LOAN AGREEMENT
BETWEEN
SUMMIT BANK
AS BANK
AND
XXXXXXXXXX GRAPHICS INTERNATIONAL, INC.
A NEW JERSEY CORPORATION
AND
XXXXXXXXXX GRAPHICS REALTY, L.L.C.
A NEW JERSEY LIMITED LIABILITY COMPANY
AS BORROWER
FEBRUARY 3, 1999
INDEX
PAGE
----
Section 1 - DEFINITIONS..................................................... 1
Section 2 - THE LOANS....................................................... 8
Section 3 CONDITIONS PRECEDENT ........................................... 13
Section 4 - SECURITY........................................................ 20
Section 5 - REPRESENTATIONS AND WARRANTIES.................................. 20
Section 6 - COVENANTS BY BORROWER........................................... 24
Section 7 - EVENTS OF DEFAULT............................................... 32
Section 8 - BANK'S RIGHTS AND REMEDIES..................................... 35
Section 9 - BORROWER'S RIGHTS AND REMEDIES.................................. 38
Section 10 - MISCELLANEOUS PROVISIONS....................................... 38
LOAN AGREEMENT
THIS AGREEMENT entered into this 3rdday of February, l999 by and among
XXXXXXXXXX GRAPHICS INTERNATIONAL, INC., a corporation organized under the laws
of the State of New Jersey, XXXXXXXXXX GRAPHICS REALTY, L.L.C., a limited
liability company organized under the laws of New Jersey and SUMMIT BANK, a bank
organized and existing under and by virtue of the laws of the State of New
Jersey.
SECTION 1
DEFINITIONS
1.1 The following terms as used in this Agreement shall have the meanings
hereinafter provided:
"Advances": Extensions of credit under any loan.
"Affidavit": The Affidavit in the form annexed hereto as Schedule 3.1(t).
"Affiliate": Any Person or any group acting in concert in respect of such
Person that directly or indirectly, through one or more Persons, is in control
of, is controlled by, or is under common control with such Person.
"Agreement": The contents hereof together with the contents of any and all
Schedules and Riders annexed hereto and all other agreements, instruments or
documents executed or delivered in connection herewith, including without
limitation, the Loan Documents.
"Appraisal": The appraisal described in section 3.1.(2) of this Agreement.
"Appraiser": An MAI appraiser designated or approved by Bank.
"Architect": Xxxxx Xxxx or such other architect or architects as may be
engaged by Borrower from time to time in connection with the Improvements with
Bank's prior written approval, which shall not be unreasonably withheld.
"Architect's Agreement": The agreement between the Architect and Borrower
wherein Architect agrees to render certain services to Borrower in connection
with the Project.
"Architect's Certification": A certain letter delivered by the Architect to
the Bank in connection with the execution and delivery of this Agreement in the
form annexed hereto as Schedule 3.2(c).
"Assignment of Agreements Affecting Real Estate": The assignment to Bank of
Borrower's interest in all licenses, permits, approvals, certificates and
agreements issued by any Governmental Authority (as hereinafter defined) to
Borrower, together with contracts, subcontracts, agreements, service agreements,
rights, warranties and purchase orders executed by or on behalf of Borrower, all
in connection with the Improvements, executed and delivered on the date hereof,
and all as more particularly set forth therein.
"Assignment of Architect's Agreement": The assignment to Bank of Borrower's
interest in the Construction Agreement, executed and delivered on the date
hereof, together with an acknowledgement of and consent to such Assignment by
the Principal Contractor in the form annexed hereto as Schedule 3.2(k)(A) and
3.2(k)(B), respectively.
"Assignment of Construction Management Agreement": The assignment to Bank
of Borrower's interest in the Construction Management Agreement, executed and
delivered on the date hereof, together with acknowledgment of and consent to
such Assignment by the Construction Manager in the forms annexed hereto as
Schedules 3.2(j)(A) and 3.2(j)(B), respectively.
"Assignment of Contracts": The collective reference to the Assignment of
Agreements Affecting Real Estate, Assignment of Architect's Agreement,
Assignment of Construction Management Agreement, and Assignment of Plans and
Specifications, such Assignments having been executed and delivered on the date
hereof.
"Assignment of Leases and Rents": The assignment to Bank of Tenant Leases
and the rents derived therefrom, such assignment having been executed and
delivered on the date hereof.
"Assignment of Plans and Specifications": The assignment to Bank of
Borrower's interest in all plans, specifications, surveys, drawings and reports
between Borrower and any other party, existing as of the date hereof or created
in the future with respect to the Improvements, executed and delivered on the
date hereof, and all as more particularly set forth therein.
"Bank": Summit Bank, a bank organized and existing under and by virtue of
the laws of the State of New Jersey.
"Bank's Rights and Remedies": All of the rights and remedies of the Bank
described in Section 8.
"Borrower": Unless the context otherwise indicates, Borrower shall mean
individually and collectively and jointly and severally, Xxxxxxxxxx Graphics
International, Inc., a New Jersey corporation, and Xxxxxxxxxx Graphics Realty,
L.L.C., a New Jersey limited liability company, and their respective successors
and assigns.
"Borrowing Certificate": The Certificate in the form annexed hereto as
Schedule 3.2(d).
"Business Day": Any day except Saturday or Sunday or other day on which
Banks in the State of New Jersey are authorized or required to close.
"Collateral": The Construction Documents.
"Commencement Date": The date of commencement of construction of the
Improvements.
"Completion Date": December 31, 1999.
2
"Construction Advance": An advance of the Construction Loan for the purpose
of construction of the Improvements.
"Construction Documents": The collective reference to the Construction
Management Agreement, all other contracts between Borrower and any architect,
contractor, subcontractor, Construction Manager or materialman, the Plans and
Specifications, and Permits.
"Construction Loan": The loan to be made as provided in Subsection 2.1(b)
below, in the maximum principal amount of [THREE MILLION DOLLARS
($3,000,000.00)]. The amount of the Construction Loan is included in the face
amount of the Note. The description of the Construction Loan and the Mortgage
Loan as separate loans, and the use of the defined term "Loans" is for
convenience of reference only, and the Loans shall nevertheless be deemed a
single loan evidenced by the Note.
"Construction Loan Period": The period commencing on the date of this
agreement and ending on the earlier of (i) December 31, 1999, or (ii) the date
on which a permanent Certificate of Occupancy is issued for the Improvements.
"Construction Manager": Xxxxxxx & Associates, Inc., or such other
Construction Manager or Managers as may be engaged by Borrower from time-to-time
in connection with the Improvements, with the Bank's prior approval which shall
not unreasonably be withheld.
"Construction Management Agreement": The agreement between the Borrower and
the Construction Manager described in Subsection 3.2(e) providing for the
construction of the Improvements, as the same may be amended or supplemented
from time to time with Bank's prior written approval.
"Consulting Professional": Such licensed professional architectural or
engineering consultant as Bank may engage (or who may be an employee of Bank) to
examine the Plans and Specifications, changes in the Plans and Specifications
and cost breakdowns and estimates, to make periodic inspections of the work and
construction of the Improvements on Bank's behalf, and to advise and render
reports to Bank.
"Default Rate": The Interest Rate plus 2% per annum, not to exceed,
however, the maximum amount permitted by law.
"Engineer": The engineer or firm of engineers retained by the Architect or
Construction Manager to provide engineering services in connection with the
Improvements.
"Environmental Remediation Agreement": Individually and collectively the
Environmental Remediation Agreements to be delivered by the Seller of the
Premises to Xxxxxxxxxx Graphics Realty, L.L.C. in form and substance
satisfactory to the Bank.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Event of Default": Any of the events described in Section 7 below.
"First Advance": The first advance of Construction Loan from the Investment
3
Account described in Section 2.4.
"Funds Transfer Agreement": The Funds Transfer Agreement in the form
annexed hereto as Schedule 3.1(w).
"GAAP": Generally accepted accounting principles in the United States of
America consistently applied.
"Guaranty": The Guaranty in the form annexed hereto as Schedule 3.1(p)
hereof delivered by each U.S. Subsidiary.
"Guarantor": Xxxxxxxxxx Graphics, Inc. and any other U.S. Subsidiary now or
hereafter organized or acquired, and their respective successors and assigns.
"Improvements": The improvements to be constructed and installed on the
Premises (as herewith defined) in accordance with the Plans and Specifications
(as hereinafter defined) and pursuant to the Permits (as hereinafter defined),
consisting of all construction necessary, all as shown on the Plans.
"Interest Rate": Seven and one-half (7-1/2%) percent per annum.
"Investment Management Account Agreement": The Investment Management
Account Agreement annexed hereto as Schedule 3.1(x).
"Lease": Any lease executed by Borrower as landlord and a Tenant for the
occupancy of space in the building on the Premises, or for any part of the
Premises, including without limitation the Lease annexed hereto as Schedule
3.1(ll).
"Liens": All mortgages, chattel mortgages, liens, judicial liens,
encumbrances, security interests, charges, pledges, hypothecations, assignments,
assignments of accounts receivable, conditional sale or other title retention
agreements, and the like, relating to any personal and moveable property
interest of the Borrower, whether legal or equitable.
"Loans": The Construction Loan and the Mortgage Loan, collectively. The
description of the Construction Loan and the Mortgage Loan as separate loans,
and the use of the defined term "Loans" is for convenience of reference only,
and the Loans shall nevertheless be deemed a single loan evidenced by the Note.
"Loan Commitment Fee": A non-refundable fee in the amount of $74,000.00
payable by Borrower to Bank, which amount is equal to one percent (1%) of the
Loan. The Loan Commitment Fee is in addition to all other costs and expenses to
be paid or reimbursed by Borrower.
"Loan Documents": This Agreement, the Note, the Mortgage, the Assignment of
Contracts, the Guaranty, the Assignment of Leases and Rents, the Environmental
Rider, the Powers of Attorney, and all other documents and instruments from time
to time evidencing or securing the Loans (or either of them) and any other
documents or instruments executed by Borrower or Guarantor (or either of them)
in connection with the Loans.
4
"Maturity Date": March 1, 2009 or such later date as the same may be from
time to time extended at the sole option of the Bank.
"Memorandum of Agreement": That certain Memorandum of Agreement by and
among the Seller of the Premises, Xxxxxxxxxx Realty, L.L.C. and the New Jersey
Department of Environmental Protection dated on or about February 3, 1999.-
"Mortgage": The Mortgage given by Borrower to Bank dated the date hereof
encumbering the Premises, in the principal amount of $7,400,000.00 as security
for the Loans, in the form annexed hereto as Schedule 3.1(k).
"Mortgage Loan": The mortgage loan to be made as provided in Subsection
2.1(a) below, in the aggregate principal amount of Four Million Four Hundred
Thousand Dollars ($4,400,000.00)
"Note": The promissory note in the form annexed hereto as Schedule 3.1(b)
executed by Borrower and delivered to Bank in the amount of $7,400,000.00 dated
the date hereof, which evidences the Loans and any notes in renewal thereof or
subsections or replacement therefor.
"Obligations": All loans, advances, indebtedness, notes, letters of credit,
guaranties, agreements, liabilities and amounts, liquidated or unliquidated,
each of every kind, nature and description, of the Borrower and its Subsidiaries
to or with the Bank, whether arising under this Agreement or otherwise,
including, without limitation, principal and interest, charges, expenses,
attorney's fees, and whether secured or unsecured, direct or indirect, absolute
or contingent, joint or several, due or to become due, now existing or hereafter
contracted (including without limitation any participation or interest of the
Bank in any obligation of the Borrower or such Subsidiaries to others) acquired
outright, conditionally or as collateral security from another, and whether
incurred by the Borrower as principal, surety, endorser, guarantor,
accommodation party or otherwise, together with any extensions, renewals or
modifications thereof, and also including any relationship whereby the obligor
is bound to render a performance in favor of an obligee.
"PBGC": The Pension Benefit Guaranty Corporation.
"Permits": All consents, approvals, licenses and building permits required
for construction, completion, occupancy and operation of the Improvements in
accordance with all Requirements of Law affecting the Real Property and the
Improvements.
"Permitted Exceptions": The matters shown on Schedule B, Section 2 of the
Title Commitment, and any other exceptions to title to the Mortgaged Property
which Bank or its counsel may have heretofore or hereafter approved in writing.
"Permitted Lien":
(i) Liens for taxes, assessments or other governmental charges not yet
due and payable;
(ii) Statutory Liens of Landlords, carriers, warehousemen, mechanics,
materialmen and other similar Liens imposed by law, which are incurred in
the ordinary course of
5
business for sums not more than thirty (30) days delinquent or which are
being contested in good faith; provided that a reserve or other appropriate
provision shall have been made therefor and the aggregate amount of
liabilities secured by such Liens is less than $50,000.00.
(iii) Liens (other than any Lien imposed by ERISA or any rule or
regulation promulgated thereunder) incurred or deposits made in the
ordinary course of business in connection with workers compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety, stay, customs and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar
obligations(exclusive of obligations for the payment of borrowed money);
(iv) Deposits, in an aggregate amount not to exceed $100,000.00 made
in the ordinary course of business to secure liability to insurance
carriers;
(v) Liens for purchase money obligations, provided that: (a) the
purchase of the asset subject to any such Lien is permitted under the
Revolving Line of Credit; (b) the indebtedness secured by any such Lien is
permitted under Subsection 6.21; and (c) any such Lien encumbers only the
asset so purchased;
(vi) Any attachment or judgment Lien not constituting an Event of
Default under Section 7;
(vii) Easements, rights of way, restrictions, and other similar
charges or encumbrances not interfering in any material respect with the
ordinary conduct of the business of Borrower or any of its Subsidiaries;
(viii) Any interest or title of a lessor or sublessor under any lease
permitted by Section 6.21(d);
(ix) Liens in favor of the Bank; and
(x) Liens existing on the date hereof and renewals and extensions
thereof, which Liens are set forth on Schedule 5.8 hereof.
"Person": Any individual, sole proprietorship, corporation, partnership,
association, limited liability company, joint stock company, trust, estate,
unincorporated organization, joint venture, company, entity, party, court or
government or political subdivision or agency thereof.
"Plan": Any plan subject to the minimum funding requirements of Section 412
of the Internal Revenue Code of 1986, as amended.
"Plans and Specifications": The plans and specifications for the
construction of the of the Improvements, prepared by the Architect and certified
to Bank, all of which shall be subject to approval by Bank, including without
limitation such amendments thereto as may from time to time be made by Borrower
and the Architect and/or the Construction Manager.
"Premises": That certain real property commonly known as 0 Xxxxx Xxxx,
Xxxxxx
0
Xxxx, Xxx Xxxxxx upon which the Improvements will be constructed. Upon
acquisition, the Premises shall also include the real Property located at 0
Xxxxxx XxXxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx. The Premises are more
particularly described in the Schedule to the Mortgage.
"Project": The construction of the Improvements on the Premises, as
specified in the Plans.
"Project Budget": The budget for Borrower's use of the Construction Loan,
as more particularly set forth on Schedule 3.1(y) hereto.
"Real Property": The collective reference to the Premises and the
Improvements and any other real property encumbered by a Mortgage.
"Reportable Event": As such term is defined in Title IV of ERISA.
"Responsible Officer": A president, vice president, chief operating officer
or secretary or other authorized signatory of any Person, or such other officer
or agent thereof as is approved in writing by Bank.
"Requirement of Law": As to any Person, the certificate of incorporation
and by-laws or trust agreement or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject; and, as to the Real Property, any applicable
environmental, zoning or building use and land use laws, ordinances, rules or
regulations of any Governmental Authority or agency, and any applicable
covenants and restrictions.
"Revolving Line of Credit": The Revolving Line of Credit made available to
Borrower pursuant to Section 2.1 of the Credit and Security Agreement dated July
9, 1998 between Borrower and Bank.
"Security Agreement": The Security Agreement executed by the Borrower
substantially in the form annexed hereto as Schedule 3.1(kk).
"Security Documents": Each and all of the documents executed and delivered
by Borrower to Bank that secure the amounts owed by Borrower to Bank under the
Loan Documents, including but not limited to the Mortgage and the Assignment of
Leases and Rents.
"Subsidiary": Any corporation more than a majority (by number of shares or
votes) of the common stock which is at the time owned or controlled by the
Borrower or a direct or indirect Subsidiary of the Borrower.
"Tenant": Any person who occupies any space in the building on the
Premises, or any part of the Premises.
"Tenant Leases": Any agreement by and between Borrower and any Tenant(s)
that
7
governs the occupancy of any space in the building on the Premises, or any part
of the Premises.
"Title Commitment": Title Commitment No.24,520 issued by Xxxxxx Realty
Abstract, as agent for Xxxxxxx Title Insurance Company.
"Title Company": Xxxxxxx Title Insurance Co., or such other title company
as may be approved by Bank.
"Total Funded Debt": The outstanding principal amount of all borrowings of
the Borrower, including without limitation, bank borrowings and borrowings from
other Banks, and borrowings made pursuant to securities issued and sold by the
Borrower, and borrowings where interest is inputted in accordance with GAAP plus
the outstanding amounts due under capitalized leases, but excluding, however,
trade debt incurred in the ordinary course of Borrower's business.
"U.S. Subsidiary": Any Subsidiary of Borrower organized under the laws of a
state within the United States of America.
1.2 Any accounting terms used in this Agreement which are not specifically
defined shall have the meanings customarily given thereto in accordance with
GAAP.
1.3 Terms such as "accounts", "accounts receivable", "contract rights",
"letters of credit", "advices", "confirmations", inventory", "equipment",
"instruments", "chattel paper", "documents of title", "goods", "general
intangibles", "account debtors", "proceeds", "products", and the like, shall,
unless other-wise specifically defined herein, have the meanings applicable to
them for the purposes of Article 9 (Secured Transactions) of the Uniform
Commercial Code in force and effect in the State of New Jersey at the date of
this Agreement.
SECTION 2
THE LOANS
2.1 Agreements to Lend and to Borrow: (a) Subject to the conditions and
upon the terms herein provided, Bank agrees to lend to Borrower and Borrower
also agrees to borrow from Bank the Mortgage Loan in the principal amount of
FOUR MILLION, FOUR HUNDRED THOUSAND DOLLARS ($4,400,000.00), which Borrower
shall use to pay a portion of the purchase price of the Premises, which is
$6,500,000.00. Borrower will, at closing, pay the balance of the said purchase
price from its existing cash reserves. The Mortgage Loan shall be made
simultaneously with Borrower's purchase of the Premises.
2.1 (a)(i) The Mortgage Loan shall be madein the full amount of
$4,400,000.00 but shall be disbursed as follows: The first advance shall be in
the amount of $3,425,000 and shall be used to fund a portion of the purchase
price of the real property and improvements thereon located at 0 Xxxxx Xxxx,
Xxxxxx Xxxx, Xxx Xxxxxx and shall be made simultaneously upon the execution of
this Agreement by the parties.
2.1(a)(ii) The second advance shall be in the amount of $975,000 and
8
shall be used to fund a portion of the purchase price of the unimproved real
property located at 1 Xxxxxx XxXxxxxx Boulevard, Jersey City, New Jersey. Until
the second advance is required, the balance of the proceeds of the Mortgage Loan
will be invested in the manner applicable to the Construction Loan as provided
in Subsection 2.4. At the closing of the purchase of the Xxxxxx XxXxxxxx
Boulevard property, the Bank shall fund the second advance of the Mortgage Loan
as set forth above. In the event the purchase of the Xxxxxx XxXxxxxx Boulevard
property is not purchased on or prior to August 31, 1999, the Borrower shall
have the right, upon two (2) days notice to Bank, to have the Bank disburse the
said $975,000 from the Investment Account referred to in Subsection 2.4 and to
reduce the amount of the Note and Mortgage in like amount. In such case, the
monthly installments payable on the Note shall be adjusted accordingly and
appropriate modifications to the Note and Mortgage shall be executed and
delivered by the parties, in form and substance satisfactory to the parties and
their respective counsel. The modification of the Mortgage shall be recorded in
Xxxxxx County.
2.1(a)(iii) Satisfaction of all the conditions precedent to the making of
the first advance under the Mortgage Loan set forth in this Agreement shall be
conditions precedent to the making of the second advance under the Mortgage
Loan. More specifically, but not by way of limitation, the Borrower will be
required to procure and deliver a mortgage (or at the option of Bank, a
Modification of Mortgage), in form and substance substantially identical to the
Mortgage, Environmental Remediation Agreement, Memorandum of Agreement, a policy
of title insurance, the other insurance required by this Agreement, appropriate
affidavits and certificates, lien and judgment searches, assignments and each
and every other document required by this Agreement in connection with the first
advance of the Mortgage Loan, except that to the extent the transactions
contemplated by the second advance are, in the judgment of counsel for the Bank,
approved in the resolutions delivered in connection with the first Mortgage Loan
advance, no additional resolutions need be delivered. In addition, no additional
certificates of incorporation or formation, good standing certificates or
incumbency certificates need be delivered provided that a duly authorized
officer of Borrower delivers an appropriate certificate covering these matters
at the time of the second advance.
(b) Subject to the conditions and upon the terms herein provided, Bank also
agrees to lend to Borrower, and Borrower agrees to borrow from Bank the
Construction Loan in the maximum principal amount not to exceed THREE MILLION
DOLLARS ($3,000,000.00).
2.2 Note: The Loans shall be collectively evidenced by the Note
representing the obligation of the Borrower to pay to Bank SEVEN MILLION FOUR
HUNDRED THOUSAND DOLLARS ($7,400,000). The Note matures on the Maturity Date and
bears interest at the Interest Rate from the date hereof on the outstanding
principal amount thereof until such amount shall become due and payable (whether
at the stated maturity, by acceleration or otherwise) and thereafter at the
Default Rate until paid in full (both before and after judgment). The Note
provides that interest shall be payable monthly in arrears on the first day of
each calendar month, commencing on April 1, 1999.
2.3 Use of Construction Loan Funds: All of the Construction Loan funds
shall be allocated to hard costs of construction. No part of the Construction
Loan is budgeted for any soft costs or for an interest reserve.
9
2.4 Procedure for Construction Loan Borrowing: The Project Budget, attached
hereto and made a part of this Agreement as Schedule 3.1(y), indicates the
allocation of the Construction Loan contemplated to be used for construction of
the Improvements. The entire proceeds of the Construction Loan shall be
disbursed at the Mortgage Closing but shall be deposited in an Investment
Account (the "Investment Account") by Bank pursuant to the form of Investment
Management Account Agreement as set forth in Section 3.1(x) and invested for the
benefit of Borrower. These funds shall be disbursed from the Investment Account
in accordance with the following procedures:
(a) Prior to any advance by Bank to Borrower, Borrower must provide to Bank
satisfactory evidence that it has obtained all necessary permits and approvals
in connection with construction of the Improvements, and that all Requirements
of Law in connection therewith have been satisfied.
(b) Requisitions for advances shall be made directly to Bank on forms
acceptable to Bank not more frequently than once per month. The requisition
forms shall list the original cost breakdown approved by Bank, together with the
cost of the work in place of each item and the balance remaining to complete
each item. Each requisition form shall be certified by the Borrower and the
Architect or Construction Manager.
(c) Requisition for advances shall be equal to the cost of the work
completed.
(d) Provided that Borrower has satisfied the conditions set forth in
Subsection 2.4(a) above, Bank shall make actual advances to Borrower in
accordance with the terms hereof, but only after:
2.4(d)(i) Satisfactory inspection of the Project by Bank and/or its
authorized designee and issuance of reports and certification that the
improvements in place, to the point of advance (by trade and cost breakdown on
an item by item basis) have been completed in a good and workmanlike manner in
accordance with all Plans and Specifications previously approved by Bank and as
required by all inspecting governmental authorities having jurisdiction thereof
and that there remain sufficient funds available in the Construction Loan to
complete the Project. The cost of such reports and certifications shall be paid
by the Borrower. Bank shall exercise reasonable efforts to cause each inspection
to be made not more than five (5) business days following receipt of each
appropriate draw request.
2.4(d)(ii) Receipt by Bank of a lien search certificate from the Title
Company indicating that there are no liens on the Real Property except for the
lien of the Bank and Permitted Exceptions
2.4(d)(iii) Final disbursement shall be made upon satisfaction of the
conditions set forth herein and in addition upon final completion of
construction in accordance with the Plans and Specifications, receipt of a
temporary or final Certificate of Occupancy, and a certificate of substantial
completion made by parties to this Agreement reasonably satisfactory to Bank.
2.4(d)(iv) Borrower shall be in compliance with all other requirements and
10
conditions hereof, and there shall be no existing default hereunder.
2.5 First Advance: Bank will make the First Advance of the Construction
Loan upon satisfaction of the conditions set forth in Subsection 2.4(a) above,
and all conditions specified in Sections 3 and 4 below.
2.6 Subsequent Advances. Subsequent to the First Advance, applications for
advances are to be made upon the satisfaction of all conditions set forth in
this Section 2 and in Section 3 below. If any portion of such application shall
be for an advance of the Construction Loan for payment to any materialman or
contractor who has performed work on the Improvements, then it shall be subject
to Bank receiving, prior to the Borrowing Date, an inspection report of the
Consulting Professional covering the progress of construction, substantial
conformity of such construction to the Plans and Specifications, quality and
quantity of materials incorporated into the Premises and work completed.
Applications by Borrower for advances for the payment of any other costs shall
be in writing and be supported by such evidence as shall be reasonably
acceptable to Bank. The making of any advance shall not be deemed an approval or
acceptance by Bank of the work done prior to such advance. Any request for an
advance shall be binding on Borrower if signed by a Responsible Officer Although
no part of the Construction Loan has been allocated for the payment of interest,
or any interest payment date under the Note, Bank may in its option, advance
Construction Loan funds to itself to pay same, notwithstanding that Borrower may
have requested an advance of such date, and Bank will simultaneously notify
Borrower of each such interest advance.
2.7 [INTENTIONALLY LEFT BLANK]
2.8 Budget Evaluation and Equity Injection. If Bank or Borrower reasonably
estimates and determines at any time that the amount of the Construction Loan
not yet advanced under Subsection 2.6 above is insufficient to pay the cost of
completing the Improvements in accordance herewith and with the Plans, it shall
deliver to the other, within five (5) Business Days of making such
determination, a detailed breakdown, which, in the case of Bank's making such
determination, shall be certified by the Consulting Professional, and which in
the case of Borrower's making such determination, shall be certified by the
Architect, specifying those items in which the Project Budget is believed to be
insufficient, the respective amounts thereof, and the amount of such aggregate
funds insufficiency (the "Funds Insufficiency"). With respect to each advance
requested subsequent to a determination of the existence of a Funds
Insufficiency, Bank shall, instead of being required to fund the full amount of
such request, be entitled to require Borrower to expend the amount of such Funds
Insufficiency from its own funds before Bank advances any additional funds.
Borrower may request to draw from excess amounts in other line items in the
Project Budget to cover a Funds Insufficiency; provided that Bank determines
that such excess amounts exist, then Bank may, in the exercise of its reasonable
discretion, allow such a draw for an excess amount. In the event of any
disagreement between the Consulting Professional and the Architect with respect
to a Funds Insufficiency, the determination of the Consulting Professional shall
control.
2.9 Partial Advances. If any or all conditions precedent to an advance of
the Construction Loan have not been satisfied on the applicable Borrowing Date,
Bank, in its
11
discretion, may, but shall have no obligation to, disburse all or a part of the
requested advance. If all conditions precedent to an advance have been met but
the Consulting Professional advises Bank that the particular work or materials
which are the subject of a particular line item or items on the Borrowing
Certificate, as referred to in Subsection 3.2(d) below, are defective or not
substantially in accordance with the Plans or invoices for such work or
materials, or not yet properly the subject of an advance hereunder, Bank will
nevertheless fund the other line items which are not faulty.
2.10 Payment of Principal and Interest.
(a) The Loan shall be for a term of ten (10) years, be based on an
amortization of twenty (20) years, and be repayable in 119 equal consecutive
monthly installments of $60,687.12, including accrued interest, commencing on
April 1, 1999, with a final installment of the entire outstanding principal
balance of $5,037,735.55 plus all accrued but unpaid interest, fees and
penalties, if any, due and payable on the Maturity Date. The principal amount
outstanding under the Loan shall bear interest at a fixed annual rate of 7 1/2%
per annum, for the actual number of days elapsed as if each full calendar year
consisted of three hundred sixty (360) days. If any part of the unpaid principal
balance of the Loan or the interest thereon shall become past due (whether at
stated maturity, by acceleration or otherwise) interest on the Loan shall
thereafter be payable at an annual rate equal to the Default Rate until such
overdue amount shall be paid in full. All accrued interest shall be paid monthly
on the first day of each month after the date hereof, until the principal and
all interest thereon is fully paid. Any payment not made on or within 10 days of
its due date will result in a late fee equal to 5% of the payment due. All
payments of interest and principal, however designated by the Borrower, shall be
first applied on account of accrued interest and the remainder of such payments,
if any, on account of the unpaid principal balance.
(b) In the event that any change in applicable law, regulation, condition,
directive or interpretation occurs which (i) subjects the Bank to any tax with
respect to any amount paid or to be paid by the Bank under the Loan Documents or
changes the basis of taxation of payments to the Bank on any amounts payable
under the Loan Documents (other than any tax measured by or based upon the
overall net income of the Bank); or (ii) imposes, modifies or deems applicable
any reserve or deposit requirements against the assets held by the Bank in
connection with advances or payments by the Bank pursuant to the Loan Documents;
or (iii) imposes upon the Bank any other condition with respect to any amounts
paid or payable to or by the Bank; and the result of any of the foregoing is to
increase the cost to the Bank of making any loans under the Loan Documents, or
to reduce the rate of return on the Bank's capital to a level below that which
the Bank would have achieved but for such event, then and in such event the Bank
shall deliver to the Borrower written notice of the happening of such event, and
the Bank shall be entitled to adjust the terms of the Loan Documents to make up
any increased cost or reduction of payment or return experienced by the Bank as
a result of such event. In the event the Borrower is not in agreement with said
adjustment, the Borrower shall have the right to pay in full all principal,
interest, charges and sums due under the Loan Documents, without consideration
of such adjustment, within ninety (90) days of such notice.
(c) The Borrower hereby directs the Bank to debit the Borrower's Demand
Deposit Account(s) on any date on which a payment is due under the Loans, in an
amount equal to such payment. Any failure or delay by the Bank in debiting said
account for said payments
12
shall not be construed as a discharge or waiver of the Borrower's obligation to
make such payments.
2.11 Interest Reserve. As set forth in Section 2.3 above, no part of the
Construction Loan is designated for use as an interest reserve. Borrower shall
make all interest payments from its own funds.
2.12 Use of Proceeds. The proceeds of the Construction Loan shall be used
by Borrower for payment of costs specified in the Budget.
2.13 Security/Collateral. The Loans and all amounts owed under the Loan
Documents shall at all times be secured by a first priority lien on the Real
Property, pursuant to the Mortgage and the Security Documents.
SECTION 3
CONDITIONS PRECEDENT TO LOANS
Bank shall not be obligated to make the Mortgage Loan or the Construction
Loan hereunder until all of the conditions set forth in this Section 3 shall
have been satisfied.
3.1 Closing Documents. Bank shall have received the following, each and all
of which must, where applicable, be duly executed and sealed and be reasonably
satisfactory to Bank in form and substance:
3.1(a) This Agreement properly executed.
3.1(b) The Note, in the form annexed hereto, as Schedule 3.1(b) .
3.1(c) A certified copy of resolutions of the Board of Directors, or
Members, as the case may be, of each Borrower in form satisfactory to the Bank,
authorizing the execution, delivery and performance of this Agreement, the Note,
the Mortgage, the other Loan Documents, the Security Documents, the Guaranty,
and any other documents, agreements, instruments or writings to be delivered
pursuant to this Agreement, the transactions contemplated by all of the
foregoing documents and all such other and further actions in connection with
this Agreement as designated officers of each Borrower may deem necessary and
proper.
3.1(d) Certificates by the Secretaries or other authorized officer of each
Borrower and each U.S. Subsidiary as to the incumbency and signatures of the
respective officers of the Borrower and U.S. Subsidiaries designated to sign the
documents described in Section 3.
3.1(e) Copy, certified by the respective Secretary of each Borrower and
each U.S. Subsidiary, of its Certificate of Incorporation or Certificate of
Formation, as the case may be, and any amendments thereto.
13
3.1(f) Certificates of the Secretary of State (or other appropriate
governmental authority) of each state or jurisdiction of organization of each
Borrower and U.S. Subsidiary dated within thirty (30) days prior to the date of
this Agreement, as to the good standing (or equivalent status) of each Borrower
and each U.S. Subsidiary.
3.1(g) Copy of each Borrower's and each U.S. Subsidiary's By-Laws or
Operating Agreement, as the case may be, certified by its respective Secretary
or other authorized person.
3.1(h) A Certificate, satisfactory to the Bank in form and substance, of a
reputable insurance company, licensed to conduct business in the State of New
Jersey and each jurisdiction where the Borrower and each U.S. Subsidiary has an
office evidencing appropriate insurance as required by Subsection 6.8
accompanied by evidence of the payment of the premiums therefor, with mortgagee
loss payable endorsements naming Bank as an additional insured..
3.1(i) The opinions of Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx,
Xxxxx & Behot and Margulies Wind Xxxxxxxxxx & Xxxxx, in form and substance
satisfactory to the Bank and its counsel.
3.1(j) UCC Financing Statements perfecting the Bank's security interest in
and lien on (subject only to such prior liens and exceptions, if any, as the
Bank previously shall have approved in writing) all the Construction Documents
and Contracts assigned to the Bank pursuant to this Agreement and all of the
Borrower's equipment, fixtures, and other personal property, if any, used in
connection with the operation of the Premises (as more particularly described in
the Mortgage), now or hereafter arising therefrom and whether or not installed
on or affixed thereto, condemnation awards and insurance proceeds.
3.1(k) The Mortgage from Borrower to Bank.
3.1(l) A certified copy of resolutions of the Board of Directors of the
Guarantor in form satisfactory to the Bank, authorizing the execution, delivery
and performance of the Guaranty and Power of Attorney and all such other and
further actions in connection therewith as designated officers of the Guarantor
may deem necessary and proper;
3.1(m) Copy, certified by the Secretary of each Borrower and each U.S.
Subsidiary of its Certificate of Authority to Transact Business (or equivalent)
as a foreign corporation in the states (or other jurisdictions) set forth in
Schedule 5.1 annexed hereto;
3.1(n) Proof, satisfactory to the Bank in form and substance, of the
satisfaction, termination and discharge of any Liens other than the Liens
created by this Agreement and the other Loan Documents and Permitted Liens;
3.1(o) UCC, federal tax lien, state tax lien, and upper court judgment
searches and franchise tax lien certificates (or their equivalent) for each
Borrower and U.S. Subsidiary; provided, however, that Borrower shall have sixty
(60) days following the date of this Agreement to provide all franchise tax
certificates required hereunder showing that there are no
14
franchise taxes due. If franchise taxes are due, Borrower shall pay the entire
amount due within ten (10) days after delivering the franchise tax certificates
to Bank;
3.1(p) The Guaranty in the form annexed hereto as Schedule 3.1(p), duly
executed by the Guarantor;
3.1(q) Assignment of Leases and Rents in the form annexed hereto or
Schedule 3.1(q);
3.1(r) Evidence of all zoning and planning approvals and permits issued by
all governing agencies having jurisdiction over the Project. All such Permits
shall be in final unappealable form and to the extent that they are conditional
such conditions shall be acceptable to Bank.
3.1(s) The Title Commitment for issuance of an ALTA form of mortgagee's
title insurance policy in the full amount of the Loan. The Title Commitment
shall insure that the Mortgage constitutes a valid, direct, first mortgage lien
in an aggregate amount not less than the face amount of the Note upon the good,
marketable title of the Borrower in and to the Premises without exceptions,
except Permitted Exceptions.
3.1(t) Affidavit of Xxxxxx X. Xxxx.
3.1(u) A Phase I environmental audit report, prepared by an independent
environmental engineering firm satisfactory to Bank, containing such
environmental information as necessary, in Bank's sole discretion, to assist in
the analysis and assessment of any potential hazardous or toxic waste conditions
on the Premises or adjacent properties and which is otherwise satisfactory to
Bank in its sole discretion.
3.1(v) Duly executed copies of all Loan Documents.
3.1(w) Funds Transfer Agreement in the form annexed hereto as Schedule
3.1(w) executed by the Borrower and the Guarantor;
3.1(x) The Investment Management Account Agreement in the form annexed
hereto as Schedule 3.1(x).
3.1(y) The Project Budget in the form annexed as Schedule 3.1(y).
3.1(z) An appraisal prepared by the Appraiser that is satisfactory to Bank
in form and substance, and a loan to value ratio acceptable to Bank.
3.1(aa) The Memorandum of Agreement in form and substance satisfactory to
Bank and its counsel;
3.1(bb) An initial commitment fee in the amount of $74,000.
15
3.1(cc) Evidence that all past and current (if then due and payable) taxes
and assessments applicable to the Premises or the Real Property have been paid
in full.
3.1(dd)(i) A survey of the Premises satisfactory to the Bank and its
counsel, which survey shall be certified to the Bank and the Title Company. The
survey shall show all parcels comprising the Premises, dimensions and locations
of any Improvements, easements, rights of way, adjoining sites, encroachments
and the extent thereof, establishing building lines and street lines, the
distance to and names of the nearest intersecting streets and such other details
as the Bank may reasonably request.
3.1(dd)(ii) An Affidavit of No Change from the Seller of the Premises with
respect to the above Survey, in form and substance satisfactory to the Bank and
its counsel.
3.1(ee) Certificates or other evidence of the insurance required by Section
6.8 hereof, along with proof of payment of premiums therefor and "All Risk" and
builders risk insurance policies, with extended coverage, written by a company
reasonably satisfactory to the Bank, with a standard mortgagee clause running in
favor of the Bank. The amount of coverage unless prohibited by law will be not
less than the greater of (x) 100% of the insurable value of the Premises, as
improved by the Improvements (including the Borrower's fixtures, equipment,
etc., but excluding land) and (y) the maximum principal balance of the Loan.
3.1(ff) All other closing documents, in form and substance reasonably
satisfactory to Bank and its counsel, which Bank ordinarily requires in
connection with the funding of the acquisition of real property and the funding
of construction thereon, including, without limitation, affidavits of title of
seller and purchaser, Notice of Settlement, and title endorsements.
3.1(gg) Environmental Remediation Agreements.
3.1(hh) [INTENTIONALLY LEFT BLANK]
3.1(ii)[INTENTIONALLY LEFT BLANK]
3.1(jj) Duly executed counterparts of the Construction Documents.
3.1(kk) The Security Agreement in the form annexed hereto as Schedule
3.1(kk).
3.1(ll) Lease between Xxxxxxxxxx Graphics Realty, L.L.C. and Xxxxxxxxxx
Graphics, Inc.
3.2 Additional Closing Documents for Advances. Prior to making the First
Advance or any subsequent Advances from the Investment Account for construction
of the Improvements, Bank shall received the following, each and all of which
must be reasonably satisfactory to Bank in form and substance:
3.2(a) Invoices or other evidence satisfactory to Bank documenting each
16
item included in the First Advance.
3.2(b) Construction Cost Breakdown in the form annexed hereto as Schedule
3.2(c).
3.2(c) The Architect's or Construction Manager's Certification, executed by
the Architect or Construction Manager, as the case may be.
3.2(d) A Borrowing Certificate, in the form annexed hereto as
Schedule3.2(d), dated the Borrowing Date, with appropriate insertions and
attachments in form and substance satisfactory to Bank and its counsel, executed
by a Responsible Officer.
3.2(e) The Construction Management Agreement between Borrower and the
Construction Manager, and, if requested by Bank, all agreements with contractors
and any sub-contractors.
3.2(f) The Architects Agreement.
3.2(g) Assignment of Agreements Affecting Real Estate in the form annexed
hereto as Schedule 3.2(g).
3.2(h) Final revised Plans and Specifications, initialed to show Borrower's
approval, satisfactory in form and content to Bank and the Consulting
Professional.
3.2(i) Assignment of Plans, Specifications and Reports.
3.2(j)(A) Assignment of Construction Management Contract
3.2(j)(B) Acknowledgement and Consent to Assignment of Construction
Management Contract.
3.2(k)(A) The Assignment of Architect's Agreement.
3.2(k)(B) The Acknowledgement and Consent to Assignment of Architect's
Agreement.
3.3 Additional Conditions. The Bank shall not be obligated to lend to the
Borrower hereunder unless at the time of any such loan:
3.3(a) The Borrower shall have complied and shall be then in material
compliance with all the terms, covenants and conditions of this Agreement which
are binding upon it.
3.3(b) All representations and warranties contained herein and otherwise
made by Borrower in connection herewith shall be true and correct with the same
effect as though such representations and warranties were made on and as of the
date of the Borrowing.
17
3.3(c) No condition, event or act exists which would constitute an Event of
Default as defined herein, and no condition, event or act exists which with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
3.3(d) No litigation and no proceeding nor investigation by or before any
court, public body, agency or authority is impending or threatened, of which is
aware, which may adversely affect the financial condition, business or
operations of Borrower and its U.S. Subsidiaries taken as a whole or the Real
Property.
3.3(e) Neither the Improvements (to the extent then constructed) nor any
other part of the Real Property shall have been damaged by any casualty valued
at more than $10,000.00 or condemned, or threatened with condemnation, unless in
the event of such casualty damage (but such exception not applying to
condemnation), Bank shall have received insurance proceeds sufficient in the
judgment of the Consulting Professional when added to (a) the undisbursed amount
of the Construction Loan plus (b) any equity funds injected by Borrower prior
thereto and/or simultaneously therewith, to effect the satisfactory restoration
of the Improvements and any other affected part of the Mortgaged Property and to
permit the completion of the Improvements prior to the Completion Date.
3.3(f) [INTENTIONALLY LEFT BLANK]
3.3(g) [INTENTIONALLY LEFT BLANK]
3.3(h) There shall be no Event of Default under the Note, the Mortgage,
this Agreement or any of the other Loan Documents. Provided, however, Bank may,
in its sole discretion, make advances notwithstanding the existence of such
Event of Default, and any advances shall be deemed to have been made pursuant to
this Agreement and not in modification thereof and without same constituting a
waiver by Bank of any of its remedies.
3.3(i) The Mortgage shall constitute a valid and first lien on the Premises
for the full amount then and theretofore advanced, free and clear of all liens
and encumbrances.
3.3(j) All proceedings taken on or prior to each advance in connection with
the performance of this Agreement shall be satisfactory to Bank, and Bank shall
be furnished with all relevant documents, reports, architect's certificates,
affidavits and other information, including without limitation, construction and
title affidavits, in form and substance reasonably satisfactory to Bank.
3.3(k) No advance shall be due or payable while there is any lien or
encumbrance upon the Improvements or the Premises other than the Permitted
Exceptions, or while there is any charge, question or claim of any kind
whatsoever, whether of record or not, which, in the opinion of counsel for the
Bank, may constitute a cloud on the title to the aforesaid, render the title
unmarketable or otherwise invalidate or have priority over the Bank's lien
pursuant to the Mortgage or any portion thereof.
3.3(l) Nothing contained herein or in any other documents or agreement
18
contemplated hereby or executed approximately simultaneously herewith shall
impose upon the Bank any obligation to see to the proper application of advances
by the Borrower, Principal Contractor or other contractors or any
subcontractors, and nothing shall prevent the Bank, at its option, from
deducting from any advance any sums due to it from the Borrower for unpaid
interest or for sums paid and expended by the Bank for taxes or assessments, for
insurance, pursuant to the terms of this Agreement, the Note or the Mortgage
given by the Borrower to the Bank.
3.3(m) Such stipulations, subordinations, waivers, releases and discharges
of mechanics' and materialmen's notices, claims, liens, lien rights and stop
notices as the Bank may require.
3.3(n) Affidavits from the Borrower that all money previously disbursed on
the Construction Loan has been paid to all contractors and subcontractors and
that there are presently no amounts owing to contractors, subcontractors,
materialmen or laborers, other than with respect to the amounts requested to be
disbursed and the holdbacks or retainage provided for under existing contractual
arrangements between the parties.
3.3(o) Proof that all insurance as required by the Bank under the Loan
Documents is in full force and effect.
3.4 No Advances Required. Bank shall have no obligation to make any advance
if at such time the total amount owed on the Loans is greater than eighty
percent of the Appraiser's estimated fair market value of the Premises as
improved by the Improvements. Bank may obtain updates of the Appraisal from the
Appraiser at any time while any amount remains owing under any of the Loan
Documents, and Borrower will promptly pay the cost of such updates.
3.5 Completion. The Improvements shall not be deemed completed for purposes
of this Agreement until all of the following conditions shall have been
satisfied:
3.5(a) The Improvements shall have been completed substantially in
accordance with the Plans and Specifications.
3.5(b) Bank shall have received the following, in each case in form and
substance reasonably satisfactory to Bank:
3.5(b)(i) Evidence of the approval of all appropriate Governmental
Authorities of the Improvements as being complete as to construction; and the
issuance of a temporary or permanent Certificate of Occupancy when the
Improvements are fully occupied; provided, however, that if a temporary
Certificate of Occupancy shall be obtained, a permanent Certificate of Occupancy
shall be obtained not later than the earlier of (i) sixty (60) days thereafter
or (ii) the Completion Date.
3.5(b)(ii) The certification of the Architect and of the Consulting
Professional that the Improvements have been completed substantially in
accordance with the Plans and Specifications and that direct connection has been
made to all appropriate utility facilities and the Improvements are ready for
occupancy.
19
SECTION 4
SECURITY AGREEMENT
4.1 In consideration of the Bank making the Loans to Borrower, in
accordance with the terms and conditions of this Agreement, and to secure
payment and performance of all obligations of Borrower to the Bank pursuant to
this Agreement, Borrower hereby assigns to the Bank and mortgages and grants to
the Bank an undivided security interest in the Collateral.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
5.1 The Borrower and each U.S. Subsidiary is a corporation (or limited
liability company) duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of organization and is duly qualified to
transact business as a foreign corporation in each jurisdiction in which the
character of the properties owned or the business transacted requires such
qualification, except where the failure to qualify would not have a material
adverse effect on the business or financial condition of either Borrower or such
U.S. Subsidiary. Set forth on Schedule 5.1 hereof is a list of the jurisdictions
in which each Borrower and each U.S. Subsidiary is qualified as a foreign
corporation as of the date hereof.
5.2 The Borrower has the requisite corporate power to execute, deliver and
perform this Agreement and to borrow hereunder and has taken all necessary
corporate action to authorize (i) the borrowing hereunder on the terms and
conditions of this Agreement and (ii) the execution, delivery and performance of
this Agreement. The Guarantor has the requisite corporate power to execute,
deliver and perform its Guaranty.
5.3 The Borrower and each U.S. Subsidiary possesses, in full force and
effect, all necessary franchises, franchise rights, patents, licenses,
trademarks, trademark rights, trade names, trade name rights, alternate or
fictitious name authorizations or certificates and copyrights to conduct its
business as now conducted ,except where the failure to possess same would not
have a material and adverse effect on its business, operations or financial
condition. Neither the Borrower nor any U.S. Subsidiary has received any written
notice and Borrower's and each U.S. Subsidiary's officers have received any oral
or other notice of any infringement of the franchises, patents, licenses,
trademarks, trademark rights, trade name, trade name rights, fictitious name
authorizations or certificates and copyrights of others, which infringement
allegation, if adversely determined, may materially and adversely affect the
business, operations or financial condition of the Borrower or such U.S.
Subsidiary.
5.4 On the date hereof, the Borrower has no Subsidiaries except as set
forth on Schedule 5.1 hereof.
5.5 The Borrower and each U.S. Subsidiary is engaged in the business of
graphic
20
communications and printing (or is a holding company solely for one or more
Subsidiaries so engaged) and conducts no other business or activities.
5.6 All federal, state and foreign tax returns of the Borrower and each
U.S. Subsidiary required by law to be filed have been duly filed or extensions
obtained. All federal, state and foreign taxes, assessments and governmental
charges or levies upon the Borrower and each U.S. Subsidiary or any of its
properties, income, profits or assets which are due and payable have been paid
or provided for, except such tax returns the non-filing of which, and such taxes
the nonpayment of which, would not have a material adverse effect upon the
business, assets, liabilities, financial condition, results of operation or
business prospects of the Borrower or such U.S. Subsidiary and except for such
taxes and assessments which the Borrower or such U.S. Subsidiary is disputing in
good faith and for which the Borrower or such U.S. Subsidiary has established
adequate reserves on its books for the payment of such disputed taxes or
assessments in accordance with Generally Accepted Accounting Principles. The
Borrower and each U.S. Subsidiary shall cause all future tax returns to be
timely filed or extensions obtained therefor, and all future taxes and
assessments to be paid when due.
5.7 Except as set forth on Schedule 5.7 annexed hereto, there are no
outstanding judgments, actions, proceedings, claims or investigations pending
or, to the best of Borrower's knowledge after diligent inquiry, threatened
before any court or governmental body which, if adversely determined, may
materially and adversely affect the business, operations or affairs of the
Borrower or any U.S. Subsidiary. There are no outstanding judgments, actions,
proceedings, claims, or investigations pending, or to the best of Borrower's
knowledge after diligent inquiry, threatened before any court or governmental
body against or relating to the Premises.
5.8 The Borrower and each U.S. Subsidiary has good and marketable title to
all of the properties and assets owned by it, subject to no Liens except
Permitted Liens, including without limitation, the Liens set forth on Schedule
5.8 annexed hereto.
5.9 No consent or approval of any person, landlord or mortgagee, no waiver
of any lien or right of distraint or other similar right, and no consent,
license, approval or authorization of or registration, qualification,
designation, declaration or filing with any governmental authority on the part
of the Borrower or any U.S. Subsidiary is required in connection with the
execution, delivery and performance of the Agreement or the consummation of any
other transactions contemplated hereby.
5.10 There is no term of any contract, bond, note, indenture or other
agreement or of any charter or other corporate restriction or of any judgment,
decree, order, or to the best of Borrower's knowledge, any statute, rule or
regulation which materially and adversely affects the business, operations or
affairs, as presently conducted, of the Borrower or any U.S. Subsidiary or any
of their respective assets, and to the best knowledge of the Borrower after
diligent inquiry, neither the Borrower nor any U.S. Subsidiary is now in
violation of any such term; and the execution, delivery and performance of, and
compliance with, this Agreement will not (with or without the giving of notice
of lapse of time, or both) result in any violation of, or be in conflict with,
or constitute a default under, any such term, or result in the creation of any
Liens upon any of the assets of the Borrower or any U.S. Subsidiary. The
operations of the Borrower and each U.S. Subsidiary
21
comply in all material respects with all laws, statutes, rules, regulations,
ordinances and the like, applicable to them.
5.11 Neither the Borrower nor any U.S. Subsidiary has, within the six (6)
year period immediately preceding the date of this Agreement, changed its name,
been the surviving corporation of a merger or consolidation, or acquired all or
substantially all of the assets of any person or entity, except as set forth on
Schedule 5.11 annexed hereto.
5.12 On the date hereof, the sole places of business of the Borrower and
each U.S. Subsidiary and their respective addresses are set forth on Schedule
5.12 annexed hereto.
5.13 The Borrower and each U.S. Subsidiary is in compliance in all respects
with the applicable provisions of ERISA (or comparable law) and all regulations
issued thereunder. No employee benefit plan as defined in ERISA (or such
comparable law) maintained and administered by the Borrower or any U.S.
Subsidiary, nor any trusts created thereunder, nor any trustee or administrator
thereof, has engaged in a prohibited transaction as defined in the Internal
Revenue Code of 1986 (or comparable law), which could subject the Borrower, any
U.S. Subsidiary, any such plan or trust, or any trustee or administrator
thereof, or any party dealing with any such plan or trust to the tax or penalty
on prohibited transactions imposed by said Internal Revenue Code. Neither any of
the plans nor trusts have been terminated, nor has there been any Reportable
Event or accumulated funding deficiency as defined in ERISA (or comparable law),
nor has the Borrower or any U.S. Subsidiary incurred any liability to the PBGC
(or comparable authority).
5.14 This Agreement and the other Loan Documents have been duly executed
and delivered and constitutes the valid and legally binding obligation of the
Borrower and/or the U.S. Subsidiary and/or Guarantor executing same, enforceable
in accordance with their respective terms.
5.15 The Borrower and each U.S. Subsidiary is solvent on the date hereof.
For the purpose of this Agreement, the term "solvent" shall mean that: (a)the
liquidation value of its property is in excess of the total amount of its debts;
and (b) it is able to pay its debts as they mature.
5.16 The Borrower has furnished to the Bank predecessor consolidated
(audited) financial statements as of December 31, 1997 and consolidated
(audited) financial statements of Roda Limited as of December 31, 1997. The
financial statements of Borrower have been prepared in accordance with GAAP, and
the financial statements of Roda Limited have been prepared in accordance with
United Kingdom generally accepted accounting principles ("UK GAAP") consistently
applied with footnote adjustments to GAAP. Such financial statements fairly
present the financial condition and results of operations and changes in cash
flows of the Borrower and Roda Limited, respectively, on the dates and for the
periods involved. Such financial statements make full and adequate provision for
all obligations, liabilities and commitments, fixed and contingent, of the
Borrower and Roda as of the date of the financial statements. Since the date of
the latest balance sheet contained in the above-referenced financial statements,
there has been no material and adverse change in the financial condition of the
Borrower or any U.S. Subsidiary not reflected in the financial statements as of
that date, and since such date the business of the Borrower and each U.S.
Subsidiary has not been materially and adversely affected by any occurrence,
whether or not insured against.
22
5.17 The advent of the year 2000 shall not adversely affect the Borrower's
or any Subsidiary's operations or the performance of its information technology.
Without limiting the generality of the foregoing, (i) the hardware and software
utilized by Borrower and each Subsidiary are designed to be used prior to,
during and after calendar year 2000 A.D. and such hardware and software will
operate during such time period without error relating to date data,
specifically including any error relating to, or the conduct of, date data which
represents or references different centuries or more than one century, (ii) the
hardware and software utilized by Borrower and each Subsidiary will not
abnormally end or provide invalid or incorrect results as a result of date data,
and (iii) the hardware and software utilized by Borrower have been designed to
ensure year 2000 A.D. compatibility, including date data, century recognition,
leap year, calculations which accommodate same century and multicentury formulas
and data values, and date data interface values that reflect the century.
5.18 All information, reports and other papers and data furnished to the
Bank were, at the time the same were so furnished, complete and correct in all
material respects. No document furnished or statement made to the Bank in
connection with the negotiation, preparation or execution of the Loan Documents
contains or will contain any untrue statement of material fact or omits or will
omit to state a material fact necessary in order to make the statements
contained therein not misleading. No fact is know to the Borrower which has had
or may in the future have a materially adverse effect upon the Borrower's or any
U.S. Subsidiary's business, assets, liabilities, condition, financial or
otherwise, or results of operations that has not been set forth in the financial
statements furnished to the Bank or other reports or other papers or data
otherwise disclosed in writing to the Bank.
5.19 All property owned or utilized by Borrower and each U.S. Subsidiary,
as well as all operations of Borrower and each U.S. Subsidiary, are to the best
of Borrower's knowledge and due diligence in compliance and will continue to be
in compliance with all federal, foreign, state, county, municipal and regulatory
agency and equivalent laws, rules, regulations, and ordinances including, but
not limited to, all applicable environmental laws and regulations.
5.20 (a) Except as set forth on Schedule 5.7 hereto, there are no
outstanding notices of violations of any Requirements of Law of any Governmental
Authority having jurisdiction over the Premises and/or the Improvements.
(b) The Plans and Specifications presently or hereafter existing for the
construction of the Improvements on the Premises as well as such Improvements
constructed thereon as of the date hereof and thereafter do and shall, and the
use of the Premises and Improvements does and shall:
(i) Comply with all applicable zoning, environmental protection,
subdivision, health, use and building codes, statutes, laws, regulations,
ordinances and all Requirements of Law.
(ii) The use and occupancy of said Improvements for their intended
purposes does not and will not, if constructed in accordance with the Plans
and Specifications,
23
conflict with any Requirements of Law.
(iii) All necessary Permits required at the stage of construction
reached at the time of the First Advance have been issued, Borrower shall
obtain all additional ones as and when required to construct the
Improvements, and knows of no reason why such additional permits will not
issue in the ordinary course and when needed for the particular stage of
construction.
SECTION 6
COVENANTS BY BORROWER
The Borrower covenants and agrees that:
6.1 The Borrower and each U.S. Subsidiary shall preserve and keep in full
force and effect its respective corporate existence and all franchises, rights
and privileges necessary, in the reasonable judgment of the Borrower's
management, to the proper conduct of its respective business, including, without
limitation, all necessary franchises, patents, licenses, trademarks, trademark
rights, trade name rights, fictitious name authorizations or certificates and
copyrights without any unlawful conflict with such franchises, patents,
licenses, trademarks, trademark rights, fictitious name authorizations or
certificates and copyrights of others.
6.2 The Borrower shall promptly deliver to the Bank copies of any
amendments or modifications to its or any U.S. Subsidiary's certificate of
incorporation and by-laws (or equivalent documents), certified with respect to
the certificate of incorporation (or equivalent) by the Secretary of State of
the state or jurisdiction of incorporation (or similar authority), and, with
respect to the by-laws (or equivalent), by the Secretary of the Borrower and
each U.S. Subsidiary.
6.3 The Borrower and each U.S. Subsidiary shall comply in all material
respects with all laws, ordinances, rules and regulations, now or hereafter in
effect, applicable to it of any federal, state, regional or local government or
any instrumentality or agency thereof.
6.4 The Borrower and each U.S. Subsidiary shall pay and discharge, as they
become due, all its respective obligations, in accordance with their terms,
including without limitation, all taxes, assessments, debts, claims and other
governmental or non-governmental charges lawfully imposed upon it or incurred by
it or its properties and assets and provide the Bank, if requested, evidence of
said taxes, assessments, debts, claims and charges, and of payment thereof,
except taxes, assessments, debts, claims and charges contested in good faith in
appropriate proceedings.
6.5 The Borrower and each U.S. Subsidiary shall maintain, preserve and keep
all its properties, equipment and assets reasonably necessary for its business
in good repair, working order and condition, reasonable wear and tear excepted,
and make, or cause to be made, all necessary or appropriate repairs, renewals,
replacements, substitutions, additions, betterments and improvements thereto so
that the efficiency of all such properties and assets shall at all times be
properly preserved and maintained.
6.6 The Borrower and each U.S. Subsidiary having its principal offices
located in the
24
Bank's marketing area shall maintain such business operating bank accounts at
the Bank as the parties may reasonably agree from time to time in good faith. If
the parties cannot agree as to the maintenance of such operating accounts, Bank
shall have the right to increase the interest rate on the Loan by one-half (.5%)
percent. In such case, the parties shall execute and deliver modifications of
the Loan Documents in form and substance reasonably acceptable to the parties
and their counsel.
6.7 The Borrower and each U.S. Subsidiary having operations or facilities
in New Jersey shall execute and comply with the terms of the Environmental Rider
annexed hereto as Schedule 6.7, the indemnification provisions of which shall
survive termination of this Agreement.
6.8 Borrower shall provide and maintain in full force and effect at all
times, certificates or other evidence of insurance in such forms and covering
such risks and hazards and in such amounts and with such companies as Bank may
reasonably require, satisfactory to Bank and otherwise as may be required under
the provisions of the Mortgage, and shall deliver signed original policies
relating thereto to Bank. Such policies shall require the insurer to give Bank
at least thirty (30) days notice prior to termination, cancellation or
expiration. All renewal policies, certificates or evidence of insurance, with
premiums paid, shall be delivered to Bank at least twenty (20) days before
expiration of the old policies. All insurance policies shall contain extended
coverage and replacement loss endorsements, or the equivalent thereof, and shall
be endorsed with a standard mortgagee/loss payee clause in favor of Bank, not
subject to contribution. During periods when construction shall be taking place
on the Premises, Borrower shall maintain standard Builder's Risk Insurance as
required by Subsection 3.1(ee)hereof.
The Borrower shall not permit any condition to exist which would wholly or
partially invalidate the insurance and shall make all payments for insurance
premiums for which provision has been made herein or in the Mortgage, and in
default thereof and after ten (10) business days following Bank's receipt of
written notice, the Bank may pay the same and the Borrower shall reimburse the
Bank therefor on demand by Bank and delivery to Borrower of a paid receipt
therefor. Bank shall not by the fact of approving, disapproving, accepting,
preventing, obtaining or failing to obtain any such insurance, incur any
liability for the form or legal sufficiency of insurance contracts, solvency of
insurers, payment of losses or otherwise in connection with such insurance. If
the insurance, or any part thereof, shall expire, or be withdrawn, or become
void or unsafe by reason of the failure or impairment of the capital of any
company in which the insurance may then be carried, or if for any reason
whatsoever the insurance shall be unsatisfactory to Bank, in Bank's reasonable
discretion, Borrower shall place new insurance on the Mortgaged Property with
companies having a Best's rating of B+ XII or better, reasonably satisfactory to
Bank. Borrower shall, immediately upon becoming aware of any loss or damage to
the whole or any portion of the Premises or of the Improvements and the
equipment now or hereafter located thereon, give immediate notice in writing to
Bank, and Bank may make proof of loss if not made promptly by Borrower. All such
policies, including policies for any amounts in excess of the required minimum
and policies not specifically required by Bank, together with any unearned
premiums thereon, are hereby assigned to the Bank as further security for the
Loans. Borrower shall also furnish evidence, from time to time when requested by
Bank, that workers' compensation insurance and public liability insurance have
been obtained and are being maintained by or on behalf of Borrower in amounts
and with companies reasonably satisfactory to Bank. Each insurance company
concerned
25
is hereby authorized and directed to make payment under such insurance,
including return of unearned premiums, directly to Bank instead of to Borrower
and Borrower appoints Bank, irrevocably, as Borrower's attorney-in-fact to
endorse any draft therefor.
6.9 [INTENTIONALLY LEFT BLANK]
6.10 Except for Permitted Liens, the Borrower shall not directly or
indirectly permit to exist any Liens with respect to the Real Property except
with the prior written consent of the Bank.
6.11 The Borrower shall promptly notify the Bank of any litigation,
actions, proceedings, claims or investigations pending or threatened against the
Borrower, wherein claimant seeks to recover in excess of $100,000.00 and of the
entry of any judgment in excess of $100,000.00 against the Borrower or the entry
of any Liens securing any obligation or obligations in excess of $100,000.00
(individually or in the aggregate), other than Permitted Liens, against any of
its assets.
6.12 Neither the Borrower nor any U.S. Subsidiary shall engage in any
business other than the business specified in Section 5.5 without the prior
written consent of the Bank which consent shall not be unreasonably withheld or
delayed.
6.13 The Borrower shall deliver to the Bank the following financial and
other reports of the Borrower:
(a) At such time as the Borrower is required to file its Form 10-K with the
Securities Exchange Commission, an audited balance sheet as at the end of such
year and audited statements of income thereof for such year, all in reasonable
detail and prepared and certified by independent certified public accountants
acceptable to Bank.
(b) Not later than two (2) days after filing same with the Securities and
Exchange Commission, copies of the Borrower's Annual Report to Stockholders,
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, Proxy Statement and any other reports filed with or filings made with
the Securities and Exchange Commission. With respect to the financial statements
included in the Reports on Form 10-Q, the chief financial officer of the
Borrower shall certify same as complete and correct, which certificate shall
include a statement of his examination (which shall include a review of the
relevant provisions of this Agreement) and stating whether his examination has
disclosed the existence of any condition or event which constitutes an Event of
Default, and, if so, specifying the nature and period of existence thereof; and
(c) Within ten (10) days after the Bank's request therefor, such additional
information regarding the financial condition and affairs of the Borrower as the
Bank shall reasonably require;
6.14 The Borrower agrees to pay by check or bank account debit at the time
of execution of the Loan Documents the Bank's attorneys' fees in addition to
disbursements in connection with the preparation of this Agreement and all
related documents (i.e., search fees, filing fees, etc.), and to pay, reimburse,
indemnify and hold harmless, the Bank, its directors, officers, employees,
agents and representatives from and against any and all actions, costs, damages,
disbursements, expenses
26
(including reasonable attorneys' fees), judgments, liabilities, losses,
obligations, penalties and suits of any kind or nature whatsoever with respect
to: (i) the reasonable costs of the administration, enforcement, interpretation,
amendment, modification, waiver or consent of any of the Loan Documents; (ii)
the reasonable costs of the exercise of any right or remedy granted in any of
the Loan Documents, the collection or enforcement of any of the Obligations and
the proof or allowability of any claim or receivership proceeding or otherwise;
(iii) any proceeding or any investigation or claim and the prosecution or
defense thereof, arising out of or in any way connected with any of the Loan
Documents whether or not the Bank is a party thereto; (iv) any liabilities with
respect thereto, or resulting from any delay in paying stamp and other taxes, if
any, which may be payable or determined to be payable in connection with the
Loan Documents; and (v) the failure of the Bank to take action in respect of any
transaction effected under this Agreement or in connection with the Lien
provided for herein.
6.15 [INTENTIONALLY LEFT BLANK]
6.16 The Borrower shall, at all times and in accordance with generally
accepted accounting principles, consistently applied, keep complete and accurate
books and records concerning its business, affairs and operations and concerning
its properties and assets.
6.17 The Borrower shall from time to time permit the Bank and its agents
during Borrower's regular business hours to make field audits of the Borrower or
otherwise to inspect or examine the properties and assets of the Borrower and
further to examine, check, audit, make copies of or extracts from any of the
Borrower's books, records, journals, receipts, orders, correspondence or other
data and to independently verify the orders and accounts receivable of Borrower.
Unless and until an Event of Default shall have occurred and be continuing,
audits shall be at the expense of the Bank.
6.18 In the event Borrower shall institute a "defined benefit Plan", as
defined in Section 414(j) of the Code, the Borrower shall furnish to the Bank:
(i) as soon as possible and in any event within thirty (30) days after the
Borrower or a duly appointed administrator of a defined benefit Plan knows or
has reason to know that any Reportable Event has occurred with respect to any
defined benefit Plan, a statement of the chief financial officer of the Borrower
setting forth details as to such Reportable Event and the action which the
Borrower proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC; (ii) promptly after the
filing thereof with the United States Department of Labor, the Internal Revenue
Service or the PBGC, copies of each annual and other report or notice with
respect to each defined benefit Plan; and (iii) promptly after receipt thereof,
a copy of any notice the Borrower or any other member of a Controlled Group of
the Borrower may receive from the United States Department of Labor, the
Internal Revenue Service or the PBGC with respect to any defined benefit Plan.
The above shall apply as nearly as possible to any foreign U.S. Subsidiary under
the laws, rules and regulations applicable to it.
6.19 The Borrower shall use the Loans only for the purposes set forth in
Section 2.1.
6.20 The Bank may from time to time in the Bank's sole discretion hold and
treat any deposits or other sums at any time credited by or due from the Bank to
the Borrower and any
27
securities or other property of the Borrower in possession of the Bank, whether
for safekeeping, investment or otherwise, as collateral security for and apply
or set off the same against any of the Obligations of the Borrower to the Bank.
Without limiting the generality of the foregoing, if at any time the amount of
the loans or advances by the Bank as allowed by this Agreement shall be
exceeded, the Borrower shall pay to the Bank, in immediately available funds,
the amount of such excess if the Bank so requests, or the Bank may charge such
amount against any deposit account of the Borrower with the Bank.
6.21 Except as otherwise expressly provided herein, without the prior
written consent of the Bank, neither the Borrower nor any U.S. Subsidiary shall:
(a) [INTENTIONALLY LEFT BLANK]
(b) Assume, guarantee, endorse or otherwise become liable, in connection
with the Obligations of any person, firm or corporation except:
(i) Liabilities resulting from product warranties made in the ordinary
course of business;
(ii) Liabilities resulting from its endorsement of items or
instruments for deposit or collection in the ordinary course of business;
or
(iii) Assumptions, guarantees, endorsements or other liabilities for
obligations which in the aggregate do not exceed $5,000,000 at any time
outstanding;
(c) [INTENTIONALLY LEFT BLANK]
(d) Purchase, lease, or otherwise acquire the capital stock, properties,
assets or real estate, or any interest therein, of any Person, except the
Premises and purchases, leases or other acquisitions of inventory and equipment
made in the ordinary course of business in bona fide arm's length transactions
and acquisitions of capital stock or assets so long as the Borrower will be in
compliance with Section 6.22 and the other provisions of this Agreement, and
further provided that at least ten (10) Business Days prior to entering into any
agreement, whether written or oral, to acquire such capital stock or assets, the
Chief Financial Officer of the Borrower shall provide to Bank a notice
containing the material terms of such acquisition and a computation showing that
such acquisition will comply with the financial covenant set forth in Section
6.22 and will be in compliance with the other terms of this Agreement.
Notwithstanding the foregoing, no such notice need be given if the Borrower is
not using the Revolving Line of Credit to fund all or part of such acquisition
and the cash portion of the Purchase Price is less than $1,000,000;
(e) [INTENTIONALLY LEFT BLANK]
(f) [INTENTIONALLY LEFT BLANK]
(g) Purchase or acquire the obligations, securities or stock of (except
stock purchases in connection with acquisitions permitted hereunder), or make
loans, advances or capital
28
contributions to, any person, firm or corporation, except:
(i) Marketable direct obligations of the United States of America;
(ii) Commercial paper issued by corporations conducting substantially
all of their business in the United States of America, maturing within 180
days from the date of the original issue thereof, and rated "prime" by the
National Credit Office;
(iii) Bonds of any state, county, or municipality of the United States
of America, (w) which mature within two years from the date of acquisition
thereof, and (x) which are not in default as to principal or interest, and
(y) which are rated AA, or better, by Xxxxx'x Investors Service, and (z)
the interest of which is exempt from federal income tax;
(iv) Customer's notes, chattel paper, or the like received as non-cash
proceeds of the sale of any inventory in the ordinary course of business;
(v) Certificates of deposit and repurchase agreements;
(h) Make any new loans or advances (individually or in the aggregate
exceeding at any one time the sum of $500,000.00) to any of its officers or
senior management; or
(i) [INTENTIONALLY LEFT BLANK]
6.22 Without the prior written consent of the Bank, the Borrower shall not
cause, suffer or permit on a consolidated basis:
(a) the Minimum Fixed Charge Coverage Ratio at the end of each fiscal
quarter, defined as EBITDA for the four most recently completed fiscal quarters
minus unfunded capital expenditures, divided by all interest expense and all
scheduled principal payments of Total Funded Debt for the four most recently
completed fiscal quarters, to be less than 2.5:1; provided, however, for
purposes of this Subsection 6.22(a) only, unfunded capital expenditures shall
exclude (i) the amounts expended by Borrower on Improvements, and (ii) the sum
equal to Borrower's contribution to the purchase price of the Premises in excess
of the Mortgage Loan; or
(b) The Maximum Leverage Ratio, defined as the ratio of Total Funded Debt
to EBITDA, at the end of any fiscal quarter, to exceed 4.0:1; provided, however,
for purposes of this Subsection 6.22(b) only, Total Funded Debt shall exclude
the sum equal to the outstanding principal amount of the Loans at the end of the
fiscal quarter for which the Maximum Leverage Ratio is being computed.
6.23 The Borrower and each Subsidiary shall, upon becoming aware thereof,
immediately notify the Bank of the occurrence of an Event of Default and shall
further notify the Bank of the nature and period of existence thereof.
6.24 The Borrower and each Subsidiary shall observe, perform and comply
with, and shall continue, until all Obligations of the Borrower to the Bank
pursuant to this Agreement are
29
fully paid and satisfied, to observe, perform and comply with, all of its
covenants made in this Agreement.
6.25 The Borrower shall not directly or indirectly apply any part of the
proceeds of any loan under this Agreement which violates or which is
inconsistent with the provisions of any regulations of the Board of Governors of
the Federal Reserve System or any regulations, interpretations or rulings
thereunder as from time to time in effect, or any substantially similar orders
or regulations in substitution therefor or in addition thereto.
6.26 (a) Borrower will commence construction of the Improvements within
thirty (30) days of the date hereof and shall complete (as such term is used in
Subsection 3.2 above) the construction and equipping of the Improvements with
due diligence on or before the Completion Date, subject to and in accordance
with the Plans and this Agreement. The Improvements shall be constructed and
equipped in full compliance with the Requirements of Law affecting the Real
Property and all requirements of the appropriate Board of Fire Underwriters or
other similar body acting in and for the locality in which the Premises are
situated. All work shall be performed in a good and workmanlike manner.
(b) Borrower will not engage or continue to employ any contractor,
subcontractor or materialman who may be objectionable to Bank, in the exercise
of reasonable business judgment.
(c) Immediately after receiving notice from Bank, Borrower will remove from
the Premises all materials and all portions of the construction which Bank may
condemn as failing in a substantial way to conform with the Plans or any permits
and/or approvals of the Project, and will make good all portions of the
construction damaged by such removal.
(d) Borrower shall make or cause to be made payments to all contractors,
subcontractors, laborers and materialmen, when due, and to obtain and deliver to
Bank and the Title Company, lien waivers (if applicable), subordination of lien,
releases of liens, releases of notices of unpaid balance and right to file lien,
affidavits of payment and any and all other documents and instruments necessary
to induce the title insurer to at all times insure the lien of the Mortgage free
and clear of mechanics' and materialmen's' liens and the like. Borrower shall
furnish to Bank and file with public authorities as appropriate such lien
waivers (if applicable), subordinations of lien, affidavits, and/or releases,
together with paid receipts, as Bank and/or the Title Company and/or other
applicable title insurance companies may require prior to the commencement of
construction of the Improvements and from time to time thereafter to assure
proper expenditure of advances made or to be made by Borrower hereunder. All
contracts executed by Borrower shall contain the following requirements: (i) the
contractor shall provide Borrower with a monthly requisition for payment,
verified under oath, setting forth the names and addresses of all persons or
entities providing services, labor, material or equipment in connection
therewith, who may have a right to file a construction lien pursuant to New
Jersey P.L. 1993, C. 318, Section 37 (the "New Jersey Construction Lien Law")
and Borrower may reject the requisition for payment if such listing is not
included; and (ii) the contractor's failure to strictly comply with the New
Jersey Construction Lien Law shall, at Borrower's option, be deemed to be a
breach of the contract entitling the Borrower to terminate same.
30
6.27 Borrower shall duly perform and observe all of the covenants,
agreements and conditions on its part to be performed and observed hereunder and
under the other Loan Documents, the Construction Documents, the Construction
Management Agreement and the Tenant Leases.
6.28 Immediately upon becoming aware of the same, Borrower shall commence
to correct (a) any defect in the Improvements and (b) any departure from the
Plans, other than approved modifications and amendments thereof and as provided
in permitted Change Orders.
6.29 The Improvements shall be constructed entirely on the Premises and
shall not encroach upon or overhang (unless consented to by the affected
property owner) any easement or right-of-way or the land of others, and when
erected shall be wholly within any building restriction lines, however
established. Neither the construction of the Improvements nor the use thereof
will violate any Requirements of Law. No Improvements shall constitute an
addition to the Premises or expansion of any part thereof, but shall only
constitute renovations of existing structures and systems.
6.30 Bank and the Consulting Professional, or designated representatives of
either of them, shall have the right of entry and free access to the
Improvements and the right to inspect all work done, labor performed and
materials furnished in and about the Improvements and the right to inspect with
or without advance notice during normal business hours at the office of
Borrower, all books, contracts and records of Borrower relating to the
Improvements, all such reviews to be done in a manner so as not to unreasonably
interfere with Borrower's operations.
6.31 [INTENTIONALLY LEFT BLANK]
6.32 [INTENTIONALLY LEFT BLANK]
6.33 Borrower shall pay all expenses reasonably incurred by Bank with
respect to any and all transactions contemplated herein and the preparation of
any document required hereunder and the prosecution or defense of any action or
proceeding or other litigation affecting Borrower, the Real Property, or any
other security given for the Loans, including (without limiting the generality
of the foregoing) all title and conveyancing charges, recording and filing fees
and taxes, mortgage taxes, intangible personal property taxes, escrow fees,
revenue and tax stamp expenses, insurance premiums (including title insurance
premiums), brokerage commissions, finders' fees, placement fees, court costs,
surveyors', photographers', appraisers', architects', Consulting Professionals',
accountants' and attorneys' fees and disbursements and will reimburse to Bank
all expenses paid by Bank of the nature described in this Subsection 6.33 which
have been or may be reasonably incurred by Bank with respect to any and all of
the transactions contemplated herein. If Borrower fails to pay such amounts on
demand, Bank may pay or deduct from the Construction Loan proceeds any of such
expenses and any Construction Loan proceeds so applied shall be deemed advances
under this Agreement and shall be secured by the Mortgage.
6.34 Borrower shall submit an Architect's or other evidence satisfactory to
Bank and Bank's counsel that upon completion, the Project and the Premises will
be in compliance with the
31
Americans With Disabilities Act, 42 U.S.C. 12111, et seq. and all regulations
promulgated thereunder.
6.35 Borrower shall not create or suffer to exist any Lien on the Real
Property, or any part thereof whether superior or subordinate to the Mortgage
which is not discharged within thirty (30) days, or (b) sell or convey the
Premises, except that the Real Property may be subject to the lien of the Loan
Documents which secure payment of the Note, real estate taxes and assessments,
sewer rents and water charges, if applicable, not yet due and payable, and the
Permitted Exceptions.
6.36 Modify or supplement the Plans and Specifications without the prior
written consent of the Consulting Professional and Bank, which shall not be
unreasonably withheld.
6.37 Except as otherwise permitted herein or under any of the other Loan
Documents, the Borrower shall not surrender, terminate, cancel, rescind or
supplement, alter, revise, modify or amend any of the Construction Documents or
permit any such action to be taken.
SECTION 7
EVENTS OF DEFAULT
There shall be an Event of Default by the Borrower under this Agreement
upon the occurrence of any one of the following:
7.1 The Borrower's, Guarantor's or U.S. Subsidiary's failure to pay, when
due, on demand or at maturity (whether as stated or by acceleration), as the
case may be, any payment of principal, interest or other charges due and owing
to the Bank pursuant to any Obligations of the Borrower, Guarantor or U.S.
Subsidiary to the Bank, which breach remains uncured for a period of ten (10)
days from the date such payment is due.
7.2 A material breach by the Borrower, Guarantor or any U.S. Subsidiary of
any other covenant contained in this Agreement or the other Loan Documents,
including, without limitation, those covenants contained in Section 6, which
breach remains uncured for a period of thirty (30) days following notice thereof
from the Bank to the Borrower.
7.3 If any warranty or representation made by the Borrower to the Bank,
whether past, contemporaneous or future, including, without limitation, the
warranties and representations contained in Section 5, shall be false or
misleading in any material respect when made, or if any financial statement
given by the Borrower to the Bank shall be false or misleading in any material
respect.
7.4 Upon dissolution, termination of existence, insolvency, appointment of
a trustee, receiver or custodian of all or any part of the properties or assets
of the Borrower or any U.S. Subsidiary, upon an assignment for the benefit of
creditors by, the calling of a meeting of creditors of, or the commencement of
any proceeding under any bankruptcy or insolvency laws of any state or of the
United States or any foreign jurisdiction applicable to any U.S. Subsidiary by
the Borrower or any U.S. Subsidiary or the commencement of any proceeding under
any bankruptcy or insolvency laws of any state, or of the United States, or any
foreign jurisdiction applicable to any
32
U.S. Subsidiary against the Borrower or any U.S. Subsidiary, which proceeding is
not vacated within thirty (30) days of its commencement, or upon the entry of an
adjudication of insolvency or order for relief therein.
7.5 [INTENTIONALLY LEFT BLANK]
7.6 If, in the good faith opinion of the Bank, there is any material
adverse change in the Borrower's business or financial condition.
7.7 A final judgment in excess of $250,000,000 (net of insurance coverage)
is entered against the Borrower and same remains undischarged for a period of
sixty (60) days, unless such judgment is being contested in good faith and the
judgment debtor has posted any required bond with respect thereto.
7.8 If at any time title to any part of the Mortgaged Property is not
satisfactory to Bank by reason of any lien, encumbrance or other defect (even
though the same may have existed at the time of any prior advance), except the
Permitted Exceptions, and such lien, encumbrance or other defect is not
corrected within thirty (30) days after notice to Borrower, or if the same can
be corrected without material adverse effect upon Bank but not within such
period, then if the Borrower does not promptly commence curing upon receipt of
notice [but in any event within thirty (30) days after receiving notice] and
diligently and continuously prosecute such correction to a successful
conclusion.
7.9 If Borrower assigns any of this Agreement or any Advance to be made
hereunder or any interest in either.
7.10 (a) If the Improvements are, in Bank's judgment, damaged or destroyed
by fire or any other cause including without limitation, flood, wind, or other
natural cause, if the same occurs prior to completion of the Improvements and
the restoration thereof cannot reasonably be expected to be completed so the
Improvements will be completed on or before the Completion Date, or (b) if a
condemnation or eminent domain proceeding in respect of any substantial part of
the Mortgaged Property is commenced. For the purposes of this Section
"substantial" shall mean a material taking or adverse change in the ingress or
egress of the Mortgaged Property or a taking of twenty (20%) percent of the land
or the building.
7.11 If there is any cessation of construction of any portion of the
Improvements for any period after the date of commencement of construction of
that particular portion of the Improvements in excess of forty-five (45)
consecutive days, subject to delays caused or occasioned by strikes, lockouts,
labor disputes, acts of God, governmental action (other than the failure to
issue permits), fire or other casualty, equal to one day for each day of delay,
provided, however, such delays do not exceed fifteen (15) days in the aggregate.
7.12 If the construction of the Improvements, or any part thereof, shall be
in a manner materially other than as herein provided and as provided in the
Plans and change orders, and Borrower fails to conform the same to the
reasonable satisfaction of Bank within thirty (30) days following notice of same
received from Bank.
33
7.13 If (a) Borrower executes any mortgage on the Real Estate or the
Improvements, or other security agreement on any materials, fixtures or articles
of personal property used in the construction or operation of the Improvements
or if any such materials, fixtures or articles are purchased pursuant to any
conditional sales contract or other security agreement or otherwise so that the
ownership thereof does not vest unconditionally in Borrower free from
encumbrance or (b) any such materials, fixtures or articles are not
substantially in accordance with the Plans, or (c) Borrower does not furnish to
Bank upon request the contracts, bills of sale, statements, receipted vouchers
and agreements, or any of them, under which Borrower claims title to such
materials, fixtures or articles.
7.14 If Borrower shall fail to inject equity funds when required under
Subsection 2.8 above.
7.15 If Borrower fails, within fifteen (15) days after notice from Bank or
from any Governmental Authority, to comply with any requirement of any
Governmental Authority, subject to Borrower's right to contest same; provided
such failure or contest does not materially adversely affect the continued
construction of the Improvements or completion by the Completion Date.
7.16 If Borrower does not within ten (10) Business Days after request from
Bank after entering into a contract for the construction of any part of the
Improvements or the furnishing of labor or materials therefor, disclose to Bank
the names of all persons with whom Borrower has so contracted, or fails to
deliver to Bank within ten (10) Business Days after request, copies of all such
contracts, provided, however, such contract does, in Bank's reasonable judgment,
have an adverse affect on Bank's security.
7.17 If any default by Borrower shall occur under any of the Construction
Documents, after the expiration of any applicable grace period therein provided.
7.18 If as of the close of business on the Completion Date the Improvements
have not been completed, or if Bank reasonably determines during the course of
construction that the Improvements cannot be substantially completed by the
Completion Date. If Bank so determines, it shall permit Borrower to present to
it evidence that it can complete the Improvements by the Completion Date and
will duly consider any such evidence in making its determination.
7.19 (a) In the event that a building permit which enables full
construction of the Improvements is not issued or, in Bank's reasonable
discretion, will not be issued in a timely manner so as to enable completion of
the Improvements prior to the Completion Date, Bank will not be obligated to
make any further advances of the Construction Loan and may declare the entire
unpaid principal balance, together with all accrued interest and all other sums
owing under the Note immediately due and payable, without presentation, demand,
or further action of any kind.
(b) If any Permit shall not be issued, shall be revoked or otherwise cease
to be in full force and effect, unless Borrower promptly commences and
diligently pursues obtaining an extension or issuance of a new one and Bank, in
its sole discretion, determines that such Permit not being in full force and
effect will not materially adversely affect the Project or Bank.
34
7.20 Any Guaranty shall cease for any reason to be in full force and effect
or any Guarantor shall so assert or any representation or warranty made by any
Guarantor to or for the benefit of Bank shall prove to have been incorrect in
any material respect on or as of the date made.
7.21 Any of the Security Documents shall cease for any reason to be in full
force and effect, or Borrower shall so assert in writing.
7.22 If at any time in Bank's judgment the total amount owed on the Loan is
greater than eighty (80%) percent of the Appraiser's estimated value of the
Premises. Bank may obtain updates of the Appraisal from the Appraiser at any
time while any amount remains owing under any of the Loan Documents, and
Borrower will promptly pay the cost of such updates.
SECTION 8
BANK'S RIGHTS AND REMEDIES
8.1 Remedies. From and after and during the continuation of an Event of a
Default, Bank may, at its option, without further demand, notice or delay, do
any or all of the following:
(a) Declare the entire unpaid principal balance of the Note to be due and
payable immediately. Thereupon, said principal, all accrued interest and all
other sums owed under the Loan Documents shall become immediately due and
payable. Thereafter, the default may be cured only by the payment of the entire
principal balance and all other sums owing under the Note, the Mortgage and the
other Loan Documents. In addition, upon the occurrence of an Event of Default,
Borrower and Guarantors shall be liable to Bank for all reasonable attorneys'
fees and costs incurred by Bank in connection with enforcement of its rights
under any of the Loan Documents or in any way related to any of the Loan
Documents, together with interest thereon at the Default Rate.
(b) Bank may (a) exercise the rights available to it under the Uniform
Commercial Code, or (b) take such other action at law or in equity for the
enforcement of this Agreement or any of the other Loan Documents. Bank may
proceed in any such action to final judgment and execution thereon for all sums
owed under the Loan Documents, together with interest on such sums as provided
therein, all costs of suit and reasonable attorneys' fees. Interest shall
accrued on the judgment amount at the Default Rate from the date of judgment
until the judgment amount is paid in full.
(c) [INTENTIONALLY LEFT BLANK]
(d) Receive and have access to printouts and all other information
respecting financial records of the Borrower and each U.S. Subsidiary maintained
by external computer service companies;
(e) Without waiving any default or releasing Borrower from any obligation
under any of the Loan Documents or under any Lease: (a) collect any or all of
the rents, including any rents past due and unpaid, (b) perform any obligation
or exercise any right or remedy of
35
Borrower under any Lease, or (c) enforce any obligation of any tenant of any of
the Real Property. Bank shall not be obligated to do any of the foregoing, even
if Bank may have previously performed any such obligation or exercised any such
remedy. Bank may exercise any such right whether or not Bank shall have entered
into possession of any of the Real Property; and nothing herein contained shall
be construed as constituting Bank a "mortgagee in possession" unless Bank shall
have entered into and shall remain in actual possession of the Real Property.
Borrower shall indemnify Bank and hold Bank harmless from any and all liability
under any lease and from any and all claims and demands which may be asserted
against Bank by reason of any alleged obligations to perform any provision of
any lease, except as to Bank's own negligence or willful misconduct.
(f) Subject to conditions of record or recorded at Closing, without waiving
any default or releasing Borrower from any obligation under any of the Loan
Documents or under any Lease: enter upon and take possession of any of the Real
Property, with or without legal action, or have a receiver appointed. Bank or
said receiver may manage and operate any of the Real Property; make, cancel,
enforce or modify leases for terms shorter or longer than the term of the Note;
obtain and evict tenants; establish or change the amount of any rents; and
perform any acts which Bank deems proper to protect the security of the
Mortgage. After deduction of all reasonable costs and expenses of operation and
management of the Real Property and of collection of the rents (including
reasonable attorneys' fees, administration expenses, management fees and
brokers' commissions), Bank may apply the rents received by Bank to the payment
of any or all of the following, in such order and amounts as Bank, in its sole
discretion, may elect: liens on any of the Real Property, taxes, claims,
insurance premiums, other carrying charges, invoices of persons who have
supplied goods or services to or for the benefit of any of the Real Property,
costs and expenses of maintenance, repair, restoration, alteration or
improvement of any of the Real Property, or the outstanding principal balance of
the Loans. Bank may, in its sole discretion, determine the method by which, and
extent to which, the rents will be collected and obligations of tenants
enforced; and Bank may waive or fail to enforce any right or remedy of the
landlord under a lease. Bank shall not be accountable for any rents or other
sums it does not actually receive. After an Event of Default, Borrower hereby
appoints Bank as its attorney-in-fact to perform all acts which Borrower is
required or permitted to perform under any and all leases.
(g) Bank may disaffirm and cancel any lease which is subordinate to the
Mortgage at any time before the expiration of sixty (60) days after Bank
acquires legal title to the Real Property by any transfer pursuant to the
exercise of a remedy hereunder or otherwise, even though Bank shall have
enforced such lease, collected rents thereunder or taken any action that might
be deemed by law to constitute an affirmance of the lease. Such disaffirmance
shall be made by notice addressed to the tenant at the Real Property or, at
Bank's option, such other address of the tenant as may be provided in that
tenant's lease.
8.2 In addition to the above remedies, if an Event of Default under this
Agreement has occurred, the Bank shall have the right and remedy, without
posting bonds or other security, to have any provision of the Loan Documents
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such Event of Default will cause irreparable
injury to the Bank and that money damages will not provide an adequate remedy
thereto.
36
8.3 Bank may exercise all of the rights and remedies provided in this
Agreement or any of the other Loan Documents, or which may be available to Bank
by law, and all such rights and remedies may be cumulative and concurrent and
may be pursued singly, successively or together, at Bank's sole discretion, and
may be exercised as often as occasion therefor shall occur. Any real estate sold
pursuant to any writ of execution issued on a judgment obtained by virtue of the
Note or this Mortgage, or pursuant to any other judicial proceedings under the
Mortgage, may be sole in one parcel, as an entirety, or in such parcels, and in
such manner or order as Bank, in its sole discretion, may elect.
8.4 (a) Upon the occurrence of an Event of Default under this Agreement,
Bank may, in addition to any other remedies which Bank may have under this
Agreement or by statute or by rule of law, enter upon the Premises and perform
all work and labor necessary to construct, equip and complete the Improvements
substantially in accordance with the Plans and employ watchmen to protect the
Premises form injury, all at the risk, cost and expense of Borrower. Bank shall
have the right at any and all times to discontinue any work commenced by it in
respect of the Improvements or to change any course of action undertaken by it
and shall not be bound by any limitations or requirements of time whether set
forth herein or otherwise. Bank shall have the right and power (but shall not be
obligated) to assume any contract made by or on behalf of Borrower in any way
relating to the Improvements and to take over and use all or any part or parts
of the labor, materials, supplies and equipment contracted for, by, or on behalf
of Borrower, whether or not previously incorporated into the Improvements, all
in the sole and absolute discretion of Bank.
(b) In connection with any construction of the Improvements undertaken by
Bank pursuant to the provisions of this Subsection, Bank may: (a) engage
builders, contractors, architects, and others for the purpose of furnishing
labor, materials and equipment in connection with any construction of the
Improvements, (b) pay, settle or compromise all bills or claims which may become
liens against any of the Real Property, or which have been or may be incurred in
any manner in connection with the construction, completion and equipment of the
Improvements or for the discharge of liens, encumbrances or defects in the title
of any of the Real Property, and (c) take such other action (including the
employment of watchmen to protect the Improvements) or refrain from acting under
this Agreement as Bank may in its sole and absolute discretion from time to time
determine without any limitation whatsoever.
(c) Borrower and Guarantor shall be liable to Bank for all sums paid or
incurred by Bank for the construction, completion and equipment of the
Improvements substantially in accordance with the Plans, whether the same shall
be paid or incurred pursuant to the provisions of this Subsection or otherwise,
and all payments made or liabilities incurred by Bank under this Agreement of
any kind whatsoever shall be paid by Borrower to Bank within five (5) Business
Days of demand with interest at the Default Rate set forth in the Note to the
date of payment to Bank, and all of the foregoing including interest shall be
deemed and shall constitute advances under this Agreement and be evidenced by
the Note and secured by the other Loan Documents.
(d) Upon the occurrence of any Event of Default, the rights, powers and
privileges provided in this Subsection and all other remedies available to Bank
under this Agreement or by statute or by rule of law may be exercised by Bank at
any time and from time to time whether or not the Indebtedness evidenced and
secured by the Note and the Mortgage shall be
37
due and payable, and whether or not Bank shall have instituted any foreclosure
or other action for the enforcement of the Mortgage or the Note. Neither Bank
nor its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Subsection 8.3 (except for its or
such Person's own negligence or willful misconduct).
SECTION 9
BORROWER'S RIGHTS AND REMEDIES
9.1 The Borrower and each Guarantor shall have all of the rights and
remedies provided in this Agreement and by the Uniform Commercial Code and other
applicable law.
SECTION 10
MISCELLANEOUS PROVISIONS
10.1 All preconditions to the obligation of Bank to make advances hereunder
are imposed solely and exclusively for the benefit of Bank and its assigns and
no other person shall have standing to require satisfaction of such conditions
in accordance with their terms or be entitled to assume that Bank will refuse to
make advances in the absence of strict compliance with any or all thereof and no
person shall, under any circumstances, be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by Bank
at any time if in its sole discretion it deems it advisable to do so.
Inspections and approvals of the Plans, the Improvements, and the workmanship
and materials used therein impose no responsibility or liability of any nature
whatsoever on Bank, and no person shall, under any circumstances, be entitled to
rely upon such inspections and approvals by Bank for any reason. Bank's sole
obligation hereunder is to perform in accordance with the terms of this
Agreement, including the making of advances if and to the extent required by
this Agreement.
10.2 All notices hereunder shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes as and when hand delivered or
sent by nationally recognized overnight courier service requiring receipt for
delivery or as and when deposited in a United States mail depository or Post
Office, registered or certified mail, return receipt requested, addressed to any
party hereto at the following addresses, or at such other address as such party
has provided to the other party in writing.
If to Borrower:
c/o Xxxxxx X. Xxxx
000 Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
With an Information copy to:
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxxx Xxxxxxx, Esq.
38
If to Bank:
Summit Bank
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx XxXxx, Vice President
With an Information copy to:
Podvey, Sachs, Meanor, Catenacci, Xxxxxxx & Cocoziello
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Failure to send an information only notice shall not invalidate any notice
otherwise properly given.
10.3 All rights, powers and remedies herein given to Bank are cumulative
and not alternative, and are in addition to all statutes or rules of law. Any
forbearance or delay by Bank in exercising the same shall not be deemed to be a
waiver thereof, and the exercise of any right or partial exercise thereof shall
not preclude the further exercise thereof, and the same shall continue in full
force and effect until specifically waived by an instrument in writing executed
by Bank. All representations and covenants by Borrower shall survive the making
of the advances of the Loans, and the provisions hereof shall be binding upon
and inure to the benefit of the respective successors and assigns of the parties
hereto.
10.4 All the terms, covenants, conditions, obligations, stipulations and
agreements contained in the Note and the other Loan Documents are hereby
incorporated herein and made a part hereof to the same extent and effect as if
fully set forth herein. In the event of a conflict between any of the Loan
Documents and the provisions of this Agreement, the provision that grants the
Bank the greatest protection shall control.
10.5 (a) Notice of default and presentment, demand, protest and notice of
dishonor as to any provision of this Agreement, the Note, the Mortgage or any
other agreement or instrument is hereby waived by the Borrower, except as may be
otherwise specifically provided in this Agreement or in any other Loan Document.
(b) To the extent it may be lawful to do so, each Borrower for itself and
for any Person who may claim through or under it hereby:
(i) agrees that neither it nor any such Person will set up, plead, claim or
in any manner whatsoever take advantage of, any appraisement, valuation, stay,
extension or redemption
39
laws, now or hereafter in force in any jurisdiction, which may delay, prevent or
otherwise hinder (i) the performance or enforcement of, or foreclosure under,
this Agreement or the other Loan Documents, (ii) the sale of any of the
Collateral or (iii) the putting of the purchaser or purchasers thereof into
possession of such property immediately after the sale thereof;
(ii) waives all benefit or advantage of any such laws;
(iii) waives and releases all rights to have the Collateral marshaled upon
any foreclosure, sale or other enforcement of this Agreement; and
(iv) waives all claims, damages and demands against the Bank's
repossession, retention or sale of the Collateral and all defenses, rights of
set off and rights to interpose counterclaims of any nature.
10.6 The Bank and the Borrower agree that the relationship of the Bank to
the Borrower is that of a Bank only. The intent of this provision is to clarify
and stipulate that the Bank is not a partner or a co-venturer of the Borrower
and that Bank's sole interest in the Real Property and Collateral is for the
purpose of security for repayment of the Obligations of the Borrower.
10.7 (a) The Borrower may at any time prepay any Loan without premium or
penalty.
10.8 Borrower and the Guarantor agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further documents and instruments as
may reasonably be required for carrying out the intention of or facilitating the
performance of this Agreement or as requested by the Bank to perfect or preserve
any interests or liens granted to it pursuant to the Loan Documents.
10.9 In the event there is more than one Borrower, all representations,
warrants, covenants, rights granted hereunder and provisions contained herein
shall apply to each Borrower severally as well as to all Borrowers jointly.
10.10 Anything to the contrary notwithstanding, the Bank shall be entitled
to retain all sums paid by or on behalf of Borrower pursuant to the terms of
this Agreement and any other agreement, document, or instrument executed in
connection herewith despite the filing of any insolvency proceeding under
federal or state law, it being acknowledged by Borrower that all such payments
made to the Bank did not constitute a preference, was given in exchange for
contemporaneous value, permitted Borrower to continue to operate, did not favor
the Bank over other creditors, and resulted in Borrower obtaining substantial
value and benefits.
10.11 The Bank shall be under no duty to any Borrower or anyone else to,
nor shall the Bank have any liability whatsoever to any Borrower or anyone else
for failing to: (i) preserve, protect or marshal any of its Collateral; (ii)
preserve or protect the rights of any Obligor against any person claiming an
interest in any of the Collateral adverse to that of any Obligor; (iii) realize
upon any of the Collateral or in any particular order or manner or seek
repayment of the Obligations from any particular source; or (iv) permit any
substitution or exchange of all or any part of any of the Collateral or release
any part of any of the Collateral from any lien, even if that substitution or
40
release would leave the Bank inadequately secured.
10.12 Without limitation of the Bank's rights at law, the Borrower hereby
agrees that so long as Bank remains the lead Bank and there is no additional
costs or fees payable by the Borrower, the Bank shall have the right to sell
participations in any Obligation in the sole discretion of the Bank, and the
Borrower shall provide, or cause to be provided, all required assistance to the
Bank in selling and closing any participation, including permitting any
prospective participant to inspect any Obligor's books, records, the Real
Property or Collateral.
10.13 Bank shall be permitted to publicize the Construction Loan by any
means, including without limitation, by erecting and maintaining on the Premises
until completion of the construction of the Improvements, a sign or signs at
Bank's expense, in form and in locations reasonably acceptable to Borrower
indicating the source of the construction financing.
10.14 The within Agreement and the other Loan Documents are to be executed
and delivered within the State of New Jersey, are to be principally performed
within the State of New Jersey, and the Borrower and the Bank elect that the
laws of New Jersey (without regard to its principles of conflicts of law) shall
govern the construction of this Agreement and the rights, remedies, warranties,
representations, covenants and provisions hereof. The Borrower hereby
irrevocably consents to the exclusive jurisdiction of the state courts of the
State of New Jersey and any federal court located in the State of New Jersey in
connection with any action or proceeding arising out of or relating to this
Agreement or any other Loan Document. The Borrower hereby waives the defenses of
forum non conveniens and improper venue.
10.15 If any of the provisions of this Agreement shall contravene or be
held invalid under the laws of any jurisdiction, the Agreement shall be
construed as if not containing such provisions and the rights, remedies,
warranties, representations, covenants and provisions hereof shall be construed
and enforced accordingly in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction, or any other provisions in this
Agreement in any jurisdiction.
10.16 The Events of Default, rights, remedies, warranties, representations,
covenants and provisions set forth in this Agreement, or as may be provided by
applicable law, shall be cumulative and not alternative or exclusive, and the
Bank's Rights and Remedies may be exercised by the Bank at such time or times,
in such order of preference, as the Bank in its sole discretion may determine.
10.17 Section and Subsection headings are for reference only and shall not
affect the interpretation or meaning of any provision of this Agreement.
10.18 This Agreement embodies the entire agreement and understanding
between the Borrower and the Bank and supersedes all prior agreements and
understandings relating to the subject matter hereof. All warranties,
representations and covenants incorporated or made herein shall survive the
execution and delivery of this Agreement. No delay or omission of the Bank in
exercising or enforcing any of the Bank's Rights and Remedies hereunder shall
constitute a waiver thereof; and no waiver by the Bank of any Event of Default
should operate as a waiver of any other Event of Default. No term or provision
hereof shall be waived, altered or modified except with the
41
prior written consent of the Bank, which consent makes explicit reference to
this Agreement. Except as provided in the preceding sentence, no other agreement
or transaction, of whatsoever nature, entered into between the Bank and the
Borrower at any time (whether before, during or after the effective date of this
Agreement), shall be construed in any particular as a waiver, modification or
limitation of any of the Bank's Rights and Remedies under this Agreement nor
shall anything in this Agreement be construed as a waiver, modification or
limitation of any of the Bank's Rights and Remedies, not only under the
provisions of this Agreement, but also of any such other agreement or
transaction.
10.19 Any and all references to "days" in this Agreement shall mean
"calendar days" except as otherwise specifically provided herein or by law.
10.20 THE BANK AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CIVIL
LITIGATION BASED HEREIN, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE BANK ENTERING INTO THIS AGREEMENT EXECUTED AT NEWARK, NEW JERSEY ON THE DATE
FIRST ABOVE MENTIONED.
ATTEST: XXXXXXXXXX GRAPHICS
INTERNATIONAL, INC.
BY: ________________________ BY: _____________________________
Xxxxxx X. Xxxx,
Secretary Senior Vice President and
Chief Financial Officer
WITNESS: XXXXXXXXXX GRAPHICS REALTY, L.L.C.
BY: ________________________ BY: _____________________________
Xxxxxx X. Xxxx,
Chief Financial Officer
SUMMIT BANK
BY: _____________________________
Xxxx XxXxx,
Vice President
42
