EXHIBIT 10.5
Amended and Restated Loan and Security Agreement
between
ACS Acquisition Corp.
and
Guaranty Business Credit Corporation d/b/a Fidelity Funding
March 14, 2000
1 Amended and Restated Loan and Security Agreement
2 Financing Statements
3 Mortgage, Security Agreement, Assignment of Leases and Rents, and
Fixture Filing
4 Amended, Restated, and Consolidated Mortgage, Security Agreement,
Assignment of Leases and Rents, and Fixture Filing
5 Amended and Restated General Continuing of Aqua Care Systems, Inc.
6 Amended and Restated Patent Collateral Assignment
7 Amended and Restated Trademark Security Agreement
8 Promissory Note
9 Certificate of Corporate Resolution of ACS Acquisition Corp.
10 Certificate of Corporate Resolution of Aqua Care Systems, Inc.
11 Perfection Certificate of ACS Acquisition Corp.
12 Notice of Final Agreement
13 Certificate of Incorporation (DE, NY)
(Intercreditor Agreement is located in Volume 3)
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Amended and Restated Loan and Security Agreement (this
"AGREEMENT"), dated as of March _____, 2000, is entered into by and between ACS
Acquisition Corp., a New York corporation ("COMPANY") and Guaranty Business
Credit Corporation d/b/a Fidelity Funding, a Delaware corporation ("GBCC"). In
consideration of the mutual covenants and agreements contained herein, Company
and GBCC hereby agree as follows:
BACKGROUND
A. Fidelity Funding of California, Inc. ("FFC") and Company entered
into that certain Loan and Security Agreement (A/R Loan), dated as of June 4,
1997 (as amended by that certain First Amendment to Loan and Security Agreement
(A/R Loan), dated as of January 1, 1999, the "A/R LOAN AGREEMENT").
B. FFC and Company entered into that certain Loan and Security
Agreement (Term Loan), dated as of June 4, 1997 (as amended by that certain
First Amendment to Loan and Security Agreement (Term Loan), dated as of January
1, 1999, the "TERM LOAN AGREEMENT").
C. Fidelity Funding, Inc. ("FFI") and Company entered into that certain
Loan and Security Agreement (Inventory and Term Loans), dated as of June 4, 1997
(as amended by that certain First Amendment to Loan and Security Agreement
(Inventory and Term Loans), dated as of January 1, 1999, the "INVENTORY LOAN
Agreement"). The A/R Loan Agreement, the Term Loan Agreement, and the Inventory
Loan Agreement are each a "PRIOR LOAN AGREEMENT" and, collectively, the "PRIOR
LOAN AGREEMENTS."
D. The Prior Loan Agreements and the documents, instruments, and
certificates executed and/or delivered in connection with any of the Prior Loan
Agreements (the "PRIOR TRANSACTION DOCUMENTS"), and the rights, titles,
interests, and obligations of FFI and FFC were assigned by FFI and FFC,
respectively, to GBCC. GBCC is the owner and holder of the Prior Loan Agreements
and Prior Transaction Documents and the loans, liens, and guaranties evidenced
thereby and granted therein.
E. Company executed and delivered that certain Promissory Note, dated
the date hereof, payable to the order of GBCC, in the original principal amount
of $312,900.00 (the "GAP NOTE").
F. GBCC and Company desire to amend and restate the Prior Loan
Agreements and the Gap Note as herein set forth.
AGREEMENT
SECTION 1. DEFINITIONS AND CONSTRUCTION.
1.1 When used herein, the following terms shall have the following
meanings:
"ACCOUNT" means the right of Company to payment for goods sold or
leased or for services rendered which is not evidenced by an instrument or
chattel paper, whether or not earned by performance.
"ACCOUNT DEBTOR" means the Person obligated to make payment on an
Account.
"ACS" means Aqua Care Systems, Inc., a Delaware corporation and the
owner of all of the outstanding capital stock of Company.
"ADVANCE" means a Revolving Advance or any Term Advance.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, or is controlled by or under common control
with, such Person.
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"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated
June 4, 1997, between Company and Durco.
"ASSIGNED CONTRACT RIGHTS" means all of Company's right, title, and
interest in and to (but not its obligations under) (a) the Asset Purchase
Agreement and (b) all other agreements, contracts, and instruments executed and
delivered by Durco for the benefit of Company in connection with the
consummation of the transactions contemplated by the Asset Purchase Agreement.
"AVAILABILITY" means the difference between (i) the lesser of the
Borrowing Base and the Revolving Facility Limit and (ii) the outstanding
principal balance of all Revolving Advances.
"BORROWING BASE" means an amount equal to the sum, determined by GBCC
from time to time, of (a) eighty percent (80%) of the face amount of Eligible
Accounts of Company plus (b) the lesser of (i) forty percent (40%) of the value
of Eligible Inventory, valued at the lower of cost or market and (ii)
$1,200,000. GBCC may change the percentage of Eligible Accounts and Eligible
Inventory constituting the Borrowing Base and may establish reserves from time
to time based upon dilution and other factors deemed appropriate by GBCC.
"BORROWING BASE CERTIFICATE" means a certificate in the form attached
hereto as EXHIBIT A, duly executed by an authorized officer of Company.
"CAPITAL EXPENDITURES" means, for any period, the aggregate
expenditures by Company during such period that are classified as capital
expenditures in accordance with GAAP.
"CASH COLLATERAL" has the meaning given to it in SECTION 9.
"COLLATERAL" means all Personal Property Collateral and all Real
Property Collateral.
"COLLATERAL ASSIGNMENT OF PATENTS" means the Amended and Restated
Collateral Assignment of Patents dated as of the date hereof from Company to
GBCC.
"CONCENTRATION LIMIT" means, as of any date, an amount equal to 20% of
the face amount of the sum of Eligible Accounts outstanding on such date.
"CONTRACT RATE" means, unless GBCC has elected to charge the Default
Rate after the occurrence and during the continuance of a Default or an Event of
Default, a rate of interest equal to the lesser of (a) the Prime Rate in effect
from time to time plus one and one-quarter percent (1.25%) PER ANNUM and (b) the
maximum rate permitted by applicable law and, at the option of GBCC, after the
occurrence and during the continuance of a Default or an Event of Default, the
Default Rate or, subject to the limitations set forth in SECTION 2.18, a
covenant noncompliance fee. The Contract Rate shall be automatically increased
or decreased, as the case may be, without notice to Company from time to time as
of the effective date of each change in the Prime Rate.
"CURRENT ASSETS" means, as of any date, only those assets of Company
that may, in the ordinary course of business, be converted into cash within a
period of one year from such date, but excluding (a) amounts due from employees,
officers, shareholders or directors of Company, (b) prepaid expenses for
services or for supplies that are not purchased for resale, and (c) amounts due
from Affiliates of Company.
"CURRENT LIABILITIES" means, as of any date, the Advances outstanding
on such date and all other liabilities of Company that would be classified as
"current liabilities" in accordance with GAAP, other than any balloon principal
payment on any Term Advance.
"DEBT" means, with respect to any Person, all indebtedness, obligations
and liabilities of such Person, including without limitation: (a) all
liabilities which would be reflected on a balance sheet of such Person prepared
in accordance with GAAP, (b) all obligations of such Person in respect of any
guaranty of any Debt of another Person, or (c) all obligations, indebtedness and
liabilities secured by any lien on or security interest in any property or
assets of such Person.
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"DEBT SERVICE COVERAGE RATIO" means, as of any date, the ratio of
EBITDA for the period from the first day of the calendar year in which such date
occurs and ending on such date (annualized) the "MEASUREMENT PERIOD") to the sum
of (a) the Interest Expense incurred by Company during the Measurement Period
(annualized), (b) all scheduled principal payments on all Debt for money
borrowed or assets financed under capitalized leases by Company (including the
Obligations but excluding any balloon principal payment due on any Term Advance)
for the twelve-month period beginning on such date (including all scheduled
principal payments on Debt expected to be incurred during such period), and (c)
the Capital Expenditures made by Company during the Measurement Period
(annualized).
"DEFAULT" means an event or circumstance that would, with the giving of
notice, the passage of time, or both, constitute an Event of Default.
"DEFAULT RATE" means a rate of interest equal to the lesser of (x) the
Prime Rate in effect from time to time plus six and one-quarter percent (6.25%)
PER ANNUM and (y) the maximum rate permitted by applicable law. The Default Rate
shall be automatically increased or decreased, as the case may be, without
notice to Company from time to time as of the effective date of each change in
the Prime Rate
"DURCO" means Durco International, Inc., a New York corporation.
"EBITDA" means, for any period, the sum (determined without duplication
on a consolidated basis and in accordance with GAAP) of (a) Company's net income
(or net loss) (including gains and losses from the sales of assets in the
ordinary course of business) for such period, (b) the provision for income taxes
of Company for such period, (c) the Interest Expense of Company for such period,
and (d) any depreciation or amortization expenses incurred by Company in
determining its net income (or net loss) for such period.
"ELIGIBLE ACCOUNTS" means, at the time of determination thereof, all
Accounts arising out of the ordinary course of Company's business other than (i)
any Account which is payable more than 30 days from invoice date, (ii) any
Account which has been outstanding for more than 90 days from invoice date,
(iii) any Account as to which GBCC does not have a valid and perfected, first
priority security interest, (iv) to the extent that the aggregate outstanding
Accounts owed by any single Account Debtor exceeds the Concentration Limit, that
portion of the Accounts owed by such Account Debtor in excess of the
Concentration Limit, (v) any Account that is owed by an Account Debtor that is
an Affiliate of Company or an officer or employee of Company, (vi) any Account
that arises out of a sale made or services performed outside of the United
States or that is owed by an Account Debtor located outside the United States,
(vii) any Account that is owed by a creditor or supplier of Company or with
respect to which any defense, counterclaim or right of set off has been
asserted, (viii) any Account owed by an Account Debtor if more than 25% (in
dollar amount) of such Account Debtor's Accounts have been outstanding more than
90 days from invoice date, (ix) any Account that is owed by the United States or
any department, agency or instrumentality thereof, unless the right to payment
under such Account is assigned to GBCC as Collateral in full compliance with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. 3727), and (x) any
Account that has not been approved by GBCC for inclusion in the Borrowing Base
in its sole and absolute discretion.
"ELIGIBLE INVENTORY" means, at the time of determination, all raw
materials and finished goods that are part of Company's Inventory that (i) are
owned by Company, are located in the United States of America, and if located on
leased or mortgaged premises, are subject to the terms of a lien waiver letter
executed by the landlord or mortgagee of such premises if deemed necessary by
GBCC in its sole discretion, (ii) are ready for sale, and are not, in the
opinion of GBCC, damaged, obsolete or otherwise not readily salable at full
value, (iii) have been held in Inventory for not more than two hundred and
seventy (270) days, (iv) are not on lease or consignment or furnished under any
contract of service from or to any Person, (v) are subject to an enforceable,
first-priority, perfected security interest in favor of GBCC, (vi) are not the
subject of an invoice giving rise to an Eligible Account, and (vii) have been
approved by GBCC for inclusion in the Borrowing Base.
"ELIGIBLE MACHINERY & EQUIPMENT" means, at the time of determination,
all machinery and equipment that (i) are owned by Company, are located in the
United States of America and, if located on leased or mortgaged premises, are
subject to the terms of a lien waiver letter executed by the landlord or
mortgagee of such premises if deemed necessary by GBCC in its sole discretion,
(ii) are not on lease or consignment to any Person, (iii) are subject to an
enforceable, first priority, perfected security interest in favor of GBCC, (iv)
are not , in the opinion of GBCC, damaged
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or obsolete, (v) are not fixtures, and (vi) have been approved by GBCC in its
sole and absolute discretion as Eligible Machinery and Equipment.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, rules, orders, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants or industrial, toxic or hazardous
substances into the environment, or otherwise relating to the manufacture,
processing, treatment, transport or handling of pollutants or industrial, toxic
or hazardous substances.
"EQUIPMENT ADVANCE" has the meaning given to it in SECTION 2.6.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA PLAN" means any pension benefit plan subject to Title IV of
ERISA maintained by Company or any Affiliate thereof with respect to which
Company has a fixed or contingent liability.
"EVENT OF DEFAULT" has the meaning given it in SECTION 11.
"FACILITY LIMIT" means Five Million Six Hundred Seventy-Four Thousand
Five Hundred and No/100 Dollars ($5,674,500.00).
"GAAP" means generally accepted accounting principles and practices as
promulgated by the American Institute of Certified Public Accountants, applied
on basis consistent with past practices.
"INDEMNIFIED CLAIMS" means any and all claims, demands, actions, causes
of action, judgments, liabilities, damages and consequential damages, penalties,
fines, costs, fees, expenses and disbursements (including, without limitation,
fees and expenses of attorneys and other professional consultants and experts in
connection with any investigation or defense) of every kind, known or unknown,
existing or hereafter arising, foreseeable or unforeseeable, which may be
imposed upon, threatened or asserted against or incurred or paid by any
Indemnified Person at any time and from time to time, because of, resulting
from, in connection with or arising out of any transaction, act, omission, event
or circumstance in any way connected with the Collateral or the Transaction
Documents (including but not limited to enforcement of GBCC's rights thereunder
or the defense of GBCC's actions thereunder), excluding with respect to any
Indemnified Persons, any of the foregoing directly caused by such Indemnified
Person's gross negligence or willful misconduct.
"INDEMNIFIED PERSONS" means GBCC, its successors and assigns and their
respective officers, directors, shareholders, employees, attorneys,
representatives and Affiliates.
"INTANGIBLE ASSETS" means such of Company's assets as are treated as
intangible pursuant to GAAP, including, without limitation: (a) obligations
owing by officers, directors, shareholders, employees, subsidiaries, Affiliates
or any Person in which any such officer, director, shareholder, employee,
subsidiary, or Affiliate owns any interest and (b) any asset which is intangible
or lacks intrinsic or marketable value or collectibility, including, without
limitation, goodwill, noncompetition agreements, patents, copyrights,
trademarks, franchises, organization or research and development costs.
"INTEREST EXPENSE" means, for any period, all interest charges paid or
accrued by Company during such period.
"INVENTORY" means all goods, now owned or hereafter acquired by
Company, wherever located, that are held for sale or lease or are to be
furnished under any contract of service (including, but not limited to raw
materials, work in process, finished goods and materials used or consumed in the
manufacture or production thereof, goods in which Company has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Company).
"MORTGAGE" means the Amended and Restated Mortgage, Security Agreement,
and Assignment of Lease and Rents, dated as of the date hereof, from Company to
GBCC, granting a lien in the Real Property Collateral.
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"NET INCOME" means, for any period, Company's net income after tax for
such period determined in accordance with GAAP.
"OBLIGATIONS" means all indebtedness, obligations and liabilities of
Company to GBCC arising under the Transaction Documents, and all other
indebtedness, obligations and liabilities of Company to GBCC, whether presently
existing or hereafter arising, direct or indirect, primary or secondary, joint
or several, fixed or contingent, and whether originally payable to GBCC or to a
third party and subsequently acquired by GBCC.
"PERSON" means any individual, corporation, joint venture, partnership,
trust, unincorporated organization or governmental entity or agency.
"PERSONAL PROPERTY COLLATERAL" has the meaning given to it in SECTION
8.
"PRIME RATE" means the rate PER ANNUM announced by Guaranty Federal
Bank F.S.B. or its successors or assigns from time to time as its base rate,
which base rate may not necessarily be the lowest or best rate actually charged
to customers of such bank.
"REAL ESTATE ADVANCE" has the meaning given to it in SECTION 2.6.
"REAL PROPERTY COLLATERAL" means the three separate parcels of real
property owned by Company located in Erie County, New York, and more
particularly described in the Mortgage.
"REMITTANCE ADDRESS" means such address as GBCC shall direct Company
from time to time in writing in accordance with the terms hereof.
"REVOLVING ADVANCE" has the meaning given to it in SECTION 2.1.
"REVOLVING FACILITY LIMIT" means Three Million Nine Hundred Thousand
and No/100 Dollars ($3,900,000.00).
"SHAREHOLDERS' EQUITY" means, as of any date, the shareholders' equity
of Company determined in accordance with GAAP.
"SHORT-TERM ADVANCE" has the meaning given to it in SECTION 2.6.
"TANGIBLE NET WORTH" means, as of any date, the amount obtained by
subtracting Company's Intangible Assets as of such date from the sum of (a)
Company's Shareholders' Equity as of such date and (b) the then-outstanding
principal balance of any Debt of Company subordinated to the Obligations
pursuant to a subordination agreement acceptable to GBCC between GBCC and the
Person to whom such Debt is owed.
"TANGIBLE NET WORTH REQUIREMENT" means $1,000,000 until December 31,
2000, and for each calendar year thereafter means (i) if Company's Net Income
for the previous calendar year is greater than or equal to zero, the Tangible
Net Worth Requirement as of the last day of the preceding calendar year plus
fifty percent (50%) of Company's Net Income for the previous calendar year and
(ii) if Company's Net Income for the previous calendar year is negative, the
Tangible Net Worth Requirement as of the last day of the preceding calendar
year.
"TERM" has the meaning given to it in SECTION 13.4.
"TERM ADVANCES" means the Real Estate Advance, the Equipment Advance,
and the Short-Term Advance and "TERM ADVANCE" means any of them.
"TERMINATION EVENT" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) of ERISA or (ii)
any other reportable event described in Section 4043(b) of ERISA other than a
reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA or (b) the withdrawal of Company or any
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Affiliate of Company from any ERISA Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) any
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any ERISA
Plan.
"TRADEMARK SECURITY AGREEMENT" means the Amended and Restated Trademark
Security Agreement, dated as of the date hereof, from Company to GBCC.
"TRANSACTION DOCUMENTS" means this Agreement, all other documents and
instruments executed and delivered in connection therewith, the Collateral
Assignment of Patents, the Trademark Security Agreement, and the Mortgage, as
the same may be amended, restated, renewed, extended, supplemented, or otherwise
modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.
"WORKING CAPITAL" means, as of any date, the excess of Current Assets
over Current Liabilities as of such date.
"WORKING CAPITAL REQUIREMENT" means $0.00.
1.2 Terms defined in the UCC and used but not defined herein shall have
the meanings ascribed to them in the UCC.
1.3 References herein to a particular agreement, instrument or document
also shall be deemed to refer to and include all renewals, extensions and
modifications of such agreement, instrument or document. All addenda, exhibits
and schedules attached to this Agreement are a part hereof for all purposes.
Words in the singular form shall be construed to include the plural and vice
versa, unless the context otherwise requires.
1.4 All interest accruing hereunder shall be calculated on the basis of
actual days elapsed (including the first but excluding the last day) plus three
(3) business days and a year of 360 days. Unless otherwise expressly provided
herein or unless GBCC otherwise consents, all financial statements and reports
furnished to GBCC hereunder shall be prepared, and all financial computations
and determinations pursuant hereto shall be made, in accordance with GAAP. All
payments received by GBCC after its internally established time for closing
business on any business day shall be applied as of the next succeeding business
day. Any payment which is due on a day which is not a business day shall instead
be deemed to be due on the next succeeding business day, and interest thereon
shall accrue and be payable at the then applicable rate during the time of such
extension. GBCC's records in respect of loans advanced, accrued interest,
payments received and applied and other matters in respect of calculation of the
amount of the Obligations shall be deemed conclusive absent demonstration of
error. All statements of account rendered by GBCC to Company relating to
principal, accrued interest or costs owing by Company under this Agreement shall
be presumed to be correct and accurate unless, within 30 days after receipt
thereof, Company shall notify GBCC in writing of any claimed error therein.
SECTION 2. ADVANCES.
2.1 Subject to the terms of this Agreement, including, without
limitation, SECTION 3, GBCC shall make advances to Company (each a "REVOLVING
ADVANCE" and collectively the "REVOLVING ADVANCES") from time to time during the
Term, provided, however, that the aggregate principal amount of Revolving
Advances outstanding at any time shall not exceed the lesser of (i) the
Borrowing Base determined by GBCC from time to time and (ii) the Revolving
Facility Limit. Company shall not be entitled to request more than one Revolving
Advance during any calendar week, and each Revolving Advance must be at least
$5,000 or, if the Availability is less than $5,000, then the amount of the
Availability. Company hereby agrees to repay to GBCC all Revolving Advances made
to Company hereunder, together with interest thereon, in the manner provided
herein. The principal owing hereunder in respect of the Revolving Advances at
any given time shall equal the aggregate amount of Revolving Advances made
hereunder minus all principal payments thereon received by GBCC hereunder.
Subject to the terms and conditions hereof, Company may borrow, repay and
reborrow under this Agreement.
2.2 Each request by Company to GBCC for a Revolving Advance hereunder
must be in writing or promptly confirmed in writing. Each such written request
or confirmation shall be accompanied by a Borrowing Base Certificate in the form
attached hereto as EXHIBIT A, together with (i) appropriate sales and cash
receipt journals, (ii) a
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schedule of Eligible Inventory, setting forth the location of all such
Inventory, including Eligible Inventory not in the possession of Company and the
name of the Person in possession thereof, and (iii) such supporting information
as GBCC shall request.
2.3 Promptly after receiving each Borrowing Base Certificate, GBCC
shall, based upon such Borrowing Base Certificate and such other information
available to GBCC, redetermine the Borrowing Base, which redetermination shall
take effect immediately and remain in effect until the next such
redetermination. If all conditions precedent to any Revolving Advance requested
have been met, GBCC will on the date requested make such Revolving Advance
available to Company by wire transfer to the account designated in writing by
Company. In the event GBCC does not receive an appropriately completed Borrowing
Base Certificate, GBCC shall have no obligation to redetermine the Borrowing
Base or make any additional Revolving Advances hereunder.
2.4 If at any time the aggregate unpaid principal balance of the
Revolving Advances outstanding to Company exceeds the lesser of (i) the
Borrowing Base and (ii) the Revolving Facility Limit, Company shall, upon
receipt of notice thereof from GBCC, immediately repay the principal of the
Revolving Advances in an amount at least equal to such excess, together with
accrued but unpaid interest on the amount repaid. Any principal repaid pursuant
to this SECTION 2.4 shall be in addition to, and not in lieu of, all payments
otherwise required to be paid under the Transaction Documents.
2.5 Except as provided in SECTION 2.17, all accrued but unpaid interest
on the outstanding principal balance of the Revolving Advances shall be due and
payable by Company to GBCC on the last day of each calendar month. The aggregate
unpaid principal balance of the Revolving Advances plus all accrued but unpaid
interest thereon shall be due and payable by Company to GBCC on demand, or if no
demand is made, on the last day of the Term.
2.6 Subject to the terms and conditions hereof, including, without
limitation, SECTION 3, GBCC agrees to make (a) a single advance based upon the
Real Property Collateral (the "REAL ESTATE ADVANCE") to Company on the date of
this Agreement, in the aggregate amount of $1,055,000, (b) a single advance
based upon the Eligible Machinery and Equipment (the "EQUIPMENT ADVANCE") to
Company on the date of this Agreement in the aggregate amount of $425,000, and
(c) a single advance based upon all of the Collateral (the "SHORT-TERM Advance")
to the Company on the date of this Agreement, in the aggregate amount of
$294,500. Company hereby agrees to repay to GBCC the Term Advances, together
with interest thereon, in the manner provided herein. The principal owing
hereunder in respect of the Real Estate Advance at any given time shall equal
the aggregate initial amount of the Real Estate Advance made hereunder minus all
principal payments thereon received by GBCC in respect of the Real Estate
Advance; the principal owing hereunder in respect of the Equipment Advance at
any given time shall equal the aggregate initial amount of the Equipment Advance
made hereunder minus all principal payments thereon received by GBCC in respect
of the Equipment Advance; and the principal owing hereunder in respect of the
Short-Term Advance at any given time shall equal the aggregate initial amount of
the Short-Term Advance made hereunder minus all principal payments thereon
received by GBCC in respect of the Short-Term Advance. Amounts repaid in respect
of any of the Term Advances may not be reborrowed hereunder.
2.7 The aggregate principal balance of and accrued but unpaid interest
on the Real Estate Advance, the Equipment Advance, and the Short-Term Advance
shall be due and payable by Company to GBCC on demand, or if no demand is made,
as follows:
(a) The principal balance of the Real Estate Advance shall be
repaid in sixty-two (62) monthly installments of $5,861.11, due and
payable on the last day of each calendar month, commencing on March 31,
2000, provided that the remaining unpaid principal balance of the Real
Estate Advance and all accrued interest thereon shall be due and
payable on the earlier of (i) the payment of the remaining unpaid
principal balance of the Revolving Advances and (ii) June 2, 2005.
(b) The principal balance of the Equipment Advance shall be
repaid in sixty-two (62) monthly installments of $5,059.52, due and
payable on the last day of each calendar month, commencing on March 31,
2000, provided that the remaining unpaid principal balance of the
Equipment Advance and all accrued and unpaid interest thereon shall be
due and payable on the earlier of (i) the payment of the remaining
unpaid principal balance of the Revolving Advances and (ii) June 2,
2005.
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(c) The principal balance of the Short-Term Advance shall be
repaid in twenty-four (24) monthly installments of $12,270.83, due and
payable on the last day of each calendar month, commencing on March 31,
2000, provided, however, that the remaining unpaid principal balance of
the Short-Term Advance shall be payable on the earliest of (i) the
payment of the remaining unpaid principal balance of the Revolving
Advances, (ii) the last day of the Term, and (iii) February 28, 2002.
2.8 The Eligible Machinery and Equipment shall, at all times, have an
appraised orderly liquidation value of not less than 80% of the outstanding
principal balance of the Equipment Advance. GBCC may, from time to time, have
the Eligible Machinery and Equipment appraised by an independent appraiser
selected by GBCC, and Company shall pay the reasonable costs of such appraisal.
If any such appraisal indicates that the orderly liquidation value of the
Eligible Machinery and Equipment is less than 80% of the outstanding principal
balance of the Equipment Advance, Company shall, at GBCC's option exercised in
its sole and absolute discretion, either (a) grant a first priority security
interest to GBCC in additional collateral satisfactory to GBCC having an orderly
liquidation value, which together with the orderly liquidation value of the
Eligible Machinery and Equipment, equals or exceeds 80% of the outstanding
principal balance of the Equipment Advance or (b) immediately pay down the
outstanding principal balance of the Equipment Advance, plus all accrued
interest on the amount prepaid, to an amount equal to 80% of the orderly
liquidation value of the Eligible Machinery and Equipment, without the payment
of any premium or penalty. Any payment of principal under this SECTION 2.8 shall
be in addition to any other payments of principal required hereunder.
2.9 Company shall have no right to make any prepayment (i) of the
Equipment Advance except in accordance with SECTION 2.8 or SECTION 13.4 or (ii)
of the Real Estate Advance except in accordance with SECTION 13.4. Company may
prepay the Short-Term Advance in whole or in part at any time without penalty or
premium.
2.10 The aggregate unpaid principal balance of all Advances shall bear
interest at the Contract Rate in effect from time to time. Except as provided in
SECTION 2.17, all accrued but unpaid interest on each Advance shall be due and
payable by Company to GBCC on the last day of each calendar month.
2.11 Company shall pay to GBCC an annual facility fee in the amount of
one-half percent (0.50%) of the sum of the Revolving Facility Limit plus the
outstanding principal balance of the Term Advances, payable on June 2 of each
year during the Term, commencing on June 2, 2000. All facility fees payable
hereunder shall be deemed earned on the date hereof, and shall be subject to
acceleration upon any early termination of this Agreement prior to the end of
the Term. Company hereby authorizes GBCC, at its sole discretion, to deduct any
facility fee from any Revolving Advance hereunder.
2.12 In the event that the income earned by GBCC during any calendar
month pursuant to SECTION 2.10 in respect of the Revolving Advances and SECTION
2.13 is less than $10,000, Company shall pay to GBCC a minimum usage fee equal
to the difference between the amount so earned by GBCC and $10,000, regardless
of GBCC's prior compensation. The minimum usage fee for each calendar month
shall be due and payable on the first day of the next calendar month, and shall
be prorated for any partial calendar month during the Term.
2.13 Company shall pay to GBCC a collateral monitoring fee in the
amount of $500 for each calendar month. The collateral monitoring fee for each
calendar month shall be due and payable on the first day of the next calendar
month.
2.14 In addition to, and not in lieu of, any termination fee required
by SECTION 13.4, Company shall pay to GBCC a liquidation fee (in this section
called the "LIQUIDATION FEE") in the amount of five percent (5%) of the face
amount of each Eligible Account included in the Borrowing Base that is
outstanding at any time during the Liquidation Period (as defined below). The
Liquidation Fee shall be payable on the earlier to occur of (i) the date on
which GBCC collects the applicable Eligible Account and (ii) the ninetieth day
after the invoice date of the applicable Eligible Account. For purposes of this
section, the term "LIQUIDATION PERIOD" means a period beginning on the earliest
of (i) the date of commencement against or by Company of any voluntary or
involuntary case under the federal Bankruptcy Code, (ii) the date of any general
assignment by Company for the benefit of its creditors; (iii) the date of any
appointment or taking possession by a receiver, liquidation, assignee, custodian
or similar official of all or a substantial part of Company's assets, or (iv)
the date of the cessation of business of Company, and ending on the date on
which GBCC has actually received all fees, costs, expenses and other amounts
owing to it hereunder.
8
2.15 Contemporaneously with the execution and delivery hereof, Company
shall pay to GBCC a documentation fee of $3,000.00 plus additional fees and
expenses to cover the legal costs and expenses of the negotiation, preparation,
execution and delivery of the Transaction Documents. In addition, Company shall
pay or reimburse GBCC upon demand for all other costs and expenses incurred by
GBCC in connection with its due diligence review of Company and the closing of
the transactions contemplated hereby and all reasonable attorneys' fees, court
costs and other expenses incurred by GBCC (whether or not litigation is
commenced or judgment issued, and if litigation is commenced whether at trial or
any appellate level) in connection with the enforcement by GBCC of this
Agreement or any other Transaction Document, the protection or enforcement of
GBCC's interest in the Collateral, the collection by GBCC of the Collateral, or
the representation of GBCC in connection with any bankruptcy case or insolvency
proceeding involving Company, the Collateral, or any Account Debtor, including,
without limitation, any representation involving relief from a stay motion, a
cash collateral dispute, an assumption or rejection motion or a dispute
concerning any proposed disclosure statement and plan proposed in any such
proceeding.
2.16 GBCC shall be entitled to collect upon demand its normal and
customary charges for the following routine services provided or obtained in the
course of performing its functions with respect to the Collateral: appraisals,
lock box charges, long-distance telephone charges, postage, credit reports, wire
transfers, check copying charges, overnight mail delivery, UCC, judgment,
litigation and tax lien searches and filings.
2.17 All interest, fees and other amounts due to GBCC pursuant to this
SECTION 2 shall be payable on demand, and may, in GBCC's sole discretion, be
deducted from Advances or paid from the Cash Collateral.
2.18 The parties hereto intend to contract in strict compliance with
applicable usury law from time to time in effect. In furtherance thereof, the
parties hereto stipulate and agree that none of the terms and provisions
contained in this Agreement or any other Transaction Document shall ever be
construed to create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the maximum amount of interest permitted to be
charged by applicable law from time to time in effect. Company, any present or
future guarantor or any other Person hereafter becoming liable for the payment
of the Obligations, shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully charged under applicable law from time to time in effect, and
the provisions of this paragraph shall control over all other provision of the
Transaction Documents which may be in conflict therewith. If any indebtedness or
obligation owed by Company under the Transaction Documents is prepaid or
accelerated and as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or GBCC shall otherwise collect
moneys which are determined to constitute interest which would otherwise
increase the interest on all or any part of such obligations to an amounts in
excess of that permitted to be charged by applicable law then in effect, then
all such sums determined to constitute interest in excess of such legal limit
shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related indebtedness or obligations or, at GBCC's option
returned to Company or the other payor thereof upon such determination. In
determining whether or not any amount paid or payable, under any circumstance,
exceeds the maximum amount permitted under applicable law, GBCC and Company
shall to the greatest extent permitted under applicable law, characterize any
non-principal payment as an expense, fee or premium rather than as interest, and
amortize, prorate, allocate and spread the total amount of interest throughout
the entire contemplated term of this Agreement in accordance with the amounts
outstanding from time to time hereunder and the Maximum Rate from time to time
in effect under applicable law in order to lawfully charge the maximum amount of
interest permitted under applicable law. If at any time the rate at which
interest is payable hereunder exceeds the Maximum Rate, the amount outstanding
hereunder shall bear interest at the Maximum Rate only, but shall continue to
bear interest at the Maximum Rate until such time as the total amount of
interest accrued hereunder equals (but does not exceed) the total amount of
interest which would have accrued hereunder had there been no Maximum Rate
applicable hereto. In the event applicable law provides for an interest ceiling
under Chapter 303 of the Texas Finance Code, that ceiling shall be the indicated
(weekly) ceiling and shall be used when appropriate in determining the maximum
rate permitted by applicable law. As used in this section, (i) the term
"applicable law" means the laws of the State of Texas or the laws of the United
States of America, whichever laws allow the greater interest, as such laws now
exist or may be changed or amended or come into effect in the future, and (ii)
the term "MAXIMUM RATE" means, at the time of determination, the maximum rate of
interest which, under applicable law, may then be charged hereunder. The parties
agree that this Agreement shall not be subject to Chapter 346 of the Texas
Finance Code.
9
SECTION 3. CONDITIONS PRECEDENT TO ADVANCES.
3.1 GBCC shall not be obligated to make any Advance hereunder
(including the first) until it shall have received the following documents, duly
executed in form and substance satisfactory to GBCC and its counsel:
(a) this Agreement;
(b) UCC-3 financing statements executed by Company;
(c) the amended and restated continuing unconditional and absolute
guarantee by ACS of all Obligations;
(d) an acknowledgment executed by Finova Mezzanine Capital, Inc.
respecting that certain Subordination Agreement, dated as of
June 30, 1998, among Finova Mezzanine Capital, Inc. (as
successor in interest to Sirrom Capital Corp. d/b/a Tandem
Corp.), FFI, FFC, ACS, and Company;
(e) the Trademark Security Agreement;
(f) the Collateral Assignment of Patents;
(g) the Mortgage and a gap mortgage;
(h) certificates executed by the President and the Secretary of
Company and ACS certifying (i) the names and signatures of the
officers of Company or ACS, as appropriate, authorized to
execute Transaction Documents, (ii) the resolutions duly
adopted by the Boards of Directors of Company or ACS, as
appropriate, authorizing the execution of this Agreement and
the other Transaction Documents, and (iii) correctness and
completeness of the copy of the bylaws of Company or ACS, as
appropriate, attached thereto;
(i) certificates regarding the valid existence and good standing
of each of Company and ACS in the state of its organization
issued by the appropriate governmental authorities in such
jurisdiction;
(j) a release executed by Durco releasing all liens and security
interests of Durco in the Collateral;
(k) endorsements naming GBCC as an additional insured and loss
payee on all liability insurance and all property insurance
policies of Company;
(l) an appraisal of the Real Property Collateral performed by an
appraiser selected by GBCC in its sole and absolute discretion
showing that the fair market value of the Real Property
Collateral is at least $1,315,000;
(m) a mortgagee's policy of title insurance (or an unconditional
commitment for the issuance thereof) in an amount at least
equal to the fair market value of the Real Property Collateral
from a title company acceptable to GBCC insuring that the
Mortgage creates a valid first lien in favor of GBCC in the
Real Property Collateral, such policy to contain only the
standard exceptions and such exceptions thereto as are
acceptable to GBCC; and
(n) such other documents, certificates, opinions, and information
that GBCC may require.
3.2 Furthermore, GBCC shall not be obligated to make any Advance
hereunder (including the first), unless: (i) all representations and warranties
made by Company in the Transaction Documents are true on and as of the date of
such Advance as if such representations and warranties had been made as of the
date of such Advance, (ii) Company has performed and complied with all
agreements and conditions required in the Transaction Documents to be performed
or complied with by it on or prior to the date of such Advance, (iii) no Default
or Event of Default shall have occurred and be continuing, (iv) such Advance
shall not be prohibited by any law or any regulation or any order of any court
or governmental agency or authority, (v) Company shall not have repudiated or
made any anticipatory
10
breach of any of its obligations under any Transaction Document, and (vi) GBCC
shall not have disapproved such Advance in whole or in part.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES. Company represents
and warrants to GBCC on the date hereof, and shall be deemed to represent and
warrant to GBCC on each date on which an Advance is made to Company hereunder,
that:
4.1 Company is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, with all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and the other Transaction Documents to which it is a party
and to conduct its business as presently conducted. Company is duly qualified
and authorized to do business as a foreign corporation and is in good standing
in all states in which such qualification and good standing are necessary or
desirable for the conduct by Company of its business or the performance by
Company of its obligations hereunder. The execution, delivery and performance by
Company of this Agreement and the other Transaction Documents to which it is a
party do not and will not constitute (a) a violation of any applicable law or
Company's articles or certificate of incorporation or bylaws or (b) a material
breach of any other document, agreement or instrument to which Company is a
party or by which Company is bound. This Agreement and the other Transaction
Documents to which Company is a party have been duly authorized, executed and
delivered by Company, and are legal, valid and binding obligations of Company
enforceable against Company in accordance with their terms. No consent of,
approval by, registration or filing with or authorization from any governmental
authority or agency is required in connection with the execution, delivery or
performance by Company of this Agreement or the other Transaction Documents to
which it is a party.
4.2 Except for the liens and security interests created in favor of
GBCC and the liens and security interests described in SCHEDULE 4.2 attached
hereto, none of the Collateral is subject to any lien, encumbrance, security
interest or other claim of any kind or nature. Company has not transferred,
sold, pledged or given a security interest in any of its assets (including,
without limitation, its Accounts, Inventory, machinery, equipment, and real
property) to any Person other than GBCC. There are no financing statements on
file in any public office governing any property of Company of any kind, real or
personal, in which Company is named in or has signed as the debtor, except the
financing statement or statements filed or to be filed in respect of this
Agreement.
4.3 Company is the sole owner and holder of, and has good and
marketable title to, all Collateral. This Agreement creates a valid security
interest in the Collateral in favor of GBCC, and such security interest is a
perfected, first priority security interest in the Personal Property Collateral
superior to the rights of any other Person therein. The Mortgage creates a valid
and subsisting first lien on the Real Property Collateral in favor of GBCC,
superior to the rights of any other Persons therein.
4.4 The amount of each Eligible Account is due and owing to Company and
represents an accurate statement of a bona fide sale, delivery and acceptance of
Inventory or performance of service by Company to or for an Account Debtor. The
terms for payment of the Eligible Accounts are 30 days from date of invoice and
the payment of the Eligible Accounts is not contingent upon the fulfillment by
Company of any further performance of any nature whatsoever. There are no
set-offs, allowances, discounts, deductions, counterclaims against the Eligible
Accounts or any claims by Account Debtors, of any kind whatsoever, valid or
invalid, that have been or may be asserted as a basis for refusing to pay an
Eligible Account, in whole or in part, either at the time it is accepted by GBCC
for inclusion in the Borrowing Base or prior to the date it is to be paid. To
the best of Company's knowledge, each Account Debtor's business is solvent.
Company has served or caused to be served any and all preliminary notices
required by law to perfect or enforce any mechanic's lien or stop notice or
bonded stop notice for the Eligible Accounts and the information contained in
those notices is true and correct to the best of Company's knowledge.
4.5 All Inventory covered by any Borrowing Base Certificate submitted
to GBCC is in good condition, meets all standards imposed by any governmental
authority or agency having regulating authority over such Eligible Inventory or
its use or sale, currently is either useable or saleable in the ordinary course
of business without diminution in value and meets all of the criteria contained
in the definition of Eligible Inventory (except clause (vii) thereof).
4.6 All Machinery and Equipment of Company described on SCHEDULE 4.6
attached hereto is in good operating condition and repair (normal wear and tear
excepted), and meets all of the criteria specified in the definition of Eligible
Machinery and Equipment (except clause (iv) thereof).
11
4.7 The address set forth below Company's signature hereon is, and for
at least the last six months has been, Company's mailing address, its chief
executive office, its principal place of business, and the office where all of
the books and records concerning the Eligible Accounts are maintained. The
addresses set forth in SCHEDULE 4.7 are and for at least the last six months
have been the locations of all Personal Property Collateral. Company does not
transact business, and has not transacted business during the past five years,
under any trade, fictitious or assumed name other than those set forth on
SCHEDULE 4.7. During the past five years, Company has not been a party to a
merger or consolidation and has not acquired all or substantially all of the
assets of any Person, other than the acquisition of assets contemplated by the
Asset Purchase Agreement.
4.8 Company has filed all tax reports and returns required to be filed
by it and has paid all federal, state and local taxes and governmental charges
imposed upon Company.
4.9 Company is in compliance with ERISA, and is not required to
contribute to any "multiemployer plan" as defined in Section 4001 of ERISA.
Company has conducted its business in material compliance with all applicable
laws, including but not limited to, applicable Environmental Laws, and maintains
and is in compliance with all licenses and permits required under any such laws
to conduct its business and perform its obligations hereunder. Company does not
have any known, material contingent liability under any Environmental Law.
4.10 The application made by Company to GBCC in connection with this
Agreement and the statements made therein and in any materials furnished in
connection therewith are true and correct as of the date hereof. All financial
statements furnished by Company to GBCC in connection with such application or
hereunder have been prepared in accordance with GAAP and fairly present the
financial condition and results of operations of Company as of the dates and for
the periods indicated therein.
4.11 There is no fact which Company has not disclosed to GBCC in
writing which could materially adversely affect the properties, business or
financial condition of Company, or any of the Collateral, or which it is
necessary to disclose in order to keep the foregoing representations and
warranties from being misleading.
4.12 Company has (i) reviewed the areas within its business and
operations which could be adversely affected by failure to become "Year 2000
Compliant" (i.e., that computer applications, imbedded microchips, and other
systems used by Company or any of its material vendors, will be able properly to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a detailed plan
and timetable to become Year 2000 Compliant in a timely manner, and (iii)
committed adequate resources to support the Year 2000 plan of Company. Based
upon such review, Company reasonably believes that Company will become Year 2000
Compliant in a timely manner.
SECTION 5. AFFIRMATIVE COVENANTS OF COMPANY. From the date hereof and
until the payment and performance in full of all of the Obligations, Company
covenants with GBCC that:
5.1 Company shall preserve and maintain its corporate existence, good
standing and authority to transact business in all jurisdictions where necessary
for the proper conduct of its business, and shall maintain all of its
properties, rights, privileges and franchises necessary or desirable in the
normal conduct of its business.
5.2 Company shall permit GBCC and its representatives, including any
appraisers, auditors and accountants selected by GBCC, to inspect any of the
Collateral at any time during normal business hours. In addition, GBCC shall
have the right, from time to time, to audit Company's books and records during
normal business hours. Company shall pay all costs associated with any such
audits at the rate of $700 per day per auditor plus reasonable out-of-pocket
expenses. Company shall not be responsible for the costs of more than one such
audit hereunder during any calendar quarter unless a Default or an Event of
Default has occurred, in which case, there shall be no limit on Company's
responsibility for the payment of any such audit.
5.3 Company shall maintain its books and records in accordance with
GAAP. Company shall furnish GBCC, upon request, such information and statements
as GBCC shall request from time to time regarding Company's business affairs,
financial condition and results of its operations. Without limiting the
generality of the foregoing, Company shall provide GBCC, on or prior to the
forty-fifth (45th) day after the last day of each month, unaudited
12
consolidated and consolidating financial statements of ACS with respect to such
month and, within 90 days after the end of each of ACS' fiscal years, audited
annual consolidated and consolidating financial statements of ACS and such
certificates relating to the foregoing as GBCC may request including, without
limitation, a monthly certificate from the president and chief financial officer
of Company stating whether any Events of Default have occurred and stating in
detail the nature thereof. Company shall provide GBCC a Borrowing Base
Certificate, appropriately completed and with all attachments, at any time that
GBCC shall request and on or before the last day of any calendar week in which
Company does not request an Advance. In addition, Company shall furnish to GBCC
upon request a current listing of all open and unpaid accounts payable and
accounts receivable, names, addresses and contact persons for Account Debtors,
and such other items of information that GBCC may deem necessary or appropriate
from time to time. Company immediately shall notify GBCC in writing upon
becoming aware of the existence of any condition or circumstance that
constitutes a Default or an Event of Default. Any such written notice shall
specify the nature of such condition or circumstance, the period of the
existence thereof and the action that Company proposes to take with respect
thereto. Company shall provide GBCC with a copy of any document filed by ACS
with the Securities and Exchange Commission promptly after the filing thereof
and a copy of any document or communication provided to the stockholders of ACS
generally promptly after such provision.
5.4 Company promptly shall notify GBCC of any attachment or any other
legal process levied against Company and any action, suit, proceeding or other
similar claim initiated against Company.
5.5 Company shall keep and maintain adequate insurance by insurers
acceptable to GBCC with respect to its business and all Collateral. Such
insurance shall cover loss, damages and liability of amounts not less than
reasonably requested by GBCC and shall include, at a minimum, business
interruption insurance, insurance for workers compensation, general premises
liability, fire, casualty, theft and all risk. Company shall cause GBCC to be an
additional insured and loss payee under all policies of insurance covering any
of the Collateral, to the extent of GBCC's interest. Any such policy shall be
endorsed to provide that it will not be amended, modified, or canceled without
30 days' prior, written notice to GBCC. Company shall deliver copies of each
insurance policy to GBCC upon request.
5.6 Company shall file all tax reports and returns required to be filed
by it in the manner and at the times required by applicable law, and shall pay
all federal, state and local taxes and charges imposed upon Company when due.
5.7 Company shall comply with ERISA and shall not become required to
contribute to any "multiemployee plan" as defined in Section 4001 of ERISA.
Company shall conduct its business in material compliance with all applicable
laws, and shall maintain and comply with all licenses and permits required under
any such laws to conduct its business and perform its obligations hereunder.
Without limiting the generality of the foregoing, Company shall comply in all
material respects with all Environmental Laws now or hereafter applicable to
Company and shall obtain, at or prior to the time required by applicable
Environmental Laws, all environmental, health and safety permits, licenses and
other authorizations necessary for its operations. Company promptly shall
furnish to GBCC all written notices of violation, complaints, penalty
assessments, suits or other proceedings received by Company with respect to any
alleged violation of or non-compliance with any Environmental Laws.
SECTION 6. NEGATIVE COVENANTS OF COMPANY. From the date hereof and
until the payment and performance in full of all of the Obligations, Company
covenants with GBCC that:
6.1 Other than the liens and security interest created hereunder and
under the Transaction Documents and the liens and securities interests described
on SCHEDULE 4.2 attached hereto, Company shall not grant, create or allow to
exist any security interest, lien or other encumbrance on any of the Collateral
other than the lien and security interest granted to GBCC herein, and Company
shall not execute any financing statement in favor of any Person other than
GBCC. Company shall not change its mailing address, chief executive office,
principal place of business or place where such records are maintained, open any
new place of business, close any existing place of business or change the
location of any of the Collateral or transact business under any trade,
fictitious or assumed name other than those set forth on SCHEDULE 4.7 hereto
without providing at least 30 days' prior, written notice thereof to GBCC.
6.2 Company shall not accept any returns or grant any allowance or
credit (other than those returns, allowances and credits accepted or granted in
the ordinary course of Company's business) to any Account Debtor without notice
to and the prior written approval of GBCC. Company shall provide to GBCC for
each Account Debtor
13
on Accounts a weekly report, in form and substance satisfactory to GBCC,
itemizing all such returns and allowances made during the previous week with
respect to such Accounts.
6.3 Company shall not directly or indirectly incur, or become liable in
connection with, any Debt for borrowed money or otherwise under any promissory
note, bond, indenture or similar instrument, or in connection with the
obligations of any Person, whether by guaranty, suretyship, endorsement (other
than endorsement of negotiable instruments for collection in the ordinary course
of business), purchase or repurchase agreement, agreement to provide funds or
maintain working capital, agreement to assure a creditor against loss or
agreement to make investments or otherwise), other than in favor of GBCC or in
the normal and ordinary course of Company's business.
6.4 Company shall not use any of the funds paid to Company hereunder
directly or indirectly for personal, family, household or agricultural purposes.
6.5 Company shall not discontinue, or make any material change in, its
business as currently established, or enter any new or different line of
business not directly related to Company's existing line of business.
6.6 Company shall not declare, pay or issue any dividends or other
distributions in respect of its capital stock or distribute, reserve, secure, or
otherwise make or commit distributions on account of its capital stock, or make
any payment on account of the purchase, redemption or other acquisition or
retirement of any shares of its capital stock.
6.7 Company shall not make any loans or advances to or for the benefit
of any officer, director or shareholder of Company except advances for routine
expense allowances in the ordinary course of business. Company shall not make
any loans or advances to or for the benefit of any Affiliate of Company. Company
shall not make any payment on any obligation owing to any officer, director,
shareholder or Affiliate of Company, provided, however, that so long as no
Default or Event of Default has occurred, Company may pay to ACS periodic
management fees payable to ACS pursuant to a written management agreement
between ACS and Company (in form and substance acceptable to GBCC) in an amount
equal to the lesser of one percent (1%) of Company's revenues from time to time
and the amount that would be payable by Company in an arms-length transaction
with an unaffiliated third party for services actually rendered by ACS to
Company pursuant to such management agreement.
6.8 Without GBCC's prior, written consent, which shall not be
unreasonably withheld, Company shall not purchase or otherwise acquire assets
from any Person outside the ordinary course of business of Company.
6.9 Without GBCC's prior, written consent, which shall not be
unreasonably withheld, Company shall not invest in or otherwise purchase or
acquire the securities of any Person.
6.10 Without GBCC's prior, written consent, which may be withheld in
GBCC's sole discretion, Company shall not sell or dispose of any of its assets
other than the sale of Inventory in the ordinary course of business, and Company
shall not dissolve or liquidate or become a party to any merger or consolidation
with any Person.
6.11 Company shall perform its obligations under the Assigned Contract
Rights, and shall not amend, modify, or waive any of its rights under any
Assigned Contract Right without GBCC's prior, written consent, which may be
withheld in GBCC's sole discretion.
6.12 Company shall keep and maintain its furniture, fixtures machinery
and equipment in good operating condition and repair (normal wear and tear
excepted), and shall make all necessary repairs thereto so that the value and
operating efficiency thereof shall at all times be maintained and preserved.
Company shall notify GBCC immediately in writing of any material loss or damage
to any item of its furniture, fixtures, machinery and equipment.
6.13 If Company now owns or hereafter acquires any vehicles, aircraft,
watercraft or other machinery and equipment for which a certificate of title has
been issued or applied for, Company immediately shall deliver to GBCC, properly
endorsed, each certificate of title or application for title or other evidence
of ownership for each such item of
14
machinery and equipment. Company shall take all actions necessary to have GBCC's
security interest properly recorded on each such certificate of title and shall
take all other actions necessary to perfect GBCC's security interest in all such
assets now or hereafter acquired by Company.
SECTION 7. FINANCIAL COVENANTS OF COMPANY. From the date hereof and
until the payment and performance in full of all of the Obligations, Company
covenants with GBCC that:
7.1 Company shall maintain a Tangible Net Worth of not less than the
Tangible Net Worth Requirement at all times.
7.2 Company shall maintain a Debt Service Coverage Ratio of not less
than 1.0 to 1.0 at all times.
7.3 Company's Net Income for each fiscal year shall equal or exceed
$500,000.
7.4 Company shall maintain Working Capital of not less than the Working
Capital Requirement at all times.
SECTION 8. COLLATERAL.
8.1 In order to secure the payment of all Obligations Company hereby
grants to GBCC a security interest in and lien upon all property of Company,
whether now owned or hereafter acquired and wherever located, including, without
limitation, all of Company's right, title and interest in and to (a) all
Accounts, contract rights and general intangibles, receivables and claims
whether now or hereafter arising, all guaranties and security therefor and all
of Company's right title and interest in the goods purchased and represented
thereby, if any, including all of Company's rights in and to returned goods and
rights of stoppage in transit, replevin and reclamation as unpaid vendor; (b)
all chattel paper; (c) all documents and instruments; (d) all letters of credit
and letter-of-credit rights; (e) all deposit accounts; (f) all investment
property and financial assets; (g) all Inventory and all accessions thereto and
products thereof and documents therefor; (h) all furniture, fixtures, equipment
and machinery, wherever located and whether now or hereafter existing, and all
parts thereof, accessions thereto, and replacements therefor and all documents
and general intangibles covering or relating thereto; (i) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and any other designs or sources of
business identifiers, indicia of origin or similar devices, all registrations
with respect thereto, all applications with respect to the foregoing, and all
extensions and renewals with respect to any of the foregoing, together with all
of the goodwill associated therewith, in each case whether now or hereafter
existing, and all rights and interest associated with the foregoing; (j) all
copyrights, and all copyrights of works based on, incorporated in, derived from
or relating to works covered by such copyrights, and all right, title and
interest to make and exploit all derivative works based on or adopted from works
covered by such copyrights, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all rights and interests
associated with the foregoing; (k) all patents, patent applications, and
patentable inventions, all continuations, divisions, renewals, extensions,
modifications, substitutions, continuations-in-part, or reissues of any of the
foregoing, the right to xxx for past, present, and future infringements of any
of the foregoing, all income, royalties, profits, damages, awards, and payments
relating to or payable under any of the foregoing, and all other rights and
benefits relating to any of the foregoing throughout the world; (l) the Assigned
Contract Rights, all rights to receive monies due or to become due thereunder,
all chattel paper, documents, and instruments now existing or hereafter arising,
relating to such rights to receive money, and all security therefor, all rights
to receive proceeds of any insurance, indemnity, warranty, or guaranty with
respect to the Assigned Contract Rights, all claims for damages arising out of
or for a breach of or default under the Assigned Contract Rights, and the right
to enforce the performance under the Assigned Contract Rights and otherwise to
exercise remedies available thereunder; (m) all books and records pertaining to
the foregoing, including but not limited to computer programs, data,
certificates, records, circulation lists, subscriber lists, advertiser lists,
supplier lists, customer lists, customer and supplier contracts, sales orders,
and purchasing records; and (n) all proceeds of the foregoing (collectively, the
"PERSONAL PROPERTY COLLATERAL"). In addition, Company shall, pursuant to the
Mortgage, xxxxx x xxxx on and security interest in the Real Property Collateral
to GBCC to secure payment of the Obligations described therein.
15
8.2 Company agrees to comply with all appropriate laws in order and to
take all actions necessary or desirable in GBCC's judgment to perfect GBCC's
security interest in and to the Collateral, to execute any financing statement
or additional documents as GBCC may request and to deliver to GBCC a list of all
locations of its Inventory, equipment and machinery and landlord and or
mortgagee lien waivers with respect to each site where Inventory, equipment or
machinery is located and which is either leased by Company or has been mortgaged
by Company, upon request by GBCC. If any item of Collateral or the proceeds
thereof is or becomes evidenced by a note, chattel paper, or instrument, Company
immediately shall deliver possession thereof, duly endorsed to GBCC, to be held
by GBCC as Collateral hereunder. Company shall be and remain liable for the
performance of its obligations under the Assigned Contract Rights and GBCC shall
have no liability therefor.
8.3 The parties acknowledge and agree to the following provisions of
this Agreement in anticipation of the possible application, in one or more
jurisdictions to the transactions contemplated hereby, of the revised Article 9
of the Uniform Commercial Code in the form or substantially in the form approved
in 1998 by the American Law Institute and the National Conference of
Commissioners on Uniform State Law ("REVISED ARTICLE 9"):
(a) GBCC may at any time and from time to time, pursuant to the
provisions of SECTION 10, file financing statements, continuation statements,
and amendments thereto that describe the Collateral as all assets of Company of
the kind pledged hereunder and which contain any other information required by
Part 5 of Revised Article 9 for the sufficiency of filing office acceptance of
any financing statement, continuation statement, or amendment, including whether
Company is an organization, the type of organization, and any organizational
identification number issued to Company. Company agrees to furnish any such
information to GBCC promptly upon request. Any such financing statements,
continuation statements, or amendments may be signed by GBCC on behalf of
Company, as provided in SECTION 10, and may be filed at any time in any
jurisdiction whether or not Revised Article 9 is then in effect in that
jurisdiction.
(b) Company shall at any time and from time to time, whether or not
Revised Article 9 is in effect in any particular jurisdiction, take such steps
as GBCC may reasonably request for GBCC (i) to obtain an acknowledgment, in form
and substance satisfactory to GBCC, of any bailee having possession of any of
the Collateral that the bailee holds such Collateral for GBCC, (ii) obtain
"control" of any Collateral consisting of investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper (as such terms are defined
in Revised Article 9 with corresponding provisions in Revised Sections 9-104,
9-105, 9-106, and 9-107 relating to what constitutes "control" for such items of
Collateral), with any agreements establishing control to be in form and
substance satisfactory to GBCC, and (iii) otherwise to insure the continued
perfection and priority of GBCC's security interest in any of the Collateral and
of the preservation of its rights therein, whether in anticipation and following
the effectiveness of Revised Article 9 in any jurisdiction.
(c) Nothing contained in this SECTION 8.3 shall be construed to narrow
the scope of GBCC's security interest in any of the Collateral or the perfection
or priority thereof or to impair or otherwise limit any of the rights, powers,
privileges or remedies of GBCC hereunder except (and then only to the extent)
mandated by Revised Article 9 to the extent then applicable.
SECTION 9. COLLECTION. Each invoice representing an Account shall state
on its face that amounts payable thereunder are payable only at the Remittance
Address. GBCC shall have the right at any time, either before or after the
occurrence of an Event of Default and without notice to Company, to notify any
or all Account Debtors on the Collateral of the assignment of the Collateral to
GBCC and to direct such Account Debtors to make payment of all amounts due or to
become due to Company directly to GBCC, and to the extent permitted by law, to
enforce collection of any Collateral and to adjust, settle or compromise the
amount or payment thereof. So long as no Default or Event of Default has
occurred and is continuing, all collections of Collateral received by GBCC shall
be applied by GBCC to the payment of the Advances, whether or not then due, then
to all other Obligations of Company to GBCC then due and any remaining funds
shall be delivered to Company. Upon the occurrence and during the continuance of
a Default or an Event of Default, any such remaining funds may be held by GBCC
as cash collateral ("CASH COLLATERAL") until all Obligations have been paid in
full and GBCC has no further obligation to advance funds to Company. All amounts
and proceeds (including instruments and writings) received by Company shall be
received in trust for the benefit of GBCC hereunder, shall be segregated from
other funds of Company and shall be immediately paid over to GBCC in the same
form as received (with any necessary endorsement) to be applied in the same
manner as payments received directly by GBCC.
16
SECTION 10. POWER OF ATTORNEY. Company grants to GBCC an irrevocable
power of attorney coupled with an interest authorizing and permitting GBCC, at
its option, with or without notice to Company, to do any or all of the
following: (a) endorse the name of Company on any checks or other evidences of
payment whatsoever that may come into the possession of GBCC regarding
Collateral, including checks received by GBCC pursuant to SECTION 9 hereof; (b)
receive, open and forward any mail addressed to Company and put GBCC's address
on any statements mailed to Account Debtors; (c) pay, settle, compromise,
prosecute or defend any action, claim, conditional waiver and release, or
proceeding relating to Collateral; (d) upon the occurrence of an Event of
Default, notify, in the name of Company, the U.S. Post Office to change the
address for delivery of mail addressed to Company to such address as GBCC may
designate (provided that GBCC shall turn over to Company all such mail not
relating to Collateral); (e) verify, sign, acknowledge, record, file for
recording, serve as required by law, any claim of mechanic's lien, stop notice
or bonded stop notice in the sole and absolute discretion of GBCC relating to
any Collateral; (f) insert all recording or service information in any
mechanic's lien or assignment of rights under stop notice/bonded stop notice
which Company has signed in connection with this Agreement, recorded or served
to enforce payment of the Collateral; (g) execute and file on behalf of Company
any financing statement, amendment thereto or continuation thereof (i) deemed
necessary or appropriate by GBCC to protect GBCC's interest in and to the
Collateral or (ii) required or permitted under any provision of this Agreement;
and (h) do all other things necessary and proper in order to carry out this
Agreement. The authority granted to GBCC herein is irrevocable until this
Agreement is terminated and all amounts due to GBCC hereunder have been paid in
full. Fidelity shall have no obligation to exercise any of the rights granted to
it hereunder. Company authorizes GBCC to verify and confirm Company's Accounts
from time to time with the related Account Debtors. Any such verification or
confirmation may, at GBCC's option, be conducted orally or in writing.
SECTION 11. DEFAULT. An event of default ("EVENT OF DEFAULT") shall be
deemed to have occurred hereunder, GBCC shall have no further obligation to make
any further Advances and may immediately exercise its rights and remedies with
respect to the Collateral under this Agreement, the Uniform Commercial Code and
applicable law, upon the happening of one or more of the following:
(a) Company shall fail to pay on demand or otherwise as and when
required or due any amount required to be paid or owed by Company to GBCC,
whether hereunder or otherwise.
(b) Company shall breach any covenant or agreement made herein or in
any other Transaction Document and the same shall not be cured to GBCC's
satisfaction within ten (10) days after such covenant or agreement is breached.
(c) Any warranty or representation made herein or in any other
Transaction Document shall be untrue when made or any report, certificate,
schedule, financial statement, profit and loss statement or other statement
furnished by Company, or by any other person on behalf of Company, to GBCC is
not true and correct when furnished.
(d) There shall be commenced by or against Company or any guarantor of
the Obligations any voluntary or involuntary case under the federal Bankruptcy
Code, or Company or any guarantor of the Obligations shall make an assignment
for the benefit of its creditors, or of a receiver or custodian shall be
appointed for Company or any guarantor of the Obligations for a substantial
portion of its assets.
(e) Company shall become insolvent in that its debts are greater than
the fair value of its assets, or Company is generally not paying its debts as
they become due.
(f) Any involuntary lien, garnishment, attachment or the like shall be
issued against or shall attach to the Collateral.
(g) An event or circumstance shall have occurred which GBCC believes
has or may result in a material adverse change in Company's financial condition,
business or operations or the value of the Collateral.
(h) Company shall have a federal or state tax lien filed against any of
its properties, or shall fail to pay any federal or state tax when due, or shall
fail to file any federal or state tax form or report as and when due.
17
(i) Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) in excess of
$25,000 exists with respect to any ERISA Plan, or (ii) any Termination Event
occurs with respect to any ERISA Plan and the then current value of such ERISA
Plan's benefit liabilities exceeds the then current value of such ERISA Plan's
assets available for the payment of such benefit liabilities by more than
$25,000.
(j) Company suffers the entry against it a final judgment for the
payment of money in excess of $25,000, and such judgment is not satisfied within
30 days after such entry.
(k) GBCC believes that the prospect for payment or performance of the
Obligations has become impaired.
(l) Any guarantor of the Obligations shall repudiate his, her or its
obligations in respect of such guaranty.
(m) ACS shall cease to own one hundred percent (100%) of the
outstanding capital stock of Company.
Upon the occurrence of an Event of Default described in subsections (d) or (e)
of this section, all of the Obligations owing by Company to GBCC under any of
the Transaction Documents shall thereupon be immediately due and payable,
without demand, presentment, notice of demand or of dishonor and nonpayment, or
any other notice or declaration of any kind, all of which are hereby expressly
waived by Company. During the continuation of any other Event of Default, GBCC,
at any time and from time to time, may declare any or all of the Obligations
owing by Company to GBCC under any of the Transaction Documents immediately due
and payable, all without notice, demand, presentment, notice of demand or of
dishonor and nonpayment, or any notice or declaration of any kind, all of which
are hereby expressly waived by Company. After any such acceleration (whether
automatic or due to declaration by GBCC), any obligation of GBCC to make any
further Advances or loans of any kind under this Agreement or any other
agreement with Company shall terminate.
The enumeration of Events of Default shall not impair the nature of the
Obligations as demand obligations, at all times payable upon demand pursuant
hereto. All Advances hereunder are subject to approval by GBCC in its sole
discretion, and may be declined in whole or in part, without prior notice to
Company, whether or not an Event of Default may then be in existence.
SECTION 12. REMEDIES AND APPLICATION OF PROCEEDS.
12.1 In addition to, and without limitation of, the foregoing
provisions of this Agreement, if an Event of Default shall have occurred and be
continuing, GBCC may from time to time in its discretion, without limitation and
without notice except as expressly herein: (a) exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein, under
the other Transaction Documents or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral); (b) require Company to, and Company hereby
agrees that it will at its expense, assemble all or part of the Personal
Property Collateral as directed by GBCC and make it available to GBCC at a place
to be designated by GBCC that is reasonably convenient to both parties; (c)
reduce its claim to judgment or foreclose or otherwise enforce, in whole or in
part, the security interest created hereby by any available judicial procedure;
(d) dispose of, at its office, on the premises of Company or elsewhere, all or
any part of the Personal Property Collateral, as a unit or in parcels, by public
or private proceedings; (e) buy the Personal Property Collateral, or any part
thereof, at any public sale, or at any private sale if the Personal Property
Collateral is of a type customarily sold in a recognized market or is of a type
that is the subject to widely distributed standard price quotations; (f) apply
by appropriate judicial proceedings for appointment of a receiver for the
Collateral, or any part thereof, and Company hereby consents to any such
appointment; and (g) at its discretion, retain the Personal Property Collateral
in satisfaction of the Obligations whenever the circumstances are such that GBCC
is entitled to do so under the UCC or otherwise. Company agrees that, to the
extent notice of sale shall be required by law, at least five (5) days' notice
to Company of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. GBCC shall
not be obligated to make any sale of Collateral regardless of whether any notice
of sale has been given. GBCC may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice,
18
be made at the time and place to which it was so adjourned. In addition, if an
Event of Default shall have occurred and be continuing, GBCC may from time to
time in its discretion, exercise all of the rights and remedies afforded to it
under the Collateral Assignment of Patents and the Trademark Security Agreement.
12.2 If any Event of Default shall have occurred and be continuing,
GBCC may in its discretion apply any Cash Collateral, and any cash proceeds
received by GBCC in respect of any sale of, collection from, or other
realization upon all or any part of the Personal Property Collateral, to any or
all of the following in such order as GBCC may elect: (a) the repayment of all
or any portion of the Obligations; (b) the repayment of reasonable costs and
expenses, including reasonable attorneys' fees and legal expenses, incurred by
GBCC (whether or not litigation has been commenced or a judgment has been
issued, and if litigation has been commenced, whether at trial or any appellate
level) in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral, (iii) the exercise or enforcement of any
of the rights of GBCC hereunder, or (iv) the failure of Company to perform or
observe any of the provisions hereof; (c) the payment or other satisfaction of
any liens and other encumbrances upon any of the Collateral; (d) the
reimbursement of GBCC for the amount of any obligations of Company paid or
discharged by GBCC, and of any expenses of GBCC payable by Company hereunder or
under the other Transaction Documents; (e) by holding the same as Collateral;
(f) the payment of any other amounts required by applicable law (including,
without limitation, Part 5 of Article 9 of the UCC or any successor or similar
applicable statutory provision); and (g) by delivery to Company or to whomsoever
shall be lawfully entitled to receive the same or as a court of competent
jurisdiction shall direct. Any proceeds from the sale or other liquidation of
all or any part of the Real Property Collateral shall be applied in accordance
with the Mortgage.
SECTION 13. MISCELLANEOUS.
13.1 In the event that Company commits any act or omission that
prevents or unreasonably interferes with (a) GBCC's exercise of the rights and
privileges arising under the power of attorney granted in SECTION 10 of this
Agreement or (b) GBCC's perfection of or levy upon the security interest granted
in the Collateral, including any seizure of any Collateral, Company acknowledges
that such conduct will cause immediate, severe, incalculable and irreparable
harm and injury, and agrees that such conduct shall constitute sufficient
grounds to entitle GBCC to an injunction, writ of possession, or other
applicable relief in equity, and to make such application for such relief in any
court of competent jurisdiction, without any prior notice to Company.
13.2 All rights, remedies and powers granted to GBCC in this Agreement,
or in any other instrument or agreement given by Company to GBCC or otherwise
available to GBCC in equity or at law, are cumulative and may be exercised
singularly or concurrently with such other rights as GBCC may have. These rights
may be exercised from time to time as to all or any part of the Collateral as
GBCC in its discretion may determine. No waiver by GBCC of its rights and
remedies shall be effective unless the waiver is in writing and signed by GBCC.
A waiver by GBCC of a right or remedy under this Agreement or any other
Transaction Document on one occasion shall not be deemed to be a waiver of such
right or remedy on any subsequent occasion. The making of an Advance by GBCC
during the continuation of a Default or an Event of Default shall not obligate
GBCC to make any further Advances during the continuation of such Default or
Event of Default.
13.3 Any notice or communication with respect to this Agreement or any
other Transaction Document shall be given in writing, sent by (i) personal
delivery, (ii) expedited delivery service with proof of delivery, (iii) United
States mail, postage prepaid, registered or certified mail, or (iv) prepaid
telegram, telex or telecopy, addressed to each party hereto at its address set
forth below its signature hereon or to such other address or to the attention of
such other Person as hereafter shall be designated in writing by the applicable
party sent in accordance herewith. Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the
case of delivery service or mail, as of the date of first attempted delivery at
the address and in the manner provided herein, or in the case of telegram, telex
or telecopy, upon receipt. Company hereby agrees that GBCC may publicize the
transaction contemplated by this Agreement in newspapers, trade and similar
publications including, without limitation, the publication of a "tombstone".
13.4 The term of this Agreement shall be from the date hereof to June
2, 2005 (the "INITIAL TERM"; the Initial Term and all extensions thereof are
herein called the "TERM") and from year to year thereafter unless either party
hereto gives notice to the other party hereto not more than 90 days or less than
60 days prior to the end of the Term that
19
such party wants to terminate the Agreement at the end of the Term, provided,
however, that GBCC may terminate this Agreement at any time effective
immediately upon the occurrence of an Event of Default. Company acknowledges
that it shall have no right to terminate this Agreement prior to the end of the
Term, that termination of this Agreement at any time prior to the end of the
Term would result in the loss by GBCC of benefits under this Agreement and that
the damages incurred by GBCC as a result of such termination would be difficult
and impractical to ascertain. Therefore, subject to the limitation set forth in
SECTION 2.18 hereof, in the event this Agreement is terminated for any reason
(i) on or before June 2, 2000, Company shall pay to GBCC an early termination
fee equal to six percent (6%) of the Prepayment Base, (ii) after June 2, 2000,
but on or before the end of the Term, Company shall pay to GBCC an early
termination fee of four percent (4%) of the Prepayment Base; provided, however,
in the event that GBCC repays all Obligations owed hereunder from the net
proceeds of a public offering or private placement of its common stock, the
early termination fee shall be limited to the lesser of (a) one percent (1%) of
the sum of (1) the outstanding principal balance of the Real Estate Advance as
of the date of prepayment plus (2) the outstanding principal balance of the
Equipment Advance as of the date of prepayment and (b) the maximum amount
permitted by applicable law. Any termination of this Agreement shall not affect
GBCC's security interest in the Collateral, and this Agreement shall continue to
be effective, until all transactions entered into and obligations incurred
hereunder have been completed and satisfied in full. As used herein, "PREPAYMENT
BASE" shall mean (x) the Revolving Facility Limit plus (y) the outstanding
principal balance of the Real Estate Advance as of the date of prepayment plus
(z) the outstanding principal balance of the Equipment Advance as of the date of
prepayment.
13.5 Company hereby agrees that in the event Company receives an offer
either during or at the end of the Term from a third party to provide financing
or factoring to Company, which offer Company intends to accept, Company shall
require the offeror to reduce such offer to a written commitment (the "NEW
COMMITMENT"). In addition, (a) Company will notify GBCC in writing of the
identity of the offeror and the complete terms of the New Commitment and (b) if,
within 30 days after GBCC's receipt of such notice and a signed copy of the New
Commitment, GBCC elects, in its sole discretion, to offer to terminate this
Agreement in accordance with SECTION 13.4 and to match the New Commitment,
Company will accept GBCC's offer.
13.6 Each and every provision, condition, covenant and representation
contained in this Agreement is, and shall be construed, to be a separate and
independent covenant and agreement. If any term or provision of this Agreement
shall to any extent be invalid or unenforceable, the remainder of the Agreement
shall not be affected thereby.
13.7 Company hereby indemnifies and agrees to hold harmless and defend
all Indemnified Persons from and against any and all Indemnified Claims. THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH INDEMNIFIED CLAIMS ARE
IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY
OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY INDEMNIFIED PERSON. Upon notification and demand, Company agrees
to provide defense of any Indemnified Claim and to pay all costs and expenses of
counsel selected by any Indemnified Person in respect thereof. Any Indemnified
Person against whom any Indemnified Claim may be asserted reserves the right to
settle or compromise any such Indemnified Claim as such Indemnified Person may
determine in its sole discretion, and the obligations of such Indemnified
Person, if any, pursuant to any such settlement or compromise shall be deemed
included within the Indemnified Claims. Except as specifically provided in this
section, Company waives all notices from any Indemnified Person. The provisions
of this SECTION 13.7 shall survive the termination of this Agreement.
13.8 All grants, covenants and agreements contained in this Agreement
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that Company may delegate or assign
any of its duties or obligations under this Agreement without the prior written
consent of GBCC. GBCC RESERVES THE RIGHT TO ASSIGN ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT IN WHOLE OR IN PART TO ANY PERSON OR ENTITY. Without
limiting the generality of the foregoing, GBCC may from time to time grant
participations in all or any part of the Obligations to any Person on such terms
and conditions as may be determined by GBCC in its sole and absolute discretion,
provided that the grant of such participation shall not relieve GBCC of its
obligations hereunder nor create any additional obligation of Company.
13.9 Any action permitted or provided to be taken or omitted by GBCC
hereunder may be taken or omitted, as the case may be, by GBCC in its sole and
absolute discretion, and any consent or waiver required of GBCC
20
or determination to be made by GBCC hereunder may be given, withheld or made, as
the case may be, by GBCC in its sole and absolute discretion.
13.10 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO THE RULES
THEREOF RELATING TO CONFLICTS OF LAW. COMPANY HEREBY IRREVOCABLY SUBMITS ITSELF
TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY,
TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY
LEGAL PROCEEDING RELATING TO THIS AGREEMENT, ANY BORROWING HEREUNDER OR ANY
OTHER RELATIONSHIP BETWEEN GBCC AND COMPANY BY ANY MEANS ALLOWED UNDER STATE OR
FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT, ANY BORROWING HEREUNDER OR ANY OTHER RELATIONSHIP BETWEEN GBCC AND
COMPANY SHALL BE BROUGHT AND LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR
FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS HAVING JURISDICTION UNLESS GBCC
SHALL ELECT OTHERWISE. THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER.
13.11 EACH OF COMPANY AND GBCC HEREBY (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
13.12 THIS AGREEMENT AND THE OTHER WRITTEN AGREEMENTS DESCRIBED HEREIN
AND DELIVERED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT OF THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION OR AMENDMENT OF OR SUPPLEMENT TO
THIS AGREEMENT OR TO ANY SUCH OTHER WRITTEN AGREEMENT SHALL BE VALID OR
EFFECTIVE UNLESS THE SAME IS IN WRITING AND SIGNED BY THE PARTY AGAINST WHOM IT
IS SOUGHT TO BE ENFORCED.
13.13 This Agreement restates and amends the Prior Loan Agreements and
the Gap Note in their entirety effective as of the date hereof, and all of the
terms and provisions hereof shall supersede the terms and provisions thereof;
provided that all indebtedness and obligations of the Company to GBCC under the
Prior Loan Agreements and the Gap Note are renewed and extended hereby and all
liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities (the "LIENS") created by the Prior Loan
Agreements and the Gap Note are renewed and extended hereby and shall continue
in full force and effect to secure the Obligations. By this Agreement, the Liens
are hereby ratified and confirmed as valid, subsisting and continuing to secure
the Obligations.
21
The undersigned have entered into this Agreement as of the date first
written above.
GUARANTY BUSINESS CREDIT CORPORATION ACS ACQUISITION CORP.,
D/B/A FIDELITY FUNDING, a New York corporation
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX By: /s/ [ILLEGIBLE]
--------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxx Name: [ILLEGIBLE]
Title: President Title: Pres/CEO
Mailing Address: Mailing Address:
0000 Xxxxxxx Xxxxxx, 00000 X.X. 00xx Xxxxxx
Xxxxx 000 Xxxxx Xxxxxxx, Xxxxxxx 00000
Xxxxxx, Xxxxx 00000
Street Address: Street Address:
0000 Xxxxxxx Xxxxxx, 00000 X.X. 00xx Xxxxxx
Xxxxx 000 Xxxxx Xxxxxxx, Xxxxxxx 00000
Xxxxxx, Xxxxx 00000
EXHIBIT INDEX
Exhibit A Borrowing Base Certificate
Schedule 4.6 Eligible Machinery and Equipment
Schedule 4.7 Trade Names and Locations
RATIFICATIONS AND CONSENTS
Finova Mezzanine Capital, Inc. (successor in interest to Sirrom Capital
Corp. d/b/a Tandem Corp.; "Finova"), FFI, FFC, ACS, and Company executed that
certain Subordination Agreement, dated as of June 30, 1998 (the "SUBORDINATION
AGREEMENT"). Finova (i) consents, acknowledges, and agrees to the execution,
delivery, and performance by Company of this Agreement and the other Transaction
Documents, (ii) acknowledges and agrees that neither this Agreement nor any
other Transaction Document affects, diminishes, waives, or releases its
obligations under the Subordination Agreement, and (iii) ratifies and confirms
its obligations pursuant to the Subordination Agreement.
FINOVA MEZZANINE CAPITAL, INC.,
(successor in interest to Sirrom Capital
doing business as Tandem Capital)
By:
---------------------------------------
Name:
Title:
ACS executed (a) a Subordination Agreement, dated as of June 4, 1997,
among ACS, FFI, and Company, (b) a Subordination Agreement, dated as of June 4,
1997, among ACS, FFC, and Company, and (c) a Subordination Agreement, dated as
of June 30, 1998, among Sirrom Capital Corporation, FFI, FFC, ACS, and Company
(collectively, the "SUBORDINATION AGREEMENTS"). ACS (i) consents, acknowledges,
and agrees to the execution, delivery, and performance by Company of this
Agreement and the Transaction Documents, (ii) acknowledges and agrees that
neither this Agreement nor any other Transaction Document affects, diminishes,
waives, or releases its obligations under any of the Subordination Agreements,
and (iii) ratifies and confirms its obligations pursuant to the Subordination
Agreements.
AQUA CARE SYSTEMS, INC.
By: /s/ [ILLEGIBLE]
---------------------------------------
Name: [ILLEGIBLE]
Title: Pres/CEO
22
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the New York
Department of State on June 20, 1997, under file number 127490 is amended as
follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 ---------- attached hereto
and made a part hereof.
4. This Financing Statement Change is presented for filing to the
New York Department of State.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the New York
Department of State on June 20, 1997, under file number 127493 is amended as
follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
New York Department of State.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the New York
Department of State on June 20, 1997, under file number 127487 is amended as
follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
New York Department of State.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the Florida
Secretary of State on June 20, 1997, under file number 970000136386 is amended
as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
Florida Secretary of State.
NO FLORIDA DOCUMENTARY STAMP OR INTANGIBLE TAX IS REQUIRED.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the Florida
Secretary of State on June 20, 1997, under file number 970000136387 is amended
as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
Florida Secretary of State.
NO FLORIDA DOCUMENTARY STAMP OR INTANGIBLE TAX IS REQUIRED.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the Florida
Secretary of State on June 20, 1997, under file number 970000136388 is amended
as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
Florida Secretary of State.
NO FLORIDA DOCUMENTARY STAMP OR INTANGIBLE TAX IS REQUIRED.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the County
Clerk of Erie County, New York on June 23, 1997, under file number 199706230540
is amended as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
County Clerk of Erie County, New York.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the County
Clerk of Erie County, New York on June 23, 1997, under file number 199706230546
is amended as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
County Clerk of Erie County, New York.
SECURED PARTY:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
DEBTOR:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: VP Finance
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
FINANCING STATEMENT CHANGE (AMENDMENT)
This instrument is prepared and is intended to be a Financing Statement
Change complying with the formal requisites therefor as set forth in the Uniform
Commercial Code.
1. The name and address of debtor ("DEBTOR") is:
ACS ACQUISITION CORP.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
2. The name and address of secured party ("SECURED PARTY") is:
GUARANTY BUSINESS CREDIT CORPORATION
D/B/A FIDELITY FUNDING
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
3. The financing statement filed in the office of the County
Clerk of Erie County, New York on June 23, 1997, under file number 199706230544
is amended as follows:
a. To change Secured Party's address to
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
b. To amend the collateral description to be the collateral
description set forth on SCHEDULE 1 attached hereto and made a
part hereof.
4. This Financing Statement Change is presented for filing to the
County Clerk of Erie County, New York.
Schedule 1 to UCC-3 Statement of Change
Debtor: ACS Acquisition Corp.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Secured Party: Guaranty Business Credit Corporation, doing business as
Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All of Debtor's personal property, whether now owned or hereafter acquired and
wherever located, including, without limitation, all of Debtor's right, title
and interest in and to (a) all accounts, contract rights and general
intangibles, receivables and claims whether now or hereafter arising, all
guarantees and security therefor and all of Debtor's right title and interest in
the goods purchased and represented thereby, if any, including all of Debtor's
rights in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor; (b) all chattel paper; (c) all documents and
instruments; (d) all letters of credit and letter-of-credit rights; (e) all
deposit accounts; (f) all investment property and financial assets; (g) all
inventory, including without limitation, all goods, now owned or hereafter
acquired by Debtor, wherever located, that are held for sale or lease or are to
be furnished under any contract of service (including, but not limited to
raw-materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which Debtor has an interest in
mass or a joint or other interest or rights of any kind, and goods which have
been returned to or repossessed or stopped in transit by Debtor) and all
accessions thereto and products thereof and documents therefor; (h) all
furniture, fixtures, equipment and machinery, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and any other designs or sources of business identifiers, indicia of
origin or similar devices, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals with
respect to any of the foregoing, together with all of the goodwill associated
therewith, in each case whether now or hereafter existing, and all rights and
interest associated with the foregoing; (j) all copyrights, and all copyrights
of works based on, incorporated in, derived from or relating to works covered by
such copyrights, and all right, title and interest to make and exploit all
derivative works on or adopted from works covered by such copyrights, all
registrations with respect thereto, all applications with respect to the
foregoing, and all extensions and renewals with respect to any of the foregoing,
together with all rights and interests associated with the foregoing; (k) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx for
past, present and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of the
foregoing throughout the world; (l) the Assigned Contract Rights, all rights to
receive monies due or to become due thereunder, all chattel paper, documents,
and instruments now existing or hereafter arising, relating to such rights to
receive money, and all security therefor, all rights to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Assigned
Contract Rights, all claims for damages arising out of or for a breach of or
default under the Assigned Contract Rights, and the right to enforce the
performance under the Assigned Contract Rights and otherwise remedies available
thereunder; (m) all books and records pertaining to the foregoing, including but
not limited to computer programs, data, certificates, records, circulation
lists, subscriber lists, advertiser lists, supplier lists, customer lists,
customer and supplier contract, sales orders, and purchasing records; and (n)
all proceeds of the foregoing, including, without limitation, proceeds of
insurance policies.
THIS INSTRUMENT AFFECTS REAL AND PERSONAL PROPERTY SITUATED IN
THE STATE OF NEW YORK, COUNTY OF ERIE, AFFECTING PREMISES SITUATED
AT 0000-00 XXXXXXX XXXX, XXXXX, XXX XXXX
ACS ACQUISITION CORP.
("MORTGAGOR")
to
GUARANTY BUSINESS CREDIT CORPORATION,
doing business as Fidelity Funding
("MORTGAGEE")
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS,
AND FIXTURE FILING
dated as of March 14, 2000
Property Location: 0000-00 Xxxxxxx Xxxx, Xxxxx, Xxx Xxxx
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Guaranty Business Credit Corporation, doing business as Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx Xxxx
Mortgage, Security Agreement, and Assignment of Leases and Rents
MORTGAGE, SECURITY AGREEMENT, AND ASSIGNMENT OF LEASES AND RENTS (THE
"MORTGAGE"), DATED AS OF THE 14 DAY OF MARCH, 2000, BY ACS ACQUISITION CORP., A
NEW YORK CORPORATION HAVING OFFICES AT 00000 X.X. 00XX XXXXXX, XXXXX XXXXXXX,
XXXXXXX 00000 ("MORTGAGOR") AND GUARANTY BUSINESS CREDIT CORPORATION, DOING
BUSINESS AS FIDELITY FUNDING, HAVING OFFICES AT 0000 XXXXXXX XXXXXX, XXXXX 000,
XXXXXX, XXXXX 00000 ("MORTGAGEE").
W I T N E S S E T H:
Mortgagor and Mortgagee have entered into that certain Amended and
Restated Loan and Security Agreement, dated the date hereof (together with all
amendments, restatements, renewals, extensions, or modifications thereof, the
"LOAN AGREEMENT"); terms defined in the Loan Agreement and used herein shall
have the meanings ascribed to them in the Loan Agreement.
TO SECURE THE PAYMENT OF THREE HUNDRED TWELVE THOUSAND NINE HUNDRED AND 00/100
DOLLARS U.S. ($312,900.00) of principal, plus all interest and other sums due
with respect to such advance made by Mortgagee to Mortgagor (the "ADVANCE") made
pursuant to the terms of that certain Promissory Note, dated the date hereof, in
the original principal amount of $312,900.00 (the "NOTE") (which Advance and all
interest and other sums due with respect thereto being hereinafter referred to
as the "DEBT"), Mortgagor has mortgaged, given, granted, bargained, sold,
aliened, conveyed, confirmed, pledged, assigned, and hypothecated and by these
presents does hereby mortgage, give, grant, bargain, sell, alien, convey,
confirm, pledge, assign and hypothecate unto Mortgagee all right, title,
interest and estate of Mortgagor now owned, or hereafter acquired, in and to the
following property, rights, interests and estates (such property, rights,
interests and estates being hereinafter described are collectively referred to
herein as the "MORTGAGE PROPERTY"):
(a) those certain parcels of land containing approximately 80
acres, located at Hardpan Road in the Town of Xxxxx, Erie County, New York, and
being more particularly described in Exhibit A annexed hereto, together with any
improvements now or hereafter located or constructed thereon or therein, and all
of the easements, rights, privileges and appurtenances thereunto belonging or in
anywise, appertaining thereto including, but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Mortgagor therein and in
and to the strips and gores, streets and ways adjacent thereto, whether in law
or in equity, in possession or expectancy, now or hereafter acquired;
(b) all machinery, equipment, fixtures, furniture, equipment,
and inventories and other property of every kind and nature, whether tangible or
intangible, whatsoever owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Property, or appurtenant
thereto, and usable in connection with the present or future operation and
occupancy of the Property and all building equipment, materials and supplies of
any nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Property, or appurtenant
thereto, or usable in connection with the present
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 1
or future operation, enjoyment and occupancy of the Property (hereinafter
collectively called the "EQUIPMENT");
(c) all accounts, contract rights, and general intangibles,
receivables and claims whether now or hereafter arising, all guaranties and
security therefor and all of the Mortgagor's goods and rights of stoppage in
transit, replevin and reclamation as unpaid vendor;
(d) all inventory and all accessions thereto and products
thereof and documents therefor;
(e) all books and records pertaining to the foregoing,
including, but not limited to, computer programs, data, certificates, records,
circulation lists, subscriber lists, advertiser lists, supplier lists, customer
lists, customer and supplier contracts, sales orders and purchasing records;
(f) the Assigned Contract Rights, all rights to receive moneys
due or to become due thereunder, all chattel paper, documents and instruments
now existing or hereafter arising, relating to such rights to receive money and
all security therefor, all rights to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Contract Rights,
all claims for damages arising out of or for a breach of or default under the
Assigned Contract Rights and the right to enforce the performance under the
Assigned Contract Rights and otherwise to exercise all remedies available
thereunder;
(g) all right, title and interest of Mortgagor in and to all
condemnation and other awards heretofore made or hereafter to be made for the
taking by eminent domain of the whole or any part of the Property, or any estate
or easement therein, including any awards for change of grade of streets, all of
which awards are hereby assigned to Mortgagee, which is hereby authorized to
collect and receive the proceeds of such awards and to give proper receipts and
acquittances therefor and Mortgagee shall have the right and option to apply
such excess towards the payment of any sum owing on account of this Mortgage,
the Note, and the indebtedness secured thereby, notwithstanding the fact that
such sum may not then be due and payable;
(h) all present and future leases, subleases and licenses and
any guarantees thereof (the "LEASES"), rents, issues and profits and additional
rents now or at any time hereafter covering or affecting all or any portion of
the Mortgaged Property and all proceeds of, and all privileges and appurtenances
belonging or in any way appertaining to, the Mortgaged Property, or any part
thereof, and all other property subjected or required to be subjected to the
lien and/or security interest of the Mortgage, including, without limitation,
all of the income, revenues, earnings, rents, maintenance payments, tolls,
issues, products and profits thereof (the "RENTS"), which income, revenues,
earnings, rents, maintenance payments, tolls, issues, awards, products and
profits are hereby expressly assigned with the right to take and collect the
same upon the terms hereinafter set forth;
(i) all right, title and interest of Mortgagor in and to all
agreements, or contracts, now or hereafter entered into for the sale, leasing,
brokerage, development, management, maintenance and/or operation of the Property
(or any part thereto, including all moneys due and to become due thereunder, and
all permits, licenses, bonds, insurance policies, plans and
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 2
specifications relative to the construction and/or operation of the Improvements
upon the Mortgaged Property;
(j) all of Mortgagor's claims and rights to the payment of
damages arising from any rejection of a Lease under or pursuant to the
Bankruptcy Code, 11 U.S.C. /section/ 101, ET SEQ.;
(k) any other property and rights which are, by the provisions
of the Loan Agreement or any other loan document, required to be subject to the
lien hereof, and any additional property and rights that may from time to time
hereafter be owned by Mortgagor and installed in the Mortgaged Property, or by
writing of any kind, or otherwise, be subjected to the lien hereof by Mortgagor
or by anyone on its behalf,
(l) all Personal Property Collateral as defined and described
in the Loan Agreement;
(m) all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Mortgaged Property;
(n) the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect to the
Mortgaged Property and to commence any action or proceeding to protect the
interest of Mortgagee in the Mortgaged Property; and
(o) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including, without
limitation, proceeds of insurance and condemnation awards, all right, title and
interest of Mortgagor in and to all unearned premiums accrued, accruing and to
accrue under any or all insurance policies obtained by Mortgagor, and all rights
of the Mortgagor to refunds of real estate taxes and assessments relating to the
Mortgaged Property.
TO HAVE AND TO HOLD the Mortgaged Property, unto the Mortgagee and its
successors and assigns, upon the terms, provisions and conditions herein set
forth, forever, and Mortgagor does hereby bind itself and its successors, legal
representatives and assigns to warrant and forever defend all and singular the
Mortgaged Property unto the Mortgagee and its successors and assigns, against
every person whomsoever lawfully claiming or to claim the same or any part
thereof.
AND Mortgagor represents and warrants to and covenants and agrees with Mortgagee
as follows:
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Mortgagor will pay the Debt at the time and in the manner provided
in the Note and in this Mortgage. All the covenants, conditions and agreements
contained in the Loan Agreement, dated as of the date hereof, between Mortgagor
and Mortgagee, as the same may be modified or supplemented from time to time,
and any other Transaction Documents now or hereafter executed by Mortgagor
and/or others and by or in favor of Mortgagee, which wholly or partially secure
or
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 3
guaranty payment of the Debt (collectively, the "LOAN DOCUMENTS"), are hereby
made a part of this Mortgage to the same extent and with the same force as if
fully set forth herein.
2. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has good
and marketable title to all of the Mortgaged Property, in each case free and
clear of liens, claims and encumbrances.
3. INSURANCE.
(a) Mortgagor, at its sole cost and expense, will keep the
Mortgaged Property insured during the entire term of this Mortgage for the
mutual benefit of Mortgagor and Mortgagee against loss or damage by fire and
against loss or damage by other risks and hazards covered by a standard extended
coverage insurance policy including, but not limited to, riot and civil
commotion, vandalism, malicious mischief, burglary and theft. Such insurance
shall be in an amount (i) equal to one hundred percent (100%) of the
then-replacement cost of the improvements within the premises leased by
Mortgagor pursuant to the Leases (the "IMPROVEMENTS") and the Equipment, without
deduction for physical depreciation and (ii) such that the insurer would not
deem Mortgagor a co-insurer under said policies. The policies of insurance
carried in accordance with this paragraph shall be paid annually in advance and
shall contain the "Replacement Cost Endorsement" with a waiver of depreciation.
(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain during the
entire term of this Mortgage the following policies of insurance:
(i) Flood insurance if any part of the Property is located in
an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (and any
successor act thereto) in an amount at least equal to the outstanding
principal amount of the Loan Agreement or the maximum limit of coverage
available with respect to the Improvements and Equipment under said
Act, whichever is less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries
(including death resulting therefrom) coverages in an amount not less
than $1,000,000 per occurrence and $10,000,000 in the aggregate.
(iii) Business interruption insurance in an amount equal to
the aggregate annual amount of all income from, and revenues and rents
payable with respect to, the Property, such business interruption
insurance to cover losses for a period of at least twelve (12) months
after the date of the fire or casualty in question.
(iv) During the course of any renovations of the Improvements,
builder's completed value risk insurance against "all risks of physical
loss", including collapse and transit coverage, with deductibles
reasonably satisfactory to Mortgagee, in non-reporting form, covering
the total value of work performed and equipment, supplies and materials
furnished. Such policy of insurance shall contain the "permission to
occupy upon
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 4
completion of work or occupancy" endorsement and a waiver of
co-insurance or an agreed amount endorsement.
(v) Insurance against loss or damage from explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery
and equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements.
(vi) Such other insurance as may from time to time be
reasonably required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "POLICIES") required
pursuant to this paragraph 3 shall be issued by an insurer having an A.M. Best
rating of A:V or better and satisfactory to Mortgagee, (ii) shall contain the
standard New York mortgagee non-contribution clause naming Mortgagee as the
person to which all payments made by such insurance company shall be paid, (iii)
shall be maintained throughout the term of this Mortgage without cost to
Mortgagee, (iv) original certificates, or copies thereof, certified to be true
and correct, shall be delivered to Mortgagee, (v) shall contain such provisions
as Mortgagee deems reasonably necessary or desirable to protect its interest
including, without limitation, endorsements providing that neither Mortgagor,
Mortgagee nor any other party shall be a co-insurer under said Policies and that
Mortgagee shall receive at least thirty (30) days' prior, written notice of any
modifications or cancellation, and (vi) shall be satisfactory in form and
substance to Mortgagee and shall be approved by Mortgagee as to amounts, form,
risk coverage, deductibles, loss payees and insureds. All such premiums for such
Policies (the "INSURANCE PREMIUMS") shall be paid by Mortgagor making payment
when due directly to the carrier. Not later than thirty (30) days prior to the
expiration date of each of the Policies, Mortgagor will deliver to Mortgagee
satisfactory evidence of the renewal of each Policy.
(d) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Mortgagor shall give prompt,
written notice thereof to Mortgagee. Sums paid to Mortgagee by an insurer, after
deduction of Mortgagee's reasonable costs and expenses of collection (after such
deduction, the "INSURANCE PROCEEDS"), may be retained and (i) applied by
Mortgagee toward payment of the Debt in such priority and proportions as
Mortgagee in its discretion in shall deem proper (any such application for
repayment to be without any prepayment consideration, except that if a Default
or an Event of Default has occurred, then such application shall be subject to
the prepayment consideration computed in accordance with the Note) or (ii) if
the conditions set forth in paragraph 3(f) of this Mortgage are satisfied, paid
to Mortgagor for the restoration and repair of the Mortgaged Property in
accordance with paragraph 3(e) of this Mortgage in whole or in such lesser
amount as is necessary to pay for the costs of such restoration and repair.
(e) If the Insurance Proceeds are held by Mortgagee to
reimburse Mortgagor for the cost of restoration and repair of the Mortgaged
Property, (i) the Mortgaged Property shall be substantially restored to the
equivalent of its condition prior to such casualty or to such other condition as
Mortgagee may approve in writing, (ii) such restoration and repair shall be done
in compliance with all applicable laws, rules and regulations, and (iii) all
reasonable costs and expenses incurred by Mortgagee in connection with making
the Insurance Proceeds available for such restoration and repair including,
without limitation, counsel fees and inspecting engineers'
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 5
fees incurred by Mortgagee, shall be paid by Mortgagor. Mortgagee may, at
Mortgagee's option, condition disbursement of said proceeds on Mortgagee's
approval (which approval shall not be unreasonably withheld or delayed) of such
plans and specifications of an architect reasonably satisfactory to Mortgagee,
contractor's cost estimates, architect's certificates, waivers of liens, sworn
statements of mechanics and materialmen, and such other evidence of costs,
percentage completion of construction, application of payments, and satisfaction
of liens as Mortgagee may reasonably require. If the Insurance Proceeds are
applied to the payment of the Debt, any such application of proceeds to
principal shall not extend or postpone the maturity date of the Note or change
the amount or the due date of any installment payment under the Note. Any
surplus Insurance Proceeds, after payment of the Debt, shall be paid to
Mortgagor. If the Mortgaged Property is sold pursuant to paragraph 26 of this
Mortgage or if Mortgagee acquires title to the Mortgaged Property, Mortgagee
shall have all of the right, title and interest of Mortgagor in and to any
insurance policies and unearned premiums thereon and in and to the Insurance
Proceeds resulting from any damage to the Mortgaged Property prior to such sale
or acquisition.
(f) Mortgagee shall not exercise Mortgagee's option to apply
Insurance Proceeds to the payment of the sums secured by this Mortgage if all
the following conditions are met: (i) no Event of Default is then continuing
under this Mortgage or the Loan Agreement; (ii) Mortgagee determines that there
will be sufficient funds (whether consisting of Insurance Proceeds and/or other
sums made available by Mortgagor for restoration) to restore and repair the
Mortgaged Property to the condition required under paragraph 3(e) above; (iii)
Mortgagee determines that restoration and repair of the Mortgaged Property to
the condition required under paragraph 3(e) above will be completed within the
greater of (A) three (3) months or (B) the period of time covered by the
business interruption insurance then in effect from the date of the loss or
casualty to the Mortgaged Property; and (iv) Mortgagee shall have received
evidence reasonably satisfactory to it that during the period of restoration and
repair of the Mortgaged Property to the condition required under subparagraph
3(e) above, the sum of (A) income derived from the Mortgaged Property, as
reasonably determined by Mortgagee, plus (B) proceeds of business interruption
insurance, if any, to be paid, plus (C) amounts that Mortgagor demonstrates to
Mortgagee's reasonable satisfaction will be made available by Mortgagor from
other sources during such period will equal or exceed the sum of (D) expenses in
connection with the operation of the Mortgaged Property and (E) the debt service
under the Note.
4. PAYMENT OF TAXES, ETC.
(a) All taxes, assessments and water and sewer rents, now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof (the "TAXES") and all premiums relative to the Policies of
insurance required under paragraph 3 above shall be paid when due in the manner
provided in paragraph 4 of this Mortgage. Mortgagor shall pay all rents,
maintenance charges, other governmental impositions, and other charges,
including without limitation vault charges and license fees for the use of the
Property and any adjoining areas, now or hereafter levied or assessed or imposed
against the Mortgaged Property or any part thereof (the "OTHER CHARGES") as the
same become due and payable. Mortgagor will deliver to Mortgagee, promptly upon
Mortgagee's request, evidence satisfactory to Mortgagee that the Taxes and Other
Charges have been so paid or are not then delinquent. Mortgagor shall not suffer
and shall promptly cause to be paid or discharged any lien or charge whatsoever
which may be or become a
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 6
lien or charge against the Mortgaged Property, and shall promptly pay for all
utility services provided to the Mortgaged Property. Mortgagor shall furnish to
Mortgagee or its designee receipts for the payment of the Taxes and Other
Charges prior to the date the same shall become delinquent.
(b) Mortgagor, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of
the Taxes or Other Charges, provided that (i) Mortgagor is not in default under
the Loan Agreement or this Mortgage, (ii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument
to which Mortgagor is subject and shall not constitute a default thereunder,
(iii) neither the Mortgaged Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, cancelled or lost, (iv)
Mortgagor shall have paid the Taxes under protest or set aside adequate reserves
for the payment of the Taxes or Other Charges, together with all interest and
penalties thereon, and (v) Mortgagor shall have furnished such security as may
be required in the proceeding, or as may be requested by Mortgagee to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon.
(c) Mortgagee may, at any time and from time to time, at its
option, upon ten (10) days' prior, written notice to Mortgagor, require the
deposit by Mortgagor at the time of each payment of an installment of interest
or principal under the Loan Agreement of an additional amount sufficient to
discharge when they become due Mortgagor's obligations for Taxes and insurance
premiums under paragraph 4(a) above. The determination of the amount so payable
and of the fractional part thereof to be deposited with Mortgagee, so that the
aggregate of such deposit shall be sufficient for this purpose, shall be made by
Mortgagee in its sole discretion. Such amounts shall be held by Mortgagee
without interest to the Mortgagor in an account acceptable to the Mortgagee and
applied to the payment of the obligations in respect to which such amounts were
deposited or, after the occurrence of an Event of Default, at the option of
Mortgagee and subject to applicable law, to the payment of the Debt in such
order or priority as Mortgagee shall determine, on or before the respective
dates on which the same or any of them would become delinquent. If one month
prior to the due date of any of the obligations under this subsection (c) the
amounts then on deposit therefor shall be insufficient for the payment of such
obligations in full, Mortgagor within five (5) days after demand shall deposit
the amount of the deficiency with Mortgagee. Nothing herein contained shall be
deemed to affect any right or remedy of Mortgagee under the provisions of this
Mortgage or of any statute or rule of law to pay any such amount and to add the
amount so paid together with interest at the Default Rate to the indebtedness
hereby secured.
5. CONDEMNATION.
(a) Mortgagor shall promptly give Mortgagee written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Mortgagee copies of any and all papers served in
connection with such proceedings. Notwithstanding any taking by any public or
quasi-public authority through eminent domain or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Mortgagor shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note, this Mortgage, and the other Loan
Documents and the Debt shall not be reduced until any award or payment therefor
shall have been actually received after expenses of
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 7
collection and applied by Mortgagee to the discharge of the Debt. Mortgagee
shall not be limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award interest at the rate
or rates provided herein and in the Note. Mortgagor shall cause the award or
payment made in any condemnation or eminent domain proceeding, which is payable
to Mortgagor, to be paid directly to Mortgagee. Sums paid to Mortgagee for such
condemnation or action of eminent domain, after deduction of Mortgagee's
reasonable costs and expenses of collection (after such deduction, the
"CONDEMNATION PROCEEDS"), shall be retained and (i) applied by Mortgagee toward
payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper (any such application for repayment to be without
any prepayment consideration, except that if a Default or an Event of Default
has occurred then such application shall be subject to the prepayment
consideration computed in accordance with the Note) or (ii) if the conditions
set forth in paragraph 5(c) of this Mortgage are satisfied, paid to Mortgagor
for the restoration and repair of the Mortgaged Property in accordance with
paragraph 5(b) of this mortgage in whole or in such lesser amount as is
necessary to pay for the costs of such restoration and repair. If the Mortgaged
Property is sold pursuant to paragraph 26 of this Mortgage or if Mortgagee
acquires title to the Mortgaged Property, Mortgagee shall have all of the right,
title and interest of Mortgagor in and to any Condemnation Proceeds resulting
from any condemnation or eminent domain proceeding of the Mortgaged Property
prior to such sale or acquisition.
(b) If the Condemnation Proceeds are held by Mortgagee to
reimburse Mortgagor for the cost of restoration and repair of the Mortgaged
Property, (i) the Mortgaged Property shall be substantially restored to the
equivalent of its condition prior to such condemnation or to such other
condition as Mortgagee may approve in writing, (ii) such restoration and repair
shall be done in compliance with all applicable laws, rules and regulations, and
(iii) all reasonable costs and expenses incurred by Mortgagee in connection with
making the Condemnation Proceeds available for such restoration and repair
including, without limitation, counsel fees and inspecting engineers' fees
incurred by Mortgagee, shall be paid by Mortgagor. Mortgagee may, at Mortgagee's
option, condition disbursement of said proceeds on Mortgagee's approval (which
approval shall not be unreasonably withheld or delayed) of such plans and
specifications of an architect reasonably satisfactory to Mortgagee,
contractor's cost estimates, architect's certificates, waivers of liens, sworn
statements of mechanics and materialmen and such other evidence of costs,
percentage completion of construction, application of payments, and satisfaction
of liens as Mortgagee may reasonably require. If the Condemnation Proceeds are
applied to the payment of the Debt, any such application of proceeds to
principal shall not extend or postpone the maturity date of the Note or change
the amount or the due date of any installment payment under the Note. Any
surplus Condemnation Proceeds, after payment of the Debt, shall be paid to
Mortgagor. If the Mortgaged Property is sold pursuant to paragraph 26 of this
Mortgage or if Mortgagee acquires title to the Mortgaged Property, Mortgagee
shall have all of the right, title and interest of Mortgagor in and to any
Condemnation Proceeds resulting from any condemnation or eminent domain
proceeding of the Mortgaged Property prior to such sale or acquisition.
(c) Mortgagee shall not exercise Mortgagee's option to apply
Condemnation Proceeds to the payment of the sums secured by this Mortgage if all
the following conditions are met: (i) no Event of Default is then continuing
under this Mortgage or the Note; (ii) Mortgagee determines that there will be
sufficient funds (whether consisting of Condemnation Proceeds and/or other sums
made available by Mortgagor for restoration) to restore and repair the Mortgaged
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 8
Property to the condition required under paragraph 5(b) above; (iii) Mortgagee
determines that restoration and repair of the Mortgaged Property to the
condition required under paragraph 5(b) above will be completed within the
greater of (A) three (3) months or (B) the period of time covered by the
business interruption insurance then in effect from the date of the loss or
casualty to the Mortgaged Property; and (iv) Mortgagee shall have received
evidence reasonably satisfactory to it that during the period of restoration and
repair of the Mortgaged Property to the condition required under subparagraph
5(b) above, the sum of (A) income derived from the Mortgaged Property, as
reasonably determined by Mortgagee, plus (B) proceeds of business interruption
insurance, if any, to be paid, plus (C) amounts that Mortgagor demonstrates to
Mortgagee's reasonable satisfaction will be made available by Mortgagor from
other sources during such period will equal or exceed the sum of (D) expenses in
connection with the operation of the Mortgaged Property and (E) the debt service
under the Note.
6. LEASES AND RENTS.
(a) Mortgagor does hereby absolutely and unconditionally
assign to Mortgagee its right, title and interest in all current and future
Leases and Rents, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Mortgagee shall not be construed to bind
Mortgagee to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise to impose any obligation upon
Mortgagee. Mortgagor agrees to execute and deliver to Mortgagee such additional
instruments, in form and substance reasonably satisfactory to Mortgagee, as may
hereafter be requested by Mortgagee to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this paragraph 6, Mortgagee
grants to Mortgagor a revocable license to operate and manage the Mortgaged
Property and to collect the Rents. Mortgagor shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, in trust for
the benefit of Mortgagee for use in the payment of such sums. Upon an Event of
Default, the license granted to Mortgagor herein shall be automatically revoked
and Mortgagee shall immediately be entitled to possession of all Rents, whether
or not Mortgagee enters upon or takes control of the Mortgaged Property.
Mortgagee is hereby granted and assigned by Mortgagor the right, at its option
upon the revocation of the license granted herein to enter upon the Mortgaged
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license herein granted
may be applied toward payment of he Debt in such priority and proportion as
Mortgagee in its discretion shall deem proper.
(b) Upon request, Mortgagor shall furnish Mortgagee with
copies of all Leases and all amendments or modifications of any Lease. All
Leases shall provide that each such Lease is subordinate to this Mortgage and
that the sublessee agrees to attorn to Mortgagee. Mortgagor (i) shall observe
and perform all the obligations imposed upon the lessor under the Leases and
shall not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall upon request by Mortgagee, send Mortgagee
copies of all notices of default sent to or received by Mortgagee under the
Leases; (iii) shall enforce all of the terms, covenants and conditions contained
in the Leases on the part of the lessee thereunder to be observed or performed;
(iv) shall not collect any of the Rents more than one (1) month in advance
(except with respect to collection of the final month's rent as security); (v)
shall not execute any other assignment of lessor's interest in the leases or the
Rents; and (vi) shall execute and deliver at the request of
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 9
Mortgagee all such further assurances, confirmations and assignments in
connection with the Mortgaged Property as Mortgagee shall from time to time
require.
(c) Mortgagor shall not, without the prior, written consent of
Mortgagee permit the Mortgaged Property to be used or occupied by anyone other
than (i) Mortgagor or (ii) a tenant which is a wholly-owned subsidiary of
Mortgagor or a third party tenant, each under a Lease approved by Mortgagee, and
after any such Lease has been so approved by Mortgagee, it may not be amended,
modified, terminated, cancelled or surrendered without Mortgagee's written
consent.
7. MAINTENANCE OF MORTGAGED PROPERTY. Mortgagor shall cause the
Mortgaged Property to be maintained in a good and safe condition and repair. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal removal of Equipment, provided same is replaced with
Equipment of equivalent quality) without the written consent of Mortgagee.
Mortgagor shall promptly comply with all laws, orders and ordinances affecting
the Mortgaged Property and the use thereof. Mortgagor shall promptly repair,
replace or rebuild any part of the Mortgaged Property that (i) is damaged or
destroyed by any casualty (provided that, if no Event of Default is continuing
hereunder, Mortgagee provides Mortgagor with the Insurance Proceeds relating to
such casualty), (ii) becomes damaged, worn or dilapidated, or (iii) is affected
by any proceeding of the character referred to in paragraph 5 hereof (provided
that, if no Event of Default is continuing hereunder, Mortgagee provides
Mortgagor with the Condemnation Proceeds relating to such proceeding) and
Mortgagor shall complete and pay for any structure at any time in the process of
construction or repair on the Land. Mortgagor shall not initiate, join in,
acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Mortgaged Property or any part thereof. If under
applicable zoning provisions the use of all or any portion of the Mortgaged
Property is or shall become a nonconforming use, Mortgagor will not cause or
permit such nonconforming use to be discontinued or abandoned without the
express written consent of Mortgagee.
8. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.
(a) Mortgagor acknowledges that Mortgagee has examined and
relied on the creditworthiness of Mortgagor and experience of Mortgagor in
owning and operating properties such as the Mortgaged Property in agreeing to
make the loan secured hereby, and that Mortgagee will continue to rely on
Mortgagor's ownership of the Mortgaged Property as a means of maintaining the
value of the Mortgaged Property as security for repayment of the Debt. Mortgagor
acknowledges that Mortgagee has a valid interest in maintaining the value of the
Mortgaged Property so as to ensure that, should Mortgagor default in the
repayment of the Debt, Mortgagee can recover the Debt by a sale of the Mortgaged
Property. Mortgagor shall not, without the prior written consent of Mortgagee,
sell, convey, alien, mortgage, encumber, pledge or otherwise transfer the
Mortgaged Property or any part thereof, or permit the Mortgaged Property or any
part thereof to be sold, conveyed, aliened, mortgaged, encumbered, pledged or
otherwise transferred (any of the foregoing, a "TRANSFER").
(b) A Transfer of the Mortgaged Property within the meaning of
this paragraph 8 shall be deemed to include:
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 10
(i) an installment sales agreement wherein Mortgagor agrees to
sell the Mortgaged Property or any part thereof for a price to be paid
in installments;
(ii) an agreement by Mortgagor selling, leasing, assigning or
otherwise transferring all or a substantial part of the Mortgaged
Property, or a sale, assignment or other transfer of, or the grant of a
security interest in, Mortgagor's right, title and interest in and to
any Leases or any Rents; and
(iii) any voluntary or involuntary Transfer of a Control
Individual's (hereinafter defined) Controlling Interests (hereinafter
defined) or any voluntary or involuntary event whereby a Control
Individual's Controlling Interests are diluted or his or her Control
over Mortgagor is otherwise diminished.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Mortgagor's Transfer of the
Mortgaged Property without Mortgagee's consent; this provision shall apply to
every Transfer of the Mortgaged Property regardless of whether voluntary or not,
or whether or not Mortgagee has consented to any previous Transfer of the
Mortgaged Property.
(d) For purposes of this paragraph 8, the following terms
shall have the following meanings: "CONTROL" when used with respect to Mortgagor
means the power to direct the respective management and policies of Mortgagor,
directly or indirectly, whether through the ownership of voting securities,
membership interests, partnership interests or any other beneficial interest, by
contract or otherwise, whether acting alone or with others; "CONTROL INDIVIDUAL"
shall mean Aqua Care Systems, Inc.; "CONTROLLING INTERESTS" shall mean those
beneficial interests or contract rights in or with respect to the Mortgagor (or
any entity that has a direct or indirect beneficial interest in Mortgagor) that
give a Control Individual his or her Control over Mortgagor; "NON-CONTROLLING
INTERESTS" shall mean any beneficial interests in Mortgagor (or any entity that
has a direct or indirect beneficial interest in the Mortgagor) that are not
Controlling Interests.
9. ESTOPPEL CERTIFICATES AND NO DEFENSE AFFIDAVITS. After request
by Mortgagee, Mortgagor shall within twenty (20) days furnish Mortgagee with a
statement, duly acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal balances of all
Advances under the Note, (iii) the rate of interest of under the Note, (iv) the
date installments of interest and/or principal were last paid, (v) any offsets
or defenses to the payment of the Debt, if any, and (vi) that the Note and this
Mortgage are valid, legal and binding obligations and have not been modified or
if modified, giving the particulars of such modification.
10. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted
or adopted or amended after the date of this Mortgage which deducts the Debt
from the value of the Mortgaged Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Mortgagee's
interest in the Mortgaged Property, Mortgagor will pay such tax, with interest
and penalties thereon, if any. In the event Mortgagee is advised by counsel
chosen by it that the
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 11
payment of such tax or interest and penalties by Mortgagor would be unlawful or
taxable to Mortgagee or unenforceable or provide the basis for a defense of
usury, then in any such event, Mortgagee shall have the option, by written
notice of not less than ninety (90) days, to declare the Debt immediately due
and payable.
11. NO CREDITS ON ACCOUNT OF THE DEBT. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes or Other Charges assessed against the Mortgaged Property, or
any part thereof, and no deduction shall otherwise be made or claimed from the
assessed value of the Mortgaged Property, or any part thereof, for real estate
tax purposes by reason of this Mortgage or the Debt. In the event such claim,
credit or deduction shall be required by law, Mortgagee shall have the option,
by written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.
12 DOCUMENTARY STAMPS. If the United States of America, the State
of New York or any subdivision thereof imposes any taxes or charges with respect
to, or requires that revenue or other stamps be affixed to, the Note, this
Mortgage, or any other document or instrument recorded, filed or executed
relative to the Debt, Mortgagor will pay for the same, with interest and
penalties thereon, if any.
13. USURY LAWS. The parties hereto intend to contract in strict
compliance with applicable usury law from time to time in effect. In furtherance
thereof, the parties hereto stipulate and agree that none of the terms and
provisions contained in this Mortgage or any other Loan Document shall ever be
construed to create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the maximum amount of interest permitted to be
charged by applicable law from time to time in effect. Mortgagor, any present or
future guarantor or any other person hereafter becoming liable for the payment
of the Obligations, shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully charged under applicable law from time to time in effect, and
the provisions of this paragraph shall control over all other provision of the
Loan Documents which may be in conflict therewith. If any indebtedness or
obligation owed by Mortgagor under the Loan Documents is prepaid or accelerated
and as a result any amounts held to constitute interest are determined to be in
excess of the legal maximum, or Mortgagee shall otherwise collect moneys which
are determined to constitute interest which would otherwise increase the
interest on all or any part of such obligations to an amounts in excess of that
permitted to be charged by applicable law then in effect, then all such sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related indebtedness or obligations or, at Mortgagee's option returned to
Mortgagor or the other payor thereof upon such determination. In determining
whether or not any amount paid or payable, under any circumstance, exceeds the
maximum amount permitted under applicable law, Mortgagee and Mortgagor shall to
the greatest extent permitted under applicable law, characterize any
non-principal payment as an expense, fee or premium rather than as interest, and
amortize, prorate, allocate and spread the total amount of interest throughout
the entire contemplated term of the Note in accordance with the amounts
outstanding from time to time hereunder and the Maximum Rate from time to time
in effect under applicable law in order to lawfully charge the maximum amount of
interest permitted under applicable law. If at any time the rate at which
interest is payable hereunder exceeds the Maximum Rate, the amount outstanding
hereunder shall bear interest at the
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 12
Maximum Rate only, but shall continue to bear interest at the Maximum Rate until
such time as the total amount of interest accrued hereunder equals (but does not
exceed) the total amount of interest which would have accrued hereunder had
there been no Maximum Rate applicable hereto. In the event applicable law
provides for an interest ceiling under Chapter 303 of the Texas Finance Code,
that ceiling shall be the indicated (weekly) ceiling and shall be used when
appropriate in determining the maximum rate permitted by applicable law. As used
in this section, (i) the term "applicable law" means the laws of the State of
Texas or the laws of the United States of America, whichever laws allow the
greater interest, as such laws now exist or may be changed or amended or come
into effect in the future, and (ii) the term "MAXIMUM RATE" means, at the time
of determination, the maximum rate of interest which, under applicable law, may
then be charged hereunder.
14. PERFORMANCE OF LEASES; SECURITY AGREEMENT.
(a) Mortgagor will comply with the terms and provisions of the
Leases and will faithfully perform all of its obligations under the Leases and
promptly cure any default by it under any of the provisions thereof. Mortgagor
shall promptly send to Mortgagee a true and correct copy of any notice, report,
certificate or other communication that Mortgagor is obligated to deliver in
connection with any Lease.
(b) Mortgagor hereby assigns and transfers to Mortgagee and
creates a security interest in all of Mortgagor's right, title and interest in
and to the consideration, in whatever form delivered, for the sale, transfer or
conveyance of Mortgagor's interest in the Leases.
15. PERFORMANCE OF OTHER AGREEMENTS. Mortgagor shall observe and
perform each and every term to be observed or performed by Mortgagor pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
16. FURTHER ACTS, ETC. Mortgagor will, at the cost of Mortgagor,
and without expense to Mortgagee, do, execute, acknowledge, and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as Mortgagee shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee,
or for carrying out the intention or facilitating the performance of the terms
of this Mortgage or for filing, registering or recording this Mortgage.
Mortgagor, on demand, will execute and deliver and hereby authorizes Mortgagee
to execute in the name of Mortgagor or without the signature of Mortgagor to the
extent Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Mortgagor grants to Mortgagee
an irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Mortgagee
at law and in equity, including without limitation such rights and remedies
available to Mortgagee pursuant to this paragraph 16.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 13
17. TRUST FUND. Mortgagor shall, in compliance with Section 13 of
the Lien Law, receive the advances secured hereby and shall hold the right to
receive the advances as a trust fund to be applied first for the purpose of
paying the cost of any improvement and shall apply the advances first to the
payment of the cost of any such improvement on the Mortgaged Property before
using any part of the total of the same for any other purpose.
18. RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged Property. Mortgagor
will pay and be responsible for all mortgage taxes and other taxes and charges
and all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Mortgage, any mortgage
supplement hereto, any security instrument or financing statement with respect
to the Mortgaged Property, any instrument of further assurance, and any filings
necessary to perfect and maintain Mortgagee's lien on and security interest in
the Mortgaged Property, and all federal, state, county, and municipal, taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property or any instrument
of further assurance. Mortgagor shall hold harmless and indemnify Mortgagee, its
successors and, assigns, against any liability incurred by reason of the
imposition of any tax on the making and recording of this Mortgage and
Mortgagee's funding from time to time of the Term Advances.
19. PREPAYMENT. The Debt may not be voluntarily or involuntarily
prepaid in whole or in part, except in accordance with the Note, and this
Mortgage also secures any termination fees or penalties due under the Note.
20. EVENTS OF DEFAULT. The Debt shall become immediately due and
payable at the option of Mortgagee, without notice or demand, upon any one or
more of the following events ("EVENTS OF DEFAULT"):
(a) if any portion of the Debt is not paid when due;
(b) if any of the Taxes or Other Charges are not paid when the
same are due and payable;
(c) if the Policies are not kept in full force and effect, or
if the Policies are not delivered to Mortgagee upon request;
(d) if Mortgagor violates or does not comply with any of the
provisions of this Mortgage, including, without limitation paragraphs 3, 4, 5,
6, 7 or 8 hereof;
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 14
(e) if a default by Mortgagor under any Lease shall continue
beyond any applicable notice or grace period, or if any Lease shall be modified,
amended, terminated, surrendered or assigned by Mortgagor, without the prior,
written consent of Mortgagee;
(f) if any representation or warranty of Mortgagor made
herein, or by Aqua Care Systems, Inc. ("GUARANTOR") in the Amended and Restated
Continuing Guaranty, dated as of the date hereof, made by Guarantor for the
benefit of Mortgagee (the "GUARANTEE OF PAYMENT"), or in any certificate,
report, financial statement oi other instrument or document furnished to
Mortgagee by Mortgagor or Guarantor shall have been false or misleading in any
material respect when made;
(g) if Mortgagor or Guarantor shall make an assignment for the
benefit of creditors or if Mortgagor or Guarantor shall generally not be paying
its debts as they become due;
(h) if a receiver, liquidator, or trustee of Mortgagor or
Guarantor shall be appointed or if Mortgagor or Guarantor shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization, or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Mortgagor
or Guarantor or if any proceeding for the dissolution or liquidation of
Mortgagor or Guarantor shall be instituted by a third party, and same is not
dismissed within 30 days;
(i) [Intentionally Omitted]
(j) if the Mortgaged Property becomes subject to any
mechanic's, materialman's or other lien other than a lien for local real estate
taxes and assessments not then due and payable and such lien shall remain
undischarged of record (by payment, bonding or otherwise) for a period of sixty
(60) calendar days after Mortgagor's receipt of notice thereof;
(k) if Mortgagor fails to cure promptly any violations of laws
or ordinances affecting the Mortgaged Property and such failure continues for a
period of thirty (30) calendar days after Mortgagor's receipt of notice thereof;
(1) if Mortgagor shall be in default beyond any applicable
notice and cure period under any other term, covenant or condition of the Loan
Agreement, this Mortgage, or any of the other Loan Documents or if an Event of
Default under the Loan Agreement occurs; or
(m) if at any time while this Mortgage is of record, Aqua Care
Systems, Inc. shall fail to own one hundred percent (100%) of the ownership
interests in Mortgagor of shall cease to have primary responsibility for the
day-to-day management and Control of Mortgagor.
21. DEFAULT INTEREST. Upon the occurrence of any Event of Default,
at the option of Mortgagee, Mortgagor shall pay Default Interest on all sums due
Mortgagee, with respect to the Debt for any period after an Event of Default
occurs. The Default Rate shall be computed from the occurrence of the Event of
Default until the actual receipt and collection of the Debt. This charge shall
be added to the Debt, and shall be deemed secured by this Mortgage. This clause,
however, shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt,
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 15
nor as a waiver of any other right or remedy accruing to Mortgagee by reason of
the occurrence of any Event of Default.
22. MORTGAGOR'S RIGHT TO MAKE ADVANCES, ETC. Upon the occurrence
of any Event of Default or if Mortgagor fails to make any payment or to do any
act as herein provided, Mortgagee may, but without any obligation to do so and
without notice to or demand on Mortgagor and without releasing Mortgagor from
any obligation hereunder, make or do the same in such manner and to such extent
as Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Mortgaged Property for such purposes or appear in,
defend, or bring any action or proceeding to protect its interest in the
Mortgaged Property or to foreclose this Mortgage or collect the Debt, and the
reasonable cost and expense thereof (including reasonable attorneys' fees to the
extent permitted by law and any appraisal fees), with interest calculated at the
Default Rate, shall constitute a portion of the Debt and shall be secured by
this Mortgage and the other Loan Documents and shall be due and payable to
Mortgagee upon demand. All such costs and expenses incurred by Mortgagee in
remedying such Event of Default or in appearing in, defending, or bringing any
such action or proceeding shall bear interest at the Default Rate, for the
period after notice from Mortgagee that such cost or expense was incurred to the
date of payment of Mortgagee.
23. LATE PAYMENT CHARGE. If any portion of the Debt is not paid
within fifteen (15) calendar days after the date on which it is due, Mortgagor
shall pay to Mortgagee upon demand a late charge equal to the lesser of two
percent (2%) of such unpaid portion of the Debt or the maximum amount permitted
by applicable law, to defray the expense incurred by Mortgagee in handling and
processing such delinquent payment and to compensate Mortgagee for the loss of
the use of such delinquent payment, and such amount shall be secured by this
Mortgage.
24. PREPAYMENT AFTER EVENT OF DEFAULT. If following the occurrence
of any Event of Default, Mortgagor shall tender payment of an amount sufficient
to satisfy the Debt at any time prior to a sale of the Mortgaged Property either
through foreclosure or the exercise of other remedies available to Mortgagee
under this Mortgage, such tender by Mortgagor shall be deemed to be a voluntary
prepayment under the Note and this Mortgage in the amount tendered, and
Mortgagor shall, in addition to the entire Debt, also pay to Mortgagee the
applicable termination fees and other sums due under the Note.
25. RIGHT OF ENTRY. Mortgagee and its agents shall have the right
to enter and inspect the Mortgaged Property at all reasonable times.
26. REMEDIES.
(a) Upon the occurrence of any Event of Default, Mortgagee may
take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Mortgaged Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 16
(i) declare the entire Debt to be immediately due and payable;
(ii) institute proceedings for the complete foreclosure of
this Mortgage, in which case the Mortgaged Property or any interest
therein may be sold for cash or upon credit in one or more parcels or
in several interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Mortgage for the
portion of the Debt then due and payable, subject to the continuing
lien of this Mortgage for the balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or
any part thereof and all estate, claim, demand, right, title and
interest of Mortgagor therein and rights of redemption thereof,
pursuant to power of sale or otherwise, at one or more sales, as an
entity or in parcels, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein or in the Loan Agreement;
(vi) recover judgment on the Debt evidenced by the Note either
before, during or after any proceedings for the enforcement of this
Mortgage;
(vii) apply for the appointment of a receiver of the Mortgaged
Property, without notice and without regard for the adequacy of the
security for the Debt and without regard for the solvency of the
Mortgagor, Guarantor or of any person, firm or other entity liable for
the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents
and enter into or upon the Mortgaged Property, either personally or by
its agents, nominees or attorneys and dispossess Mortgagor and its
agents and servants therefrom, and thereupon Mortgagee may (A) use,
operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and any part of the Mortgaged Property and
conduct the business thereat; (B) make alterations, additions,
renewals, replacements and improvements to or on the Mortgaged
Property; (C) exercise all rights and powers of Mortgagor with respect
to the Mortgaged Property, whether in the name of Mortgagor or
otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, xxx
for, collect and receive all earnings, revenues, rents, issues, profits
and other income of the Mortgaged Property and every part thereof; and
(D) apply the receipts from the Mortgaged Property to the payment of
the Debt, after deducting therefrom all reasonable expenses (including
reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, assessments,
insurance and Other Charges in connection with the Mortgaged Property,
as well as just and reasonable compensation for the services of
Mortgagee, its counsel, agents and employees; or
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 17
(ix) pursue such other rights and remedies as may be available
at law and in equity.
In the event of a sale, by foreclosure or otherwise, of less than all
of the Mortgaged Property, this Mortgage shall continue as a lien on the
remaining portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its discretion shall deem proper.
(c) To the extent permitted by applicable law, Mortgagee may
adjourn from time to time any sale by it to be made under or by virtue of this
Mortgage by announcement at the time and place appointed for such sale or for
such adjourned sale or sales; and, except as otherwise provided by any
applicable provision of law, Mortgagee, without further notice or publication,
may make such sale at the time and place to which the same shall be so
adjourned.
(d) Upon the completion of any sale or sales made by Mortgagee
under or by virtue of this paragraph, Mortgagee, or an officer of any court
empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient instruments,
conveying, assigning and transferring all estate, right, title and interest in
and to the property and rights sold. Mortgagee is hereby irrevocably appointed
the true and lawful attorney of Mortgagor, in its name and stead, to make all
necessary conveyances, assignments, transfers and deliveries of the Mortgaged
Property and rights so sold and for that purpose Mortgagee may execute all
necessary instruments of conveyance, assignment and transfer, and may substitute
one or more persons with like power, Mortgagor hereby ratifying and confirming
all that its said attorney or such substitute or substitutes shall lawfully do
by virtue hereof. Any such sale or sales made under or by virtue of this
paragraph shall operate to divest all the estate, right, title, interest, claim
and demand whatsoever, whether at law or in equity, of Mortgagor in and to the
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against Mortgagor and against any and all persons claiming or who may
claim the same, or any part thereof from, through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers, and remedies of Mortgagee shall continue unimpaired as before.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 18
27. REASONABLE USE AND OCCUPANCY. In addition to the rights which
Mortgagee may have herein, upon the occurrence of any Event of Default,
Mortgagee, at its option, may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be occupied by Mortgagor or may require Mortgagor to vacate and
surrender possession of the Mortgaged Property to Mortgagee or to such receiver
and, in default thereof, Mortgagor may be evicted by summary proceedings or
otherwise.
28. SECURITY AGREEMENT. This Mortgage is both a real property
mortgage and a "security agreement" within the meaning of the Uniform Commercial
Code. The Mortgaged Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Mortgagor in the Mortgaged Property. Mortgagor by executing and delivering this
Mortgage has granted and hereby grants to Mortgagee, as security for the Debt, a
security interest in the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the Uniform Commercial Code. If an Event of
Default shall occur, Mortgagee, in addition to any other rights and remedies
which it may have, shall have and may exercise immediately and without demand,
any and all rights and remedies granted to a secured party upon default under
the Uniform Commercial Code, including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Mortgagee may deem necessary for the care,
protection and preservation of the Collateral. Upon the request or demand of
Mortgagee, Mortgagor shall at its expense assemble the Collateral and make it
available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor
shall pay to Mortgagee on demand any and all expenses, including legal expenses
and reasonable attorneys' fees, incurred or paid by Mortgagee in protecting the
interest in the Collateral and in enforcing the rights hereunder with respect to
the Collateral. Any notice of sale, disposition or other intended action by
Mortgagee with respect to the Collateral sent to Mortgagor in accordance with
the provisions hereof at least ten (10) days prior to such action, shall
constitute commercially reasonable notice to Mortgagor. The proceeds of any
disposition of the Collateral, or any part thereof, may be applied by Mortgagee
to the payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper.
This Mortgage shall also constitute as "fixture filing" for the
purposes of the Uniform Commercial Code against all of the Mortgaged Property
which is or is to become fixtures. Information concerning the security interest
herein granted may be obtained at the address of Debtor (Mortgagor) and Secured
Party (Mortgagee) as set forth in the first paragraph of this Mortgage.
29. ACTIONS AND PROCEEDINGS. Mortgagee has the right to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, decides should be brought to
protect their interest in the Mortgaged Property. Mortgagee shall, at its
option, be subrogated to the lien of any mortgage or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 19
30. WAIVER OF COUNTERCLAIM. Mortgagor hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Mortgagee.
31. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Mortgagee thereafter to bring an action of foreclosure, or any other action,
for a default or defaults by Mortgagor existing at the time such earlier action
was commenced.
32. MARSHALLING AND OTHER MATTERS. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor, to the
extent permitted by law, hereby expressly waives any and all rights of
redemption from sale under any order, or decree of foreclosure of this Mortgage
on behalf of Mortgagor, and on behalf of each and every person acquiring any
interest in or title to the Mortgaged Property subsequent to the date of this
Mortgage and on behalf of all persons to the extent permitted by applicable law.
33. HAZARDOUS WASTE AND ASBESTOS. Mortgagor hereby represents and
warrants to Mortgagee that to the best of Mortgagor's knowledge after diligent
inquiry: (a) the Mortgaged Property is not in direct or indirect violation of
any local, state, federal or other governmental authority, statute, ordinance,
code, order, decree, law, rule or regulation pertaining to or imposing liability
or standards of conduct concerning environmental regulation, contamination or
clean-up including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended ("CERCLA"), the Resource
Conservation and Recovery Act, as amended ("RCRA"), and any state super-lien and
environmental clean-up statutes (collectively, "ENVIRONMENTAL LAWS"); (b) the
Mortgaged Property is not subject to any private or governmental lien or
judicial or administrative notice or action relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials, pollutants or
contaminants, petroleum, tremolite, anthlophylie or actinolite or
polychlorinated biphenyls (including, without limitation, any raw materials
which include hazardous constituents) and any other substances or materials
which are included under or regulated by Environmental Laws (collectively,
"HAZARDOUS MATERIALS"); (c) no Hazardous Materials are or have been, prior to
Mortgagor's acquisition of the Mortgaged Property, discharged, generated,
treated, disposed of or stored on, incorporated in, or removed or transported
from the Mortgaged Property otherwise than in compliance with all Environmental
Laws; and (d) there is no asbestos present in, and no underground storage tanks
exist on, any of the Mortgaged Property. So long as Mortgagor owns or is in
possession of the Mortgaged Property, Mortgagor shall keep or cause the
Mortgaged Property to be kept free from Hazardous Materials and in compliance
with all Environmental Laws and shall promptly notify Mortgagee if Mortgagor
shall become aware of any Hazardous Materials on the Mortgaged Property and/or
if Mortgagor shall become aware that the Mortgaged Property is in direct or
indirect violation of any Environmental Laws, and Mortgagor shall remove such
Hazardous Materials and/or cure such violations, as applicable, as required by
law, promptly after Mortgagor becomes aware of same, at Mortgagor's sole
expense. Nothing herein shall prevent Mortgagor from recovering such expenses
from any other party that may be liable for such removal or cure. Upon
Mortgagee's reasonable request, at
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 20
any time and from time to time while this Mortgage is in effect, but not more
frequently than once per calendar year, unless Mortgagee has determined that
reasonable cause exists for the performance of additional environmental
inspections or audits of the Mortgaged Property, Mortgagor shall provide, at
Mortgagor's expense, an inspection or audit of the Mortgaged Property prepared
by a licensed hydrogeologist or licensed environmental engineer approved by
Mortgagee indicating the presence or absence of Hazardous Materials on the
Mortgaged Property. If Mortgagor fails to provide such inspection or audit
within thirty (30) days after such request, Mortgagee may order same, and
Mortgagor hereby grants to Mortgagee and its employees and agents access to the
Mortgaged Property and a license to undertake such inspection or audit. The
obligations and liabilities of Mortgagor under this paragraph 33 shall survive
any termination, satisfaction, or assignment of this Mortgage, any Transfer
and/or any exercise by Mortgagee of any of its rights or remedies hereunder,
including but not limited to, the acquisition of the Mortgaged Property by
foreclosure or a conveyance in lieu of foreclosure.
34. HANDICAPPED ACCESS.
(a) Mortgagor agrees that the Mortgaged Property shall at all
times comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, all state and local laws and ordinances related
to handicapped access and all rules, regulations, and orders issued pursuant
thereto, including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Building and Facilities (collectively, "ACCESS
LAWS").
(b) Mortgagor agrees to give prompt notice to Mortgagee of the
receipt by Mortgagor of any complaints related to violations of any Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
35. INDEMNIFICATION. In addition to any other indemnifications
provided herein or in the Loan Agreement or the other Loan Documents, Mortgagor
shall protect, defend, indemnify and save harmless Mortgagee from and against
all liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted
against Mortgagee, INCLUDING THOSE CAUSED BY OR RESULTING FROM MORTGAGEE'S
ORDINARY NEGLIGENCE, except to the extent resulting from Mortgagee's gross
negligence or willful misconduct, by reason of (a) ownership of this Mortgage or
the Mortgaged Property or any interest therein; (b) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Mortgaged Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (c) any use,
nonuse or condition in, on or about the Mortgaged Property or any part thereof
or on adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (d) any failure on the part of Mortgagor to perform or comply
with any of the terms of this Mortgage; (e) performance of any labor or services
or the furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof; (f) the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release of any
Hazardous Materials on, from, or affecting the Mortgaged Property or any other
property; (g) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Materials; (h)
any lawsuit brought or threatened, settlement reached, or government order
relating
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 21
to such Hazardous Materials; (i) any violation of the Environmental Laws, which
are based upon or in any way related to such Hazardous Materials including,
without limitation, the costs and expenses of any remedial action, attorney and
consultant fees, investigation and laboratory fees, court costs and litigation
expenses; and (j) any failure of the Mortgaged Property to comply with any
Access Laws. Any amounts payable to Mortgagee by reason of the application of
this paragraph 35 shall be secured by this Mortgage and shall become immediately
due and payable and shall bear interest at the Default Rate from the date any
payment is made by Mortgagee hereunder until such payment is reimbursed by
Mortgagor. The obligations and liabilities of Mortgagor under this paragraph 35
shall survive any termination, satisfaction or assignment of this Mortgage, any
Transfer and/or any exercise by Mortgagee of any of its rights and remedies
hereunder, including but not limited to, the acquisition of the Mortgaged
Property by foreclosure or a conveyance in lieu of foreclosure.
36. NOTICES. Any notice, demand, statement, request or consent
made hereunder shall be in writing to the other party hereto at its address set
forth below or at such other address as such party may designate by notice to
the other party hereto and shall be deemed given (i) on receipt, if mailed, by
certified or registered U.S. mail, return receipt requested, postage prepaid;
(ii) on receipt, if delivered, fee prepaid, to a national overnight delivery
service (such as Federal Express, Purolator Courier, U.P.S. Next Day Air); or
(iii) when delivered, if delivered by hand, as evidenced by a signed receipt:
To Mortgagor:
ACS Acquisition Corp.
0000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: _________________
Telephone: 954-796-333i
To Mortgagee:
Guaranty Business Credit Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: ACS Loan Officer
Telephone: 214-360.3424
Refusal to accept delivery of any notice shall be deemed to be receipt of such
notice.
37. AUTHORITY. (a) Mortgagor (and the undersigned representative
of Mortgagor) has full power, authority and right to execute, deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, pledge, hypothecate and assign
the Mortgaged Property pursuant to the terms hereof and to keep and observe all
of the terms of this Mortgage on Mortgagor's part to be performed and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 22
Revenue Code of 1986, as amended and the related Treasury Department
regulations, including temporary regulations.
38. WAIVER OF NOTICE. Mortgagor shall not be entitled to any
notices of any nature whatsoever from Mortgagee except with respect to matters
for which this Mortgage specifically and expressly provides for the giving of
notice by Mortgagee to Mortgagor and except with respect to matters for which
Mortgagee is required by applicable law to give notice, and Mortgagor hereby
expressly waives the right to receive any notice from Mortgagee with respect to
any matter for which this Mortgage does not specifically and expressly provide
for the giving of notice by Mortgagee to Mortgagor.
39. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
40. NON-WAIVER. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Loan Agreement or the other Loan
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Mortgaged Property, or of any Person liable for the Debt or any
portion thereof, or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise modifying or supplementing the terms of the Loan
Agreement, this Mortgage or the other Loan Documents. Mortgagee may resort for
the payment of the Debt to any other security held by Mortgagee in such order
and manner as Mortgagee, in its discretion, may elect. Mortgagee may take action
to recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Mortgagee thereafter to foreclose this
Mortgage. The rights and remedies of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Mortgagee shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
41. NO ORAL CHANGE. This Mortgage, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor or Mortgagee,
but only by an agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
42. SECTION 254 OF REAL PROPERTY LAW. All covenants hereof, other
than those included in the New York statutory form of mortgage, shall be
construed as affording to Mortgagee rights additional to, and not exclusive of,
the rights conferred under the provisions of Section 254 of the Real Property
Law of the State of New York.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 23
43. COMMERCIAL PROPERTY. Mortgagor represents that this Mortgage
does not encumber real property principally improved or to be improved by one or
more structures containing in the aggregate not more than six residential
dwelling units, each having its own separate cooking facilities.
44. MAXIMUM PRINCIPAL INDEBTEDNESS. Notwithstanding anything to
the contrary contained herein, the maximum amount of principal indebtedness
secured by the Mortgage or which under any contingency may be secured by this
Mortgage is $312,900.00.
45. SECTION 291-F AGREEMENT. This Mortgage is intended to be, and
shall operate as, the agreement described in Section 291-f of the Real Property
Law of the State of New York, and shall be entitled to the benefits afforded
thereby. Mortgagor shall (unless such notice is contained in such tenant's
Lease) deliver notice of this Mortgage in form and substance acceptable to
Mortgagee, to all present and future holders of any interest in any Lease, by
assignment or otherwise, and shall taken such other action as may now or
hereafter be reasonably required to afford Mortgagee the full protections and
benefits of Section 291-f. Mortgagor shall request the recipient of any such
notice to acknowledge the receipt thereof.
46. SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon
and inure to the benefit of Mortgagor and Mortgagee and their respective heirs,
personal representatives, successors and assigns forever.
47. INAPPLICABLE PROVISIONS. If any term, covenant or condition of
the Loan Agreement or this Mortgage is held to be invalid, illegal or
unenforceable in any respect, the Loan Agreement and this Mortgage shall be
construed without such provision.
48. HEADINGS, ETC. The headings and captions of various paragraphs
of this Mortgage are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
49. GOVERNING LAW. This Mortgage shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflict of laws.
50. DEFINITIONS. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided herein, words used in this Mortgage
may be used interchangeably in singular or plural form and the word "Mortgagor"
shall mean "each Mortgagor and any subsequent owner or owners of the Mortgaged
Property or any part thereof or any interest therein," the word "Mortgagee"
shall mean "Mortgagee and any subsequent holder of the Loan Agreement and the
Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Mortgage," the word "person" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, and any other entity, and the words
"Mortgaged Property" shall include any portion of the Mortgaged Property and any
interest therein. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms and the
singular form of nouns and pronouns shall include the plural and vice versa.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 24
51. WAIVER OF TRIAL BY JURY. MORTGAGOR AND MORTGAGEE HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN EVIDENCED BY THE
NOTE OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE NOTE, THIS MORTGAGE, OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF MORTGAGOR OR MORTGAGEE. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE'S MAKING OF THE LOAN SECURED BY
THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS.
52. ASSIGNMENT. Mortgagee shall have the right, exercisable at any
time and from time to time, to sell, transfer or assign the Mortgage and the
other Loan Documents, or grant participations therein, or issue certificates or
securities evidencing a beneficial interest therein in a rated or unrated public
offering or private placement, and Mortgagee may forward to any purchaser,
transferee, assignee, servicer, participant, investor or credit rating agency
rating such securities (collectively, an "INVESTOR" or prospective Investor all
documents and information in Mortgagee's possession with respect to Mortgagor,
the Mortgaged Property and the Loan Documents as such Investor or prospective
Investor may request.
53. CONFLICTING PROVISIONS. To the extent any provision
(including, without limitation, any covenant, default, or event of default) in
this Mortgage conflicts with any provision in the Loan Agreement, the provisions
that is more restrictive on Mortgagor shall prevail.
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, intending to
be legally bound, the day and year first above written.
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: President / CEO
----------------------------
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXX
Xx the 10th day of March, 2000, before me personally came Xxxxxx X.
Xxxxxx to me known to be the individual who executed the foregoing instrument
and, who, being duly sworn by me, did depose and say that he is the President /
CEO of ACS ACQUISITION CORP., a New York corporation and that he executed the
foregoing instrument in the name of ACS ACQUISITION CORP. and that he had
authority to sign the same, and acknowledged that he executed the same as the
act and deed of said corporation.
XXXXXX X. XXXXXXXXX
COMMISSION # CC592402 /s/ XXXXXX X. XXXXXXXXX
[SEAL] EXPIRES OCT 10, 2000 -----------------------------
BONDED THROUGH Notary Public
ATLANTIC BONDING CO., INC.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 26
EXHIBIT A
PARCEL I
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Xxx Xx. 00, Xxxxxxxx
0, Xxxxx 0 of the Holland Land Company's Survey, bounded and described as
follows:
Beginning at a point in the center of the Hardpan Road at its
intersection with the southeasterly boundary of the right of way of the
Pennsylvania Railroad (as now laid out); running thence southerly along the
center line of the Hardpan Road a distance of 243.08 feet more or less to a
point 180 feet southeasterly from the southeasterly bounds of said railroad
(measured at right angles therefrom); thence southwesterly and parallel with the
southeasterly boundary of said railroad and 180 feet southeasterly therefrom a
distance of 601.23 feet more or less to the southerly boundary of lands conveyed
to Xxxxx X. Xxxxxx by deed recorded in Erie County Clerk's Office in Liber 1960
of Deeds at page 184; thence westerly along the southerly boundary of said Xxxxx
X. Xxxxxx'x land a distance of 265.13 feet more or less to the southeasterly
boundary of said Pennsylvania Railroad right of way; thence northeasterly and
along the southeasterly boundary of said railroad a distance of 959.26 feet more
or less to the center line of said Hardpan Road at the point or place of
beginning.
Said Parcel I contains 5.2 acres more or less.
PARCEL II
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Xxx Xx. 00, Xxxxxxxx
0 and Range 9 of the Holland Land Company's Survey, beginning at a point in the
center line of Hardpan Road 430.16 feet southerly from the southeast xxxxx of
lands conveyed to Xxxxx Engineering Inc., measured along the center line of
Hardpan Road, by deed recorded in Liber 2174 of Deeds at page 528;
THENCE westerly along a line parallel with the north fine of
Xxx Xx. 00, Xxxxxxxx 0 and Range 9, 447.7 feet;
THENCE on an angle northeasterly along the southerly bounds of
lands so conveyed to the Xxxxx Engineering Inc., by deed recorded in Liber 2174
of Deeds at page 528, 606 feet to a point in the center line of Hardpan Road
430.16 feet north of the point of beginning.
THENCE southerly 430.16 feet to the point of beginning.
Said Parcel II contains 3.0 acres more or less.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 27
PARCEL III
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Lots Nos. 63 and 54,
Township 8 and Range 9 of the Holland Land Company's Survey, and more
particularly bounded and described as follows:
BEGINNING at the point of intersection of the westerly line of
said Farm Lot 54 with the center line of that portion of Hardpan Road (now
abandoned) which runs east and west, said point of beginning being about 1102.43
feet southerly from the northwesterly corner of said Farm Lot 54; running thence
easterly along said center line of Hardpan Road 1146.74 feet; thence southerly
along a line forming a southwesterly angle of 89(degree) 57' with the said
center line of Hardpan Road 3083.16 feet to the southerly line of said Farm Lot
54; thence westerly along the southerly line of said Farm Lot 54 and the center
line of Holland Road, which is also the southerly line of said Farm Lot 63,
1434. 11 feet to the point of intersection of the extension southerly of the
center line of that portion of Hardpan Road which runs north and south with the
southerly line of said Farm Lot 63, being at a point in the southerly line of
said Farm Lot 63, which is about 277.19 feet westerly from the southeasterly
xxxxx of said Farm Lot 63; thence northerly along the center line of that
portion of Hardpan Road which runs northerly and southerly and which is now
abandoned, and along the center line of Hardpan Road as now constituted and
used, and its extension northerly (now abandoned) 3069.77 feet to its
intersection with the center line of that portion of Hardpan Road (now
abandoned) which runs east and west; thence easterly along said center line of
Hardpan Road 261.69 feet to the westerly line of Farm Lot 54 to the point or
place of beginning.
EXCEPTING AND RESERVING therefrom the premises conveyed in a
certain deed from Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx, co-executrices etc. to
the Western New York and Pennsylvania Railroad Company, dated December 17, 1891
and duty recorded in Erie County Clerk's Office, December 28, 1891 in Liber 627
of Deeds at page 590;
EXCEPTING AND RESERVING also therefrom the premises conveyed
in a certain deed from Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx, individually and
as executrices, etc. to the New York, Chicago and St. Louis Railroad Company,
dated January 15, 1892 and duly recorded in Erie County Clerk's Office, June 30,
1892 in Liber 666 of Deeds at page 252; and
EXCEPTING AND RESERVING also therefrom the premises conveyed
by a certain deed from Xxxxxx X. Xxxxxxx and wife to one, Xxxxxx X. Xxxxxxxxx,
dated April 4, 1914 and duly recorded in the Erie County Clerk's Office, July
17, 1914 in Liber 1256 of Deeds at page 396; and
EXCEPTING AND RESERVING also therefrom a parcel of land
described as follows:
Beginning at a point in the center line of Xxxxxx Road, now
called Hardpan Road, where it is intersected by the easterly line of the parcel
first above described; thence westerly along the center fine of said Xxxxxx Xxxx
000 feet; thence south parallel to the east line of Xxxxx Xxxxxx farm 1500 feet;
thence easterly parallel to the center line of Xxxxxx Xxxx 000 feet to the east
line of said farm; and thence north on said east line 1500 feet to the place of
beginning.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 28
Said Parcel III contains 72.6 acres more or less.
Together with all right, title and interest of Mortgagor in
and to any streets and roads abutting the above described premises.
Mortgage, Security Agreement, and Assignment of Leases and Rents - Page 29
THIS INSTRUMENT AFFECTS REAL AND PERSONAL PROPERTY SITUATED IN
THE STATE OF NEW YORK, COUNTY OF ERIE, AFFECTING PREMISES SITUATED
AT 0000-00 XXXXXXX XXXX, XXXXX, XXX XXXX
ACS ACQUISITION CORP.
("MORTGAGOR")
to
GUARANTY BUSINESS CREDIT CORPORATION,
doing business as Fidelity Funding
("MORTGAGEE")
AMENDED, RESTATED, AND CONSOLIDATED
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS,
AND FIXTURE FILING
dated as of March 14, 2000
Property Location: 0000-00 Xxxxxxx Xxxx, Xxxxx, Xxx Xxxx
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Guaranty Business Credit Corporation, doing business as Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx Xxxx
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents -
THIS AMENDED, RESTATED, AND CONSOLIDATED MORTGAGE, SECURITY AGREEMENT, AND
ASSIGNMENT OF LEASES AND RENTS AMENDS, RESTATES, CONSOLIDATES, AND SPREADS THE
EXISTING MORTGAGES (AS SUCH TERM IS DEFINED BELOW). THE DEBT (AS DEFINED HEREIN)
SECURED HEREBY AMENDS, RESTATES, AND CONSOLIDATES THE EXISTING DEBT (AS DEFINED
BELOW) IN THE AGGREGATE PRINCIPAL BALANCE OF $1,774,500.00.
MORTGAGE RECORDING TAXES IN CONNECTION WITH THE EXISTING MORTGAGES WERE PAID IN
CONNECTION WITH THE RECORDATION OF THE EXISTING MORTGAGES, AND NO ADDITIONAL
MORTGAGE RECORDING TAXES ARE DUE IN CONNECTION WITH THE RECORDING HEREOF.
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS AND IS
ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS UNDER THE NAMES OF
MORTGAGOR AS "DEBTOR" AND MORTGAGEE AS "SECURED PARTY."
AMENDED, RESTATED, AND CONSOLIDATED
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING
This Amended, Restated, and Consolidated Mortgage, Security Agreement,
Assignment of Leases and Rents, and Fixture Filing (this "MORTGAGE") is executed
as of March ___, 2000, by ACS Acquisition Corp., a New York corporation
("MORTGAGOR"), whose address for notice hereunder is 00000 X.X. 00xx Xxxxxx,
Xxxxx Xxxxxxx, Xxxxxxx 00000, for the benefit of Guaranty Business Credit
Corporation, doing business as Fidelity Funding ("MORTGAGEE"), whose address for
notice hereunder is 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
RECITALS:
A. Mortgagee is the mortgagee under the following mortgages
(collectively, the "EXISTING MORTGAGES"):
(i) Mortgage, Security Agreement and Assignment of Leases and
Rents, dated as of June 4, 1997, from Mortgagor to Fidelity Funding,
Inc. as mortgagee, recorded on June 6, 1997, at Liber 12746 of
Mortgages page 0406 of the real property records of Erie County, New
York, securing debt in the amount of $2,750,000.00, assigned by that
certain ________, dated ________, 1999, executed by Fidelity Funding,
Inc. to Mortgagee, recorded on ________, 1999, at Liber _______of
Mortgages page _______ of the real property records of Erie County, New
York.
(ii) Mortgage, Security Agreement, Assignment of Leases and
Rents, and Fixture Filing, of even date herewith, executed by Mortgagor
to Mortgagee to be recorded or recorded in the real property records of
Erie County, New York, securing debt of Mortgagor to Mortgagee in the
original principal amount of $349,500.00.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 1
B. The debt secured by the Existing Mortgages described above is
collectively referred to as the "EXISTING DEBT."
C. The outstanding principal balance of the Existing Debt as of
the date hereof is $1,774,500.00.
D. Mortgagor has requested that Mortgagee combine and consolidate
the outstanding principal balance of and extend the term of the Existing Debt to
evidence one unified indebtedness in the aggregate principal amount of
$1,774,500.00, and Mortgagee has agreed to do so, provided that Mortgagor agrees
to certain modifications to the Existing Debt and the Existing Mortgages,
including, INTER ALIA, changes to the interest rate and the amendment and
complete restatement of the Existing Debt as evidenced by that certain Amended
and Restated Loan and Security Agreement, dated of even date, between Mortgagor
and Mortgagee.
E. Mortgagor and Mortgagee, furthermore, desire to hereby
consolidate, amend, completely restate, and supersede the terms of the Existing
Mortgages.
The Existing Mortgages and the respective liens thereof are hereby
spread over those portions of the Mortgaged Property not already covered
thereby. The Existing Mortgages and the respective liens thereof, as spread, are
hereby combined, consolidated and coordinated with this Mortgage and the lien
hereof, so that together they shall hereafter constitute in law but one
mortgage, a single lien, covering the Mortgaged Property and securing the
indebtedness secured hereby, together with interest thereon as provided in the
Note (hereinafter defined). This Mortgage is not intended to and shall not
extinguish any of the indebtedness or obligations of Mortgagor under the
Existing Notes or the Existing Mortgages in such manner as would constitute a
release or novation of the original indebtedness or obligations under the
Existing Debt or the Existing Mortgages, nor shall this Mortgage affect or
impair the priority of any liens created thereby, it being the intention of the
parties hereto to preserve all liens and security interests securing the payment
of the Existing Debt which liens and security interest are acknowledged by
Mortgagor to be valid and subsisting against the Mortgaged Property and any
other security or collateral for the indebtedness secured hereby.
The Existing Mortgages are hereby completely amended and
restated to read as follows:
Mortgagor and Mortgagee have, on or about the date hereof, executed and
delivered an Amended and Restated Loan and Security Agreement (together with all
amendments, restatements, renewals, extensions, or modifications thereof, the
"LOAN AGREEMENT"; terms defined in the Loan Agreement and used herein shall have
the meanings ascribed to them in the Loan Agreement), which Loan Agreement
includes (i) a $1,055,000.00 Real Estate Term Advance, (ii) a $425,000.00
Equipment Term Advance, and (iii) a $294,500.00 Short-Term Advance
(collectively, the "TERM ADVANCES"). The parties intend that this Mortgage shall
secure all sums advanced under the Term Advances under the Loan Agreement.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 2
TO SECURE THE PAYMENT OF ONE MILLION SEVEN HUNDRED SEVENTY-FOUR THOUSAND FIVE
HUNDRED AND 00/100 DOLLARS U.S. ($1,774,500.00) of principal, plus all interest
and other sums due with respect to all Term Advances made by Mortgagee under the
Loan Agreement (which Term Advances and all interest and other sums due with
respect thereto being hereinafter referred to as the "DEBT"), Mortgagor has
mortgaged, given, granted, bargained, sold, aliened, conveyed, confirmed,
pledged, assigned, and hypothecated and by these presents does hereby mortgage,
give, grant, bargain, sell, alien, convey, confirm, pledge, assign and
hypothecate unto Mortgagee all right, title, interest and estate of Mortgagor
now owned, or hereafter acquired, in and to the following property, rights,
interests and estates (such property, rights, interests and estates being
hereinafter described are collectively referred to herein as the "MORTGAGE
PROPERTY"):
(a) those certain parcels of land containing approximately 80
acres, located at Hardpan Road in the Town of Xxxxx, Erie County, New York, and
being more particularly described in Exhibit A annexed hereto, together with any
improvements now or hereafter located or constructed thereon or therein, and all
of the easements, rights, privileges and appurtenances thereunto belonging or in
anywise, appertaining thereto including, but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Mortgagor therein and in
and to the strips and gores, streets and ways adjacent thereto, whether in law
or in equity, in possession or expectancy, now or hereafter acquired;
(b) all machinery, equipment, fixtures, furniture, equipment,
and inventories and other property of every kind and nature, whether tangible or
intangible, whatsoever owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Property, or appurtenant
thereto, and usable in connection with the present or future operation and
occupancy of the Property and all building equipment, materials and supplies of
any nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Property, or appurtenant
thereto, or usable in connection with the present or future operation, enjoyment
and occupancy of the Property (hereinafter collectively called the "Equipment");
(c) all accounts, contract rights, and general intangibles,
receivables and claims whether now or hereafter arising, all guaranties and
security therefor and all of the Mortgagor's goods and rights of stoppage in
transit, replevin and reclamation as unpaid vendor;
(d) all inventory and all accessions thereto and products
thereof and documents therefor;
(e) all books and records pertaining to the foregoing,
including, but not limited to, computer programs, data, certificates, records,
circulation lists, subscriber lists, advertiser lists, supplier lists, customer
lists, customer and supplier contracts, sales orders and purchasing records;
(f) the Assigned Contract Rights, all rights to receive moneys
due or to become due thereunder, all chattel paper, documents and instruments
now existing or hereafter arising, relating to such rights to receive money and
all security therefor, all rights to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Contract Rights,
all claims for damages arising out of or for a breach of or default under the
Assigned Contract Rights
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 3
and the right to enforce the performance under the Assigned Contract Rights and
otherwise to exercise all remedies available thereunder;
(g) all right, title and interest of Mortgagor in and to all
condemnation and other awards heretofore made or hereafter to be made for the
taking by eminent domain of the whole or any part of the Property, or any estate
or easement therein, including any awards for change of grade of streets, all of
which awards are hereby assigned to Mortgagee, which is hereby authorized to
collect and receive the proceeds of such awards and to give proper receipts and
acquittances therefor and Mortgagee shall have the right and option to apply
such excess towards the payment of any sum owing on account of this Mortgage,
the Loan Agreement and the indebtedness secured thereby, notwithstanding the
fact that such sum may not then be due and payable;
(h) all present and future leases, subleases and licenses and
any guarantees thereof (the "LEASES"), rents, issues and profits and additional
rents now or at any time hereafter covering or affecting all or any portion of
the Mortgaged Property and all proceeds of, and all privileges and appurtenances
belonging or in any way appertaining to, the Mortgaged Property, or any part
thereof, and all other property subjected or required to be subjected to the
lien and/or security interest of the Mortgage, including, without limitation,
all of the income, revenues, earnings, rents, maintenance payments, tolls,
issues, products and profits thereof (the "RENTS"), which income, revenues,
earnings, rents, maintenance payments, tolls, issues, awards, products and
profits are hereby expressly assigned with the right to take and collect the
same upon the terms hereinafter set forth;
(i) all right, title and interest of Mortgagor in and to all
agreements, or contracts, now or hereafter entered into for the sale, leasing,
brokerage, development, management, maintenance and/or operation of the Property
(or any part thereto, including all moneys due and to become due thereunder, and
all permits, licenses, bonds, insurance policies, plans and specifications
relative to the construction and/or operation of the Improvements upon the
Mortgaged Property;
(j) all of Mortgagor's claims and rights to the payment of
damages arising from any rejection of a Lease under or pursuant to the
Bankruptcy Code, 11 U.S.C. /section/ 101, ET SEQ.;
(k) any other property and rights which are, by the provisions
of the Loan Agreement or any other loan document, required to be subject to the
lien hereof, and any additional property and rights that may from time to time
hereafter be owned by Mortgagor and installed in the Mortgaged Property, or by
writing of any kind, or otherwise, be subjected to the lien hereof by Mortgagor
or by anyone on its behalf,
(l) all Personal Property Collateral as defined and described
in the Loan Agreement;
(m) all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Mortgaged Property;
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 4
(n) the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect to the
Mortgaged Property and to commence any action or proceeding to protect the
interest of Mortgagee in the Mortgaged Property; and
(o) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including, without
limitation, proceeds of insurance and condemnation awards, all right, title and
interest of Mortgagor in and to all unearned premiums accrued, accruing and to
accrue under any or all insurance policies obtained by Mortgagor, and all rights
of the Mortgagor to refunds of real estate taxes and assessments relating to the
Mortgaged Property.
TO HAVE AND TO HOLD the Mortgaged Property, unto the Mortgagee and its
successors and assigns, upon the terms, provisions and conditions herein set
forth, forever, and Mortgagor does hereby bind itself and its successors, legal
representatives and assigns to warrant and forever defend all and singular the
Mortgaged Property unto the Mortgagee and its successors and assigns, against
every person whomsoever lawfully claiming or to claim the same or any part
thereof.
AND Mortgagor represents and warrants to and covenants and agrees with Mortgagee
as follows:
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Mortgagor will pay the Debt at the time and in the manner provided
in the Loan Agreement and in this Mortgage. All the covenants, conditions and
agreements contained in the Loan Agreement, dated as of the date hereof, between
Mortgagor and Mortgagee, as the same may be modified or supplemented from time
to time, and any other Transaction Documents now or hereafter executed by
Mortgagor and/or others and by or in favor of Mortgagee, which wholly or
partially secure or guaranty payment of the Debt (collectively, the "LOAN
DOCUMENTS"), are hereby made a part of this Mortgage to the same extent and with
the same force as if fully set forth herein.
2. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has good
and marketable title to all of the Mortgaged Property, in each case free and
clear of liens, claims and encumbrances.
3. INSURANCE.
(a) Mortgagor, at its sole cost and expense, will keep the
Mortgaged Property insured during the entire term of this Mortgage for the
mutual benefit of Mortgagor and Mortgagee against loss or damage by fire and
against loss or damage by other risks and hazards covered by a standard extended
coverage insurance policy including, but not limited to, riot and civil
commotion, vandalism, malicious mischief, burglary and theft. Such insurance
shall be in an amount (i) equal to one hundred percent (100%) of the
then-replacement cost of the improvements within the premises leased by
Mortgagor pursuant to the Leases (the "IMPROVEMENTS") and the Equipment, without
deduction for physical depreciation and (ii) such that the insurer would not
deem Mortgagor a co-insurer under said policies. The policies of insurance
carried in accordance with this paragraph shall be paid annually in advance and
shall contain the "Replacement Cost Endorsement" with a waiver of depreciation.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 5
(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain during the
entire term of this Mortgage the following policies of insurance:
(i) Flood insurance if any part of the Property is located in
an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (and any
successor act thereto) in an amount at least equal to the outstanding
principal amount of the Loan Agreement or the maximum limit of coverage
available with respect to the Improvements and Equipment under said
Act, whichever is less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries
(including death resulting therefrom) coverages in an amount not less
than $1,000,000 per occurrence and $10,000,000 in the aggregate.
(iii) Business interruption insurance in an amount equal to
the aggregate annual amount of all income from, and revenues and rents
payable with respect to, the Property, such business interruption
insurance to cover losses for a period of at least twelve (12) months
after the date of the fire or casualty in question.
(iv) During the course of any renovations of the Improvements,
builder's completed value risk insurance against "all risks of physical
loss", including collapse and transit coverage, with deductibles
reasonably satisfactory to Mortgagee, in non-reporting form, covering
the total value of work performed and equipment, supplies and materials
furnished. Such policy of insurance shall contain the "permission to
occupy upon completion of work or occupancy" endorsement and a waiver
of co-insurance or an agreed amount endorsement.
(v) Insurance against loss or damage from explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery
and equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements.
(vi) Such other insurance as may from time to time be
reasonably required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "POLICIES") required
pursuant to this paragraph 3 shall be issued by an insurer having an A.M. Best
rating of A:V or better and satisfactory to Mortgagee, (ii) shall contain the
standard New York mortgagee non-contribution clause naming Mortgagee as the
person to which all payments made by such insurance company shall be paid, (iii)
shall be maintained throughout the term of this Mortgage without cost to
Mortgagee, (iv) original certificates, or copies thereof, certified to be true
and correct, shall be delivered to Mortgagee, (v) shall contain such provisions
as Mortgagee deems reasonably necessary or desirable to protect its interest
including, without limitation, endorsements providing that neither Mortgagor,
Mortgagee nor any other party shall be a co-insurer under said Policies and that
Mortgagee shall receive at least thirty (30) days' prior, written notice of any
modifications or cancellation, and (vi)
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 6
shall be satisfactory in form and substance to Mortgagee and shall be approved
by Mortgagee as to amounts, form, risk coverage, deductibles, loss payees and
insureds. All such premiums for such Policies (the "INSURANCE PREMIUMS") shall
be paid by Mortgagor making payment when due directly to the carrier. Not later
than thirty (30) days prior to the expiration date of each of the Policies,
Mortgagor will deliver to Mortgagee satisfactory evidence of the renewal of each
Policy.
(d) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Mortgagor shall give prompt,
written notice thereof to Mortgagee. Sums paid to Mortgagee by an insurer, after
deduction of Mortgagee's reasonable costs and expenses of collection (after such
deduction, the "INSURANCE PROCEEDS"), may be retained and (i) applied by
Mortgagee toward payment of the Debt in such priority and proportions as
Mortgagee in its discretion in shall deem proper (any such application for
repayment to be without any prepayment consideration, except that if a Default
or an Event of Default has occurred, then such application shall be subject to
the prepayment consideration computed in accordance with the Loan Agreement) or
(ii) if the conditions set forth in paragraph 3(f) of this Mortgage are
satisfied, paid to Mortgagor for the restoration and repair of the Mortgaged
Property in accordance with paragraph 3(e) of this Mortgage in whole or in such
lesser amount as is necessary to pay for the costs of such restoration and
repair.
(e) If the Insurance Proceeds are held by Mortgagee to
reimburse Mortgagor for the cost of restoration and repair of the Mortgaged
Property, (i) the Mortgaged Property shall be substantially restored to the
equivalent of its condition prior to such casualty or to such other condition as
Mortgagee may approve in writing, (ii) such restoration and repair shall be done
in compliance with all applicable laws, rules and regulations, and (iii) all
reasonable costs and expenses incurred by Mortgagee in connection with making
the Insurance Proceeds available for such restoration and repair including,
without limitation, counsel fees and inspecting engineers' fees incurred by
Mortgagee, shall be paid by Mortgagor. Mortgagee may, at Mortgagee's option,
condition disbursement of said proceeds on Mortgagee's approval (which approval
shall not be unreasonably withheld or delayed) of such plans and specifications
of an architect reasonably satisfactory to Mortgagee, contractor's cost
estimates, architect's certificates, waivers of liens, sworn statements of
mechanics and materialmen, and such other evidence of costs, percentage
completion of construction, application of payments, and satisfaction of liens
as Mortgagee may reasonably require. If the Insurance Proceeds are applied to
the payment of the Debt, any such application of proceeds to principal shall not
extend or postpone the maturity date of the Loan Agreement or change the amount
or the due date of any installment payment under the Loan Agreement. Any surplus
Insurance Proceeds, after payment of the Debt, shall be paid to Mortgagor. If
the Mortgaged Property is sold pursuant to paragraph 26 of this Mortgage or if
Mortgagee acquires title to the Mortgaged Property, Mortgagee shall have all of
the right, title and interest of Mortgagor in and to any insurance policies and
unearned premiums thereon and in and to the Insurance Proceeds resulting from
any damage to the Mortgaged Property prior to such sale or acquisition.
(f) Mortgagee shall not exercise Mortgagee's option to apply
Insurance Proceeds to the payment of the sums secured by this Mortgage if all
the following conditions are met: (i) no Event of Default is then continuing
under this Mortgage or the Loan Agreement; (ii) Mortgagee determines that there
will be sufficient funds (whether consisting of Insurance
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 7
Proceeds and/or other sums made available by Mortgagor for restoration) to
restore and repair the Mortgaged Property to the condition required under
paragraph 3(e) above; (iii) Mortgagee determines that restoration and repair of
the Mortgaged Property to the condition required under paragraph 3(e) above will
be completed within the greater of (A) three (3) months or (B) the period of
time covered by the business interruption insurance then in effect from the date
of the loss or casualty to the Mortgaged Property; and (iv) Mortgagee shall have
received evidence reasonably satisfactory to it that during the period of
restoration and repair of the Mortgaged Property to the condition required under
subparagraph 3(e) above, the sum of (A) income derived from the Mortgaged
Property, as reasonably determined by Mortgagee, plus (B) proceeds of business
interruption insurance, if any, to be paid, plus (C) amounts that Mortgagor
demonstrates to Mortgagee's reasonable satisfaction will be made available by
Mortgagor from other sources during such period will equal or exceed the sum of
(D) expenses in connection with the operation of the Mortgaged Property and (E)
the debt service under the Loan Agreement.
4. PAYMENT OF TAXES, ETC.
(a) All taxes, assessments and water and sewer rents, now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof (the "TAXES") and all premiums relative to the Policies of
insurance required under paragraph 3 above shall be paid when due in the manner
provided in paragraph 4 of this Mortgage. Mortgagor shall pay all rents,
maintenance charges, other governmental impositions, and other charges,
including without limitation vault charges and license fees for the use of the
Property and any adjoining areas, now or hereafter levied or assessed or imposed
against the Mortgaged Property or any part thereof (the "OTHER CHARGES") as the
same become due and payable. Mortgagor will deliver to Mortgagee, promptly upon
Mortgagee's request, evidence satisfactory to Mortgagee that the Taxes and Other
Charges have been so paid or are not then delinquent. Mortgagor shall not suffer
and shall promptly cause to be paid or discharged any lien or charge whatsoever
which may be or become a lien or charge against the Mortgaged Property, and
shall promptly pay for all utility services provided to the Mortgaged Property.
Mortgagor shall furnish to Mortgagee or its designee receipts for the payment of
the Taxes and Other Charges prior to the date the same shall become delinquent.
(b) Mortgagor, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of
the Taxes or Other Charges, provided that (i) Mortgagor is not in default under
the Loan Agreement or this Mortgage, (ii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument
to which Mortgagor is subject and shall not constitute a default thereunder,
(iii) neither the Mortgaged Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, cancelled or lost, (iv)
Mortgagor shall have paid the Taxes under protest or set aside adequate reserves
for the payment of the Taxes or Other Charges, together with all interest and
penalties thereon, and (v) Mortgagor shall have furnished such security as may
be required in the proceeding, or as may be requested by Mortgagee to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon.
(c) Mortgagee may, at any time and from time to time, at its
option, upon ten (10) days' prior, written notice to Mortgagor, require the
deposit by Mortgagor at the time of each
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 8
payment of an installment of interest or principal under the Loan Agreement of
an additional amount sufficient to discharge when they become due Mortgagor's
obligations for Taxes and insurance premiums under paragraph 4(a) above. The
determination of the amount so payable and of the fractional part thereof to be
deposited with Mortgagee, so that the aggregate of such deposit shall be
sufficient for this purpose, shall be made by Mortgagee in its sole discretion.
Such amounts shall be held by Mortgagee without interest to the Mortgagor in an
account acceptable to the Mortgagee and applied to the payment of the
obligations in respect to which such amounts were deposited or, after the
occurrence of an Event of Default, at the option of Mortgagee and subject to
applicable law, to the payment of the Debt in such order or priority as
Mortgagee shall determine, on or before the respective dates on which the same
or any of them would become delinquent. If one month prior to the due date of
any of the obligations under this subsection (c) the amounts then on deposit
therefor shall be insufficient for the payment of such obligations in full,
Mortgagor within five (5) days after demand shall deposit the amount of the
deficiency with Mortgagee. Nothing herein contained shall be deemed to affect
any right or remedy of Mortgagee under the provisions of this Mortgage or of any
statute or rule of law to pay any such amount and to add the amount so paid
together with interest at the Default Rate to the indebtedness hereby secured.
5. CONDEMNATION.
(a) Mortgagor shall promptly give Mortgagee written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Mortgagee copies of any and all papers served in
connection with such proceedings. Notwithstanding any taking by any public or
quasi-public authority through eminent domain or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Mortgagor shall continue to pay the Debt at the time and in the
manner provided for its payment in the Loan Agreement, this Mortgage, and the
other Loan Documents and the Debt shall not be reduced until any award or
payment therefor shall have been actually received after expenses of collection
and applied by Mortgagee to the discharge of the Debt. Mortgagee shall not be
limited to the interest paid on the award by the condemning authority but shall
be entitled to receive out of the award interest at the rate or rates provided
herein and in the Loan Agreement. Mortgagor shall cause the award or payment
made in any condemnation or eminent domain proceeding, which is payable to
Mortgagor, to be paid directly to Mortgagee. Sums paid to Mortgagee for such
condemnation or action of eminent domain, after deduction of Mortgagee's
reasonable costs and expenses of collection (after such deduction, the
"CONDEMNATION PROCEEDS"), shall be retained and (i) applied by Mortgagee toward
payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper (any such application for repayment to be without
any prepayment consideration, except that if a Default or an Event of Default
has occurred then such application shall be subject to the prepayment
consideration computed in accordance with the Loan Agreement) or (ii) if the
conditions set forth in paragraph 5(c) of this Mortgage are satisfied, paid to
Mortgagor for the restoration and repair of the Mortgaged Property in accordance
with paragraph 5(b) of this mortgage in whole or in such lesser amount as is
necessary to pay for the costs of such restoration and repair. If the Mortgaged
Property is sold pursuant to paragraph 26 of this Mortgage or if Mortgagee
acquires title to the Mortgaged Property, Mortgagee shall have all of the right,
title and interest of Mortgagor in and to any Condemnation Proceeds resulting
from any condemnation or eminent domain proceeding of the Mortgaged Property
prior to such sale or acquisition.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 9
(b) If the Condemnation Proceeds are held by Mortgagee to
reimburse Mortgagor for the cost of restoration and repair of the Mortgaged
Property, (i) the Mortgaged Property shall be substantially restored to the
equivalent of its condition prior to such condemnation or to such other
condition as Mortgagee may approve in writing, (ii) such restoration and repair
shall be done in compliance with all applicable laws, rules and regulations, and
(iii) all reasonable costs and expenses incurred by Mortgagee in connection with
making the Condemnation Proceeds available for such restoration and repair
including, without limitation, counsel fees and inspecting engineers' fees
incurred by Mortgagee, shall be paid by Mortgagor. Mortgagee may, at Mortgagee's
option, condition disbursement of said proceeds on Mortgagee's approval (which
approval shall not be unreasonably withheld or delayed) of such plans and
specifications of an architect reasonably satisfactory to Mortgagee,
contractor's cost estimates, architect's certificates, waivers of liens, sworn
statements of mechanics and materialmen and such other evidence of costs,
percentage completion of construction, application of payments, and satisfaction
of liens as Mortgagee may reasonably require. If the Condemnation Proceeds are
applied to the payment of the Debt, any such application of proceeds to
principal shall not extend or postpone the maturity date of the Loan Agreement
or change the amount or the due date of any installment payment under the Loan
Agreement. Any surplus Condemnation Proceeds, after payment of the Debt, shall
be paid to Mortgagor. If the Mortgaged Property is sold pursuant to paragraph 26
of this Mortgage or if Mortgagee acquires title to the Mortgaged Property,
Mortgagee shall have all of the right, title and interest of Mortgagor in and to
any Condemnation Proceeds resulting from any condemnation or eminent domain
proceeding of the Mortgaged Property prior to such sale or acquisition.
(c) Mortgagee shall not exercise Mortgagee's option to apply
Condemnation Proceeds to the payment of the sums secured by this Mortgage if all
the following conditions are met: (i) no Event of Default is then continuing
under this Mortgage or the Loan Agreement; (ii) Mortgagee determines that there
will be sufficient funds (whether consisting of Condemnation Proceeds and/or
other sums made available by Mortgagor for restoration) to restore and repair
the Mortgaged Property to the condition required under paragraph 5(b) above;
(iii) Mortgagee determines that restoration and repair of the Mortgaged Property
to the condition required under paragraph 5(b) above will be completed within
the greater of (A) three (3) months or (B) the period of time covered by the
business interruption insurance then in effect from the date of the loss or
casualty to the Mortgaged Property; and (iv) Mortgagee shall have received
evidence reasonably satisfactory to it that during the period of restoration and
repair of the Mortgaged Property to the condition required under subparagraph
5(b) above, the sum of (A) income derived from the Mortgaged Property, as
reasonably determined by Mortgagee, plus (B) proceeds of business interruption
insurance, if any, to be paid, plus (C) amounts that Mortgagor demonstrates to
Mortgagee's reasonable satisfaction will be made available by Mortgagor from
other sources during such period will equal or exceed the sum of (D) expenses in
connection with the operation of the Mortgaged Property and (E) the debt service
under the Loan Agreement.
6. LEASES AND RENTS.
(a) Mortgagor does hereby absolutely and unconditionally
assign to Mortgagee its right, title and interest in all current and future
Leases and Rents, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 10
security only. Such assignment to Mortgagee shall not be construed to bind
Mortgagee to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise to impose any obligation upon
Mortgagee. Mortgagor agrees to execute and deliver to Mortgagee such additional
instruments, in form and substance reasonably satisfactory to Mortgagee, as may
hereafter be requested by Mortgagee to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this paragraph 6, Mortgagee
grants to Mortgagor a revocable license to operate and manage the Mortgaged
Property and to collect the Rents. Mortgagor shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, in trust for
the benefit of Mortgagee for use in the payment of such sums. Upon an Event of
Default, the license granted to Mortgagor herein shall be automatically revoked
and Mortgagee shall immediately be entitled to possession of all Rents, whether
or not Mortgagee enters upon or takes control of the Mortgaged Property.
Mortgagee is hereby granted and assigned by Mortgagor the right, at its option
upon the revocation of the license granted herein to enter upon the Mortgaged
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license herein granted
may be applied toward payment of he Debt in such priority and proportion as
Mortgagee in its discretion shall deem proper.
(b) Upon request, Mortgagor shall furnish Mortgagee with
copies of all Leases and all amendments or modifications of any Lease. All
Leases shall provide that each such Lease is subordinate to this Mortgage and
that the sublessee agrees to attorn to Mortgagee. Mortgagor (i) shall observe
and perform all the obligations imposed upon the lessor under the Leases and
shall not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall upon request by Mortgagee, send Mortgagee
copies of all notices of default sent to or received by Mortgagee under the
Leases; (iii) shall enforce all of the terms, covenants and conditions contained
in the Leases on the part of the lessee thereunder to be observed or performed;
(iv) shall not collect any of the Rents more than one (1) month in advance
(except with respect to collection of the final month's rent as security); (v)
shall not execute any other assignment of lessor's interest in the leases or the
Rents; and (vi) shall execute and deliver at the request of Mortgagee all such
further assurances, confirmations and assignments in connection with the
Mortgaged Property as Mortgagee shall from time to time require.
(c) Mortgagor shall not, without the prior, written consent of
Mortgagee permit the Mortgaged Property to be used or occupied by anyone other
than (i) Mortgagor or (ii) a tenant which is a wholly-owned subsidiary of
Mortgagor or a third party tenant, each under a Lease approved by Mortgagee, and
after any such Lease has been so approved by Mortgagee, it may not be amended,
modified, terminated, cancelled or surrendered without Mortgagee's written
consent.
7. MAINTENANCE OF MORTGAGED PROPERTY. Mortgagor shall cause the
Mortgaged Property to be maintained in a good and safe condition and repair. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal removal of Equipment, provided same is replaced with
Equipment of equivalent quality) without the written consent of Mortgagee.
Mortgagor shall promptly comply with all laws, orders and ordinances affecting
the Mortgaged Property and the use thereof. Mortgagor shall promptly repair,
replace or rebuild any part of the Mortgaged Property that (i) is damaged or
destroyed by any casualty (provided that, if no Event of Default is continuing
hereunder, Mortgagee provides Mortgagor with the Insurance Proceeds relating to
such casualty), (ii) becomes damaged, worn or dilapidated, or
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 11
(iii) is affected by any proceeding of the character referred to in paragraph 5
hereof (provided that, if no Event of Default is continuing hereunder, Mortgagee
provides Mortgagor with the Condemnation Proceeds relating to such proceeding)
and Mortgagor shall complete and pay for any structure at any time in the
process of construction or repair on the Land. Mortgagor shall not initiate,
join in, acquiesce in, or consent to any change in any private restrictive
covenant, zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Mortgaged Property or any part
thereof. If under applicable zoning provisions the use of all or any portion of
the Mortgaged Property is or shall become a nonconforming use, Mortgagor will
not cause or permit such nonconforming use to be discontinued or abandoned
without the express written consent of Mortgagee.
8. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.
(a) Mortgagor acknowledges that Mortgagee has examined and
relied on the creditworthiness of Mortgagor and experience of Mortgagor in
owning and operating properties such as the Mortgaged Property in agreeing to
make the loan secured hereby, and that Mortgagee will continue to rely on
Mortgagor's ownership of the Mortgaged Property as a means of maintaining the
value of the Mortgaged Property as security for repayment of the Debt. Mortgagor
acknowledges that Mortgagee has a valid interest in maintaining the value of the
Mortgaged Property so as to ensure that, should Mortgagor default in the
repayment of the Debt, Mortgagee can recover the Debt by a sale of the Mortgaged
Property. Mortgagor shall not, without the prior written consent of Mortgagee,
sell, convey, alien, mortgage, encumber, pledge or otherwise transfer the
Mortgaged Property or any part thereof, or permit the Mortgaged Property or any
part thereof to be sold, conveyed, aliened, mortgaged, encumbered, pledged or
otherwise transferred (any of the foregoing, a "TRANSFER").
(b) A Transfer of the Mortgaged Property within the meaning of
this paragraph 8 shall be deemed to include:
(i) an installment sales agreement wherein Mortgagor agrees to
sell the Mortgaged Property or any part thereof for a price to be paid
in installments;
(ii) an agreement by Mortgagor selling, leasing, assigning or
otherwise transferring all or a substantial part of the Mortgaged
Property, or a sale, assignment or other transfer of, or the grant of a
security interest in, Mortgagor's right, title and interest in and to
any Leases or any Rents; and
(iii) any voluntary or involuntary Transfer of a Control
Individual's (hereinafter defined) Controlling Interests (hereinafter
defined) or any voluntary or involuntary event whereby a Control
Individual's Controlling Interests are diluted or his or her Control
over Mortgagor is otherwise diminished.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Mortgagor's Transfer of the
Mortgaged Property without Mortgagee's consent; this provision shall apply to
every Transfer of the Mortgaged Property regardless of whether voluntary
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 12
or not, or whether or not Mortgagee has consented to any previous Transfer of
the Mortgaged Property.
(d) For purposes of this paragraph 8, the following terms
shall have the following meanings: "CONTROL" when used with respect to Mortgagor
means the power to direct the respective management and policies of Mortgagor,
directly or indirectly, whether through the ownership of voting securities,
membership interests, partnership interests or any other beneficial interest, by
contract or otherwise, whether acting alone or with others; "CONTROL INDIVIDUAL"
shall mean Aqua Care Systems, Inc.; "CONTROLLING INTERESTS" shall mean those
beneficial interests or contract rights in or with respect to the Mortgagor (or
any entity that has a direct or indirect beneficial interest in Mortgagor) that
give a Control Individual his or her Control over Mortgagor; "NON-CONTROLLING
INTERESTS" shall mean any beneficial interests in Mortgagor (or any entity that
has a direct or indirect beneficial interest in the Mortgagor) that are not
Controlling Interests.
9. ESTOPPEL CERTIFICATES AND NO DEFENSE AFFIDAVITS. After request
by Mortgagee, Mortgagor shall within twenty (20) days furnish Mortgagee with a
statement, duly acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Loan Agreement, (ii) the unpaid principal
balances of all Advances under the Loan Agreement, (iii) the rate of interest of
under the Loan Agreement, (iv) the date installments of interest and/or
principal were last paid, (v) any offsets or defenses to the payment of the
Debt, if any, and (vi) that the Loan Agreement and this Mortgage are valid,
legal and binding obligations and have not been modified or if modified, giving
the particulars of such modification.
10. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted
or adopted or amended after the date of this Mortgage which deducts the Debt
from the value of the Mortgaged Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Mortgagee's
interest in the Mortgaged Property, Mortgagor will pay such tax, with interest
and penalties thereon, if any. In the event Mortgagee is advised by counsel
chosen by it that the payment of such tax or interest and penalties by Mortgagor
would be unlawful or taxable to Mortgagee or unenforceable or provide the basis
for a defense of usury, then in any such event, Mortgagee shall have the option,
by written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.
11. NO CREDITS ON ACCOUNT OF THE DEBT. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes or Other Charges assessed against the Mortgaged Property, or
any part thereof, and no deduction shall otherwise be made or claimed from the
assessed value of the Mortgaged Property, or any part thereof, for real estate
tax purposes by reason of this Mortgage or the Debt. In the event such claim,
credit or deduction shall be required by law, Mortgagee shall have the option,
by written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.
12 DOCUMENTARY STAMPS. If the United States of America, the State
of New York or any subdivision thereof imposes any taxes or charges with respect
to, or requires that revenue or other stamps be affixed to, the Loan Agreement,
this Mortgage, or any other document or instrument recorded, filed or executed
relative to the Debt, Mortgagor will pay for the same, with interest and
penalties thereon, if any.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 13
13. USURY LAWS. The parties hereto intend to contract in strict
compliance with applicable usury law from time to time in effect. In furtherance
thereof, the parties hereto stipulate and agree that none of the terms and
provisions contained in this Mortgage or any other Loan Document shall ever be
construed to create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the maximum amount of interest permitted to be
charged by applicable law from time to time in effect. Mortgagor, any present or
future guarantor or any other person hereafter becoming liable for the payment
of the Obligations, shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully charged under applicable law from time to time in effect, and
the provisions of this paragraph shall control over all other provision of the
Loan Documents which may be in conflict therewith. If any indebtedness or
obligation owed by Mortgagor under the Loan Documents is prepaid or accelerated
and as a result any amounts held to constitute interest are determined to be in
excess of the legal maximum, or Mortgagee shall otherwise collect moneys which
are determined to constitute interest which would otherwise increase the
interest on all or any part of such obligations to an amounts in excess of that
permitted to be charged by applicable law then in effect, then all such sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related indebtedness or obligations or, at Mortgagee's option returned to
Mortgagor or the other payor thereof upon such determination. In determining
whether or not any amount paid or payable, under any circumstance, exceeds the
maximum amount permitted under applicable law, Mortgagee and Mortgagor shall to
the greatest extent permitted under applicable law, characterize any
non-principal payment as an expense, fee or premium rather than as interest, and
amortize, prorate, allocate and spread the total amount of interest throughout
the entire contemplated term of the Loan Agreement in accordance with the
amounts outstanding from time to time hereunder and the Maximum Rate from time
to time in effect under applicable law in order to lawfully charge the maximum
amount of interest permitted under applicable law. If at any time the rate at
which interest is payable hereunder exceeds the Maximum Rate, the amount
outstanding hereunder shall bear interest at the Maximum Rate only, but shall
continue to bear interest at the Maximum Rate until such time as the total
amount of interest accrued hereunder equals (but does not exceed) the total
amount of interest which would have accrued hereunder had there been no Maximum
Rate applicable hereto. In the event applicable law provides for an interest
ceiling under Chapter 303 of the Texas Finance Code, that ceiling shall be the
indicated (weekly) ceiling and shall be used when appropriate in determining the
maximum rate permitted by applicable law. As used in this section, (i) the term
"applicable law" means the laws of the State of Texas or the laws of the United
States of America, whichever laws allow the greater interest, as such laws now
exist or may be changed or amended or come into effect in the future, and (ii)
the term "MAXIMUM RATE" means, at the time of determination, the maximum rate of
interest which, under applicable law, may then be charged hereunder.
14. PERFORMANCE OF LEASES; SECURITY AGREEMENT.
(a) Mortgagor will comply with the terms and provisions of the
Leases and will faithfully perform all of its obligations under the Leases and
promptly cure any default by it under any of the provisions thereof. Mortgagor
shall promptly send to Mortgagee a true and correct copy of any notice, report,
certificate or other communication that Mortgagor is obligated to deliver in
connection with any Lease.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 14
(b) Mortgagor hereby assigns and transfers to Mortgagee and
creates a security interest in all of Mortgagor's right, title and interest in
and to the consideration, in whatever form delivered, for the sale, transfer or
conveyance of Mortgagor's interest in the Leases.
15. PERFORMANCE OF OTHER AGREEMENTS. Mortgagor shall observe and
perform each and every term to be observed or performed by Mortgagor pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
16. FURTHER ACTS, ETC. Mortgagor will, at the cost of Mortgagor,
and without expense to Mortgagee, do, execute, acknowledge, and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as Mortgagee shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee,
or for carrying out the intention or facilitating the performance of the terms
of this Mortgage or for filing, registering or recording this Mortgage.
Mortgagor, on demand, will execute and deliver and hereby authorizes Mortgagee
to execute in the name of Mortgagor or without the signature of Mortgagor to the
extent Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Mortgagor grants to Mortgagee
an irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Mortgagee
at law and in equity, including without limitation such rights and remedies
available to Mortgagee pursuant to this paragraph 16.
17. TRUST FUND. Mortgagor shall, in compliance with Section 13 of
the Lien Law, receive the advances secured hereby and shall hold the right to
receive the advances as a trust fund to be applied first for the purpose of
paying the cost of any improvement and shall apply the advances first to the
payment of the cost of any such improvement on the Mortgaged Property before
using any part of the total of the same for any other purpose.
18. RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged Property. Mortgagor
will pay and be responsible for all mortgage taxes and other taxes and charges
and all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Mortgage, any mortgage
supplement hereto, any security instrument or financing statement with respect
to the Mortgaged Property, any instrument of further assurance, and any filings
necessary to perfect and maintain Mortgagee's lien on and security interest in
the Mortgaged Property, and all federal, state, county, and municipal, taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 15
and delivery of this Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property or any instrument of further
assurance. Mortgagor shall hold harmless and indemnify Mortgagee, its successors
and, assigns, against any liability incurred by reason of the imposition of any
tax on the making and recording of this Mortgage and Mortgagee's funding from
time to time of the Term Advances.
19. PREPAYMENT. The Debt may not be voluntarily or involuntarily
prepaid in whole or in part, except in accordance with the Loan Agreement, and
this Mortgage also secures any termination fees or penalties due under the Loan
Agreement.
20. EVENTS OF DEFAULT. The Debt shall become immediately due and
payable at the option of Mortgagee, without notice or demand, upon any one or
more of the following events ("EVENTS OF DEFAULT"):
(a) if any portion of the Debt is not paid when due;
(b) if any of the Taxes or Other Charges are not paid when the
same are due and payable;
(c) if the Policies are not kept in full force and effect, or
if the Policies are not delivered to Mortgagee upon request;
(d) if Mortgagor violates or does not comply with any of the
provisions of this Mortgage, including, without limitation paragraphs 3, 4, 5,
6, 7 or 8 hereof;
(e) if a default by Mortgagor under any Lease shall continue
beyond any applicable notice or grace period, or if any Lease shall be modified,
amended, terminated, surrendered or assigned by Mortgagor, without the prior,
written consent of Mortgagee;
(f) if any representation or warranty of Mortgagor made
herein, or by Aqua Care Systems, Inc. ("GUARANTOR") in the Amended and Restated
Continuing Guaranty, dated as of the date hereof, made by Guarantor for the
benefit of Mortgagee (the "GUARANTEE OF PAYMENT"), or in any certificate,
report, financial statement oi other instrument or document furnished to
Mortgagee by Mortgagor or Guarantor shall have been false or misleading in any
material respect when made;
(g) if Mortgagor or Guarantor shall make an assignment for the
benefit of creditors or if Mortgagor or Guarantor shall generally not be paying
its debts as they become due;
(h) if a receiver, liquidator, or trustee of Mortgagor or
Guarantor shall be appointed or if Mortgagor or Guarantor shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization, or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Mortgagor
or Guarantor or if any proceeding for the dissolution or liquidation of
Mortgagor or Guarantor shall be instituted by a third party, and same is not
dismissed within 30 days;
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 16
(i) [Intentionally Omitted]
(j) if the Mortgaged Property becomes subject to any
mechanic's, materialman's or other lien other than a lien for local real estate
taxes and assessments not then due and payable and such lien shall remain
undischarged of record (by payment, bonding or otherwise) for a period of sixty
(60) calendar days after Mortgagor's receipt of notice thereof;
(k) if Mortgagor fails to cure promptly any violations of laws
or ordinances affecting the Mortgaged Property and such failure continues for a
period of thirty (30) calendar days after Mortgagor's receipt of notice thereof;
(1) if Mortgagor shall be in default beyond any applicable
notice and cure period under any other term, covenant or condition of the Loan
Agreement, this Mortgage, or any of the other Loan Documents or if an Event of
Default under the Loan Agreement occurs; or
(m) if at any time while this Mortgage is of record, Aqua Care
Systems, Inc. shall fail to own one hundred percent (100%) of the ownership
interests in Mortgagor of shall cease to have primary responsibility for the
day-to-day management and Control of Mortgagor.
21. DEFAULT INTEREST. Upon the occurrence of any Event of Default,
at the option of Mortgagee, Mortgagor shall pay Default Interest on all sums due
Mortgagee, with respect to the Debt for any period after an Event of Default
occurs. The Default Rate shall be computed from the occurrence of the Event of
Default until the actual receipt and collection of the Debt. This charge shall
be added to the Debt, and shall be deemed secured by this Mortgage. This clause,
however, shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Mortgagee by reason of the occurrence of any Event of Default.
22. MORTGAGOR'S RIGHT TO MAKE ADVANCES, ETC. Upon the occurrence
of any Event of Default or if Mortgagor fails to make any payment or to do any
act as herein provided, Mortgagee may, but without any obligation to do so and
without notice to or demand on Mortgagor and without releasing Mortgagor from
any obligation hereunder, make or do the same in such manner and to such extent
as Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Mortgaged Property for such purposes or appear in,
defend, or bring any action or proceeding to protect its interest in the
Mortgaged Property or to foreclose this Mortgage or collect the Debt, and the
reasonable cost and expense thereof (including reasonable attorneys' fees to the
extent permitted by law and any appraisal fees), with interest calculated at the
Default Rate, shall constitute a portion of the Debt and shall be secured by
this Mortgage and the other Loan Documents and shall be due and payable to
Mortgagee upon demand. All such costs and expenses incurred by Mortgagee in
remedying such Event of Default or in appearing in, defending, or bringing any
such action or proceeding shall bear interest at the Default Rate, for the
period after notice from Mortgagee that such cost or expense was incurred to the
date of payment of Mortgagee.
23. LATE PAYMENT CHARGE. If any portion of the Debt is not paid
within fifteen (15) calendar days after the date on which it is due, Mortgagor
shall pay to Mortgagee upon demand a
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 17
late charge equal to the lesser of two percent (2%) of such unpaid portion of
the Debt or the maximum amount permitted by applicable law, to defray the
expense incurred by Mortgagee in handling and processing such delinquent payment
and to compensate Mortgagee for the loss of the use of such delinquent payment,
and such amount shall be secured by this Mortgage.
24. PREPAYMENT AFTER EVENT OF DEFAULT. If following the occurrence
of any Event of Default, Mortgagor shall tender payment of an amount sufficient
to satisfy the Debt at any time prior to a sale of the Mortgaged Property either
through foreclosure or the exercise of other remedies available to Mortgagee
under this Mortgage, such tender by Mortgagor shall be deemed to be a voluntary
prepayment under the Loan Agreement and this Mortgage in the amount tendered,
and Mortgagor shall, in addition to the entire Debt, also pay to Mortgagee the
applicable termination fees and other sums due under Section 13.4 of the Loan
Agreement.
25. RIGHT OF ENTRY. Mortgagee and its agents shall have the right
to enter and inspect the Mortgaged Property at all reasonable times.
26. REMEDIES.
(a) Upon the occurrence of any Event of Default, Mortgagee may
take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Mortgaged Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:
(i) declare the entire Debt to be immediately due and payable;
(ii) institute proceedings for the complete foreclosure of
this Mortgage, in which case the Mortgaged Property or any interest
therein may be sold for cash or upon credit in one or more parcels or
in several interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Mortgage for the
portion of the Debt then due and payable, subject to the continuing
lien of this Mortgage for the balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or
any part thereof and all estate, claim, demand, right, title and
interest of Mortgagor therein and rights of redemption thereof,
pursuant to power of sale or otherwise, at one or more sales, as an
entity or in parcels, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein or in the Loan Agreement;
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 18
(vi) recover judgment on the Debt evidenced by the Loan
Agreement either before, during or after any proceedings for the
enforcement of this Mortgage;
(vii) apply for the appointment of a receiver of the Mortgaged
Property, without notice and without regard for the adequacy of the
security for the Debt and without regard for the solvency of the
Mortgagor, Guarantor or of any person, firm or other entity liable for
the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents
and enter into or upon the Mortgaged Property, either personally or by
its agents, nominees or attorneys and dispossess Mortgagor and its
agents and servants therefrom, and thereupon Mortgagee may (A) use,
operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and any part of the Mortgaged Property and
conduct the business thereat; (B) make alterations, additions,
renewals, replacements and improvements to or on the Mortgaged
Property; (C) exercise all rights and powers of Mortgagor with respect
to the Mortgaged Property, whether in the name of Mortgagor or
otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, xxx
for, collect and receive all earnings, revenues, rents, issues, profits
and other income of the Mortgaged Property and every part thereof; and
(D) apply the receipts from the Mortgaged Property to the payment of
the Debt, after deducting therefrom all reasonable expenses (including
reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, assessments,
insurance and Other Charges in connection with the Mortgaged Property,
as well as just and reasonable compensation for the services of
Mortgagee, its counsel, agents and employees; or
(ix) pursue such other rights and remedies as may be available
at law and in equity.
In the event of a sale, by foreclosure or otherwise, of less than all
of the Mortgaged Property, this Mortgage shall continue as a lien on the
remaining portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its discretion shall deem proper.
(c) To the extent permitted by applicable law, Mortgagee may
adjourn from time to time any sale by it to be made under or by virtue of this
Mortgage by announcement at the time and place appointed for such sale or for
such adjourned sale or sales; and, except as otherwise provided by any
applicable provision of law, Mortgagee, without further notice or publication,
may make such sale at the time and place to which the same shall be so
adjourned.
(d) Upon the completion of any sale or sales made by Mortgagee
under or by virtue of this paragraph, Mortgagee, or an officer of any court
empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 19
sufficient instrument, or good and sufficient instruments, conveying, assigning
and transferring all estate, right, title and interest in and to the property
and rights sold. Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Mortgaged Property and rights so
sold and for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, Mortgagor hereby ratifying and confirming all that its said attorney
or such substitute or substitutes shall lawfully do by virtue hereof. Any such
sale or sales made under or by virtue of this paragraph shall operate to divest
all the estate, right, title, interest, claim and demand whatsoever, whether at
law or in equity, of Mortgagor in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against Mortgagor and against
any and all persons claiming or who may claim the same, or any part thereof
from, through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers, and remedies of Mortgagee shall continue unimpaired as before.
27. REASONABLE USE AND OCCUPANCY. In addition to the rights which
Mortgagee may have herein, upon the occurrence of any Event of Default,
Mortgagee, at its option, may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be occupied by Mortgagor or may require Mortgagor to vacate and
surrender possession of the Mortgaged Property to Mortgagee or to such receiver
and, in default thereof, Mortgagor may be evicted by summary proceedings or
otherwise.
28. SECURITY AGREEMENT. This Mortgage is both a real property
mortgage and a "security agreement" within the meaning of the Uniform Commercial
Code. The Mortgaged Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Mortgagor in the Mortgaged Property. Mortgagor by executing and delivering this
Mortgage has granted and hereby grants to Mortgagee, as security for the Debt, a
security interest in the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the Uniform Commercial Code. If an Event of
Default shall occur, Mortgagee, in addition to any other rights and remedies
which it may have, shall have and may exercise immediately and without demand,
any and all rights and remedies granted to a secured party upon default under
the Uniform Commercial Code, including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Mortgagee may deem necessary for the care,
protection and preservation of the Collateral. Upon the request or demand of
Mortgagee, Mortgagor shall at its expense assemble the
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 20
Collateral and make it available to Mortgagee at a convenient place acceptable
to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses,
including legal expenses and reasonable attorneys' fees, incurred or paid by
Mortgagee in protecting the interest in the Collateral and in enforcing the
rights hereunder with respect to the Collateral. Any notice of sale, disposition
or other intended action by Mortgagee with respect to the Collateral sent to
Mortgagor in accordance with the provisions hereof at least ten (10) days prior
to such action, shall constitute commercially reasonable notice to Mortgagor.
The proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Mortgagee to the payment of the Debt in such priority and proportions
as Mortgagee in its discretion shall deem proper.
This Mortgage shall also constitute as "fixture filing" for the
purposes of the Uniform Commercial Code against all of the Mortgaged Property
which is or is to become fixtures. Information concerning the security interest
herein granted may be obtained at the address of Debtor (Mortgagor) and Secured
Party (Mortgagee) as set forth in the first paragraph of this Mortgage.
29. ACTIONS AND PROCEEDINGS. Mortgagee has the right to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, decides should be brought to
protect their interest in the Mortgaged Property. Mortgagee shall, at its
option, be subrogated to the lien of any mortgage or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.
30. WAIVER OF COUNTERCLAIM. Mortgagor hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Mortgagee.
31. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Mortgagee thereafter to bring an action of foreclosure, or any other action,
for a default or defaults by Mortgagor existing at the time such earlier action
was commenced.
32. MARSHALLING AND OTHER MATTERS. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor, to the
extent permitted by law, hereby expressly waives any and all rights of
redemption from sale under any order, or decree of foreclosure of this Mortgage
on behalf of Mortgagor, and on behalf of each and every person acquiring any
interest in or title to the Mortgaged Property subsequent to the date of this
Mortgage and on behalf of all persons to the extent permitted by applicable law.
33. HAZARDOUS WASTE AND ASBESTOS. Mortgagor hereby represents and
warrants to Mortgagee that to the best of Mortgagor's knowledge after diligent
inquiry: (a) the Mortgaged Property is not in direct or indirect violation of
any local, state, federal or other governmental
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 21
authority, statute, ordinance, code, order, decree, law, rule or regulation
pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), the Resource Conservation and Recovery Act, as
amended ("RCRA"), and any state super-lien and environmental clean-up statutes
(collectively, "ENVIRONMENTAL LAWS"); (b) the Mortgaged Property is not subject
to any private or governmental lien or judicial or administrative notice or
action relating to hazardous and/or toxic, dangerous and/or regulated,
substances, wastes, materials, pollutants or contaminants, petroleum, tremolite,
anthlophylie or actinolite or polychlorinated biphenyls (including, without
limitation, any raw materials which include hazardous constituents) and any
other substances or materials which are included under or regulated by
Environmental Laws (collectively, "HAZARDOUS MATERIALS"); (c) no Hazardous
Materials are or have been, prior to Mortgagor's acquisition of the Mortgaged
Property, discharged, generated, treated, disposed of or stored on, incorporated
in, or removed or transported from the Mortgaged Property otherwise than in
compliance with all Environmental Laws; and (d) there is no asbestos present in,
and no underground storage tanks exist on, any of the Mortgaged Property. So
long as Mortgagor owns or is in possession of the Mortgaged Property, Mortgagor
shall keep or cause the Mortgaged Property to be kept free from Hazardous
Materials and in compliance with all Environmental Laws and shall promptly
notify Mortgagee if Mortgagor shall become aware of any Hazardous Materials on
the Mortgaged Property and/or if Mortgagor shall become aware that the Mortgaged
Property is in direct or indirect violation of any Environmental Laws, and
Mortgagor shall remove such Hazardous Materials and/or cure such violations, as
applicable, as required by law, promptly after Mortgagor becomes aware of same,
at Mortgagor's sole expense. Nothing herein shall prevent Mortgagor from
recovering such expenses from any other party that may be liable for such
removal or cure. Upon Mortgagee's reasonable request, at any time and from time
to time while this Mortgage is in effect, but not more frequently than once per
calendar year, unless Mortgagee has determined that reasonable cause exists for
the performance of additional environmental inspections or audits of the
Mortgaged Property, Mortgagor shall provide, at Mortgagor's expense, an
inspection or audit of the Mortgaged Property prepared by a licensed
hydrogeologist or licensed environmental engineer approved by Mortgagee
indicating the presence or absence of Hazardous Materials on the Mortgaged
Property. If Mortgagor fails to provide such inspection or audit within thirty
(30) days after such request, Mortgagee may order same, and Mortgagor hereby
grants to Mortgagee and its employees and agents access to the Mortgaged
Property and a license to undertake such inspection or audit. The obligations
and liabilities of Mortgagor under this paragraph 33 shall survive any
termination, satisfaction, or assignment of this Mortgage, any Transfer and/or
any exercise by Mortgagee of any of its rights or remedies hereunder, including
but not limited to, the acquisition of the Mortgaged Property by foreclosure or
a conveyance in lieu of foreclosure.
34. HANDICAPPED ACCESS.
(a) Mortgagor agrees that the Mortgaged Property shall at all
times comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, all state and local laws and ordinances related
to handicapped access and all rules, regulations, and orders issued pursuant
thereto, including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Building and Facilities (collectively, "ACCESS
LAWS").
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 22
(b) Mortgagor agrees to give prompt notice to Mortgagee of the
receipt by Mortgagor of any complaints related to violations of any Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
35. INDEMNIFICATION. In addition to any other indemnifications
provided herein or in the Loan Agreement or the other Loan Documents, Mortgagor
shall protect, defend, indemnify and save harmless Mortgagee from and against
all liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted
against Mortgagee, INCLUDING THOSE CAUSED BY OR RESULTING FROM MORTGAGEE'S
ORDINARY NEGLIGENCE, except to the extent resulting from Mortgagee's gross
negligence or willful misconduct, by reason of (a) ownership of this Mortgage or
the Mortgaged Property or any interest therein; (b) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Mortgaged Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (c) any use,
nonuse or condition in, on or about the Mortgaged Property or any part thereof
or on adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (d) any failure on the part of Mortgagor to perform or comply
with any of the terms of this Mortgage; (e) performance of any labor or services
or the furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof; (f) the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release of any
Hazardous Materials on, from, or affecting the Mortgaged Property or any other
property; (g) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Materials; (h)
any lawsuit brought or threatened, settlement reached, or government order
relating to such Hazardous Materials; (i) any violation of the Environmental
Laws, which are based upon or in any way related to such Hazardous Materials
including, without limitation, the costs and expenses of any remedial action,
attorney and consultant fees, investigation and laboratory fees, court costs and
litigation expenses; and (j) any failure of the Mortgaged Property to comply
with any Access Laws. Any amounts payable to Mortgagee by reason of the
application of this paragraph 35 shall be secured by this Mortgage and shall
become immediately due and payable and shall bear interest at the Default Rate
from the date any payment is made by Mortgagee hereunder until such payment is
reimbursed by Mortgagor. The obligations and liabilities of Mortgagor under this
paragraph 35 shall survive any termination, satisfaction or assignment of this
Mortgage, any Transfer and/or any exercise by Mortgagee of any of its rights and
remedies hereunder, including but not limited to, the acquisition of the
Mortgaged Property by foreclosure or a conveyance in lieu of foreclosure.
36. NOTICES. Any notice, demand, statement, request or consent
made hereunder shall be in writing to the other party hereto at its address set
forth below or at such other address as such party may designate by notice to
the other party hereto and shall be deemed given (i) on receipt, if mailed, by
certified or registered U.S. mail, return receipt requested, postage prepaid;
(ii) on receipt, if delivered, fee prepaid, to a national overnight delivery
service (such as Federal Express, Purolator Courier, U.P.S. Next Day Air); or
(iii) when delivered, if delivered by hand, as evidenced by a signed receipt:
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 23
To Mortgagor:
ACS Acquisition Corp.
0000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: _________________
Telephone: 954-796-333i
To Mortgagee:
Guaranty Business Credit Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: ACS Loan Officer
Telephone: 214-360.3424
Refusal to accept delivery of any notice shall be deemed to be receipt of such
notice.
37. AUTHORITY. (a) Mortgagor (and the undersigned representative
of Mortgagor) has full power, authority and right to execute, deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, pledge, hypothecate and assign
the Mortgaged Property pursuant to the terms hereof and to keep and observe all
of the terms of this Mortgage on Mortgagor's part to be performed and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
38. WAIVER OF NOTICE. Mortgagor shall not be entitled to any
notices of any nature whatsoever from Mortgagee except with respect to matters
for which this Mortgage specifically and expressly provides for the giving of
notice by Mortgagee to Mortgagor and except with respect to matters for which
Mortgagee is required by applicable law to give notice, and Mortgagor hereby
expressly waives the right to receive any notice from Mortgagee with respect to
any matter for which this Mortgage does not specifically and expressly provide
for the giving of notice by Mortgagee to Mortgagor.
39. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
40. NON-WAIVER. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 25
any of the provisions hereof or of the Loan Agreement or the other Loan
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Mortgaged Property, or of any Person liable for the Debt or any
portion thereof, or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise modifying or supplementing the terms of the Loan
Agreement, this Mortgage or the other Loan Documents. Mortgagee may resort for
the payment of the Debt to any other security held by Mortgagee in such order
and manner as Mortgagee, in its discretion, may elect. Mortgagee may take action
to recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Mortgagee thereafter to foreclose this
Mortgage. The rights and remedies of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Mortgagee shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
41. NO ORAL CHANGE. This Mortgage, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor or Mortgagee,
but only by an agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
42. SECTION 254 OF REAL PROPERTY LAW. All covenants hereof, other
than those included in the New York statutory form of mortgage, shall be
construed as affording to Mortgagee rights additional to, and not exclusive of,
the rights conferred under the provisions of Section 254 of the Real Property
Law of the State of New York.
43. COMMERCIAL PROPERTY. Mortgagor represents that this Mortgage
does not encumber real property principally improved or to be improved by one or
more structures containing in the aggregate not more than six residential
dwelling units, each having its own separate cooking facilities.
44. MAXIMUM PRINCIPAL INDEBTEDNESS. Notwithstanding anything to
the contrary contained herein, the maximum amount of principal indebtedness
secured by the Mortgage or which under any contingency may be secured by this
Mortgage is $1,774,500.00.
45. SECTION 291-F AGREEMENT. This Mortgage is intended to be, and
shall operate as, the agreement described in Section 291-f of the Real Property
Law of the State of New York, and shall be entitled to the benefits afforded
thereby. Mortgagor shall (unless such notice is contained in such tenant's
Lease) deliver notice of this Mortgage in form and substance acceptable to
Mortgagee, to all present and future holders of any interest in any Lease, by
assignment or otherwise, and shall taken such other action as may now or
hereafter be reasonably required to afford Mortgagee the full protections and
benefits of Section 291-f. Mortgagor shall request the recipient of any such
notice to acknowledge the receipt thereof.
46. SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon
and inure to the benefit of Mortgagor and Mortgagee and their respective heirs,
personal representatives, successors and assigns forever.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 25
47. INAPPLICABLE PROVISIONS. If any term, covenant or condition of
the Loan Agreement or this Mortgage is held to be invalid, illegal or
unenforceable in any respect, the Loan Agreement and this Mortgage shall be
construed without such provision.
48. HEADINGS, ETC. The headings and captions of various paragraphs
of this Mortgage are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
49. GOVERNING LAW. This Mortgage shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflict of laws.
50. DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage may be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or any interest therein," the word
"Mortgagee" shall mean "Mortgagee and any subsequent holder of the Loan
Agreement," the word "Loan Agreement" shall mean "the Loan Agreement and an
other evidence of indebtedness secured by this Mortgage," the word "person"
shall include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, and the
words "Mortgaged Property" shall include any portion of the Mortgaged Property
and any interest therein. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms and
the singular form of nouns and pronouns shall include the plural and vice versa.
51. WAIVER OF TRIAL BY JURY. MORTGAGOR AND MORTGAGEE HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN EVIDENCED BY THE
LOAN AGREEMENT OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE LOAN
AGREEMENT, THIS MORTGAGE, OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF
MORTGAGOR OR MORTGAGEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE'S
MAKING OF THE LOAN SECURED BY THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS.
52. ASSIGNMENT. Mortgagee shall have the right, exercisable at any
time and from time to time, to sell, transfer or assign the Mortgage and the
other Loan Documents, or grant participations therein, or issue certificates or
securities evidencing a beneficial interest therein in a rated or unrated public
offering or private placement, and Mortgagee may forward to any purchaser,
transferee, assignee, servicer, participant, investor or credit rating agency
rating such securities (collectively, an "INVESTOR" or prospective Investor all
documents and information in Mortgagee's possession with respect to Mortgagor,
the Mortgaged Property and the Loan Documents as such Investor or prospective
Investor may request.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 26
53. CONFLICTING PROVISIONS. To the extent any provision
(including, without limitation, any covenant, default, or event of default) in
this Mortgage conflicts with any provision in the Loan Agreement, the provisions
that is more restrictive on Mortgagor shall prevail.
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, intending to
be legally bound, the day and year first above written.
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: President / CEO
---------------------------------
GUARANTY BUSINESS CREDIT
CORPORATION, doing business as Fidelity
Funding
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: President
---------------------------------
STATE OF FLORIDA
COUNTY OF BROWARD
On the 10th day of March, 2000, before me personally came Xxxxxx X.
Xxxxxx to me known to be the individual who executed the foregoing instrument
and, who, being duly sworn by me, did depose and say that he is the President /
CEO of ACS ACQUISITION CORP., a New York corporation and that he executed the
foregoing instrument in the name of ACS ACQUISITION CORP. and that he had
authority to sign the same, and acknowledged that he executed the same as the
act and deed of said corporation.
XXXXXX X. XXXXXXXXX
COMMISSION # CC592402 /s/ XXXXXX X. XXXXXXXXX
[SEAL] EXPIRES OCT. 10, 2000 -----------------------------
BONDED THROUGH Notary Public
ATLANTIC BONDING CO., INC.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 00
XXXXX XX XXXXX
XXXXXX XX XXXXXX
Xx the 14th day of March, 2000, before me personally came Xxxxxxx X.
Xxxxxx to me known to be the individual who executed the foregoing instrument
and, who, being duly sworn by me, did depose and say that he is the President /
CEO of GUARANTY BUSINESS CREDIT CORPORATION, doing business as Fidelity Funding,
a Delaware corporation and that he executed the foregoing instrument in the name
of GUARANTY BUSINESS CREDIT CORPORATION, doing business as Fidelity Funding and
that he had authority to sign the same, and acknowledged that he executed the
same as the act and deed of said corporation.
XXXXXXXXX X. XXXXXXXXX /s/ XXXXXXXXX X. XXXXXXXXX
[SEAL] NOTARY PUBLIC --------------------------------
STATE OF TEXAS Notary Public
COMM. EXP. 07-30-2001
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 28
EXHIBIT A
PARCEL I
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Xxx Xx. 00, Xxxxxxxx
0, Xxxxx 0 of the Holland Land Company's Survey, bounded and described as
follows:
Beginning at a point in the center of the Hardpan Road at its
intersection with the southeasterly boundary of the right of way of the
Pennsylvania Railroad (as now laid out); running thence southerly along the
center line of the Hardpan Road a distance of 243.08 feet more or less to a
point 180 feet southeasterly from the southeasterly bounds of said railroad
(measured at right angles therefrom); thence southwesterly and parallel with the
southeasterly boundary of said railroad and 180 feet southeasterly therefrom a
distance of 601.23 feet more or less to the southerly boundary of lands conveyed
to Xxxxx X. Xxxxxx by deed recorded in Erie County Clerk's Office in Liber 1960
of Deeds at page 184; thence westerly along the southerly boundary of said Xxxxx
X. Xxxxxx'x land a distance of 265.13 feet more or less to the southeasterly
boundary of said Pennsylvania Railroad right of way; thence northeasterly and
along the southeasterly boundary of said railroad a distance of 959.26 feet more
or less to the center line of said Hardpan Road at the point or place of
beginning.
Said Parcel I contains 5.2 acres more or less.
PARCEL II
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Xxx Xx. 00, Xxxxxxxx
0 and Range 9 of the Holland Land Company's Survey, beginning at a point in the
center line of Hardpan Road 430.16 feet southerly from the southeast xxxxx of
lands conveyed to Xxxxx Engineering Inc., measured along the center line of
Hardpan Road, by deed recorded in Liber 2174 of Deeds at page 528;
THENCE westerly along a line parallel with the north fine of
Xxx Xx. 00, Xxxxxxxx 0 and Range 9, 447.7 feet;
THENCE on an angle northeasterly along the southerly bounds of
lands so conveyed to the Xxxxx Engineering Inc., by deed recorded in Liber 2174
of Deeds at page 528, 606 feet to a point in the center line of Hardpan Road
430.16 feet north of the point of beginning.
THENCE southerly 430.16 feet to the point of beginning.
Said Parcel II contains 3.0 acres more or less.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 29
PARCEL III
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of
Xxxxx, County of Erie and State of New York, being part of Lots Nos. 63 and 54,
Township 8 and Range 9 of the Holland Land Company's Survey, and more
particularly bounded and described as follows:
BEGINNING at the point of intersection of the westerly line of
said Farm Lot 54 with the center line of that portion of Hardpan Road (now
abandoned) which runs east and west, said point of beginning being about 1102.43
feet southerly from the northwesterly corner of said Farm Lot 54; running thence
easterly along said center line of Hardpan Road 1146.74 feet; thence southerly
along a line forming a southwesterly angle of 89(degree) 57' with the said
center line of Hardpan Road 3083.16 feet to the southerly line of said Farm Lot
54; thence westerly along the southerly line of said Farm Lot 54 and the center
line of Holland Road, which is also the southerly line of said Farm Lot 63,
1434. 11 feet to the point of intersection of the extension southerly of the
center line of that portion of Hardpan Road which runs north and south with the
southerly line of said Farm Lot 63, being at a point in the southerly line of
said Farm Lot 63, which is about 277.19 feet westerly from the southeasterly
xxxxx of said Farm Lot 63; thence northerly along the center line of that
portion of Hardpan Road which runs northerly and southerly and which is now
abandoned, and along the center line of Hardpan Road as now constituted and
used, and its extension northerly (now abandoned) 3069.77 feet to its
intersection with the center line of that portion of Hardpan Road (now
abandoned) which runs east and west; thence easterly along said center line of
Hardpan Road 261.69 feet to the westerly line of Farm Lot 54 to the point or
place of beginning.
EXCEPTING AND RESERVING therefrom the premises conveyed in a
certain deed from Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx, co-executrices etc. to
the Western New York and Pennsylvania Railroad Company, dated December 17, 1891
and duty recorded in Erie County Clerk's Office, December 28, 1891 in Liber 627
of Deeds at page 590;
EXCEPTING AND RESERVING also therefrom the premises conveyed
in a certain deed from Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx, individually and
as executrices, etc. to the New York, Chicago and St. Louis Railroad Company,
dated January 15, 1892 and duly recorded in Erie County Clerk's Office, June 30,
1892 in Liber 666 of Deeds at page 252; and
EXCEPTING AND RESERVING also therefrom the premises conveyed
by a certain deed from Xxxxxx X. Xxxxxxx and wife to one, Xxxxxx X. Xxxxxxxxx,
dated April 4, 1914 and duly recorded in the Erie County Clerk's Office, July
17, 1914 in Liber 1256 of Deeds at page 396; and
EXCEPTING AND RESERVING also therefrom a parcel of land
described as follows:
Beginning at a point in the center line of Xxxxxx Road, now
called Hardpan Road, where it is intersected by the easterly line of the parcel
first above described; thence westerly along the center fine of said Xxxxxx Xxxx
000 feet; thence south parallel to the east line of Xxxxx Xxxxxx farm 1500 feet;
thence easterly parallel to the center line of Xxxxxx Xxxx 000 feet to the east
line of said farm; and thence north on said east line 1500 feet to the place of
beginning.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 30
Said Parcel III contains 72.6 acres more or less.
Together with all right, title and interest of Mortgagor in
and to any streets and roads abutting the above described premises.
Amended and Restated Mortgage, Security Agreement,
and Assignment of Leases and Rents - Page 31
AMENDED AND RESTATED GENERAL CONTINUING GUARANTY
OF
AQUA CARE SYSTEMS, INC.
In order to induce Guaranty Business Credit Corporation d/b/a Fidelity
Funding ("GBCC"), a Delaware corporation, to extend and/or to continue to extend
financial accommodations to ACS Acquisition Corp., a New York corporation (the
"COMPANY") pursuant to the terms and conditions of that certain Amended and
Restated Loan and Security Agreement (as the same may be amended, restated,
extended, supplemented, or otherwise modified from time to time, the
"AGREEMENT"), of even date herewith, between GBCC and the Company or pursuant to
any other present or future agreement between GBCC and the Company, and in
consideration of any loans, advances, or financial accommodations heretofore or
hereafter granted by GBCC to or for the account of the Company, whether pursuant
to the Agreement or otherwise, the undersigned ("GUARANTOR"), the owner of 100%
of the outstanding capital stock of the Company, hereby guarantees, promises and
undertakes as follows:
1. GUARANTY OF OBLIGATIONS. Guarantor unconditionally, absolutely and
irrevocably guarantees and promises to pay to GBCC, on order or demand,
in lawful money of the United States, any and all indebtedness,
liabilities and obligations of the Company to GBCC whether under the
Agreement or otherwise (collectively, the "OBLIGATIONS"). Without
limiting the generality of the foregoing, Guarantor further agrees to
pay to GBCC all post-petition interest, expenses and other duties and
liabilities of the Company which would be owed by the Company but for
the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding
involving the Company. The Obligations shall include any and all
advances, debts, obligations and liabilities of the Company,
heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, however arising (including, without
limitation, indebtedness owing by the Company to GBCC under the
Agreement, indebtedness owing by the Company to third parties who have
granted GBCC a security interest in the accounts, chattel paper and
general intangibles of said third party, and any and all attorneys'
fees, expenses, costs, premiums, charges and interest owed by the
Company to GBCC, whether under the Agreement, or otherwise), whether
due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether the Company may be liable
individually or jointly with others, whether recovery upon such
indebtedness may be or hereafter becomes barred by any statute of
limitations or whether such indebtedness may be or hereafter becomes
otherwise unenforceable, and also shall include the Company's prompt,
full and faithful performance, observance and discharge of each and
every term, condition, agreement, representation, warranty undertaking
and provision to be performed by the Company under the Agreement.
2. CONTINUING GUARANTY. This guaranty (the "GUARANTY") is a continuing
guaranty and shall remain effective until it has been expressly
terminated pursuant to SECTION 14, provided, however, that, by sending
written notice (by certified mail, return receipt requested) to GBCC,
Guarantor may terminate this Guaranty as to (and only as to)
Obligations of the Company under transactions having their inception
after the effective date (the "EFFECTIVE TERMINATION DATE") specified
in such written notice, which shall be at least 90 days after GBCC's
receipt of such written notice. No such termination shall affect any
rights or obligations arising out of transactions having their
inception prior to the Effective Termination Date, including, without
limitation, any loans or advances made, or any credit granted, to the
Company after GBCC's receipt thereof pursuant to any agreement,
commitment or obligation, including, without limitation, the Agreement,
made or entered into by GBCC prior to the Effective Termination Date.
3. RIGHTS ARE INDEPENDENT. Guarantor agrees that it is directly and
primarily liable to GBCC, that the obligations of Guarantor hereunder
are independent of the obligations of the Company and that a separate
action or actions may be brought and prosecuted against Guarantor,
whether action is brought against the Company or whether the Company is
joined in any such action or actions. Guarantor agrees that any
releases which may be given by GBCC to the Company or any other
guarantor or endorser of all or any part of the Obligations shall not
release it from this Guaranty.
4. DEFAULT. In the event that any bankruptcy, insolvency, receivership or
similar proceeding is instituted by or
1
against Guarantor and/or the Company or in the event that either
Guarantor or the Company becomes insolvent, makes an assignment for the
benefit of creditors or attempts to effect a composition with
creditors, or if there be any default under the Agreement (whether
declared or not), then, at GBCC's election, without notice or demand,
the obligations of Guarantor created hereunder shall become due,
payable and enforceable against Guarantor whether or not the
Obligations are then due and payable and whether or not the Obligations
are enforceable against the Company.
5. INDEMNIFICATION. Guarantor agrees to indemnify, defend and hold GBCC
harmless from and against any and all obligations, demands and
liabilities, by whomsoever asserted and against all losses in any way
suffered, incurred or paid by GBCC as a result of or in any way arising
out of, following or consequential to transactions with the Company,
whether under the Agreement or otherwise, and also agrees that this
indemnification shall not be impaired by any modification, supplement,
extension or amendment of any contract or agreement to which GBCC and
the Company may hereafter agree, or by any agreements or arrangements
whatever with the Company or anyone else. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR
TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF
STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY GBCC, provided only that GBCC shall not
be entitled under this section to receive indemnification for that
portion, if any, of any liabilities and costs proximately caused by its
own individual gross negligence or willful misconduct.
6. CONSENT TO MODIFICATIONS. Guarantor hereby authorizes GBCC, without
notice or demand and without affecting its liability hereunder, from
time to time to: (a) renew, compromise, forbear, extend, accelerate or
otherwise change the time for payment or the terms of any of the
Obligations, or any part thereof, including, without limitation,
increasing or decreasing the rate of interest thereof or the amount of
indebtedness thereunder; (b) take and hold security, guaranties, or
other assurances of payment for the payment of the Obligations
guaranteed hereby, and exchange, enforce, waive and release any such
security; (c) apply such security and direct the order or manner of
sale thereof as GBCC in its discretion may determine; (d) release or
substitute any one or more endorsers or guarantors of all or any part
of the Obligations; and (e) assign, without notice, this Guaranty in
whole or in part and GBCC's rights hereunder to anyone at any time.
Guarantor agrees that GBCC may do any or all of the foregoing in such
manner, upon such terms, and at such times as GBCC, in its discretion,
deems advisable, without, in any way or respect, impairing, effecting,
reducing or releasing Guarantor from its undertakings hereunder, and
Guarantor hereby consents to each and all of the foregoing acts, events
and occurrences.
7. NO DUTY TO PURSUE OTHERS. It shall not be necessary for GBCC (and
Guarantor hereby waives any rights which Guarantor may have to require
GBCC), in order to enforce such payment to Guarantor, first to (i)
institute suit or exhaust its remedies against the Company or others
liable on the Obligations or any other person, (ii) enforce GBCC's
rights against any security which shall ever have been given to secure
the Obligations, (iii) enforce GBCC's rights against any other
guarantors of the Obligations, (iv) join the Company or any others
liable on the Obligations in any action seeking to enforce this
Guaranty, (v) exhaust any remedies available to GBCC against any
security which shall ever have been given to secure the Obligations, or
(vi) resort to any other means of obtaining payment of the Obligations.
GBCC shall not be required to mitigate damages or take any other action
to reduce, collect or enforce the Obligations.
8. WAIVER OF NOTICES, ETC. Guarantor agrees to the provisions of the
Agreement, and hereby waives notice of (i) any loans or advances made
by GBCC to the Company, (ii) acceptance of this Guaranty, (iii) any
amendment or extension of the Agreement or of any other Obligations,
(iv) the execution and delivery by the Company and GBCC of any other
loan or credit agreement or of the Company's execution and delivery of
any promissory notes or other documents in connection therewith, (v)
the occurrence of any breach by the Company or Event of Default (as
defined in the Agreement and collateral documents thereto), (vi) GBCC's
transfer or disposition of the Obligations, or any part thereof, (vii)
sale or foreclosure (or posting
2
or advertising for sale or foreclosure) of any collateral for the
Obligations, (viii) protest, proof of non-payment or default by the
Company, or (ix) any other action at any time taken or omitted by GBCC,
and, generally, all demands and notices of every kind in connection
with this Guaranty, the Agreement, any documents or agreements
evidencing, securing or relating to any of the Obligations and the
obligations hereby guaranteed.
9. CONTINUATION OF GUARANTY. Guarantor hereby consents and agrees to each
of the following, and agrees that Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced or
adversely affected by any of the following, and waives any common law,
equitable, statutory or other rights (including without limitation
rights to notice) which Guarantor might otherwise have as a result of
or in connection with any of the following:
(a) the invalidity, illegality or unenforceability of all or any part
of the Obligations, or any document or agreement executed in connection
with the Obligations, for any reason whatsoever, including without
limitation the fact that (i) the Obligations, or any part thereof,
exceeds the amount permitted by law, (ii) the act of creating the
Obligations or any part thereof is ULTRA XXXXX, (iii) the officers or
representatives executing the Agreement or other documents or otherwise
creating the Obligations acted in excess of their authority, (iv) the
Obligations violates applicable usury laws, (v) the Company has valid
defenses, claims or offsets (whether at law, in equity or by agreement)
which render the Obligations wholly or partially uncollectible from the
Company, (vi) the creation, performance or repayment of the Obligations
(or the execution, delivery and performance of any document or
instrument representing part of the Obligations or executed in
connection with the Obligations, or given to secure the repayment of
the Obligations) is illegal, uncollectible or unenforceable, or (vii)
the Agreement or other documents or instruments pertaining to the
Obligations have been forged or otherwise are irregular or not genuine
or authentic;
(b) any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment (including without limitation negligent,
willful, unreasonable or unjustifiable impairment) of any collateral,
property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(c) the failure of GBCC or any other party to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or
other handling or treatment of all or any part of such collateral,
property or security;
(d) the fact that any collateral, security, security interest or lien
contemplated or intended to be given, created or granted as security
for the repayment of the Obligations shall not be properly perfected or
created, or shall prove to be unenforceable or subordinate to any other
security interest or lien, it being recognized and agreed by Guarantor
that Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral for the Obligations;
(e) (i) the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the Company or any other party at any time liable for the payment of
all or part of the Obligations; (ii) any dissolution of the Company, or
any sale, lease or transfer of any or all of the assets of the Company
or Guarantor, or any change in the shareholders, partners or members of
the Company, or (iii) any reorganization, merger or consolidation of
the Company into or with any other corporation or entity;
(f) any payment by the Company to GBCC is held to constitute a
preference under bankruptcy laws, or for any reason GBCC is required to
refund such payment or pay such amount to the Company or someone else;
or
(g) any other action taken or omitted to be taken with respect to the
Agreement, the Obligations, or the security and collateral therefore,
whether or not such action or omission prejudices Guarantor or
3
increases the likelihood that Guarantor will be required to pay the
Obligations pursuant to the terms hereof; it is the unambiguous and
unequivocal intention of Guarantor that Guarantor shall be obligated to
pay the Obligations when due, notwithstanding any occurrence,
circumstance, event, action or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or
particularly described herein, except for the full and final payment
and satisfaction of the Obligations.
10. WAIVER OF DEFENSES. Guarantor hereby waives any right to assert against
GBCC as a defense, counterclaim, set-off or cross-claim, any defense
(legal or equitable), set-off, counterclaim or cross-claim which
Guarantor may now or any time hereafter have against the Company and
any other party liable to GBCC in any way or manner. Guarantor hereby
waives all defenses, counterclaims and off-sets of any kind or nature,
arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity or enforceability of the Agreement or
any security interest thereunder or any Transaction Document (as
defined in the Agreement).
Guarantor hereby waives any defense arising by reason of any claim or
defense based upon an election of remedies by GBCC, which, in any
manner impairs, affects, reduces, releases, destroys or extinguishes
Guarantor's subrogation rights, rights to proceed against the Company
for reimbursement, or any other rights of Guarantor to proceed against
the Company or against any other rights of Guarantor or against any
other person or security. Guarantor waives all presentments, demands
for performance, notices of non-performance, protests, notices of
protests, notices of dishonor, notices of default, notice of acceptance
of this Guaranty, and notices of the existence, creating or incurring
of new or additional indebtedness, and all other notices or formalities
to which Guarantor may be entitled.
As a condition to payment or performance by Guarantor under this
Guaranty, GBCC shall not be required to, and Guarantor hereby waives
any and all rights to require GBCC to prosecute or seek to enforce any
remedies against the Company or any other party liable to GBCC on
account of the Obligations or to require GBCC to seek to enforce or
resort to any remedies with respect to any security interests, liens or
encumbrances granted to GBCC by the Company or any other party on
account of the Obligations.
All monies or other property of Guarantor at any time in GBCC's
possession may be held by GBCC as security for any and all obligations
of Guarantor to GBCC no matter now existing or hereafter arising,
whether absolute or contingent, whether due or to become due, and
whether under this Guaranty or otherwise, Guarantor also agrees that
GBCC's books and records showing the account between GBCC and the
Company shall be admissible in any action or proceeding and shall be
binding upon Guarantor for the purpose of establishing the terms set
forth therein and shall constitute prima facie proof thereof.
11. NO SUBROGATION. Insofar as Guarantor and Company are concerned, any
payment hereunder by Guarantor shall be deemed a contribution to the
capital of Company, and Guarantor shall have no right of subrogation
with respect hereto (including without limitation any right of
subrogation under /section/ 34.04 of the Texas Business and Commerce
Code). Guarantor hereby waives any rights to enforce any rights of
subrogation, contribution, reimbursement, indemnification, exoneration
and any other remedy which Guarantor may have against Company or any
other person with respect to this Guaranty, the Obligations, or
applicable law. Guarantor hereby irrevocably agrees, to the fullest
extent permitted by law, that it will not exercise (and herein waives)
any rights against Company or any other person which it may acquire by
way of subrogation, contribution, reimbursement, indemnification or
exoneration under or with respect to this Guaranty, the Obligations or
applicable law, by any payment made hereunder or otherwise. If the
foregoing waivers are adjudicated unenforceable by a court of competent
jurisdiction, then Guarantor agrees that no liability or obligation of
Company that shall accrue by virtue of any right to subrogation,
contribution, indemnity, reimbursement or exoneration shall be paid,
nor shall any such liability or obligation be deemed owed, until all of
the Obligations shall have been paid in full.
12. SUBORDINATION. Guarantor hereby subordinates any and all indebtedness
of the Company to Guarantor to the full and prompt payment and
performance of all of the Obligations. Guarantor agrees that GBCC shall
be entitled to receive payment of all Obligations prior to Guarantor's
receipt of payment of any amount of any indebtedness of the Company to
Guarantor. Any payments on such indebtedness to Guarantor, if GBCC so
4
requests, shall be collected, enforced and received by Guarantor, in
trust, as trustee for GBCC and shall be paid over to GBCC on account of
the Obligations, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty.
GBCC is authorized and empowered, but not obligated, in its discretion,
(a) in the name of Guarantor, to collect and enforce, and to submit
claims in respect of, any indebtedness of the Company to Guarantor and
to apply any amounts received thereon to the Obligations, and (b) to
require Guarantor (i) to collect and enforce, and to submit claims in
respect of, any indebtedness of Company to Guarantor and (ii) to pay
any amounts received on such indebtedness to GBCC for application to
the Obligations.
13. FINANCIAL CONDITION OF THE COMPANY. Guarantor is presently informed of
the financial condition of the Company and of all other circumstances
which a diligent inquiry would reveal and which bear upon the risk of
nonpayment of the Obligations. Guarantor hereby covenants that it will
continue to keep itself informed of the Company's financial condition
and of all other circumstances which bear upon the risk of nonpayment.
Guarantor hereby waives its right, if any, to require GBCC to disclose
to Guarantor, and GBCC is relieved of any obligation or duty to
disclose to Guarantor, any information which GBCC may now or hereafter
acquire concerning such condition or circumstances.
14. TERMINATION. The Guarantor's obligation under this Guaranty shall
continue in full force and effect until the Company's Obligations are
fully paid, performed and discharged and GBCC gives the Guarantor
written notice of that fact. The Company's Obligations shall not be
considered fully paid, performed and discharged unless and until all
payments by the Company to GBCC are no longer subject to any right on
the part of any person whomsoever, including but not limited to, the
Company, the Company as a debtor-in-possession, or any trustee or
receiver in bankruptcy, to set aside such payments or seek to recoup
the amount of such payments, or any part thereof. The foregoing shall
include, by way of example and not by way of limitation, all rights to
recover preferences voidable under Title 11 of the United States Code.
In the event that any such payments by the Company to GBCC are set
aside after the making thereof, in whole or in part, or settled without
litigation, to the extent of such settlement, all of which is within
GBCC's discretion, Guarantor shall be liable for the full amount GBCC
is required to repay plus costs, interest, attorneys' fees and any and
all expenses which GBCC paid or incurred in connection therewith.
15. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the heirs,
executors, legal representatives, successors and assigns of the
Guarantor and shall inure to the benefit of GBCC's successors and
assigns, provided that this provision shall not be construed to permit
Guarantor to assign this Guaranty or any obligations hereunder to any
person or entity.
16. MODIFICATIONS. This Guaranty cannot be modified orally. No modification
of this Guaranty shall be effective for any purpose unless it is in
writing and executed by an officer of GBCC authorized to do so. All
prior agreements, understandings, representations and negotiations, if
any, are merged into this Guaranty.
17. ATTORNEYS' FEES. Guarantor agrees to pay all reasonable attorneys'
fees, post-judgment interest and all other costs and out-of-pocket
expenses which may be incurred by GBCC in the enforcement of this
Guaranty or in any way arising out of, following, or consequential to
the enforcement of the Company's Obligations, whether under this
Guaranty, the Agreement, or otherwise.
18. LIMITATION ON INTEREST. GBCC and Guarantor intend to contract in strict
compliance with applicable usury law from time to time in effect, and
the provisions of the Agreement limiting the interest for which
Guarantor is obligated are expressly incorporated herein by reference.
19. GOVERNING LAW. ALL ACTS AND TRANSACTIONS HEREUNDER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT
REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW. GUARANTOR
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS, AND AGREES AND
5
CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON GUARANTOR IN ANY
LEGAL PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER RELATIONSHIP
BETWEEN GBCC AND GUARANTOR BY ANY MEANS ALLOWED UNDER STATE OR FEDERAL
LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS
GUARANTY OR ANY OTHER RELATIONSHIP BETWEEN GBCC AND GUARANTOR SHALL BE
BROUGHT AND LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL
COURTS LOCATED IN DALLAS COUNTY, TEXAS, HAVING JURISDICTION. GUARANTOR
HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE
OR OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE THEREOF IS IMPROPER.
20. SECTION NUMBERS AND HEADINGS. Section numbers and section titles have
been set forth herein for convenience only; they shall not be construed
to limit or extend the meaning of any part of this Guaranty.
21. BENEFIT. Guarantor will directly benefit from GBCC's making loans to
the Company, and such benefit has a value reasonably equivalent to the
obligations and liabilities incurred hereunder. The Board of Directors
of Guarantor, acting pursuant to a duly called and constituted meeting,
after proper notice, or pursuant to a valid unanimous consent, has
determined that this Guaranty directly or indirectly benefits Guarantor
and is in the interests of Guarantor.
22. LEGALITY. The execution, delivery and performance by Guarantor of this
Guaranty and the consummation of the transactions contemplated
hereunder (i) have been duly authorized by all necessary corporate and
stockholder action of Guarantor, and (ii) do not, and will not,
contravene or conflict with any law, statute or regulation whatsoever
to which Guarantor is subject or constitute a default (or an event
which with notice or lapse of time or both would constitute a default)
under, or result in the breach of, any indenture, mortgage, deed of
trust, charge, lien, or any contract, agreement or other instrument to
which Guarantor is a party or which may be applicable to Guarantor or
any of its assets, or violate any provisions of its Certificate of
Incorporation, Bylaws or any other organizational document of
Guarantor; this Guaranty is a legal and binding obligation of Guarantor
and is enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to
the enforcement of creditors' rights.
23. ORGANIZATION AND GOOD STANDING. Guarantor (i) is, and will continue to
be, a corporation duly organized and validly existing in good standing
under the laws of the State of Delaware, and (ii) possesses all
requisite authority, power, licenses, permits and franchises necessary
to own its assets, to conduct its business and to execute and deliver
and comply with the terms of this Guaranty.
24. GUARANTOR'S FINANCIAL CONDITION. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligation evidenced
hereby, Guarantor is, and will be, solvent, and has and will have
assets which, fairly valued, exceed its obligations, liabilities and
debts, and has and will have property and assets in the State of Texas
sufficient to satisfy and repay its obligations and liabilities.
25. AMENDMENT AND RESTATEMENT. This Guaranty restates and amends each of
(i) that certain General Continuing Guaranty, dated as of June 4, 1997,
executed by Guarantor in favor of Fidelity Funding, Inc., (ii) that
certain General Continuing Guaranty, dated as of June 4, 1997, executed
by Guarantor in favor of Fidelity Funding of California, Inc. ("FFC"),
and (iii) that certain General Continuing Guaranty, dated as of June 4,
1997, executed by Guarantor in favor of FFC (as the same may have
heretofore been amended or modified, each an "ORIGINAL GUARANTY" and,
collectively, the "ORIGINAL GUARANTIES") in its entirety effective as
of the date hereof, and all of the terms and provisions hereof shall
supersede the terms and provisions of each Original Guaranty. Certain
of the Obligations guaranteed by Guarantor under the Original
Guaranties have been renewed and extended under the Agreement.
THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
6
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
EXECUTED AND AGREED as of
March 14, 2000:
"GUARANTOR": AQUA CARE SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: President / CEO
------------------------
Guarantor Address: 00000 XX 00 XXXXXX
------------------------------------
XXXXX XXXXXXX, XX 00000
------------------------------------
Guarantor Telephone Number: (000) 000-0000
------------------------------------
Guarantor Tax ID Number: 00-0000000
------------------------------------
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AMENDED AND RESTATED PATENT COLLATERAL ASSIGNMENT
THIS AMENDED AND RESTATED PATENT COLLATERAL ASSIGNMENT (this
"AGREEMENT") is made on March 14, 2000, between ACS Acquisition Corp., a New
York corporation ("COMPANY") and Guaranty Business Credit Corporation d/b/a
Fidelity Funding, a Delaware corporation ("LENDER").
RECITALS:
Company has executed and delivered to Lender a Loan and Security
Agreement, dated as of the date hereof, between Company and Lender (as the same
may be amended, restated, renewed, extended, supplemented, or otherwise modified
from time to time, the "LOAN AGREEMENT"). In order to induce Lender to execute
and deliver the Loan Agreement, Company has agreed to assign to Lender certain
patent rights as provided herein.
NOW, THEREFORE, in consideration of the premises, Company hereto agrees
with Lender as follows:
1. To secure the complete and timely satisfaction of all Obligations
(as defined in the Loan Agreement), Company hereby grants, assigns and conveys
to Lender its entire right, title and interest in and to all patents and all
applications with respect thereto, including, without limitation, those listed
or described on SCHEDULE 1 attached hereto, all rights existing with respect to
the foregoing, including any licenses, license rights or royalties, any proceeds
of infringement suits, and all rights to same for past, present and future
infringements, in each case, whether now or hereafter existing; all rights
corresponding thereto throughout the world; and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof
(collectively called the "PATENTS").
2. Company covenants and warrants that:
(a) The Patents are subsisting and have not been adjudged invalid
or unenforceable, in whole or in part;
(b) Each of the Patents is valid and enforceable and Company has
notified Lender in writing of all prior assignments thereof
(including the public uses and sales of which it is aware);
(c) Company is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the
Patents, free and clear of any liens, charges and
encumbrances, including without limitation, pledges,
assignments, licenses, shop rights and covenants by Company
not to sell to third persons; and
(d) Company has the unqualified right to enter into this Agreement
and perform its terms and has entered and will enter into
written agreements with each of its
1
present and future employees, agents and consultants which
will enable it to comply with the covenants herein contained.
Except as specifically set forth above, Company does not warrant that
the Patents might not be declared invalid if challenged in court.
3. Company agrees that, until all of the Obligations shall have been
satisfied in full, it will not enter into any agreement (for example, a license
agreement) which is inconsistent with Company's obligations under this
Agreement, without Lender's prior, written consent.
4. If, before the Obligations shall have been satisfied in full,
Company shall obtain rights to any new patentable inventions, or become entitled
to the benefit of any patent application or patent for any reissue, division,
continuation, renewal, extension, or continuation-in-part of any Patent or any
improvement on any Patent, the provisions of SECTION 1 automatically apply
thereto and Company shall give to Lender prompt notice thereof in writing
hereof.
5. Company authorizes Lender to modify this Agreement by amending
SCHEDULE 1 to include any future patents and patent applications which are
Patents under SECTION 1 or SECTION 4 hereof.
6. Unless and until there shall have occurred and be continuing an
Event of Default (as defined in the Loan Agreement), Lender hereby grants to
Company the exclusive, nontransferable right and license under the Patents to
make, have made for it, use and sell the inventions disclosed and claimed in the
Patents for Company's own benefit and account and for none other. Company agrees
not to sell or assign its interest in, or grant any sublicense under, the
license granted to Company in this SECTION 6, without the prior, written consent
of Lender.
7. If any Event of Default shall have occurred and be continuing,
Company's license under the Patents as set forth in SECTION 6 shall terminate
forthwith, and Lender shall have, in addition to all other rights and remedies
given it by this Agreement, those set forth in Loan Agreement, those allowed by
law and the rights and remedies of a secured party under the Uniform Commercial
Code as enacted in any jurisdiction in which the Patents may be located and,
without limiting the generality of the foregoing, Lender may immediately,
without demand of performance and without other notice (except as set forth next
below) or demand whatsoever to Company, all of which are hereby expressly
waived, and without advertisement, sell at public or private sale or otherwise
realize upon, the whole or from time to time any part of the Patents, or any
interest which Company may have therein, and after deducting from the proceeds
of sale or other disposition of the Patents all expense (including all
reasonable expenses for brokers' fees and legal services), shall apply the
residue of such proceeds toward the payment of the Obligations. Any remainder of
the proceeds after payment in full of the Obligations shall be paid over to
Company. Notice of any sale or other disposition of the Patents shall be given
to Company at least five (5) days before the time of any intended public or
private sale or other disposition of the Patents is to be made, which Company
hereby agrees shall be reasonable notice of such sale or other disposition. At
any such sale or other disposition, any holder of any Note or
2
Lender may, to the extent permissible under applicable law, purchase the whole
or any part of the Patents sold, free from any right of redemption on the part
of Company, which right is hereby waived and released.
8. If any Event of Default shall have occurred and be continuing,
Company hereby authorizes and empowers Lender to make, constitute and appoint
any officer or agent of Lender, as Lender may select in its exclusive
discretion, as Company's true and lawful attorney-in-fact, with the power to
endorse Company's name on all applications, documents, papers and instruments
necessary for Lender to use the Patents, or to grant or issue any exclusive or
nonexclusive license under the Patents to any third person, or necessary for
Lender to assign, pledge, convey or otherwise transfer title in or dispose of
the Patents to any third person. Company hereby ratifies all that such attorney
shall be lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable for the life of this Agreement.
9. At such time as Company shall completely satisfy all of the
Obligations, this Agreement shall terminate and Lender shall execute and deliver
to Company all deeds, assignments and other instruments as may be necessary or
proper to re-vest in Company full title to the Patents, subject to any
disposition thereof which may have been made by Lender pursuant hereto.
10. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by Lender
in connection with the consummation of this transaction, the filing or recording
of any documents (including all taxes in connection therewith) in public
offices, the payment or discharge of any taxes, counsel fees, maintenance fees,
encumbrances or otherwise protecting, maintaining or preserving the Patents, or
in defending or prosecuting any actions or proceedings arising out of or related
to the Patents, shall be borne and paid by Company on demand by Lender and until
so paid shall be added to the principal amount of the Obligations and shall bear
interest at the rate prescribed in the Loan Agreement.
11. Company shall have the duty, through counsel acceptable to Lender,
to prosecute diligently any patent applications of the Patents pending as of the
date of this Agreement or thereafter until the Obligations shall have been paid
in full, to make application on unpatented but patentable inventions and to
preserve and maintain all rights in patent applications and patents of the
Patents, including, without limitation, the payment of all maintenance fees. Any
expenses incurred in connection with such an application shall be borne by
Company. Company shall not abandon any right to file a patent application, or
any pending patent application or patent without the consent of Lender, which
consent shall not be unreasonably withheld.
12. Company shall have the right, with the consent of Lender, which
shall not be unreasonably withheld, to bring suit in its own name, and to join
Lender, if necessary, as a party to such suit so long as Lender is satisfied
that such joinder will not subject it to any risk of liability, to enforce the
Patents and any licenses thereunder. Company shall promptly, upon demand,
reimburse and indemnify Lender for all damages, costs and expenses, including
legal fees, incurred by Lender pursuant to this SECTION 12.
3
13. No course of dealing between Company and Lender, nor any failure to
exercise, nor any delay in exercising, on the part of Lender, any right, power
or privilege hereunder or under the Loan Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
14. All of Lender's rights and remedies with respect to the Patents,
whether established hereby or by the Loan Agreement, or by any other agreements
or by law shall be cumulative and may be exercised singularly or concurrently.
15. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any clause
or provision of this Agreement in any jurisdiction.
16. This Agreement is subject to modification only by a writing signed
by the parties, except as provided in SECTION 5. ---------
17. All grants, covenants and agreements contained in this Agreement
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that Company may not delegate or
assign any of its duties or obligations under this Agreement without the prior,
written consent of Lender. LENDER RESERVES THE RIGHT TO ASSIGN ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT IN WHOLE OR IN PART TO ANY PERSON OR ENTITY.
Without limiting the generality of the foregoing, Lender may from time to time
grant participations in all or any part of the obligations of Company hereunder
or the Loan Agreement to any Person on such terms and conditions as may be
determined by Lender in its sole and absolute discretion, provided that the
grant of such participation shall not relieve Lender of its obligations
hereunder nor create any additional obligation of Company.
18. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO THE RULES
THEREOF RELATING TO CONFLICTS OF LAW. COMPANY HEREBY IRREVOCABLY SUBMITS ITSELF
TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY,
TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN
ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER RELATIONSHIP
BETWEEN LENDER AND COMPANY BY ANY MEANS ALLOWED UNDER STATE OR FEDERAL LAW. ANY
LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY
OTHER RELATIONSHIP BETWEEN LENDER AND COMPANY SHALL BE BROUGHT AND LITIGATED
EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL COURTS LOCATED IN DALLAS COUNTY,
TEXAS,
4
HAVING JURISDICTION UNLESS LENDER SHALL ELECT OTHERWISE. THE PARTIES HERETO
HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE THEREOF IS IMPROPER.
19. EACH OF COMPANY AND LENDER HEREBY (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
20. All notices, requests, consents, demands and other communications
required or permitted under this Agreement shall be in writing and, unless
otherwise specifically provided in such Agreement, shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telegram or telex, by
expedited delivery service with proof of delivery, or by registered or certified
United States mail, postage prepaid, at the addresses specified below (unless
changed by similar notice in writing given by the particular party whose address
is to be changed). Any such notice or communication shall be deemed to have been
given either at the time of personal delivery or, in the case of delivery
service or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or, in the case of telegram or telex, upon
receipt.
21. This Agreement restates and amends that certain Collateral
Assignment of Patents, dated as of June 4, 1997, between Company and Lender (as
assignee of Fidelity Funding, Inc. and Fidelity Funding of California, Inc.)
(the "PRIOR AGREEMENT") in its entirety effective as of the date hereof, and all
of the terms and provisions hereof shall supersede the terms and provisions
thereof; provided that all indebtedness and obligations of the Company to Lender
under the Prior Agreement are renewed and extended hereby and all liens,
security interests, assignments, superior titles, rights, remedies, powers,
equities and priorities (the "LIENS") created by the Prior Agreement are renewed
and extended hereby and shall continue in full force and effect to secure the
Obligations. By this Agreement, the Liens are hereby ratified and confirmed as
valid, subsisting and continuing to secure the Obligations.
5
WITNESS the execution hereof as of the day and first year first above
written.
COMPANY:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Pres/CEO
LENDER:
GUARANTY BUSINESS CREDIT
CORPORATION D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X.XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
6
SCHEDULE 1
PATENTS
The following United States patents:
PATENT NO. TITLE ISSUED
---------- ----- ------
7
AMENDED AND RESTATED TRADEMARK SECURITY AGREEMENT
THIS AMENDED AND RESTATED TRADEMARK SECURITY AGREEMENT (this
"AGREEMENT") is entered into as of March 14, 2000, by and between ACS
Acquisition Corp., a New York corporation ("COMPANY"), and Guaranty Business
Credit Corporation d/b/a Fidelity Funding, a Delaware corporation ("GBCC").
Company hereby agrees with GBCC as follows:
1. DEFINED TERMS. Terms used but not otherwise defined herein shall
have the meanings assigned thereto in that certain Amended and Restated Loan and
Security Agreement (as the same may be amended, restated, renewed, extended,
supplemented, or otherwise modified from time to time, the "LOAN AGREEMENT"), of
even date herewith, between Company and GBCC.
2. GRANT OF SECURITY INTEREST. To secure the obligations of Company
under the Loan Agreement, Company hereby grants to GBCC a first priority
security interest in, and conditionally assigns, but does not transfer title, to
GBCC all of Company's right, title and interest in and to the following assets
and properties (collectively, the "COLLATERAL"):
(a) all trademarks, rights and interests predictable as trademarks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and any other designs or sources of
business identifies, indicia of origin or similar devices, including without
limitation, those listed on SCHEDULE 1 attached hereto, all registrations with
respect thereto, all applications with respect to the foregoing, and all
extensions and renewals with respect to any of the foregoing, together with all
of the goodwill associated therewith, in each case whether now or hereafter
existing, and all rights and interest associated with the foregoing including
any licenses, license rights and royalties of all rights to xxx or by opposition
or cancellation proceedings for past, present and future infringements of such
rights; and
(b) all proceeds of the foregoing.
3. WARRANTIES AND REPRESENTATIONS. Company hereby warrants and
represents to GBCC the following:
(a) A true and complete schedule setting forth all federal and state
trademark registrations owned or controlled by Company or licensed to Company is
set forth on SCHEDULE 1;
(b) Each of the trademarks and trademark registrations are valid and
enforceable, and Company is not presently aware of any past, present, or
prospective claim by any third party that any of the trademarks are invalid or
unenforceable, or that the use of any trademarks violates the rights of any
third person, or of any basis for any such claims;
(c) Company is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to each of the trademarks and
trademark registrations, free and clear of
1
any liens, charges and encumbrances, including without limitation, pledges,
assignments, licenses, shop rights and covenants by Company not to xxx third
persons;
(d) Company has used and will continue to use proper statutory notice
in connection with its use of each of the trademarks; and
(e) Company has used, and will continue to use, consistent standards of
high quality (which may be consistent with Company's past practices) in the
manufacture, sale, and delivery of products and services sold or delivered under
or in connection with the trademarks, including, to the extent applicable, in
the operation and maintenance of its merchandising operations, and will continue
to maintain the validity of the trademarks.
4. AFTER ACQUIRED TRADEMARK RIGHTS. If Company shall obtain rights to
any new trademarks, the provisions of this Agreement shall automatically apply
thereto. Company shall give prompt notice in writing to GBCC with respect to any
such new trademarks or renewal or extension of any trademark registration.
Company shall bear any expenses incurred in connection with future applications
for trademark registration.
5. LITIGATION AND PROCEEDINGS. Company shall commence and diligently
prosecute in its own name, as the real party in interest, for its own benefit,
and its own expense, such suits, administrative proceedings, or other actions
for infringement or other damages as are in its reasonable business judgment
necessary to protect the Collateral. Company shall provide to GBCC any
information with respect thereto reasonably requested by GBCC. GBCC shall
provide at Company's expense all necessary cooperation in connection with any
such suit, proceeding or action including, without limitation, joining as a
necessary party. Following Company's becoming aware thereof, Company shall
notify GBCC of the institution of, or any adverse determination in, any
proceeding in the United States Patent and Trademark Office, or any United
States, state or foreign court regarding Company's claim of ownership in any of
the trademarks, its right to apply for the same, or its right to keep and
maintain such trademark rights.
6. EVENTS OF DEFAULT. An Event of Default hereunder shall be deemed to
have occurred and be continuing if (a) Company shall have breached any of the
provisions of this Agreement or (b) an "Event of Default" shall have occurred
under the Loan Agreement.
7. SPECIFIC REMEDIES. Upon the occurrence of any Event of Default:
(a) GBCC may notify licensees to make royalty payments on any license
or other similar agreements relating to the Collateral directly to GBCC.
(b) GBCC may sell or reassign the Collateral and associated goodwill at
public or private sale for such amounts, and at such time or times as GBCC deems
advisable. Any requirements of reasonable notice of any disposition of the
Collateral shall be satisfied if such notice is sent to Company five (5) days
prior to such disposition. Company shall be credited
2
with the net proceeds of such sale only when they are actually received by GBCC,
and Company shall continue to be liable for any deficiency remaining after the
Collateral is sold or collected.
(c) If the sale is to be a public sale, GBCC shall also give notice of
the time and place by publishing a notice one time at least five (5) calendar
days before the date of the sale in a newspaper of general circulation in the
county in which the sale is to be held.
(d) To the maximum extent permitted by applicable law, GBCC may be the
purchaser of any or all of the Collateral and associated goodwill at any public
sale and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any public sale, to use and apply all or any part of the obligations owned by
Company to GBCC as a credit on account of the purchase price of any Collateral
payable by GBCC at such sale.
(e) GBCC may exercise any and all other rights and remedies available
to it as a secured party under applicable law or the Uniform Commercial Code
regardless of whether any part of the Collateral is subject to the Uniform
Commercial Code, and may exercise any rights and remedies available to it under
the Loan Agreement as the result of such Event of Default as if the Collateral
hereunder were Collateral under the Loan Agreement.
8. ASSIGNMENT. All grants, covenants and agreements contained in this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns, provided, however, that Company may not
delegate or assign any of its duties or obligations under this Agreement without
the prior written consent of GBCC. GBCC RESERVES THE RIGHT TO ASSIGN ITS RIGHTS
AND OBLIGATIONS UNDER THIS AGREEMENT IN WHOLE OR IN PART TO ANY PERSON OR
ENTITY. Without limiting the generality of the foregoing, GBCC may from time to
time grant participations in all or any part of the obligations of Company
hereunder or the Loan Agreement to any Person on such terms and conditions as
may be determined by GBCC in its sole and absolute discretion, provided that the
grant of such participation shall not relieve GBCC of its obligations hereunder
nor create any additional obligation of Company.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO
THE RULES THEREOF RELATING TO CONFLICTS OF LAW. COMPANY HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
DALLAS COUNTY, TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE
MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
RELATIONSHIP BETWEEN GBCC AND COMPANY BY ANY MEANS ALLOWED UNDER STATE OR
FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR ANY OTHER RELATIONSHIP BETWEEN GBCC AND COMPANY SHALL BE BROUGHT
AND LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL COURTS LOCATED IN
DALLAS COUNTY, TEXAS, HAVING
3
JURISDICTION UNLESS GBCC SHALL ELECT OTHERWISE. THE PARTIES HERETO HEREBY WAIVE
AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY
SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER.
10. WAIVERS. EACH OF COMPANY AND GBCC HEREBY (A) IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
11. NOTICES. All notices, requests, consents, demands and other
communications required or permitted under this Agreement shall be in writing
and, unless otherwise specifically provided in such Agreement, shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telegram
or telex, by expedited delivery service with proof of delivery, or by registered
or certified United States mail, postage prepaid, at the addresses specified
below (unless changed by similar notice in writing given by the particular party
whose address is to be changed). Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the
case of delivery service or mail, as of the date of first attempted delivery at
the address and in the manner provided herein, or, in the case of telegram or
telex, upon receipt.
If to Company: ACS Acquisition Corp.
00000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attn: President
If to GBCC: Guaranty Business Credit Corporation
d/b/a Fidelity Funding
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attn: Xxxx Xxxx, Loan Officer
4
12. AMENDMENT AND RESTATEMENT. This Agreement restates and amends that
certain Trademark Security Agreement, dated as of June 4, 1997, between Company
and GBCC (as assignee of Fidelity Funding, Inc. and Fidelity Funding of
California, Inc.) (the "PRIOR AGREEMENT") in its entirety effective as of the
date hereof, and all of the terms and provisions hereof shall supersede the
terms and provisions thereof; provided that all indebtedness and obligations of
the Company to GBCC under the Prior Agreement are renewed and extended hereby
and all liens, security interests, assignments, superior titles, rights,
remedies, powers, equities and priorities (the "LIENS") created by the Prior
Agreement are renewed and extended hereby and shall continue in full force and
effect to secure the Obligations. By this Agreement, the Liens are hereby
ratified and confirmed as valid, subsisting and continuing to secure the
Obligations.
IN WITNESS WHEREOF, Company and GBCC have executed this Agreement by
their duly authorized officers as of the date first above written.
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Pres/CEO
LENDER:
GUARANTY BUSINESS CREDIT
CORPORATION D/B/A FIDELITY FUNDING
By: /s/ XXXXXXX X.XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
5
SCHEDULE 1
6
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (the "MAKER") promises to pay to
the order of Guaranty Business Credit Corporation, doing business as Fidelity
Funding (together with its successors and assigns, the "HOLDER") the principal
sum of Three Hundred Twelve Thousand Nine Hundred and No/100 Dollars
($312,900.00) together with interest thereon until paid in full at the Contract
Rate, principal and interest hereunder being payable in lawful money of the
United States at the Holder's office at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000, or such other address as the Holder shall direct the Maker from
time to time in writing.
The principal balance hereof and interest thereon shall be payable on
demand.
Interest hereunder shall be calculated on the basis of a year of 360
days and the actual number of days elapsed. Each payment made hereunder shall be
allocated first to the payment of accrued and unpaid interest and then to the
payment of principal.
If this promissory note is placed in the hands of an attorney for
collection, or if it is collected through bankruptcy, collection or judicial
proceedings, the Maker agrees to pay the Holder's legal fees and collection
costs to the extent permitted by law. The Maker waives demand, presentment,
notice of dishonor, protest and notice of protest, diligence in collecting, or
in bringing suit against any party hereto.
As used herein, the term "CONTRACT RATE" means, unless the Holder has
elected to charge the Default Rate if payment hereunder is not received when
demand is made, a rate of interest equal to the lesser of (a) the Prime Rate in
effect from time to time plus one and one-quarter percent (1.25%) PER ANNUM and
(b) the maximum rate permitted by applicable law and, at the option of the
Holder, if payment has not been made when demanded, the Default Rate. The
Contract Rate shall be automatically increased or decreased, as the case may be,
without notice to the Maker from time to time as of the effective date of each
change in the Prime Rate.
As used herein, the term "DEFAULT RATE" means a rate of interest equal
to the lesser of (x) the Prime Rate in effect from time to time plus six and
one-quarter percent (6.25%) PER ANNUM and (y) the maximum rate permitted by
applicable law. The Default Rate shall be automatically increased or decreased,
as the case may be, without notice to the Maker from time to time as of the
effective date of each change in the Prime Rate
As used herein, the term "PRIME RATE" means the rate PER ANNUM
announced by Guaranty Federal Bank F.S.B. or its successors or assigns from time
to time as its base rate, which base rate may not necessarily be the lowest or
best rate actually charged to customers of such bank."
EXECUTED on March 14, 2000.
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Pres/CEO
CERTIFICATE OF CORPORATE RESOLUTION
(ACS ACQUISITION CORP.)
The undersigned, the President and Secretary of ACS Acquisition Corp.
(the "COMPANY"), a New York corporation, do hereby certify to Guaranty Business
Credit Corporation d/b/a Fidelity Funding ("GBCC") that:
1. We are the duly elected, qualified and acting President and
Secretary, respectively, of the Company, are familiar with the facts herein
certified and are duly authorized to certify such facts and make this
certificate.
2. The Company is duly organized, validly existing and in good standing
under the laws of the State of New York, and is duly authorized to transact
business as a foreign corporation in and is in good standing under the laws of
each jurisdiction where the ownership or lease of its properties and assets or
the conduct of its business would require such qualification; no changes have
been made to (a) the Company's articles or certificate of incorporation since
May 29, 1997, or (b) the Company's bylaws since June 4, 1997; all franchise and
other taxes required to maintain the Company's corporate existence have been
paid when due and no such taxes are delinquent; and no proceedings are pending
for the forfeiture of the Company's articles or certificate of incorporation or
for the Company's dissolution, voluntarily or involuntarily.
3. The following resolutions were duly adopted by Unanimous Written
Consent dated and effective as of _________________, 2000, in accordance with
all applicable laws and the Company's articles or certificate of incorporation
and by-laws:
RESOLVED, that the Company borrow from, and receive loans from
Guaranty Business Credit Corporation d/b/a Fidelity Funding ("GBCC")
under one or more agreements from time to time (collectively, the "LOAN
AND SECURITY AGREEMENT") providing for the establishment of a revolving
line of credit for the Company with GBCC and the pledge of any or all
of the assets of the Company to secure the Company's obligations to
GBCC thereunder, such Loan and Security Agreement to be in form and
substance satisfactory to the officer or officers of the Company
executing and delivering the same;
FURTHER RESOLVED, that each of the president, the
treasurer/chief financial officer, the secretary and each vice
president of the Company, acting jointly or alone, hereby are
authorized to negotiate, execute, deliver and perform the Company's
obligations under the Loan and Security Agreement and such other
documents, instruments, and certificates and to take such other actions
as they (or any of them) shall deem necessary, desirable or convenient
to consummate the transactions contemplated by the Loan and Security
Agreement and otherwise to effectuate the intent of these resolutions
and containing such terms and conditions as may be acceptable or
agreeable to any of said officers, such acceptance and agreement to be
conclusively evidenced by any of said officers' execution and delivery
thereof;
1
FURTHER RESOLVED, that the Company grant to GBCC a lien upon
and/or a security interest in all of the assets of the Company as
security for repayment of the loan evidenced by the Loan and Security
Agreement any and all extensions for any period, rearrangements or
renewals thereof and as security for any and all indebtedness,
obligations and liabilities of the Company owing to GBCC, either
directly or by assignment;
FURTHER RESOLVED, that any of said officers are hereby
authorized in the name of and on behalf of the Company to take such
further action and to do all things that may appear in the discretion
of any of them to be necessary in connection with increases, renewals,
extensions for any period, rearrangements, retirements or compromises
of the indebtedness, obligations and liabilities of the Company owing
to GBCC, either directly or by assignment;
FURTHER RESOLVED, that all acts, transactions, or agreements
undertaken prior to the adoption of these Resolutions by any of the
officers or representatives of the Company in its name and for its
account with GBCC in connection with the foregoing matters are hereby
ratified, confirmed and adopted by the Company;
FURTHER RESOLVED, that the Secretary or Assistant Secretary of
the Company is hereby authorized and directed to certify these
Resolutions to GBCC; and
FURTHER RESOLVED, that GBCC be promptly notified in writing by
the Secretary or any other officer of the Company of any change in
these Resolutions and until it has actually received such notice in
writing, GBCC is authorized to act in pursuance of these Resolutions.
4. The foregoing resolutions have not been amended, modified or
rescinded, and remain in full force and effect on and as of the date hereof.
5. The following persons are the officers, and are the persons
authorized to act on behalf, of the Company pursuant to the foregoing
resolutions:
TITLE NAME SIGNATURE
----- ---- ---------
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
Vice President of Finance XXXXXX X. XXXXXXXXX /s/ XXXXXX X. XXXXXXXXX
2
Dated as of March 14, 2000.
By: /s/ [ILLEGIBLE]
-----------------------
President
By: /s/ [ILLEGIBLE]
-----------------------
Secretary
3
CERTIFICATE OF CORPORATE RESOLUTION
(AQUA CARE SYSTEMS, INC.)
The undersigned, the President and the Secretary of Aqua Care Systems,
Inc. (the "COMPANY"), a Delaware corporation, do hereby certify to Guaranty
Business Credit Corporation d/b/a Fidelity Funding ("GBCC") that:
1. They are the duly elected, qualified and acting President and
Secretary of the Company, are familiar with the facts herein certified and are
duly authorized to certify such facts and make this certificate.
2. The Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware, and is duly authorized to transact
business as a foreign corporation in and is in good standing under the laws of
each jurisdiction where the ownership or lease of its properties and assets or
the conduct of its business would require such qualification; no changes have
been made to the Company's (a) articles or certificate of incorporation since
May 7, 1997,or (b) bylaws since June 4, 1997; all franchise and other taxes
required to maintain the Company's corporate existence have been paid when due
and no such taxes are delinquent; and no proceedings are pending for the
forfeiture of the Company's articles or certificate of incorporation or for the
Company's dissolution, voluntarily or involuntarily.
3. The following resolutions were duly adopted by Unanimous Written
Consent, dated and effective as of ___________________, 2000, in accordance with
all applicable laws and the Company's articles or certificate of incorporation
and by-laws:
RESOLVED, that the Company guaranty the obligations of ACS
Acquisition Corp. to Guaranty Business Credit Corporation d/b/a
Fidelity Funding ("GBCC") pursuant to one or more guaranty agreements
(collectively, the "GUARANTY"), such Guaranty to be in form and
substance satisfactory to the officer or officers of the Company
executing and delivering the same;
FURTHER RESOLVED, that the Company will derive direct and
indirect benefit from making such Guaranty;
FURTHER RESOLVED, that each of the president, the
treasurer/chief financial officer, the secretary and each vice
president of the Company, acting jointly or alone, hereby are
authorized to negotiate, execute, deliver and perform the Company's
obligations under the Guaranty and such other documents, instruments,
and certificates and to take such other actions as they (or any of
them) shall deem necessary, desirable or convenient to consummate the
transactions contemplated by the Guaranty and otherwise to effectuate
the intent of these resolutions and containing such terms and
conditions as may be acceptable or agreeable to any of said officers,
such acceptance and agreement to be conclusively evidenced by any of
said officers' execution and delivery thereof;
1
FURTHER RESOLVED, that any of said officers are hereby
authorized in the name of and on behalf of the Company to take such
further action and to do all things that may appear in the discretion
of any of them to be necessary in connection with increases, renewals,
extensions for any period, rearrangements, retirements or compromises
of the indebtedness, obligations and liabilities of the Company owing
to GBCC, either directly or by assignment;
FURTHER RESOLVED, that all acts, transactions, or agreements
undertaken prior to the adoption of these Resolutions by any of the
officers or representatives of the Company in its name and for its
account with GBCC in connection with the foregoing matters are hereby
ratified, confirmed and adopted by the Company;
FURTHER RESOLVED, that the Secretary or Assistant Secretary of
the Company is hereby authorized and directed to certify these
Resolutions to GBCC; and
FURTHER RESOLVED, that GBCC be promptly notified in writing by
the Secretary or any other officer of the Company of any change in
these Resolutions and until it has actually received such notice in
writing, GBCC is authorized to act in pursuance of these Resolutions.
4. The foregoing resolutions have not been amended, modified or
rescinded, and remain in full force and effect on and as of the date hereof.
5. The following persons are the officers, and are the persons
authorized to act on behalf, of the Company pursuant to the foregoing
resolutions:
TITLE NAME SIGNATURE
----- ---- ---------
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
President XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
Vice President of Finance XXXXXX X. XXXXXXXXX /s/ XXXXXX X. XXXXXXXXX
2
IN WITNESS WHEREOF, the undersigned have hereunto set the hands for and
on behalf of the Company on March _____, 2000.
By: /s/ [ILLEGIBLE]
------------------------
President
By: /s/ [ILLEGIBLE]
------------------------
Secretary
3
PERFECTION CERTIFICATE
Reference is made to the Amended and Restated Loan and Security
Agreement (the "AGREEMENT"), dated as of March 14, 2000, between ACS
Acquisition Corp., a New York corporation ("COMPANY") and Guaranty Business
Credit Corporation d/b/a Fidelity Funding, a Delaware corporation ("GBCC").
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Agreement. The undersigned, the President and Secretary of
Company, hereby certify to GBCC as follows:
1. CURRENT LOCATIONS.
(a) The chief executive office of Company is located at the
following address:
STREET ADDRESS COUNTY/PARISH
-------------- -------------
00000 XX 00 Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx, XX 00000
MAILING ADDRESS COUNTY/PARISH
--------------- -------------
00000 XX 00 Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx, XX 00000
(b) The following are all the locations where Company maintains
any books or records relating to any of its Accounts.
STREET ADDRESS COUNTY/PARISH
-------------- -------------
00000 XX 00 Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx, XX 00000
(c) The following are all the places of business of Company not
identified above: 0000 - Xxxxxxx Xxxx, Xxxxxx, XX 00000.
(d) The following are all the locations not identified above where
Company maintains any inventory or equipment: See (c) above.
(e) The following are the names and addresses of all Persons other
than Company that have possession of any of Company's
inventory or equipment: See (c) above.
1
IN WITNESS WHEREOF, we have hereunto set our hands on March 14, 2000.
ACS ACQUISITION CORP.
By: /s/ [ILLEGIBLE]
------------------------
President
By: /s/ [ILLEGIBLE]
------------------------
Secretary
2
NOTICE OF FINAL AGREEMENT
To: ACS Acquisition Corp.
00000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
("BORROWER")
As of the effective date of this Notice, Borrower and Guaranty Business Credit
Corporation, d/b/a Fidelity Funding ("GBCC") have consummated a transaction
pursuant to which GBCC has agreed to make a loan or loans to Borrower, to renew
and extend an existing loan or loans to Borrower and/or to otherwise extend
credit or make financial accommodations to or for the benefit of Borrower, in an
aggregate amount up to $5,674,500.00 (collectively, whether one or more, the
"LOAN").
In connection with the Loan, Borrower and GBCC and the undersigned guarantors
and other obligors, if any (collectively, whether one or more, "OTHER OBLIGORS")
have executed and delivered and may hereafter execute and deliver certain
agreements, instruments and documents (collectively hereinafter referred to as
the "WRITTEN LOAN AGREEMENT").
It is the intention of Borrower, GBCC and Other Obligors that this Notice be
incorporated by reference into each of the written agreements, instruments and
documents comprising the Written Loan Agreement. Borrower, GBCC and Other
Obligors each warrants and represents that the entire agreement made and
existing by or among Borrower, GBCC and Other Obligors with respect to the Loan
is and shall be contained within the Written Loan Agreement, as amended and
supplemented hereby, and that no agreements or promises exist or shall exist by
or among, Borrower, GBCC and Other Obligors that are not reflected in the
Written Loan Agreement.
THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Effective Date: March 14, 2000.
GUARANTY BUSINESS CREDIT
CORPORATION, D/B/A FIDELITY
FUNDING
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NOTICE OF FINAL AGREEMENT - Page 1
ACKNOWLEDGED AND AGREED:
BORROWER:
ACS ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Pres/CEO
OTHER OBLIGORS:
AQUA CARE SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXX
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Pres/CEO
NOTICE OF FINAL AGREEMENT - Page 2
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY "AQUA CARE SYSTEMS, INC." IS DULY INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE SO
FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE SEVENTH DAY OF MARCH, A.D.
2000.
AND I DO HEREBY FURTHER CERTIFY THAT THE SAID "AQUA CARE SYSTEMS, INC." WAS
INCORPORATED ON THE TWENTY-THIRD DAY OF OCTOBER, A.D. 1990.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO DATE.
/s/ XXXXXX X. XXXXX
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[SEAL] Xxxxxx X. Xxxxx, Secretary of State
AUTHENTICATION: 0300549
DATE: 03-07-00
2244507 8300
001115637
STATE OF NEW YORK )
) SS:
DEPARTMENT OF STATE )
I hereby certify, that the Certificate of Incorporation of ACS ACQUISITION CORP.
was filed on 05/29/1997, with perpetual duration, and that a diligent
examination has been made of the Corporate index for documents filed with this
Department for a certificate, order, or record of a dissolution, and upon such
examination, no such certificate, order or record has been found, and that so
far as indicated by the records of this Department, such corporation is a
subsisting corporation.
The Biennial Statement is past due.
* * *
Witness my hand and the official seal
of the Department of State at the City
[SEAL] of Albany, this 06th day of March
two thousand.
[ILLEGIBLE]
---------------------------------
Special Deputy Secretary of State
200003070114
FEDERAL RESEARCH CORPORATION
CORPORATE STATUS
DATE OF SEARCH: 3-7-00
JURISDICTION SEARCHED: FL, Secretary of State
NAME SEARCHED: ACS ACQUISITION CORP.
STATUS: No record.
Name variations:
ACS CORP.
ACS
ACS AIRCRAFT SERVICES, INC.
We are not liable for the accuracy of the public record and we accept no
liability for its errors and omissions. We also do not accept liability for your
choice of delivery service.
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000 XXXXXXX XXXXXX, XX, XXXXX 000, XXXXXXXXXX, XX 00000
000-000-0000 * FAX 000-000-0000
XXX.XXXXXXXXXXXXXXX.XXX
MUTUAL RELEASE
This Mutual Release (this "RELEASE"), dated as of March _____, 2000, is
among Flowserve Corporation (formerly known as Durco International, Inc.;
"FLOWSERVE"), Aqua Care Systems, Inc. ("AQUA CARE"), ACS Acquisition Corp.
("ACS"), and Guaranty Business Credit Corporation, doing business as Fidelity
Funding (as assignee of Fidelity Funding, Inc. ("FFI") and Fidelity Funding of
California, Inc. ("FFC"), "GBCC").
BACKGROUND
A. ACS and Flowserve entered into that certain Asset Purchase
Agreement, dated June 4, 1997 (the "PURCHASE AGREEMENT"). Certain obligations
under the Purchase Agreement were evidenced by a Note, dated June 4, 1997,
executed by ACS, payable to the order of Flowserve, in the original principal
amount of $2,441,397 (the "NOTE"). Obligations under the Note were secured by
(i) a Mortgage, dated June 4, 1997, between ACS and Flowserve (the "MORTGAGE")
and (ii) a Security Agreement, dated June 4, 1997, between Flowserve and ACS
(the "SECURITY AGREEMENT") and are guaranteed pursuant to a Guaranty Agreement,
dated June 4, 1997, from Aqua Care for the benefit of Flowserve (the
"GUARANTY").
B. FFI and FFC provided financing to ACS to finance a portion of the
purchase price under the Purchase Agreement.
C. (i) Flowserve executed that certain Lender Indemnification, dated
June 4, 1997, for the benefit of FFI and FFC; (ii) FFI, ACS, and Flowserve
executed that certain Subordination Agreement, dated June 4, 1997; (iii) FFC,
ACS, and Flowserve executed two Subordination Agreements, dated June 4, 1997;
(iv) FFI, Aqua Care, and Flowserve executed that certain Subordination
Agreement, dated June 4, 1997; (v) FFC, Aqua Care, and Flowserve executed two
Subordination Agreements, dated June 4, 1997; and (vi) FFI, Flowserve, ACS, and
Aqua Care executed that certain Subordination of Mortgage and Standstill
Agreement, dated June 4, 1997, recorded on June 6, 1997, in Liber 10917 of Deeds
at Page 1487 (collectively, the "SUBORDINATION AGREEMENTS").
D. The agreements executed in respect of the financing by FFI and FFC
and the Subordination Agreements have been assigned by each of FFI and FFC to
GBCC.
E. ACS desires to repay the obligations evidenced by the Note and the
parties desire to give the releases described herein.
AGREEMENT
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. RELEASES BY FLOWSERVE OF ACS AND AQUA CARE. Flowserve hereby
releases each of ACS and Aqua Care and their respective officers, directors,
shareholders, affiliates, and employees from any and all claims, suits, damages,
costs, or liabilities of any nature arising in whole or in part under or in
connection with the Purchase Agreement, the Note, the Security
Mutual Release - Page 1 of 4
Agreement, the Mortgage, the Guaranty, or the transactions contemplated thereby,
including, without limitation, any such claims, suits, damages, cost or
liabilities arising out of or relating to a claim of breach of contract, fraud,
lender liability or misconduct, breach of fiduciary duty, usury, unfair
bargaining position, unconscionably, violation of law, negligence, error or
omission in accounting or calculations, misappropriation of funds, tortious
conduct or reckless or willful misconduct, whether known or unknown, provided
that certain warrants to the common stock of Aqua Care granted to Flowserve
under the Purchase Agreement shall be unaffected by and shall survive this
Release.
2. RELEASE BY ACS AND AQUA CARE OF FLOWSERVE. Each of ACS and Aqua Care
hereby releases Flowserve and its officers, directors, shareholders, affiliates,
and employees from any and all claims, suits, damages, costs, or liabilities of
any nature arising in whole or in part under or in connection with the Purchase
Agreement, the Note, the Security Agreement, the Mortgage, the Guaranty, or the
transactions contemplated thereby, including, without limitation, any such
claims, suits, damages, cost or liabilities arising out of or relating to a
claim of breach of contract, fraud, lender liability or misconduct, breach of
fiduciary duty, usury, unfair bargaining position, unconscionably, violation of
law, negligence, error or omission in accounting or calculations,
misappropriation of funds, tortious conduct or reckless or willful misconduct,
whether known or unknown.
3. RELEASE BY FLOWSERVE OF GBCC, ET AL. Flowserve hereby releases each
of GBCC, FFI, and FFC and their respective officers, directors, shareholders,
affiliates, and employees from any and all claims, suits, damages, costs, or
liabilities of any nature arising in whole or in part under or in connection
with the Purchase Agreement, the Note, the Security Agreement, the Mortgage, the
Guaranty, the Subordination Agreements, or the transactions contemplated
thereby, including, without limitation, any such claims, suits, damages, cost or
liabilities arising out of or relating to a claim of breach of contract, fraud,
lender liability or misconduct, breach of fiduciary duty, usury, unfair
bargaining position, unconscionably, violation of law, negligence, error or
omission in accounting or calculations, misappropriation of funds, tortious
conduct or reckless or willful misconduct, whether known or unknown. Flowserve
waives all rights which it may have under the provisions of Section 1542 of the
Civil Code of the State of California, which section reads as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
4. RELEASE BY GBCC OF FLOWSERVE AND CONSENT OF GBCC. GBCC hereby
releases Flowserve from any and all obligations under the Subordination
Agreements and consents to the prepayment of the obligations of ACS to
Flowserve, which otherwise would be in contravention of the provisions of the
Subordination Agreements. GBCC waives all rights which it may have under the
provisions of Section 1542 of the Civil Code of the State of California, which
section reads as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
Mutual Release - Page 2 of 4
5. EFFECTIVENESS. This Release shall be effective upon payment by or on
behalf of ACS to or on behalf of Flowserve of $1,000,000.00.
6. REPRESENTATIONS AND WARRANTIES OF FLOWSERVE. Flowserve hereby
represents and warrants to the other parties hereto that (a) it is legally
authorized to enter into this Release, (b) it has duly executed and delivered
the Release, and (c) it is the owner of and has not assigned to any other person
or entity any of the Purchase Agreement, the Note, the Security Agreement, the
Mortgage, the Guaranty, the Subordination Agreements, or any claims which have
arisen or may arise in respect of any of such documents or any of the
transactions contemplated thereby.
7. REPRESENTATIONS AND WARRANTIES OF ACS. ACS hereby represents and
warrants to the other parties hereto that (a) it is legally authorized to enter
into this Release, (b) it has duly executed and delivered the Release, and (c)
it is the owner of and has not assigned to any other person or entity any claims
which have arisen or may arise in respect of any of the Purchase Agreement, the
Note, the Security Agreement, the Mortgage, or any of the transactions
contemplated thereby.
8. REPRESENTATIONS AND WARRANTIES OF AQUA CARE. Aqua Care hereby
represents and warrants to the other parties hereto that (a) it is legally
authorized to enter into this Release, (b) it has duly executed and delivered
the Release, and (c) it is the owner of and has not assigned to any other person
or entity any claims which have arisen or may arise in respect of any of the
Purchase Agreement, the Note, the Security Agreement, the Mortgage, or any of
the transactions contemplated thereby.
9. REPRESENTATIONS AND WARRANTIES OF GBCC. GBCC hereby represents and
warrants to the other parties hereto that (a) it is legally authorized to enter
into this Release, (b) it has duly executed and delivered the Release, and (c)
it is the owner of and has not assigned to any other person or entity any of the
Subordination Agreements, or any claims which have arisen or may arise in
respect of any of such documents or any of the transactions contemplated
thereby.
10. SUCCESSORS AND ASSIGNS. This Release shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
11. GOVERNING LAW; VENUE. This Release shall be governed by and
construed and enforced in accordance with the laws of the State of Texas,
without reference to the rules thereof relating to conflicts of law. Each of
ACS, Aqua Care, Flowserve, and GBCC hereby irrevocably submits itself to the
jurisdiction of the state and federal courts located in Dallas County, Texas,
and agrees and consents that service of process may be made upon it in any legal
proceeding relating to this Release or any other relationship among the parties
hereto by any means allowed under state or federal law. Any legal proceeding
arising out of or in any way related to this Release shall be brought and
litigated exclusively in any of the state or federal courts located in Dallas
County, Texas, having jurisdiction. The parties hereto hereby waive and agree
not to assert, by way of motion, as a defense, or otherwise, that any such
proceeding is brought in an inconvenient forum or that the venue thereof is
improper.
12. NO AMENDMENTS. No modification or amendment of or supplement to
this Release shall be valid or effective unless the same is in writing and
signed by the party against whom it is sought to be enforced.
Mutual Release - Page 3 of 4
Executed as of the date first written above.
FLOWSERVE CORPORATION
By:
---------------------------------------
Name:
Title:
ACS ACQUISITION CORP.
By:
---------------------------------------
Name:
Title:
AQUA CARE SYSTEMS, INC.
By:
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Name:
Title:
GUARANTY BUSINESS CREDIT
CORPORATION, DOING BUSINESS AS
FIDELITY FUNDING
By:
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Name:
Title:
Mutual Release - Page 4 of 4
