REVOLVING LOAN FUND LOAN AGREEMENT
----------------------------------
THIS LOAN AGREEMENT, made and entered into this 15th day of May, 1996, by
and between SHERWOOD FOODS, INC., a North Carolina Corporation, (the
"Borrower"), and LAKE COUNTRY DEVELOPMENT CORPORATION, a Virginia non-stock
corporation, (the "Lender"); and SHERWOOD BRANDS, INC., a North Carolina
Corporation and XXXXX XXXXXXX, Individually, (the "Guarantors").
WHEREAS, the Borrower desires to borrow from Lender, funds to be used as
working capital for its manufacturing plant located in Chase City, Virginia (The
"Project"), the sum of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00) to be secured as hereinafter provided; and
WHEREAS, the Borrower has agreed to secure said loan, real estate, fixtures
and equipment to be purchased for its manufacturing plant in Chase City,
Virginia, as security for said loan; and
WHEREAS, Borrower and Guarantors desire to further secure the loan by
guaranteeing the repayment thereof; and
WHEREAS, Borrower and Lender desire to set out certain terms and provisions
which will govern said loan.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That for and in consideration of the loan of Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00) from Lender to Borrower and the mutual covenants
and promises hereinafter contained. Borrower and Lender agree as follows:
1. That Lender agrees to loan and does hereby loan to
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Borrower the sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
out of Lender's Revolving Loan Fund, the receipt whereof is hereby acknowledged.
2. Borrower shall make and deliver to Lender its promissory note in writing
requiring the repayment of the sum of Two Hundred Fifty Thousand and 00/100
Dollars ($250,000.00) to Lender sixty (60) months after date with interest at
the rate of five and one-quarter percent (5.25%) per annum at the office of
Lender, 000 Xxxxx Xxxxxxxxxxx Avenue, P. 0. Xxx 000, Xxxxx Xxxx, Xxxxxxxx 00000,
or at such other place as Lender may designate in writing. Payments under said
note shall be deemed late if not paid within fifteen (15) days of the due date,
and Borrower shall pay Lender a late penalty of five percent (5%) of all past
due principal and interest in the event of such late payment, calculated on the
accumulated late payments and penalties, as more particularly provided in the
Note.
3. Borrower and Lender agree that this loan shall be secured to Lender by a
lien from the Borrower securing this loan, real estate, fixtures and equipment
now acquired by its manufacturing plant in Chase City, Virginia. PROVIDED
HOWEVER this lien is subordinate to the lien of Central Fidelity Bank and the
same priority of the Virginia Revolving Loan Fund; and the default by the
borrower on the Central Fidelity Bank or the Virginia Revolving Loan Fund loan
shall constitute default on this loan.
4. Lender agrees that prepayment of principal may be made at any time
without penalty.
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5. Borrower hereby covenants and agrees to maintain, or cause to be
maintained, fire and casualty insurance on the building, fixtures and equipment
which is the collateral for the land which is the subject of this agreement in
the amount of at least Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00), with Lake Country Development Corporation, or its assigns as
their interests may appear, named as an additional insured.
6. Borrower shall provide a copy of its in house financial statements to
lender on a quarterly basis. Annual audits are required by the Borrower. All
financial statements must be signed and dated.
7. Borrower will comply with the requirements and covenants as stated in
the LETTER OF CREDIT with Central Fidelity Bank dated April 17, 1996, which
letter is incorporated by reference and made a part of this agreement. (EXHIBIT
A).
8. Borrower hereby agrees to use all funds borrowed from Lake Country
Development Corporation for the purpose of working capital for the acquisition
of real estate, fixtures and equipment for its manufacturing plant located in
Chase City, Virginia, and in no event to use said funds for interest generating
purposes.
9. Borrower hereby agrees that if its facility is intended for use by the
public or for the employment of physically handicapped, it must be accessible to
the physically handicapped, pursuant to Public Law 90-480, as amended (42
U.S.C. 4151, et seq.), and the regulations issued thereunder.
10. Borrower hereby agrees to comply with all applicable
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environmental protection laws and statutes including, but not limited to:
a. The Clean Air Act, as amended (42 U.S.C.7401, et seq.);
b. The Federal Water Pollution Control Act, as amended (33 U.S.C. 1251, et
seq.);
c. The Safe Drinking Water Act, Public Law 93-523, as amended (42 U.S.C.
300f-300j-9);
d. The Resource Conservation and Recovery Act of 1976, Public Law 94-580,
as amended (42 U.S.C. 6901);
e. The Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (CERCLA), Public Law 96-510, as amended, by Superfund Amendments
and Reauthorization Act of 1986 (XXXX) (42 U.S.C. 6091 et seq.);
f. All state and local environmental review requirements with all
applicable Federal, State and Local Standards.
11. Borrower hereby agrees that it shall be responsible for all closing
costs of this loan, and shall pay upon closing this loan to Lake Country
Development Corporation a fee of one percent (1.0 %) of the loan amount, which
fee is Two Thousand Five Hundred and 00/100 Dollars ($2,500.00), for its
administrative/service fee.
12. Sherwood Brands, Inc., Guarantor, shall provide a copy of its in house
financial statements to lender on a quarterly basis. Annual audits are required
by Sherwood Brands, Inc. A personal financial statement is also required by
Xxxxx Xxxxxxx on an annual basis. All financial statements must be signed and
dated.
13. If any clause, provision or section of this Revolving
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Loan Fund Loan Agreement be held illegal or invalid by any court, the illegality
or invalidity of such clause, provision or section shall not affect any of the
remaining clauses, provisions or sections hereof, and this Revolving Loan Fund
Loan Agreement shall be construed and enforced as if such illegal or invalid
clause, provisions or sections had not been contained herein.
14. THE BORROWER ACKNOWLEDGES THAT THE FAILURE TO COMPLY WITH ANY PROVISION
OF THIS AGREEMENT MAY RESULT IN THE LENDER, AT ITS OPTION, ACCELERATING THE DUE
DATE OF THIS LOAN AND DECLARING THAT THE ENTIRE BALANCE, PRINCIPAL AND INTEREST,
SHALL BECOME DUE AND PAYABLE AT THE OPTION OF THE HOLDER OF THE PROMISSORY NOTE.
15. This Agreement shall be construed and interpreted according to the laws
of the Commonwealth of Virginia.
IN WITNESS WHEREOF, Lake Country Development Corporation, the Lender,
Sherwood Foods, Inc., the Borrower, and Sherwood Brands, Inc., (Guarantor), have
caused this agreement to be duly executed by their respective proper corporate
officers who have been duly and properly empowered to do so by proper resolution
of their respective boards of directors, and Xxxxx Xxxxxxx, (Individually), have
hereunto set their hands and seals, all on the day and year first above written.
SHERWOOD FOODS, INC.
A North Carolina Corporation
By: Xxxxx Xxxxxxx
------------------------------------
Title: President
---------------------------------
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ATTEST:
/s/ [ILLEGIBLE]
-------------------------------------
Secretary
LAKE COUNTRY DEVELOPMENT CORPORATION
A Virginia Non-Stock Corporation
By /s/ G. Xxxxxx Xxxxx, Xx.
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G. Xxxxxx Xxxxx, Xx., President
ATTEST:
/s/ Xxx X. Xxxxxxxxxxx
-------------------------------------
Xxx Xxxxxxxxxxx, Secretary
SHERWOOD BRANDS, INC.
A North Carolina Corporation, Guarantor
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Title President
---------------------------------
ATTEST:
/s/ [ILLEGIBLE]
-------------------------------------
Secretary
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
----------------------------------------
Individually, Guarantor
STATE OF VIRGINIA
COUNTY OF MECKLENBURG, to-wit:
The foregoing Revolving Loan Fund Loan Agreement was acknowledged before me
this 15th day of May, 1996, by XXXXX XXXXXXX, PRESIDENT, of Sherwood Foods,
Inc., a North Carolina Corporation.
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Notary Public
My commission expires: May 31, 1998.
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STATE OF VIRGINIA
COUNTY OF MECKLENBURG, to-wit:
The foregoing Revolving Loan Fund Loan Agreement was acknowledged before me
this 15th day of May, 1996, by G. Xxxxxx Xxxxx, Xx., President of Lake Country
Development Corporation, a Virginia Non-Stock Corporation.
/s/ Xxxxxxx X. Former
----------------------------------------
Notary Public
My commission expires: March 31, 2000.
STATE OF VIRGINIA
COUNTY OF MECKLENBURG, to-wit:
The foregoing Revolving Loan Fund Loan Agreement was acknowledged before me
this 15th day of May, 1996, by XXXXX XXXXXXX, PRESIDENT, of Sherwood Brands,
Inc., a North Carolina Corporation.
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Notary Public
My commission expires: May 31, 1998.
STATE OF VIRGINIA
COUNTY OF MECKLENBURG, to-wit:
The foregoing Revolving Loan Fund Loan Agreement was acknowledged before me
this 15th day of May, 1996, by Xxxxx Xxxxxxx, Individually.
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Notary Public
My commission expires: May 31, 1998.
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PROMISSORY NOTE
---------------
$250,000.00 May 15, 0000
Xxxxx Xxxx, Xxxxxxxx
FOR VALUE RECEIVED, SHERWOOD FOODS, INC., a North Carolina Corporation,
promises to pay to the order of Lake County Development Corporation, a Virginia
Non-Stock Corporation, the sum of TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS
($250,000.00), with interest thereon from date until paid, at Five and
One-Quarter Percent (5.25%) per annum, negotiable and payable at the office of
the payee, 000 Xxxxx Xxxxxxxxxxx Avenue, P. 0. Xxx 000, Xxxxx Xxxx, Xxxxxxxx
00000, or at such other place as the holder of the note may designate in writing
from time to time, without offset. It is further agreed by the makers and
endorsers hereof that time is of the essence. And the makers and endorsers
hereof waive the benefit of the homestead exemptions as to this debt; and waive
notice of maturity, presentment, demand, protest, and notice of nonpayment and
dishonor of this note; and agree to pay all costs of collection, including
reasonable attorney's fees, if it becomes necessary to place this note in the
hands of an attorney for collection. The makers and endorsers hereof agree that
15 days after the giving of 10 days notice to the undersigned of default (a) of
a payment of any installment hereof, or (b) in the observance of any uncured
violation of any covenant contained in the Revolving Loan Fund Loan Agreement,
or any other document executed in connection with this loan, the entire balance,
principal and interest, shall become due and payable at the option
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of the holder or holders hereof. Failure to exercise said option shall not
constitute a waiver of the right to exercise the same in the event of any
subsequent default.
This note is payable in nine (9) equal monthly installments of interest
only in the amount of ONE THOUSAND NINETY THREE and 75/100 DOLLARS ($1,093.75)
each, commencing July 1, 1996 and ending March 1, 1997; and thereafter this note
is payable in fifty one (51) equal monthly payments of principal and interest of
FIVE THOUSAND FOUR HUNDRED SEVENTY NINE and 83/100 DOLLARS ($5,479.83) each,
commencing on the 1st day of April, 1997, and a like sum on the 1st day of each
and every month thereafter until paid, except if not sooner paid, the entire
indebtedness shall be due and payable on June 1, 2001.
Optional prepayment is permitted at any time in whole or in part without
penalty. Any such partial payment shall be applied to installments of principal
in inverse chronological order, but such prepayments shall not reduce the amount
of the monthly payments set forth above. Payments not received by the 15th day
of the month in which they are due shall be subject to a late charge of five
percent (5%), provided said late charge shall apply on the accumulated late
monthly installments and penalty as set forth herein or as determined in
accordance herewith, and shall not operate or be construed to apply to the
outstanding principal balance of this Note in the event the same becomes due and
payable prior to maturity.
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IN WITNESS WHEREOF, SHERWOOD FOODS, INC., a North Carolina Corporation, has
caused this note to be duly executed by its proper corporate officers who have
been duly and properly empowered to do so by proper resolution of its board of
directors has exeucuted this note, this 15th day of May, 1996.
SHERWOOD FOODS, INC.,
A North Carolina Corporation
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Title President
---------------------------------
ATTEST:
/s/ [ILLEGIBLE]
-------------------------------------
Secretary
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DEED OF TRUST
-------------
THIS DEED OF TRUST, made and entered into this 15th day of May, 1996, by
and between SHERWOOD FOODS, INC., a North Carolina Corporation, party of the
first part, and XXXXX X. XXXXXXXX, TRUSTEE, of South Xxxx, Xxxxxxxx, party of
the second part;
WITNESSETH:
THAT for and in consideration of the sum of TEN DOLLARS ($10.00) cash in
hand paid, and other good and valuable consideration, the receipt of all of
which is hereby acknowledged, the said party of the first part does hereby grant
and convey with General Warranty of Title unto the said Xxxxx X. Xxxxxxxx,
Trustee, the real estate described in the attached EXHIBIT A.
IN TRUST, to secure to Lake Country Development Corporation, a Xxxxxxx
Non-Stock Corporation, or its successors and assigns, the payment of a certain
promissory note bearing even date herewith in the principal sum of TWO HUNDRED
FIFTY THOUSAND 00/100 DOLLARS ($250,000.00) plus interest from date on the
unpaid balance until paid at the rate of Five and One-Quarter Percent (5.25%)
per annum, and made by Sherwood Foods, Inc., which loan will result in direct
financial benefits to said party of the first part. The said principal and
interest shall be payable at the office of Lake Country Development Corporation,
000 Xxxxx Xxxxxxxxxxx Xxxxxx, X.X. Xxx 000, Xxxxx Xxxx, Xxxxxxxx 00000, or at
such other place as the holder may designate in writing, in nine (9) equal
monthly payments of interest only in the amount of ONE THOUSAND NINETY THREE and
75/100 DOLLARS ($1,093.75) each, commencing July 1, 1996 and ending
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March 1, 1997; and thereafter this note is payable in fifty one (51) equal
monthly payments of principal and interest in the amount of FIVE THOUSAND FOUR
HUNDRED SEVENTY NINE and 83/100 DOLLARS ($5,479.83) each, commencing on the the
1st day of April, 1997, and a like sum on the 1st day of each and every month
thereafter until paid, except if not sooner paid, the entire indebtedness shall
be due and payable on June 1, 2001.
If all or any part of the property or an interest therein is sold or
transferred by Borrower without Lender's prior written consent, excluding (a)
the creation of a lien or encumbrance subordinate to this Deed of Trust, (b) a
transfer by devise, descent or by operation of law, or (c) the grant of any
leasehold interest of three years or less not containing an option to purchase,
Lender may, at Lender's option, declare all sums secured by this Deed of Trust
to be immediately due and payable. Lender shall have waived such option to
accelerate if, prior to the sale or transfer, Lender and the person to whom the
property is to be sold or transferred reach an agreement in writing that the
credit of such person is satisfactory to Lender and that the interest payable on
the sums secured by this Deed of Trust shall be at such rate as Lender shall
request. If Lender has waived the option to accelerate provided herein, and if
Borrower's successor in interest has executed a written assumption agreement
accepted in writing by Lender, Lender shall release Borrower from all
obligations under this Deed of Trust and Note.
If Lender exercises such option to accelerate, Lender shall
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mail Borrower notice of acceleration by certified mail addressed to Borrower;
such notice shall provide a period of not less than 30 days from the date the
notice is mailed within which Borrower may pay the sums declared due. If
Borrower fails to pay such sums prior to the expiration of such period, Lender
may, without further notice or demand on Borrower, invoke any remedies permitted
by this Deed of Trust.
This Deed of Trust constitutes a second lien on this property and is
subordinate to deed of trust to Central Fidelity Bank.
This Deed of Trust is made subject to and shall be construed and executed
in accordance with Sections 55-59 and 55-60 of the Code of Virginia of 1950,
as amended, and in short form as said sections provide: Subject to all upon
default; Exemptions waived; Right of anticipation reserved; Renewal or extension
permitted; Insurance required: $250,000.00; Substitution of trustee permitted;
Advertising required: by publication for once a week for at least two
consecutive weeks in at least one newspaper of general circulation in
Mecklenburg County, Virginia, and such other as the Trustee may deem advisable.
IN WITNESS WHEREOF, Sherwood Foods, Inc., a North Carolina Corporation has
caused this agreement to be executed by its officers, all on the day and year
first above written.
SHERWOOD FOODS, INC.,
A North Carolina Corporation
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Title President
---------------------------------
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ATTEST:
/s/ [ILLEGIBLE]
-------------------------------------
Secretary
STATE OF VIRGINIA
COUNTY OF MECKLENBURG, to-wit:
The foregoing instrument was acknowledged before me this 15th day of May,
1996, by XXXXX XXXXXXX, PRESIDENT of Sherwood Foods, Inc., a North Carolina
Corporation.
----------------------------------------
Notary Public
My commission expires:
---------------------------------.
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Sherwood Foods, Inc. Deed of Trust
EXHIBIT A
ALL that certain tract or parcel of land located in the Town of Chase City,
Mecklenburg County, Virginia, containing TEN AND 00/100 (10.00) ACRES, more or
less, as shown on a survey prepared by Xxxxxxxxxxx & Associates, Inc., dated
April 11, 1996. Said survey is recorded in the Clerk's Office of the Circuit
Court of Mecklenburg County, Virginia, in New Plat Book 8, page 277, and
reference is made thereto for a more complete description of the said 10.00
acres and the metes and bounds description thereon is by reference incorporated
herein. Said property is bounded on the North by lands of Xxxxxx Oil Company; on
the East by lands of Xxxx X. and Xxxx X. Xxxxxx; on the South by lands of Okla
X. Xxxxxxx; and on the West by Virginia State Route 92.
BEING the same real estate conveyed to Sherwood Foods, Inc., a North Carolina
Corporation, by deed from Hampco Apparel, Inc., formerly known as Standard
Garments, Inc., dated April 17, 1996, recorded April 18, 1996, in the aforesaid
Clerk's Office in Deed Book 500, page 360.
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GUARANTY OF NOTE
----------------
May 15, 1996
WHEREAS, SHERWOOD FOODS, INC., a North Carolina Corporation, (hereinafter
called the "Borrower") desires to borrow TWO HUNDRED FIFTY THOUSAND and 00/100
Dollars ($250,000.00) from Lake Country Development Corporation, Non-Stock
Virginia Corporation, (hereinafter called the "Lender") to be evidenced by
Borrower's note (hereinafter call the "Note") bearing even date herewith and
payable to Lake Country Development Corporation.
NOW, THEREFORE, in consideration of the promises and other good and
valuable consideration, and in order to induce Lake Country Development
Corporation to make the loan referred to above from its Revolving Loan Fund, the
undersigned hereby individually guarantee to the Lender the payment of the Note
in a sum up to, but not in excess of, TWO HUNDRED FIFTY THOUSAND and 00/100
Dollars ($250,000.00) plus interest and collection fees thereon, and to that
end, the undersigned individually agree to make such payment to Lender if there
shall be any default by the Borrower in the payment of the Note.
Except for the limitation on the amount of the maximum liability of the
undersigned, this is an unconditional guarantee and the liability of the
undersigned to the Lender shall not be further limited to a proportionate part
of the total liability of the Borrower of the Note.
This is a guarantee of payment and not of collection.
The undersigned hereby agree, upon demand, to reimburse the
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Lender, to the extent that such reimbursement is not made by the Borrower, for
all expenses, including the cost of collection (including reasonable attorney
fees) incurred by the Lender in connection with the Note or the obligations of
the undersigned hereunder or the collection thereof.
No delay on the part of the Lender in exercising any rights hereunder or
failure to exercise the same shall operate as a waiver of such rights, and each
reference herein to the Lender shall be deemed to include its successors and
assigns, in whose favor the provisions of this guarantee shall also insure.
WITNESS the following signatures and seals:
SHERWOOD BRANDS, INC.
A North Carolina Corporation
GUARANTOR
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Title President
---------------------------------
ATTEST:
/s/ [ILLEGIBLE]
-------------------------------------
Secretary
XXXXX XXXXXXX, GUARANTOR
/s/ Xxxxx Xxxxxxx
----------------------------------------
Individually
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