time.
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"Multiemployer Plan" means any multiemployer plan within the meaning
of 3.(37) of ERISA maintained or contributed to by Borrowers or any ERISA
Affiliate.
"Note" means that certain promissory note dated as the date hereof,
and as the same may hereafter be amended or substituted for, from time to
time made by Borrowers to the order of the Lender in the original principal
amount of $1,999,999.
"Obligations" means any and all obligations of Borrowers to the Lender
or any other permitted holder of any of the Note arising out of or in connection
with the Loan, of every kind and description, direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising, regardless of how they arise or by what agreement or
instrument they may be evidenced or whether evidenced by any agreement or
instrument, and includes obligations to perform acts and to refrain from acting
as well as obligations to pay money and all obligations owing to Lender (or any
other Holder of any of the Note) under any of the Note or other Loan
Documents.
"Partial Advance" is defined in Section 3.4.
"PBGC" is The Pension Benefit Guaranty Corporation created by 4002
of ERISA and any successor entity or entities having similar responsibilities.
"Pending Purchase Agreements" is defined in Section 3.4.8.
"Person" means any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
"Property" or "Properties" is defined in Section 1.1.
"Realty Company" is defined in the preamble and includes its permitted
successors and assigns.
"Related Documents" is defined in Section 3.3.2.
"Release" is defined in Section 4.1(i)(3).
"Reorganization Plan" is defined in Section 3.6.4.
"Sale Proceeds" is defined in Section 3.1.
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"Scheduled Amount" means with respect to any of the Properties, the
amount listed for such Property in Exhibit 1.1.
"Security Instruments" means all of the Mortgages, all of the
Assignment of Leases, the Attornment and Non-Disturbance Agreements, UCC
Financing Statements, and all other instruments or documents that secure the
Obligations, all as the same may hereafter be amended, modified,
supplemented and/or restated from time to time.
"Site Assessment Reports" mean those site assessment reports listed on
Exhibit 2.1 entitled "Reports" attached hereto.
"Title Insurance Company" means Amerititle Title Insurance Corporation, or
such other national title insurance insurer as shall be approved in writing by
the Lender.
"Title Policy" shall mean, as accepted and approved by Lender, an ALTA
standard form title insurance policy or policies issued by the Title Insurance
Company (with such reinsurance or co-insurance as Lender may require, any
such reinsurance to be with direct access endorsements) in the Scheduled
Amounts for each Property as shown on Exhibit 1.1 (and in the aggregate for
all Properties of not more than One Million Nine Hundred Ninety Nine Thousand
Nine Hundred Ninety Nine Dollars ($1,999,999), insuring the priority of all of
the Mortgages as first priority liens on the Properties and that GRS holds good
clear record and marketable fee simple title to the Properties, subject only to
the encumbrances approved by Lender and which shall not contain exceptions
for mechanics liens or persons in occupancy (other than pursuant to the
Master Lease) shall not insure over any matter except to the extent that any
such affirmative insurance is acceptable to Lender in its sole discretion and
shall contain such endorsements and affirmative insurance as the Lender in its
discretion may require, including but not limited to the following: (a)
comprehensive endorsement, (b) usury endorsement, and (c) doing business
endorsement.
"UCC Financing Statements" means Uniform Commercial Code
Financing Statements, perfecting security interests of the Lender in certain
collateral including items which are now personalty but which hereafter may
become a part of the Properties or which will remain personalty to be used in
the operation of the Properties, as the same may hereafter be amended from
time to time.
2.2 Rules of Interpretation. For all purposes of this Agreement and
the other Loan Documents, except as otherwise expressly provided herein or
therein or unless the context otherwise requires:
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(a) references to any Person defined herein refer to such
Person and (as the case may be) his permitted successors, assigns, heirs,
executors, administrators and other legal representatives;
(b) references to any agreement, instrument or document refer
to such document as originally executed, or if subsequently varied or
supplemented in writing from time to time, as so varied or supplemented and
in effect at the relevant time of reference thereto;
(c) words importing the singular only shall include the plural
and words importing the plural only shall include the singular; words importing
the masculine gender shall include the feminine gender and words importing
the feminine gender shall include the masculine gender; and all references to
dollars shall be United States dollars;
(d) references to any law include any amendment or
modification to such law;
(e) the words "include," "includes" and "including" should
always be read as "include, without limitation," "includes, without limitation,"
and "including, without limitation". The use of words following any of the
words "include", "includes", or "including" is not intended to be an exclusive
list to which any of the foregoing prepositions apply;
(f) the words "herein," "hereof," "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement;
(g) accounting terms not otherwise defined in this Agreement
or any of the other Loan Documents have the meanings assigned to them in
accordance with GAAP;
(h) except as expressly provided to the contrary in a particular
provision, whenever a Loan Document requires the Lender to give its consent
or approval, such consent or approval shall be in writing and the Lender may
grant or withhold its consent or approval "in its sole and absolute discretion,"
and the quoted phrase shall be deemed included in any reference to the
Lender's consent or approval if not already set forth with respect thereto; and
(i) to the extent there are any inconsistencies or conflicts
between the terms and provisions of this Agreement and the terms and
provisions of any other Loan Documents, the terms and provisions of this
Agreement shall control the terms and provisions of any of the other Loan
Documents.
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3. THE LOAN
Upon and subject to the terms and conditions of this Agreement and the
other Loan Documents, and in reliance upon the representations, warranties
and covenants of Borrowers made herein and therein, the Lender agrees to
lend or make other financial accommodations to Borrowers and Borrowers
agree to borrow and accept such financial accommodations as follows:
3.1 Note. Lender shall lend to Borrowers and Borrowers agree to
borrow the sum of $1,999,999 ("Loan"). The Loan is evidenced by the Note
in the form attached hereto as Exhibit 3.1. As set forth in the Note, the
maturity date of the Note is July 1, 1997, subject to four one-month
extensions at the option of the Holder of the Note, or if there is more than one
such Holder, at the option of Holders owning more than 50% of the
indebtedness then owed under the Note. The Note bears interest at a fixed
rate of ten percent (10%) per annum ("Fixed Interest") and in the Event of
Default, the Note shall bear interest thereafter at the rate of twelve percent
(12%) per annum ("Default Rate").
If, as and when, any of the Properties are sold as permitted by this
Agreement, all of the proceeds of such sales as they occur, net of reasonable
closing costs customarily payable by a seller of property (such net proceeds
are referred to herein as the "Sale Proceeds", it being understood and agreed
that, in no event shall closing fees or costs paid or payable to Borrowers or
Affiliates of Borrowers qualify as closing costs to be deducted from the
proceeds of a sale) and shall be immediately paid in the following order:
(a) First, to Lender to pay all accrued and unpaid interest
under the Note;
(b) Second, at the option of Lender, to the payment of
any advances, Lender may have made for taxes, assessments, insurance
premiums, or other charges on any Property given as security for the Loan;
and
(c) Third, to Lender to pay any unpaid principal on the
Note until all principal and interest on the Note has been paid in full, plus
any Lender Expenses.
Notwithstanding anything to the contrary in the Note or the Security
Instruments to the contrary, Lender shall have the right to allocate any
principal payments received on the Note against any advances under the Note
in any order Lender may elect in its sole discretion.
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3.2 Combined Investors Loan.
3.2.1 Concurrently with making the Loan, Lender shall purchase
from Combined Investors the Combined Investors Loan for a purchase price
equal to the then outstanding principal balance plus any accrued interest in the
approximate amount of $4,000,000. Borrowers hereby consent to the
purchase of the Combined Investors Loan and agree to execute a joinder to the
loan sale agreement between Lender and Combined Investors. Lender
consents to the distribution from Realty Company to Xxxxxxxx'x of the
approximately $1,300,000 of cash being held by Combined Investors as
collateral for the Combined Investors Loan.
3.2.2 Borrowers and each of them hereby discharge Lender from
any and all claims, rights, demands, actions, suits, causes of action, damages,
counter-claims, defenses, losses, costs, obligations, liabilities and expenses
of every kind or nature, known or unknown, suspected or unsuspected, in
contract or in tort, fixed or contingent, foreseen or unforeseen, which any
Borrowers ever had, now has or might hereafter have against Lender for or by
any reason of any nature, cause or thing whatsoever, occurring prior to or
concurrently with the acquisition of the Combined Investors Loan by Lender,
including, without limitation, such as relate, directly or indirectly, in whole
or in part to any circumstances or state of facts pertaining to the Combined
Investors Loan, the administration of the Combined Investors Loan, the loan
documents relating to the Combined Investors Loan, (collectively, "Claims"),
including without limitation, those related to the actions of any parties in
administering the Combined Investors Loan or any of the loan documents
related to the Combined Investors Loan and claims of lender liability, fraud,
duress, illegality usury, waiver, bad faith, interference in the business of the
Borrowers, or any nonperformance of any agreement or obligation relating
thereto or any statements, representations, acts or omissions, intentional,
willful, negligent or innocent, by any of the parties in any way connected with,
relating to or effecting, directly or indirectly, the Combined Investors Loan,
the loan documents thereto, including any collateral securing such loan
documents and any claims, causes of action, suits or liabilities of any kind
arising under M.G.L.c.93(a).
3.3 Loan Conditions. The obligation of the Lender to make the Loan
shall be subject to the satisfaction of the following conditions precedent.
3.3.1 Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to the
Lender. Lender shall have received a fully executed copy of each such
document.
3.3.2 Related Documents. The Attornment and Subordination
Agreement, and such other documents as Lender may reasonably require in
order to carry out the transaction contemplated by this Agreement (sometimes
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collectively referred to herein as the "Related Documents") shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect with no default thereunder, and shall be in form and
substance satisfactory to Lender. Lender shall have received a certified or a
fully executed copy of each such document.
3.3.3 Certified Copies of Organization Documents. Lender shall
have received from each Borrower, a copy, certified as of a recent date by the
appropriate officer of the state in which such Borrower is organized to be true
and complete, of its corporate charter and any other of its organization
documents as in effect on such date of certification.
3.3.4 Resolutions. All action necessary for the valid execution,
delivery and performance by each Borrower of this Agreement and the other
Loan Documents and all action necessary for the valid execution, delivery and
performance by all other parties to the Related Documents of such Related
Documents shall have been duly and effectively taken, and evidence thereof
satisfactory to the Lender shall have been provided to the Lender. Lender shall
have received from each Borrowers and all other parties to the Related
Documents, true copies of the resolutions adopted by its board of directors,
partners, beneficiaries or trustees, as applicable, and shareholders where
needed, authorizing the transactions, described or referred to herein, certified
in a manner satisfactory to Lender as of a recent date to be true and complete.
3.3.5 Incumbency Certificate; Authorized Signers. Lender shall
have received from each Borrower an incumbency certificate, dated as of the
Closing Date hereunder, signed by a duly authorized officer of such Borrowers
and giving the name and bearing a specimen signature of individual or
individuals who shall be authorized: (a) to sign, in the name and on behalf of
such Borrower, each of the Loan Documents to which such Person is or is to
become a party; and (b) to give notices and to take other action on its behalf
under the Loan Documents.
3.3.6 Validity of Liens; Closing Costs. The Security Instruments
shall be effective to create in favor of the Lender a legal, valid and
enforceable second lien and security interest in all collateral described in
the Security Instruments. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Lender to protect
and preserve such lien and security interest shall have been duly effected.
Lender shall have received evidence thereof in form and substance satisfactory
to Lender. Borrowers shall have paid all recording, title, escrow, excise,
transfer fees, taxes or other costs and expenses incurred in connection with the
filing or recording of the Loan Documents and the Related Documents.
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3.3.7 Deliveries. The following items or documents shall have
been delivered to Lender by Borrowers and shall be in form and substance
satisfactory to Lender:
(a) Title Policies. Title Policies for each of the Properties
to be covered by Mortgages for which sums have been advanced under the
Loan, together with proof of payment by Borrowers of all fees and premiums
for such policies and true and accurate copies of all documents listed as
exceptions under such policies.
(b) Other Insurance. Copies of certificates of insurance
with respect to all policies of insurance required by the Loan Documents to be
obtained and maintained by Borrowers, evidencing the naming of Lender as
mortgagee and first loss payee on all property insurance coverages and as an
additional insured on all liability coverages.
(c) Site Assessment Reports. All Site Assessment
Reports for any of the Properties in the possession of or under the control of
Borrowers.
(d) Surveys and Taxes. All surveys existing for any of
the Properties to be covered by Mortgages (and any existing improvements
thereon) which are in the possession or under the control of Borrowers.
(e) Legal Opinions. Favorable opinions in form and
substance satisfactory to Lender and its legal counsel, addressed to Lender
and dated as of the date of closing hereof, from Ropes & Xxxx, special counsel
to Borrowers, and Xxxxxxx Xxxx, Esq., General Counsel of Xxxxxxxx'x, as to
such matters as Lender shall require.
3.3.8 Lien Search. Lender shall have received a certification
from Title Insurance Company or counsel satisfactory to Lender for each Property
for which funds have been advanced by Lender under the Loan that a search
of the public records disclosed no encumbrances, mortgages, conditional sales
contracts, security agreements, chattel mortgages, leases, financing
statements, title retention agreements or other security instruments of any
kind which affect any of the collateral encumbered by the Security Instruments
except for: the Combined Investors Loan, the Master Lease and those
purchase and sale agreements listed on Exhibit 3.3.8 ("Pending Purchase
Agreements").
3.3.9 Valuation. Lender shall have determined Scheduled
Amounts for the Properties which amounts shall be satisfactory to Lender
(such amounts as approved by Lender being set forth on Exhibit 1.1).
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3.3.10 Performance; No Default. Borrowers shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Closing Date, and on the Closing Date
there shall exist no Default or Event of Default.
3.3.11 Representations and Warranties. The representations and
warranties made by each Borrower in the Loan Documents have been true and
correct in all respects when made and shall also be true and correct in all
material respects on the Closing Date, except as to those representations and
warranties made as of a certain date, which shall be true as of such date.
3.3.12 Additional Documents. Lender shall have received all
information and such counterpart originals or certified copies of such
documents and such other certificates, opinions or documents as Lender may
reasonably require.
3.3.13 Advances and Consents. On or before the Closing Date,
Lender shall have received such assurances or consents, acceptable to Lender
in its sole discretion, from Congress Financial relating to modifications in
Congress Loan Agreement agreeing to provide trade credit to Xxxxxxxx'x.
3.4 Partial Advances. [Intentionally Deleted].
3.5 Post Closing Covenants. Promptly and diligently after the Closing
Date, Borrowers shall have undertaken each of the following actions:
3.5.1 Representations on Board of Directors. Xxxxxxxx'x shall
use its best efforts to cause its number of directors to be seven (7).
Xxxxxxxx'x shall have obtained the resignations of such directors as it deems
appropriate so that three vacancies are created on the seven member board of
directors. The board of directors of Xxxxxxxx'x shall elect the three nominees
of Lender set forth on Exhibit 3.5.1 hereto, to fill the vacancies created on
its board of directors. In the event of the three new directors so elected
shall resign from Xxxxxxxx'x board of directors, any director elected to fill
the vacancy created by such resignation shall be mutually agreeable to
Xxxxxxxx'x and Lender. So long as the Loan is outstanding, Lender shall have
the right at any annual meeting of shareholders of Xxxxxxxx'x to nominate
three persons for election to Xxxxxxxx'x board of directors. Xxxxxxxx'x shall
include such nominees in its proxy materials for such annual meeting and shall
solicit proxies in support of the election of such nominees. In the event that
any vacancy should occur in any of the four (4) directorships that are not
filled by such new directors, the remaining three (3) old directors shall elect,
by majority vote, a person to fill such vacancy.
16
3.5.2 Amendment of Bylaws. Xxxxxxxx'x shall use its best
efforts to cause its bylaws to be amended to provide that the following
actions, approvals or authorizations by the board of directors shall require
five (5) affirmative votes for approval; provided, however, that this Section
shall not be deemed to require ratification or other approval by such a
supermajority with respect to any action taken by any of the Borrowers, or the
board of directors or shareholders thereof, on or prior to the Closing Date.
(a) authorization of the issuance of any security;
(b) authorization for any dividend or distribution with
respect to the Common Stock;
(c) authorization to incur additional Indebtedness except
in the ordinary course of business;
(d) authorization of employment agreements with any
officer and consultant where the base salary and possible bonus exceeds
$100,000; and
(e) authorization of an operating and/or capital budget.
3.5.3 [Intentionally Deleted].
3.5.4 Reorganization. The Borrowers shall develop not later
than twenty (20) days after the Closing Date, a strategic plan for the
reorganization of their businesses, the redeployment of their assets and the
sale by Realty Company of the Properties which plan shall be reasonably
satisfactory to Lender ("Reorganization Plan"); provided, however, that nothing
in this Section 3.6.4 shall be deemed to require the boards of directors of the
Borrowers to take any action, or refrain from taking any action, contrary to the
fiduciary duty of such board of directors, as the board so determines in its
business judgment.
3.5.5 Product Agreement. Xxxxxxxx'x and Jeld-Wen shall work
cooperatively to enter into a five-year product agreement for the sale by
Xxxxxxxx'x of door and window products manufactured by Jeld-Wen or any
Affiliates of Jeld-Wen, which contract shall be terminable at no cost, in
damages or otherwise, to Xxxxxxxx'x if an order for relief is issued with
respect to Xxxxxxxx'x under Chapter 11 of Title 11 of the United States Code,
and the plan of reorganization in such case is not confirmed on or prior to the
earlier of the Maturity Date for the Note.
3.5.6 Congress Financial. Borrowers and Lender shall work
cooperatively to secure financial accommodations from Congress Financial in
17
favor of Xxxxxxxx'x on the Congress Loan Agreement, which will increase the
amount available thereon and increase the amount of the borrowing base. To
achieve such accommodations, Lender will make available to Congress
Financial, a letter of credit or other credit enhancements on terms and
conditions mutually acceptable to Borrowers, Lender and Congress Financial.
4. BORROWERS' GENERAL REPRESENTATIONS AND COVENANTS
4.1 Representations and Warranties. Borrowers represents to Lender
effective as of the Closing Date as follows (which representations Borrowers
covenants with Lender shall remain true and complete until all Obligations are
fully satisfied):
(a) Corporate Authority; Etc.
(i) Organization, Good Standing. Borrowers are each a
Delaware corporation duly organized pursuant to the laws of Delaware and are
validly existing and in good standing under the laws of the State of Delaware.
Each Borrowers (i) has all requisite power to own its property (including,
without limitation the Properties and Fixtures) and conduct its business as now
conducted and as presently contemplated, and (ii) as applicable, is in good
standing as a foreign entity and is duly authorized to do business in each
jurisdiction where the Properties and Fixtures are located and in each other
jurisdiction where such failure to so qualify would materially affect the
business or prospects of each Borrower.
(ii) Authorization. The execution, delivery and performance
of this Agreement and the other Loan Documents to which any of the
Borrowers is or is to become a party and the transactions contemplated hereby
and thereby (a) are within the authority of such Borrower, (b) have been duly
authorized by all necessary proceedings on the part of each such entity, (c) do
not conflict with or result in any breach or contravention of any provision of
law, statute, rule or regulation to which such Borrower is subject, or any
judgment, order, writ, injunction, license or permit applicable to such
Borrower, (d) do not conflict with any provision of the applicable
organizational documents, other charter documents or bylaws of, or any agreement
or other instrument binding upon, such Borrower, and (e) do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained and the recording and/or filing of the
Mortgages and any other Loan Document in the appropriate public records with
respect thereto.
(iii) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents to which any of Borrowers is or is
to become a party will result in valid and legally binding obligations of each
18
Borrower enforceable against each of them in accordance with the respective
terms and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought;
(b) Title to Properties; Leases. Realty Company warrants that
it holds good and marketable title to the Properties and the Fixtures and owns
all of the Properties and Fixtures subject to no rights of others, including any
mortgages, leases (except as to encumbrances relating to the Combined
Investors Loan, the Master Lease and the purchase and sales agreements
identified in Exhibit 3.38), conditional sales agreements, title retention
agreements, liens or other encumbrances except for encumbrances or liens or
other rights specifically set forth in the Title Policies previously provided to
or to be provided to Lender. Holding Company and Realty Company covenant
that the Master Lease shall be subordinate to the liens of the Mortgages unless
otherwise elected by Lender.
(c) Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against Holding Company or
Realty Company, before any court, tribunal or administrative agency or board
that, if adversely determined, might reasonably be expected to either in any
case or in the aggregate, materially adversely affect the properties, assets,
prospects, financial condition or business of Borrowers, or materially impair
the right of Borrowers, to carry on business substantially as now conducted by
them, or result in any substantial liability not adequately covered by
insurance, or for which adequate reserves are not maintained on the balance
sheet of Borrowers, which question the validity of this Agreement or any of the
other Loan Documents or any of the Related Documents or Master Lease, or any
action taken or to be taken pursuant hereto or thereto.
(d) No Materially Adverse Contracts, Etc. Realty Company is
not subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or may reasonably be
expected in the future to have a materially adverse effect on the business,
prospects, assets or financial condition of Realty Company. Realty Company
is not a party to any contract or agreement that has or may reasonably be
expected, in the judgment of such party's officers, to have any materially
adverse effect on the prospects or business of Realty Company.
(e) Compliance With Other Instruments, Laws, Etc. Borrowers
are not in violation of any provision of their respective organizational
documents, bylaws; or any decree, order, judgment, statute, license, rule or
19
regulation, in any of the foregoing cases in a manner that could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, prospects, properties (including the Properties and
Fixtures) or business of Borrowers; and Realty Company is not in violation of
any agreement or instrument to which it may be subject or by which it or any of
its properties (including the Properties and Fixtures) may be bound.
(f) Tax Status. Borrowers (i) have each made or filed all federal
and state income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) have each paid all taxes and
other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except (x) real estate taxes
owed by either Realty Company xx Xxxxxxxx'x, and (y) those being contested
in good faith and by appropriate proceedings for which adequate reserves have
been set aside and (iii) have each set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of any
jurisdiction, and Borrowers knows of no basis for any such claim.
(g) No Default or Event of Default. No Default or Event of
Default has occurred and is continuing.
(h) Absence of UCC Financing Statements, Etc. With respect
to Realty Company, except for the lien and encumbrance of the Loan
Documents or as disclosed in the Title Policies to the extent approved by
Lender, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded in any records,
registry or other public office that purports to cover, affect or give notice of
any present or future lien on, or security interest in, the Properties or any
other collateral subject to the Security Instruments.
(i) Environmental Compliance. Borrowers have taken
commercially reasonable steps to investigate the present conditions and past
usage of the Properties and the operations conducted thereon and, based upon
such diligent investigation, make the following representations and warranties:
(1) With respect to the Properties, except as expressly
otherwise disclosed in the Site Assessment Reports, none of Borrowers or any
tenant or operator of the Properties, or any operations thereon is in violation
or alleged violation of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response Compensation and Liability Act of
20
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to health, safety or
the environment (hereinafter "Environmental Laws"), which violation involves
the Properties and would have a material adverse effect on the environment or
the business, prospects, assets or financial condition of Borrowers or on the
fair market value of the Properties.
(2) With respect to the Properties, except as expressly
otherwise disclosed in the Site Assessment Reports, Borrowers have not
received notice from any third party including, without limitation, any federal,
state or local governmental authority, asserting (i) that it has been identified
by the United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. 9601(5), any hazardous substances
regulated by any Environmental Laws ("Hazardous Substances") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that Borrowers conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances. The
term "Hazardous Substances" shall also include in this Agreement any material
containing more than one percent (1%) by weight of asbestos, including all
varieties and forms of materials defined as asbestos under any Environmental
Law.
(3) With respect to the Properties, except as expressly
otherwise disclosed in the Site Assessment Reports or with respect to events
which would not have a material adverse effect on the business, prospects,
assets or financial condition of Borrowers or on the fair market value of the
Properties in the aggregate: (i) no portion of the Properties has been used for
the handling, processing, storage or disposal of Hazardous Substances except
for use incidental to the primary use of the Properties which use has been in
accordance with applicable Environmental Laws; and, to the best of
Borrowers' knowledge, no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion of the
Properties; (ii) in the course of any activities conducted by Borrowers or the
operators of its properties, no Hazardous Substances have been generated or
are being used on the Properties except in accordance with applicable
Environmental Laws; (iii) there has been no release, i.e. any past or present
21
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (a "Release") or threatened Release
of Hazardous Substances on, upon, into or from the Properties, or, to the best
of Borrowers' knowledge, on upon, into or from the other properties of
Borrowers or any of the other Borrowers Parties, which Release would in the
case of such other properties have a material adverse effect on the value of
any of the Properties or adjacent properties or the environment; (iv) to the
best of Borrowers' knowledge, there have been no Releases on, upon, from or into
any real property in the vicinity of any of the Properties which, through soil
or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the fair market value of, the
Properties; and (v) any Hazardous Substances that have been generated on
any of the Properties and any underground tank or underground storage
receptacle for Hazardous Substances formerly located on any portion of the
Properties have been transported off-site only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws then in effect, which transporters and facilities
have been and are, to the best of Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental Laws.
(4) To the best of Borrowers' knowledge, neither
Borrowers nor any of the Properties is subject to any applicable Environmental
Law requiring the performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the giving of notice to
any governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the recording of
the Mortgages or to the effectiveness of any other transactions contemplated
hereby.
(j) Loan Documents. All of the representations and warranties
of Borrowers made in the other Loan Documents or any document or
instrument delivered to the Lender pursuant to or in connection with any of
such Loan Documents are true and correct in all material respects, as of the
Closing Date, except representations and warranties made as of a certain date,
which are true and correct in all material respects as of such date.
(k) Governmental Approvals. The execution, delivery and
performance by Borrowers of this Agreement and the other Loan Documents
to which a Borrower is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained and the filing of the Mortgages and related Financing Statements in
the appropriate records office with respect thereto.
22
(l) Employee Benefit Plans; Multiemployer Plans; Guaranteed
Pension Plans. Neither Realty Company nor any ERISA Affiliate, other than
Xxxxxxxx'x, maintains or contributes to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan.
(m) Margin Security. Borrowers do not own any margin
security and none of the funds advanced hereunder will be used for the
purpose of purchasing or carrying any margin securities or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
any margin securities or for any other purpose not permitted by Regulation U
of the Board of Governors of the Federal Reserve System.
(n) Subsidiaries. Borrowers have no subsidiaries other than as
listed in Exhibit 4.1(n) hereto.
(o) Securities Matters. The making of the Loan, the application
of the proceeds and repayment thereof by Borrowers and the consummation of
the transactions contemplated by this Agreement, the Note and the Loan
Documents will not violate any provision of any federal or state securities
statutes, rules or regulations, or any order issued by the Securities and
Exchange Commission (collectively the "Securities Laws"). Borrowers agree to
indemnify Lender and hold Lender harmless from the claims of any Persons in
connection with any of the Securities Laws and relating to the Loan or the
transactions contemplated by this Agreement and the Loan Documents.
(p) Investment Company Act. None of the Borrowers are an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(q) Public Utility, Holding Company Act. None of the
Borrowers are a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(r) The Properties. Except as could not reasonably be
expected to have a material adverse effect on the business, prospects, assets
or financial condition of Borrowers or on the fair market value of the
Properties, in the aggregate, the following representation and warranties
concerning the Properties are true and correct:
(1) Off-Site Utilities. Except for Properties which are
vacant lots, all water, sewer, electric, gas, telephone and other utilities are
installed to the property lines of the Properties and, except in the case of
23
drainage facilities, are connected to the buildings located thereon with valid
permits and are adequate to service such buildings in their present use and in
full compliance with applicable law. The buildings are properly and legally
connected directly to, and served exclusively by, public water and sewer
systems.
(2) Access; Etc. The streets abutting the Properties are
public roads, to which the Properties have direct access by trucks and other
motor vehicles and by foot, or are private ways (with direct access by trucks
and other motor vehicles and by foot to public roads) to which the Properties
have direct access.
(3) Independent Buildings. The buildings located on the
Properties are each fully independent from buildings owned by parties other
than Borrowers in all material respects including, without limitation, in
respect of structural integrity, heating, ventilating and air conditioning,
plumbing, mechanical and other operating and mechanical systems, and electrical,
sanitation and water systems, all of which are connected directly to off-site
utilities located in public streets or ways. Each such building is located on a
lot which is separately assessed for purposes of real estate tax assessment
and payment. Except to the extent disclosed by surveys provided to Lender
prior to the closing hereof, each such building and all paved or landscaped
areas related to or used in connection with such are located wholly within the
perimeter lines of the lot or lots on which the Properties are located.
(4) Condition of Building. There are no material defects
(given age and usage) in the roof, foundation, structural elements and masonry
walls of any of the buildings or their heating, ventilating and air
conditioning, electrical, sprinkler, plumbing or other mechanical systems.
(5) Compliance with Law. Each of the buildings, as presently
constructed, does not violate, in any material respect, any applicable federal
or state law or governmental regulation or any local ordinance, order or
regulation, including but not limited to laws, regulations, or ordinances
relating to zoning, building use and occupancy, subdivision control, fire
protection, health and sanitation. Each of the buildings complies with
applicable zoning laws and regulations in all material respects. The zoning
laws permit use of each of the buildings for its current use. No notice has
been received by Realty Company or by the Master Tenant from any governmental
authority that the number of parking spaces on the lot or lots on which the
Properties is located as is inadequate under the zoning laws and regulations
to permit use of the Building for its current use.
(6) No Required Real Property Consents, Permits, Etc.
Neither Realty Company nor the Master Tenant has received written notice of,
24
nor has any knowledge of, any approvals, consents, licenses, permits, utility
installations and connections (including, without limitation, drainage
facilities), curb cuts and street openings, required for the maintenance,
operation, servicing and use of any of the Properties or any, of the buildings
thereon for its current use which have not been granted, effected, or performed
and completed (as the case may be) or any fees or charges therefor which have
not been fully paid. There are no outstanding notices, suits, orders, decrees
or judgments relating to zoning, building use and occupancy, fire, health,
sanitation, or other violations affecting, against, or with respect to, any of
the Properties or any part thereof.
(7) Insurance. Neither Realty Company nor the Master
Tenant has received any written notices from any insurer or its agent requiring
performance of any work with respect to any of the Properties or canceling or
threatening to cancel any policy of insurance, and the Properties comply with
the requirements of all insurance carriers.
(8) Real Property Taxes; Special Assessments. Except as set
forth in the Title Policies, there are no unpaid or outstanding real estate
or other taxes or assessments on or against any of the Properties or any part
thereof which are payable by Realty Company or the Master Tenant (except
only real estate taxes not yet due and payable). There are no betterment
assessments or other special assessments presently pending with respect to
any portion of the Properties, and neither Realty Company nor the Master
Tenant has received notice of any such special assessment being
contemplated.
(9) Historic Status. Neither Realty Company nor the
Master Tenant has received any written notice indicating that any buildings
located on any of the Properties are historic structures or landmarks or that
any such buildings or Properties are located within any historic district
pursuant to any federal, state or local law or governmental regulation.
(10) Eminent Domain; Unrestored Casualties. There are
no pending eminent domain proceedings against any of the Properties or any
part thereof, and, to Realty Company's and Master Tenant's knowledge, no
such proceedings are presently threatened or contemplated by any taking
authority. None of the Properties are subject to any unrestored fire or other
casualty condition.
(11) Leases. The Master Lease and a lease of property in
Lakewood, New York constitute the only agreements and understandings
relating to leasing or licensing of premises included in the Properties. Realty
Company has delivered to the Lender a true and accurate copy of such leases.
25
(12) Other Material Real Property Agreements; No
Options. There are no material agreements pertaining to any of the Properties,
or the operation or maintenance thereof other than as described in this
Agreement (including the Exhibits attached hereto) or otherwise disclosed in
writing to the Lender by Borrowers; and no person or entity has any right or
option to acquire any of the Properties or any portion thereof or interest
therein.
(s) Indebtedness. Realty Company has not incurred any
Indebtedness other than the Combined Investors Loan, this Loan, the
indebtedness shown on the Title Policies, other than unsecured obligations
incurred in the ordinary course of its business relating to the ownership,
management, operation, marketing and sale of its real estate, furniture,
fixtures and equipment.
(t) General. As of the Closing Date, Borrowers have not failed
to disclose any material fact or condition which is necessary to make the
representations and warranties set forth herein or in any other Loan Document
and the disclosures made by Borrowers not materially misleading.
4.2 Master Lease and Related Documents. Realty Company
covenants and agrees not to permit to occur any modification, termination or
cancellation of the Master Lease (other than releases of Properties leased
thereunder in connection with permitted sales of such Properties in accordance
with the provisions of this Agreement), or any of the Related Documents to
which Realty Company is a party and agrees faithfully to perform and observe
all of Realty Company's obligations under the Master Lease and such Related
Documents, it being understood and agreed, without limitation, that any
material breach of the obligations or representations and warranties of Realty
Company in any of the Related Agreements shall be an Event of Default
hereunder. Realty Company further agrees not to enter into any other
agreements with respect to the Properties other than agreements for
maintenance and operations that are terminable upon not more than thirty (30)
days notice and agreements in connection with sales of Properties permitted
by Section 4.3, and entered into consistent with the terms and conditions of
this Agreement (including contracts for alterations to be made to facilitate
such permitted sales).
4.3 Sales of Properties.
4.3.1 Except as otherwise provided in the second paragraph of
this Section 4.3, Realty Company shall not market, sell or permit to be sold
any Property except for a cash purchase price payable in its entirety at the
closing thereof and, in any event, shall not market, sell or permit to be sold
any Property for an amount less than 100% of the Scheduled Amount for such
26
Property as shown on Exhibit 1.1. Further, Realty Company shall not, without
Lender's prior written consent, encumber or lease any Property or enter into or
cause to be entered into an agreement for the sale of any Property
contemplating a closing more than six months from the date of the offer
accepted by Realty Company for such property. Realty Company shall not
market, sell or permit to be sold any Property except in a manner consistent
with this Section 4.3 and all other provisions of the Loan Document pertaining
to such sales.
4.3.2 It is understood and agreed that Realty Company shall not
accept or be permitted to accept an offer for purchase of a Property from, or
sell a Property to, any of the Borrowers or any Affiliates of Borrowers or any
Person to whom Realty Company directly or indirectly has granted the right to
participate in gains from any such sale.
4.4 Environmental Matters. Borrowers shall not do any of the
following except in the ordinary course of their businesses and in compliance
with Environmental Laws: (a) use or permit to be used any of the Properties or
any portion thereof as a facility for the handling, processing, storage or
disposal of Hazardous Substances, (b) cause or permit to be located on any of
the Properties any underground tank or other underground storage receptacle
for Hazardous Substances except in full compliance with the Environmental
Laws, (c) generate or permit to be generated any Hazardous Substances on
any of the Properties except in full compliance with the Environmental Laws,
or (d) conduct or permit to be conducted any activity at any of the Properties
or use or permit to be used any of the Properties in any manner so as to cause
a Release or threatened Release of Hazardous Substances on, upon or into any
of the Properties.
Borrowers hereby covenant and agree, to indemnify, defend with
counsel, consultants and experts reasonably acceptable to the Lender and hold
harmless the Lender, its officers, directors, employees and agents, and any
successors to the Lender's interest in the Properties (or any portion thereof),
their directors, officers, employees and agents (collectively, "Indemnitees"),
except in the case of gross negligence or willful misconduct of such persons,
against and from any and all liens, claims, demands, fines, settlement
payments, penalties, assessments, judgments, directions, orders, suits,
litigation, losses, liabilities, costs and expenses (including reasonable
attorneys', consultants' and experts' fees prior to and at trial and on any
appeal or petition for review) (collectively, "Environmental Claims") relating
to the Properties and arising out of, in connection with or in any way relating
to (i) the breach of any of the representations, warranties or covenants
contained in this Agreement with respect to Environmental Laws or Hazardous
Substances (ii) Realty Company's or Master Tenant's (or any Affiliates thereof)
use, treatment, storage, generation, manufacture, transport, release, spill,
27
disposal or other handling of Hazardous Substances on any of the Properties,
or (iii) any other presence or alleged presence of Hazardous Substances on or
about the Properties caused by Realty Company, Master Tenant or any Affiliates
thereof or otherwise in existence. Environmental Claims shall include, without
limitation, (a) the cost of all investigatory, removal, remedial and other
response action required by any Environmental Law, by judicial order or by
order of or agreement with any governmental authority having jurisdiction
under any Environmental Law, (b) claims for injury or death of any person,
including an Indemnitee, and (c) claims for damages to property of an
Indemnitee or any other person, including claims for diminution in value or loss
of use.
The liability of Borrowers under the foregoing indemnity shall survive the
payment and cancellation of the Note, the satisfaction of record of the
Mortgages and the performance of all obligations under the Loan Documents
and shall survive the delivery of a deed or deeds in lieu of foreclosure to the
Lender or any successor or assign of the Lender and shall survive any
foreclosure, whether judicial or nonjudicial, of any of the Properties (or any
portion thereof) by the Lender or any, successor or assign of the Lender, and
shall be for the benefit of the Lender and any successor or assign of the
Lender as holder of any security interest in any of the Properties (or any
portion thereof) and for the benefit of Lender or any party claiming title
through the Lender as owner of any of the Properties (or any portion thereof)
following foreclosure or the delivery of a deed in lieu thereof.
4.5 Use of Proceeds. Borrowers represent to and covenant with
Lender that the proceeds of the Loan shall be used solely for working capital
purposes of Borrowers, to maintain the Properties and comply with all of
Borrowers' covenants and obligations hereunder or under any of the Loan
Documents.
4.6 Restrictions on Distributions. Except for Distributions of proceeds
of the Loan from a Borrower to any other Borrower, and cash of approximately
$1.3 million (representing cash collateral presently held by Combined
Investors), no Borrower will make Distributions at any time until the Loan and
all Obligations have been paid in full.
4.7 Punctual Payment/Full Performance. Borrowers will duly and
punctually pay or cause to be paid the principal, interest and other charges due
under the Loan and all interest and fees provided for in this Agreement, all in
accordance, with the terms of this Agreement and the Note as well as all other
sums owing pursuant to the Loan Documents and shall duly, timely and fully
perform all of their other obligations to be performed under each of the Loan
Documents.
28
4.8 Records and Accounts. Borrowers will (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with GAAP and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation and amortization
of its properties, contingencies, and other reserves.
4.9 Insurance/Condemnation Proceeds. Borrowers will maintain
insurance on the Properties and deliver copies thereof and certificates with
respect thereto as required by the Mortgages with financially sound and
reputable insurers, insurance with respect to such properties and their business
against such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in similar
geographic areas and in amounts, containing such terms, in such forms and for
such periods as may be reasonable and prudent. All such insurance shall be in
such amounts and form, to include such coverages, deductibles and
endorsements, and shall be issued by such insurers as shall be approved by
the Lender, and shall contain the written agreement of the insurer to give the
Lender thirty (30) days prior written notice of cancellation, nonrenewal,
modification or expiration. Borrowers will provide the Lender with certificates
evidencing such insurance on or prior to the Closing Date hereunder and
thereafter annual renewal certificates evidencing such coverage as being
continuously in effect shall be delivered to Lender by no later than thirty (30)
days prior to the expiration of any policy then scheduled to expire.
Lender shall have the right to apply insurance and condemnation
proceeds as set forth in the Mortgages, subject to applicable provisions of the
Attornment and Subordination Agreement; provided that, to the extent Lender
is in receipt of any such proceeds with the right to apply such to the
Obligations and there does not then exist any Default or Event of Default.
Lender agrees to apply such proceeds to the Obligations in the manner set
forth in Section 3.1 for the application of Sale Proceeds.
4.10 Taxes. Borrowers will pay or cause to be paid taxes,
assessments and other governmental charges against the Properties as
required by the Mortgages and will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments
and other governmental charges imposed upon them and their other real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials or supplies that
if unpaid might by law become a lien or charge upon any of its property;
provided that any, such tax, assessment, charge, levy or claim with respect to
properties other than the Properties need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if Borrowers shall have set aside on their books adequate reserves with
respect thereto or otherwise provided for the timely payment thereof through
29
the Master Lease; and provided further that Borrowers will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
4.11 Inspection of Properties and Books. Borrowers shall permit
Lender at Borrowers' expense to visit and inspect any of the Properties, to
examine the books of account of Borrowers (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of
Borrowers with, and to be advised as to the same by, its officers, all at such
reasonable times and intervals as Lender may reasonably request.
4.12 Compliance with Laws, Contracts, Licenses, and Permits.
Borrowers will comply with (a) in all material respects, all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including all Environmental Laws, (b) the provisions of their corporate charter,
and other material charter documents and bylaws, (c) all applicable decrees,
orders, and judgments, and (d) in all material respects, all licenses and
permits required by applicable laws and regulations for the conduct of their
business or the ownership, use or operation of the Properties, including all
permits and approvals related thereto. The Holding Company and Realty Company
will comply with all agreements and instruments to which they are a party or by
which they are or any of its properties may be bound. If at any time while the
Loan is outstanding or Lender has any obligation to make advances hereunder,
any authorization, consent, approval, permit or license from any officer,
agency or instrumentality, of any government shall become necessary or
required in order that Borrowers may fulfill any of their obligations hereunder,
Borrowers will immediately take or cause to be taken all reasonable steps to
obtain such authorization, consent, approval, permit or license and furnish
Lender with evidence thereof.
4.13 [Intentionally Deleted].
5. BORROWERS' FINANCIAL STATEMENTS AND OTHER REPORTS
Borrowers shall deliver or cause to be delivered to the Lender:
(a) monthly reports of the progress and activities of Borrowers
by no later than the 10th day of the month following the monthly period to be
reported upon with such reports containing such information and detail as
Lender shall, from time to time reasonably require, including information
concerning the status and activities of the marketing and sale efforts for the
Properties. In addition, on a monthly basis, Borrowers shall, at Lender's
election, meet with Lender and provide a status report to Lender of the
progress of Borrowers' plan to market and sell the Properties.
30
(b) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of Borrowers, the balance
sheet of Borrowers at the end of such year, and the related statements of
earnings and cash flows for such year, each setting forth in comparative form
the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles; and
(c) from time to time such other financial data and information
concerning the Properties as Lender may reasonably request.
6. ADDITIONAL COVENANTS
Borrowers additionally covenants and agrees that, so long as the Loan is
outstanding:
6.1 Notices.
(a) Defaults. Borrowers will promptly notify the Lender in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or
under any note, evidence of indebtedness, indenture or other obligation to
which or with respect to which any Borrowers is a party or obligor, whether as
principal or surety, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on such Borrowers,
such Borrowers shall forthwith give written notice thereof to Lender,
describing the notice or action and the nature of the claimed default. Lender,
at its election, may notify Borrowers, from time to time, not to provide default
notices received from trade creditors.
(b) Environmental Events. Borrowers will promptly give notice
to Lender (i) of any violation of any Environmental Law that Borrowers report
in writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency and (ii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or local
environmental agency or board, that in either case involves any of the
Properties or has the potential to materially affect the assets, liabilities,
financial conditions or operations of Realty Company or Lender's security
interests pursuant to the Security Instruments.
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(c) Notification of Claims against Collateral. Realty Company
will, immediately upon becoming aware thereof, notify Lender in writing of any
setoff claims (including, with respect to the Properties, Environmental Claims),
withholdings or other defenses to which any of the Lender's collateral, or the
Lender's rights with respect to the such collateral, are subject.
(d) Notice of Litigation and Judgments. Borrowers will give
notice to Lender in writing, within fifteen (15) days of becoming aware of any
litigation or proceedings (including administrative proceedings) threatened in
writing or any pending litigation and proceedings (including any administrative
proceedings) affecting Borrowers or to which Borrowers are or are to become
a party involving an uninsured claim against Borrowers that could reasonably
be expected to have a materially adverse effect on such Borrower and stating
the nature and status of such litigation or proceedings.
6.2 Restrictions on Indebtedness. Realty Company will not create,
incur, assume, guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:
(a) Indebtedness to Lender arising under any of the Loan
Documents;
(b) Current liabilities of Realty Company incurred in the
ordinary course of business;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be required to be made
in accordance with the provisions hereof;
(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which Borrowers shall at the
time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review; and
(e) Endorsements for collection, deposit or negotiation and
warranties with respect to any assets sold or leased incurred in the ordinary
course of business.
6.3 Restrictions on Liens, Etc. Realty Company will not (a) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
32
hereafter acquired, or upon the income or profits therefrom; (b) transfer any of
its property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional
sale or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than thirty (30) days
after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse
(collectively, "Liens"); provided Realty Company may create or incur or suffer
to be created or incurred or to exist:
(i) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old
age pensions or other social security obligations;
(ii) presently outstanding liens on the Properties listed on
Schedules B, Parts II on the Title Policies delivered to and accepted by Lender
in connection with this transaction;
(iii) liens in favor of Lender under the Loan Documents; and
(iv) other liens and encumbrances expressly permitted
under the terms of the Security Instruments.
6.4 Restrictions on Investments. Borrowers will not make or permit to
exist or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America or any agency thereof that mature within one (1)
year from the date of purchase by Borrowers;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $1,000,000,000;
(c) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by Xxxxx'x
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's;
33
(d) trade or customer accounts or notes receivable for
inventory sold or leased or services rendered in the ordinary course of
business;
(e) advances to employees, agents and consultants in
the ordinary course of business, including, but not limited to, travel, payroll
and other expenses incurred in the ordinary course of business;
(f) investments consisting of contingent liabilities of any
Borrower represented by endorsements of negotiable instruments for collection
or deposit in the ordinary course of business, and advances, deposits, down
payments and prepayments on account of certain firm purchase orders made
in the ordinary course of business; and
(g) any additional investments that Borrowers may desire
to make shall be subject to Lenders written approval which approval will not
be unreasonably withheld or delayed.
6.5 Merger, Consolidation. Borrowers will not become a party to any
merger or consolidation, or agree to or effect any asset disposition (other than
sales of Properties to the extent not restricted hereby) or stock acquisition or
disposition; provided, however, the Borrowers may (a) sell or otherwise
dispose of (i) inventory in the ordinary course of business, (ii) tangible
assets to be replaced in the ordinary course of business by other assets of
substantially equal or greater value, (iii) assets to any Borrower, and (iv)
tangible assets either obsolete or no longer used or useful in the business of
the Borrowers and (b) issue stock to satisfy (i) certain convertible promissory
notes made by Xxxxxxxx'x payable respectively to the order of Combined
Investors and Continental Casualty and affiliates and (ii) any existing
obligations to employees, former employees, and directors.
6.6 Sale and Leaseback. Borrowers will not enter into any arrangement,
directly or indirectly, whereby Borrowers shall sell or transfer any
property owned by it in order then or thereafter to lease such properly or lease
other property that Borrowers intends to use for substantially the same
purpose as the property being sold or transferred.
6.7 Restrictions on Transfers. Without in each instance first obtaining
the written consent of Lender (which consent may be granted or withheld by
Lender in its sole discretion) or as otherwise permitted or contemplated by the
provisions of Section 4.3, Realty Company covenants and agrees not to sell or
transfer its legal or equitable interest (or any portion thereof) in any of the
Properties at any time while this Agreement is in effect; and Borrowers agree
not to permit to occur, directly or indirectly, any transfer of direct or
indirect ownership or control of any other Borrower. At all times during the
34
term of the Loan, the Holding Company in the aggregate, shall own and control
100% of the voting and equity interests in Realty Company.
6.8 Restrictions on Leases. Holding Company and Realty Company
will not become a party to, any Lease (other than Master Lease) without the
prior written approval of Lender which consent may be granted or withheld by
Lender in its sole discretion. Borrowers will not amend, supplement or
otherwise modify, or terminate or cancel, or accept the surrender, or grant any
concessions to or waive the performance of any obligations of any tenant or
guarantor under, any Lease, or give any consent, without the prior approval of
Lender. Holding Company and Realty Company will not, directly or indirectly,
cause or permit to exist any condition which would result in the termination or
cancellation of, or which would relieve the performance of any obligations of
any party under, any Lease (other than the Master Lease).
6.9 No Amendments to Certain Documents. Borrowers will not at any
time cause or permit any of its charter or other incorporation documents (if
any) to be modified, amended or supplemented in any respect, without (in
each case) the express prior written agreement, consent or approval of the
Lender.
6.10 Issuance of Stock. Except as permitted by Section 6.5(b),
Borrowers shall not issue or distribute any capital stock or other securities
convertible into or exchangeable for capital stock, any options, warrants or
rights to purchase capital stock nor make any dividends or distributions of
cash or property with respect to its capital stock without (in each case) the
express prior written agreement, consent or approval of the Lender.
6.11 Other Agreements. Borrowers shall not enter into any agreement
containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith or which
would violate or breach any provision hereof or of any such instrument or
document.
6.12 Subsidiaries. Borrowers shall not create a subsidiary not existing
on the date of this Agreement.
7. EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default and Acceleration. If any of the following events
("Events of Default") shall occur:
7.1.1 Borrowers shall fail to pay any principal of the Note when
the same shall become due and payable, whether at the stated date of
35
maturity or any accelerated date of maturity or at any other date fixed for
payment; or
7.1.2 Borrowers shall fail to pay any interest on the Note or any
other sums due hereunder or under any of the other Loan Documents, within
two (2) days of the date when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or
at any other date fixed for payment; or
7.1.3 Intentionally Deleted
7.1.4 Borrowers shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents for fifteen
(15) days after written notice of such failure has been given to Borrowers by
Lender (provided, however, that if such failure is not reasonably susceptible of
being cured within such fifteen (15) day period through diligent efforts,
Borrowers' 15-day cure period shall be extended for an additional fifteen (15)
days (but not beyond the Maturity Date) if Borrowers commence such cure
within the initial 15-day period and thereafter diligently prosecutes such cure
to completion; or
7.1.5 any representation or warranty of Borrowers in this
Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Agreement shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated; or
7.1.6 with respect to any Indebtedness of Holding Company or
Realty Company, and with respect to any Indebtedness of Xxxxxxxx'x to
Congress Financial (but excepting therefrom respectively, Realty Company's
defaults under the Combined Investors Loans and the Master Lease and
Xxxxxxxx'x defaults under the Congress Financial Loan existing as of the
Closing Date):
(a) shall fail to pay such Indebtedness or any portion
thereof when due (taking into account applicable grace periods, if any); or
(b) shall fail to observe or perform any material term,
covenant, or agreement contained in any agreement by which it is bound
evidencing or securing such Indebtedness which gives or would give after the
passage of time or the giving of notice or both) the payee of such
Indebtedness the right to accelerate the payment thereof; or
(c) an event shall occur, or shall fail to occur, which
gives (or would give after the passage of time or the giving of notice or both)
36
the payee of such Indebtedness the right to accelerate the payment thereof,
and such acceleration would have a material adverse effect on a Borrower, or
7.1.7 Borrowers, (other than Xxxxxxxx'x) shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of a Borrower, or of any substantial part of the assets of a Borrower,
shall commence any case or other proceeding relating to a Borrower, under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against a Borrower (other
than Xxxxxxxx'x), shall indicate its approval thereof, consent thereto or
acquiescence there in or shall fail to cause such case to be dismissed within
60 days of its commencement; or
7.1.8 a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating a Borrower (other than
Xxxxxxxx'x), bankrupt or Insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of a
Borrower (other than Xxxxxxxx'x), in an involuntary case under federal
bankruptcy laws as now or hereafter constituted; or
7.1.9 there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
uninsured final judgment against a Borrower (other than Xxxxxxxx'x) that,
with other outstanding uninsured final judgments, undischarged, against a
Borrower (other than Xxxxxxxx'x) exceeds in the aggregate $500,000; or
7.1.10 if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or approval of
Lender, or any action at law, suit or in equity, or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by or
on behalf of Borrowers or any of their respective holders of voting interests,
or any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof; or
7.1.11 Borrowers, shall be indicted for a crime, a punishment for
which could include the forfeiture of any assets of a Borrower; or
37
7.1.12 if any of the Related Documents are modified or amended
without the prior written consent of Lender; or
7.1.13 any "Event of Default", as defined in or referred to in the
Note and the other Loan Documents or in any other provision of this
Agreement, shall occur; then, and in any such event, so long as the same may
be continuing, Lender may, except as otherwise provided herein, by notice in
writing to Borrowers declare all amounts owing with respect to this
Agreement, the Note and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Borrowers; provided that in the event of any Event
of Default specified in 7.1.6, 7.1.7 or 7.1.8. all such amounts shall become
immediately due and payable automatically and without any requirement of
notice from Lender.
The notice and grace provisions provided in this Section 7.1 shall not be
applicable if a Borrower knowingly or intentionally breaches any of their
respective obligations under this Agreement or the Loan Documents . Further,
notwithstanding anything to the contrary contained herein, the prosecution of
the cure of any Default under this Agreement shall not preclude a separate
Default or Event of Default from arising under any other provision of this
Agreement.
7.2 Remedies. If a Default or an Event of Default shall occur the
Lender may, at its option, take any or all of the following actions:
7.2.1 Withhold any Advances or Partial Advances hereunder or
under the Note to Borrowers;
7.2.2 If such condition continues beyond any applicable period of
notice and/or grace, declare all Obligations of Borrowers to Lender to be
immediately due and payable without further notice or demand, whereupon the
same shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
Borrowers (provided that, if an Event of Default occurs under Section 7.1.6,
7.1.7 or 7.1.8, all Obligations of Borrowers to Lender shall be automatically
due and payable without the need for any declaration or notice or demand);
7.2.3 Incur and pay reasonable expenses in protecting and
enforcing the Lender's rights under this Agreement and the Lender's security
for the Loan (including reasonable attorney fees and expenses). The payment
of any such expenses shall be treated as advances on account of the Loan.
Such expenses may include, but shall not be limited to, payments on account
of any real estate tax, charge, assessment, or other lien against the Properties
38
and any interest, fee, charge or cost which Borrowers have failed to pay in
accordance with the requirements of the Loan Documents. The foregoing shall
authorize, but not obligate, the Lender to do all such things in connection with
the Properties as the Lender, in its sole and unrestricted discretion, may
consider advisable, including, without limitation, the right to make additions
to and changes in any agreements executed by Borrowers relative to the
Properties, to employ contractors, subcontractors and agents and to take any
and all such action, either in its own name or in the name of a Borrower, and
Borrowers hereby grant to the Lender an irrevocable power of attorney
coupled with an interest to act in Borrowers' names in connection with the
foregoing.
7.2.4 Direct that any deposits, credits, collateral, other
property or other sums at any time credited by or due from the Lender (or any
Affiliate of Lender or other permitted assignee or participant in the Loan) to
Borrowers may, without notice (any such notice being expressly waived hereby)
and to the fullest extent permitted by law and without regard to any source of
payment whatsoever, at any time after the occurrence and during the
continuance of an Event of Default, be applied to or set off against any of the
Obligations of Borrowers hereunder; and
7.2.5 Foreclose on the Mortgages either judicially or
nonjudicially and exercise all other rights and remedies of the Lender under the
Loan Documents and at law and in equity.
All rights and remedies of the Lender are cumulative and not
exclusive of any other rights and remedies otherwise available to Lender. All
such rights and remedies may be exercised singularly or concurrently and from
time to time.
7.3 Distribution of Collateral Proceeds. In the event that, following
the occurrence or during the continuance of any Default or Event of Default,
Lender receives any monies in connection with the enforcement of any the
Security Instruments, or otherwise with respect to the realization upon any of
the collateral securing the Obligations, or parts thereof, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of Lender for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by
Lender in connection with the collection of such monies by Lender, for the
exercise, protection or enforcement by Lender of all or any, of the rights,
remedies, powers and privileges of Lender under this Agreement or any of the
other Loan Documents or in respect of such collateral or in support of any
39
provision of adequate indemnity to Lender against any taxes or liens which by
law, shall have or may have priority over the rights of Lender to such monies;
(b) Second, to all other Obligations in such order or preference
as Lender may determine; provided, however, that Lender may in its discretion
make proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to Lender of all of the Obligations,
to the payment of any obligations required to be paid pursuant to applicable
provisions of the Uniform Commercial Code;
(d) Fourth, the excess, if any, shall be refunded to Borrowers
or to such other Persons as are entitled thereto.
8. MISCELLANEOUS
8.1 Sale or Participation. Lender may, without the prior consent of
Borrower, sell or assign to any Affiliate of Lender all or a portion of its
rights and obligations under this Agreement and the other Loan Documents.
Consistent with the foregoing sentence, the Lender may also sell participations
to any Affiliate of Lender in all or a portion of the Lender's rights and
obligations under this Agreement and the other Loan Documents. Any Affiliate
of Lender or other Person which acquires, invests in or participates in the Loan
or any part thereof may rely upon all of the representations, warranties,
covenants and other provisions of this Agreement, the Note and the other
Loan Documents. All other sales of assignments or participations shall require
the prior written approval of Borrowers, which approval will not be
unreasonably withheld or delayed.
8.2 Survival Of Covenants, Etc. All covenants, agreements,
representations and warranties made herein, in the Note, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf
of Borrowers pursuant hereto or thereto shall be deemed to have been relied
upon by Lender, notwithstanding any investigation heretofore or hereafter
made by it, and shall survive the making by Lender of the Loan, as herein
contemplated, and shall continue in full force and effect so long as any
Obligations remain outstanding. The indemnification obligations of Borrowers
provided herein and the other Loan Documents shall survive the full repayment
of amounts due and the termination of the Obligations of Borrowers hereunder
and thereunder to the extent provided herein and therein. All statements
contained in any certificate or other paper delivered to Lender at any time by
or on behalf of Borrowers pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by Borrowers.
40
8.3 Consents and Notices. Except as otherwise expressly provided in
this Agreement, all approvals and consents to be given by the Lender, and
determinations to be made by the Lender, shall only be effective if given or
made in writing and may be given or withheld, or made, in Lender's sole and
unrestricted discretion.
Whenever notice is appropriately to be given by either party to the other
under this Agreement, such notices shall be provided in the manner set forth
below:
(a) if to Borrowers, at 00 Xxx Xxxx, Xxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxx, Esq., Secretary, with a copy in like fashion to
Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000,
Attention: Xxxxxxx X. XxXxxxxx, Esq., or at such other address for notice as
Borrowers shall last have furnished in writing to Lender; and
(b) if to Lender, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx,
Xxxxxx 00000, Attention: Xxxxxxx Xxxxx, Chairman, with a copy in like
fashion to Xxxxxx Pepper & Shefelman, 0000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxx, Esq. or such other address
for notice as Lender shall last have furnished in writing to Borrowers.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier
or facsimile (with written or electronic confirmation respectively) to a
responsible officer of the party to which it is directed, at the time of the
receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first class mail, postage prepaid, on the third
business day following the mailing thereof.
8.4 Waiver. Failure on the part of the Lender to complain of any
action or non-action on the part of Borrowers, no matter how long the same
may continue, shall never be a waiver by the Lender of any of its rights
hereunder. Further, no waiver by the Lender at any time of any of the
provisions hereof shall be construed as a waiver of any of the other provisions
hereof, and a waiver at any time of any of the provisions hereof shall not be
construed as a waiver at any subsequent time of the same provisions. The
consent or approval by the Lender to or of any action by Borrowers requiring
the Lender's consent or approval shall not waive or render unnecessary, the
Lender's consent or approval to or of any subsequent similar act by Borrowers.
41
8.5 No Assignment by Borrowers. Borrowers shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of Lender, which may be withheld by Lender
in its sole discretion.
8.6 Assignment. In the event of any assignment by Lender permitted
by Section 9.1, this Agreement and the other Loan Documents shall be
amended and additional documents executed and delivered to the extent
reasonably determined by Lender to reflect the assignment, including
modifying this Agreement to add any assignee as a party hereto.
8.7 Agreements with Respect to Bankruptcy. The parties contemplate
that in the near future Borrowers may need to seek protection under Chapter
11 of the Federal Bankruptcy Code. In the event Xxxxxxxx'x files a petition
under Chapter 11, Borrowers and Lender intend to enter into certain
arrangements in connection with the reorganization to be structured under
Chapter 11. Subject to the approval of the bankruptcy court, Lender may
make available to Borrowers approximately $4.0 million of additional credit,
which is intended to be adequately secured by real estate assets of Borrowers.
The intention of Borrowers and Lender is that if an acceptable plan of
reorganization can be arranged with shareholders and creditors, and approved
by the court, that Lender will convert its outstanding secured debt, including
the amounts outstanding under the Note, into an equity position of 50% of the
outstanding shares of the reorganized Xxxxxxxx'x.
8.8 Brokerage Commission. Borrowers and Lender agrees to pay for
any and all of their respective brokerage fees, if any, which may have been
incurred incident to this Agreement.
8.9 Indemnification. Borrowers shall indemnify and hold the Lender
and its Affiliates harmless against any and all claims, causes of action,
damages, losses, settlement payments, obligations, costs, expenses and all
other liabilities of any kind whatsoever, including reasonable attorneys fees,
which may be incurred or sustained by the Lender and/or its Affiliates arising
out of or in any way relating to the Loan, this Agreement, the other Loan
Documents and the arrangements or transactions contemplated therein,
whether or not the transactions contemplated by this Agreement shall be
consummated.
8.10 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Lender, its permitted participants, successors and assigns, and
Borrowers and nothing contained herein shall confer upon anyone other than
Borrowers or the Lenders, its permitted participants, successors and assigns,
any right to insist upon or to enforce the performance or observance of any of
the obligations contained herein.
42
8.11 Further Assurances/New Note. Borrowers shall do, make,
execute and deliver all such additional and further acts, things, assurances,
and instruments as the Lender may reasonably require more completely to
carry into effect the provisions and intent of this Agreement and the other
Loan Documents. Without limiting the foregoing, Borrowers agree that at the
request of the Lender, Borrowers will issue new notes in exchange for an
existing Note in amounts to be designated by the Lender, so long as the
aggregate amount of the Note being substituted does not exceed the original
principal amount of the Note for which the substitution is made and such
substituted notes are otherwise on the same terms and conditions of the Note
for which the substitution is made.
8.12 Releases of Security Instruments. When all other portions of the
Obligations, including, principal, interest, fees and costs, have been paid
indefeasibly and fulfilled in full, the Lender agrees that it shall promptly
thereafter, at Borrowers' sole cost and expense, prepare, execute and deliver,
in recordable form, if required, all necessary discharges, releases, UCC
termination statements and other documents required to release, terminate and
discharge all Security Instruments.
In addition, at such time or times a sale of a Property occurs in
accordance with the terms and conditions hereof and all sums required to be
paid over to Lender on account of such sale have been paid and if there does
not then exist any Default or Event of Default, Lender shall deliver to
Borrowers, at Borrowers' sole cost and expense, in recordable form, all
necessary discharges, releases, UCC termination statements and other
documents required to release, terminate and discharge any Security
Instrument with respect to such Property, together with such other documents
or instruments as may be reasonable necessary to permit Borrowers to transfer
clear title to such Property.
8.13 Time is of the Essence. Time is of the essence of each and
every provision of this Agreement.
8.14 Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law. If any clause or provision hereof is held
to be illegal, invalid or unenforceable, there shall be substituted in lieu
thereof a clause or provision as similar in terms to such clause or provision
as may be legal, valid or enforceable, as possible.
43
8.15 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, sets forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations, warranties, whether oral or written, by any
officer, employee or representative of any party hereto. All of the schedules
and exhibits attached hereto are and shall constitute a part of this Agreement.
In the event of an inconsistency between the terms of this Agreement and any
of the other Loan Documents, the documents shall be construed to the
maximum extent possible so as to avoid said inconsistency; in any event, if
not withstanding such construction an inconsistency remains, the provisions of
this Agreement shall govern and be controlling.
8.16 Amendments, Waivers, Etc. This Agreement, the Note and any
provision hereof or thereof may be waived only by an instrument in writing
signed by the Lender and may be amended only by an instrument in writing
signed by Borrowers and the Lender. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon Borrowers shall entitle Borrowers to other or further
notice or demand in similar or other circumstances.
8.17 Bind and Inure. The obligations of Borrowers and the Lender
hereunder shall be binding upon the successors and assigns of Borrowers and
the Lender (but such reference is not intended as a consent to any assignment
not specifically permitted by the Lender) and shall inure to the benefit of the
successors and assigns of the Lender and Borrowers.
8.18 Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
8.19 Governing Law. Lender is located and has its principal office in
the state of Oregon. The Loan will be made in and payment will be made from
Oregon and this Agreement shall be construed in accordance with and
governed by the laws of the state of Oregon (without regard to conflicts of
laws rules).
8.20 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original for all purposes.
8.21 JURISDICTION AND VENUE: WAIVER OF JURY TRIAL.
BORROWERS HEREBY ACKNOWLEDGE THAT THE TRANSACTION
EVIDENCED HEREBY IS A COMMERCIAL TRANSACTION. BORROWERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMIT TO PERSONAL
44
JURISDICTION IN THE STATE OF OREGON OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND (B)
WAIVE ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE
(I) TO OBJECT TO JURISDICTION WITHIN THE STATE OF OREGON OR VENUE
IN ANY PARTICULAR FORUM WITHIN THE STATE OF OREGON, AND (II) TO
THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN
ACTUAL DAMAGES. BORROWERS AGREE THAT, IN ADDITION TO ANY
METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE
LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO BORROWERS AT THE ADDRESS SET
FORTH ABOVE, AND SERVICE SO MADE SHALL BE DEEMED COMPLETE FIVE
(5) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHING CONTAINED
HEREIN, HOWEVER, SHALL PREVENT LENDER FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY
SECURITY AND AGAINST BORROWERS, AND AGAINST ANY PROPERTY OF
BORROWERS, IN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR
PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT
CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT
THE LAWS OF THE STATE OF OREGON SHALL GOVERN THE RIGHTS AND
OBLIGATIONS OF BORROWERS AND LENDER HEREUNDER OR THE
SUBMISSION HEREIN MADE BY BORROWERS TO PERSONAL JURISDICTION
WITHIN THE STATE OF OREGON. BORROWERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN
ANY JURISDICTION AND IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE
OBLIGATIONS, THE OTHER LOAN DOCUMENTS, OR ANY CLAIM OR DISPUTE
HOWSOEVER ARISING, BETWEEN BORROWERS AND THE LENDER. THIS
WAIVER OF JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY
DOCUMENT EXECUTED BY BORROWERS OR LENDER, AND DELIVERED TO
LENDER OR BORROWERS, AS THE CASE MAY BE, WHETHER OR NOT SUCH
DOCUMENT SHALL CONTAIN A WAIVER OF JURY TRIAL. BORROWERS
FURTHER CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND
FREELY MADE.
8.22 Waiver of Special Damages. Except as prohibited by law,
Borrowers hereby waive any rights which it may have to claim or recover in
any litigation with respect to any action or claim arising out of any dispute in
connection with the Loan Documents, any special, exemplary or punitive
damages. Borrowers (a) certify that neither the Lender nor any representative,
agent or attorney of the Lender has represented, expressly or otherwise, that
the Lender would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledge that, in entering into this Agreement, the Lender
45
is relying upon, among other things, the waivers and certifications contained in
this Section 9.21.
8.23 Exhibits. All Exhibits attached hereto are incorporated herein by
this reference. The Exhibits attached hereto are as follows:
Exhibit 1.1 Properties and Scheduled Amounts
Exhibit 2.1 Site Assessment Reports
Exhibit 3.1 Note
Exhibit 3.5.1 Directors
Exhibit 4.1(n) Subsidiaries
WITNESS the execution hereof as an instrument under seal on the day,
and year first above written.
LENDER: GDI COMPANY, INC., an Oregon
corporation
By:
Name:
Title:
[SIGNATURES CONTINUE]
46
BORROWERS: XXXXXXXX'X INC., a Delaware
corporation
By:
Name:
Title:
GRS HOLDING COMPANY, INC., a
Delaware corporation
By:
Name:
Title:
GRS REALTY COMPANY, INC., a
Delaware corporation
By:
Name:
Title:
47
EXHIBIT 1.1
List of Properties and Scheduled Amounts
Property Owned by Realty Company Scheduled Amounts
9. 0 Xxxxxxxxx Xxxx, Xxxxxxxxxxx, XX $ 650,000
00. Xxxxxxxxx Xxxxxx, Xxxxxxx, XX $ 150,000
11. Pointe Parkway, Cleveland (Warrensville Heights), OH $1,100,000
48
EXHIBIT 2.1
Site Assessment Reports
1. Phase 1 Environmental Site Assessment - Scarborough, Maine
2. Phase 1 Environmental Site Assessment - Laconia, New Hampshire
49
EXHIBIT 3.1
SECURED PROMISSORY NOTE
$ 1,999,999 (U.S.) February , 1997
FOR VALUE RECEIVED, GRS REALTY COMPANY, INC., a Delaware
corporation, GRS HOLDING COMPANY, Inc., a Delaware corporation and
XXXXXXXX'X INC., a Delaware corporation (collectively, "Borrowers" and each a
"Borrower"), jointly and severally, promise to pay to the order of GDI COMPANY,
INC., an Oregon corporation, at its office at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxx, Xxxxxx 00000, or at such other place as the Holder of this Note
(hereinafter, "Holder") may from time to time designate in writing, the sum of
$1,999,999 in lawful money of the United States, with interest thereon from the
date of disbursement on the unpaid principal balance of this Note until paid at
the rates set forth below, computed on monthly balances.
SECTION 1. Interest Rate.
The per annum interest rate hereunder (the "Note Rate") shall be ten
percent (10%) (the "Note Rate").
SECTION 2. Payments.
Unless sooner repaid by Borrowers, the entire unpaid principal balance of
this Note, plus all accrued but unpaid interest, and all other amounts owing
hereunder or under the Loan Documents (as hereinafter defined) shall be due and
payable in full on July 1, 1997 (the "Maturity Date"). Notwithstanding the
foregoing, Holder may, at its sole option, elect to extend the Maturity Date for
up to four (4) additional periods of thirty (30) days each.
SECTION 3. Application of Payments.
Payments shall be applied: (i) first, to the payment of accrued interest;
(ii) second, at the option of Holder, to the payment of any advances Holder may
have made for taxes, assessments, insurance premiums, or other charges on any
property given as security for this Note and any late charges due hereunder; and
(iii) third, to the reduction of principal of this Note.
Interest for each full calendar month during the term of this Note shall be
calculated on the basis of a 360-day year and twelve 30-day months. Interest
for any partial calendar month at the beginning or end of the term of this Note
50
shall be calculated on the basis of a 365 or 366-day year and the actual number
of days in that month.
SECTION 4. Prepayment.
Upon thirty (30) days prior written notice, Borrowers may prepay its
obligation under this Note in full (but not in part) at any time without
penalty.
SECTION 5. Late Charge.
If any amount payable hereunder is paid more than fifteen (15) days after
the due date thereof, Borrowers promise to pay a late charge of five percent
(5%) of the delinquent amount as liquidated damages for the extra expense in
handling past due payments.
SECTION 6. Security.
This Note is secured by (i) mortgages, including security agreements,
assignments of leases and rents and fixture filings (the "Mortgages") of even
date herewith and executed by GRS Realty Company, Inc., encumbering real
property owned by GRS Realty Company, Inc. and located in Scarborough, Maine,
Laconia, New Hampshire, and Warrensville Heights, Ohio, (collectively, the
"Properties"); (ii) assignments of leases and rents of even date herewith and
executed by GRS Realty Company, Inc. encumbering the Properties (the "Assignment
of Leases"). The Mortgages, the Assignment of Leases and any and all other
documents securing this Note are collectively referred to as the "Loan
Documents"; provided, however, that "Loan Documents" specifically shall not mean
and shall not include the certificate and indemnity agreements regarding
hazardous substances being delivered concurrently herewith to Holder by
Borrowers (the "Indemnity Agreements").
SECTION 7. Default; Remedies.
Following the maturity of the indebtedness evidenced hereby, whether by
acceleration or otherwise, or following a default during the loan term, the
unpaid principal amount hereof, interest thereon, and other charges shall
thereafter bear interest at a rate equal to twelve percent (12%) per annum
("Default Rate"). Following the maturity of the indebtedness evidenced hereby,
whether by acceleration or otherwise, or following a default during the loan
term, accrued interest shall be payable upon demand. The Default Rate shall
also accrue upon any sums which payee advances hereunder or under the terms of
the Loan Documents to protect its security for this Note or otherwise assert or
protect any of its rights and benefits under the Loan Documents. Failure to
exercise this option shall not waive the right to exercise the same in the event
of any subsequent default.
51
SECTION 8. Attorneys' Fees.
In the event of any default under this Note or in the event that any dispute
arises relating to the interpretation, enforcement or performance of any
obligation secured by the Loan Documents, Holder shall be entitled to collect
from Borrowers on demand all fees, disbursements and expenses incurred in
connection therewith, including but not limited to fees of attorneys,
accountants, appraisers, environmental inspectors, consultants, expert
witnesses, arbitrators, mediators and court reporters. Without limiting
the generality of the foregoing, Borrowers shall pay all such costs and
expenses incurred in connection with: (a) arbitration or other alternative
dispute resolution proceedings, trial court actions and appeals;
(b) bankruptcy or other insolvency proceedings of a Borrower, any guarantor or
other party liable for any of the obligations secured by the Loan Documents or
any party having any interest in any security for any of those obligations;
(c) judicial or nonjudicial foreclosure on, or appointment of a receiver
for, any of the Properties; (d) post-judgment collection proceedings; (e)
all claims, counterclaims, cross- claims and defenses asserted in any of the
foregoing whether or not they arise out of or are related to this Note;
(f) all preparation for any of the foregoing; and (g) all settlement
negotiations with respect to any of the foregoing.
SECTION 9. Miscellaneous.
(a) No Offset; Waiver. All payments under this Note shall be made
by Borrowers without deduction, offset, abatement, suspension, deferment,
diminution or reduction of any kind whatsoever. Every person or entity at any
time liable for the payment of the indebtedness evidenced hereby waives
presentment for payment, demand and notice of nonpayment of this Note. Every
such person or entity further hereby consents to any extension of the time of
payment hereof or other modification of the terms of payment of this Note, the
release of all or any part of the security herefor or the release of any party
liable for the payment of the indebtedness evidenced hereby at any time and from
time to time at the request of anyone now or hereafter liable therefor. Any
such extension or release may be made without notice to any of such persons or
entities and without discharging their liability. The nonexercise by Holder of
any of the rights under this Note in any particular instance shall not
constitute a waiver of such rights in that or in any subsequent instances.
(b) Maximum Interest. No provision of this Note or of the Loan
Documents shall require the payment or permit the collection of interest in
excess of the maximum permitted by law. If any excess of interest in such
respect is herein or in the Note provided for, neither Borrowers nor their
successors or assigns shall be obligated to pay that portion of such interest
which is in excess of the maximum permitted by law, and the right to demand the
payment of any such excess shall be and is hereby waived.
52
(c) No Oral Modification. This Note may not be amended,
cancelled, discharged, extended or modified except in writing.
(d) Joint and Several Liability. Each person or entity who signs
this Note is jointly and severally liable for the full repayment of the entire
indebtedness evidenced hereby and the full performance of each and every
obligation contained in the Loan Documents.
(e) Holder. All references to Holder in this Note shall be deemed to
refer to and include the original Holder under this Note, and any heirs,
administrators, assigns, orders or other successors in interest to the original
Holder or any other holder of this Note. Borrowers hereby acknowledge and agree
that Holder may assign or otherwise transfer all or any portion of its rights
under this Note to one or more investors or affiliates thereof or to one or more
of its wholly-owned subsidiaries. Any assignee shall have the same rights and
privileges under this Note as if said assignee were the original holder hereof.
(f) Time of Essence. Time is of the essence under this Note and in
the performance of every term, covenant and obligation contained herein.
(g) Governing Law. This Note is made with reference to and is to
be construed in accordance with the laws of the state of Oregon.
(h) Headings. The headings to the various sections have been
inserted for convenience of reference only and do not define, limit, modify, or
expand the express provisions of this Note.
DATED as of the day and year first above written.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND
COMMITMENTS MADE BY LENDER AFTER OCTOBER 3, 1989
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING,
EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE
ENFORCEABLE.
GRS REALTY COMPANY, INC.
By:
Its:
53
GRS HOLDING COMPANY, INC.
By:
Its:
XXXXXXXX'X INC.
By:
Its:
54
EXHIBIT 3.5.1
Directors
1. X. X. Xxxxx
2. X. X. Xxxxxx
3. T. H. Schnormeier
55
EXHIBIT 4.1(n)
Subsidiaries of Borrowers
% Owned or
Controlled By Jurisdiction of
Name of Corporation Xxxxxxxx'x Incorporation
-------------------------- ---------------------------- ----------------
Bacon Street, Inc. 100% Massachusetts
Contractors' Warehouse, Inc. 100% California
Xxxxx Financial Corp. 100% Washington
GRS Holding Company, Inc. 100% Delaware
GRS Realty Company, Inc. 100% owned by GRS
Holding Company, Inc. Delaware
Project Pros, Inc.
("Project Pros") 100% Delaware
Project Pros Marketing
Fund, Inc. 100% owned by
Project Pros, Inc. Delaware
