BUSINESS LOAN AGREEMENT
Exhibit
10.21
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Principal
$525,000.00
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Loan
Date
06-29-2006
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Maturity
06-29-2009
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Loan
No
0000000
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Call/Coll
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Account
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Officer
CS
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Initials
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References
in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or
item.
Any
item above containing “***” has been omitted due to text length
limitations.
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Borrower:
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Xxxxxxxxx
Holdings, Inc.
000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
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Lender:
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Fidelity
& Trust Bank
0000
Xxxxxxx Xxx.
Bethesda,
MD 20814-9930
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THIS
BUSINESS LOAN AGREEMENT dated June 29, 2006, is made and executed between
Xxxxxxxxx Holdings, Inc. (‘Borrower”) and Fidelity & Trust
Bank (“Lender”)
on the following terms and conditions. Borrower has received prior commercial
loans from Lender or has applied to Lender for a commercial loan or loans
or
other financial accommodations, including those which may be described on
any
exhibit or schedule attached to this Agreement (“Loan”). Xxxxxxxx understands
and agrees that: (A) in granting, renewing, or extending any Loan, Lender
is
relying upon Borrower’s representations, warranties, and agreements as set forth
in this Agreement; (B) the granting, renewing, or extending
of any
Loan by
Xxxxxx at all times shall
be subject to Lender’s sole judgment and
discretion; and (C) all such Loans shall be
and remain subject
to the terms and conditions of this Agreement.
TERM.
This
Agreement shall be effective as of June 29, 2006, and shall continue in full
force and effect until such time as all of Borrower’s Loans in favor of Lender
have been paid in full, including principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
CONDITIONS
PRECEDENT TO EACH ADVANCE.
Lender’s
obligation to make the initial Advance and each subsequent Advance under
this
Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of
the conditions set forth in this Agreement and in the Related
Documents.
Loan
Documents.
Borrower
shall provide to Lender the following documents for the Loan: (1) the Note;
(2) Security Agreements granting to Lender security interests in the
Collateral; (3) financing statements and all other documents perfecting
Lender’s Security Interests; (4) evidence of insurance as required below;
(5) guaranties; (6) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender
and
Xxxxxx’s counsel.
Borrower’s
Authorization.
Borrower
shall have provided in form and substance satisfactory to Lender properly
certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall
have
provided such other resolutions, authorizations, documents and instruments
as
Lender or its counsel, may require.
Payment
of Fees and Expenses.
Borrower
shall have paid to Lender all fees, charges, and other expenses which are
then
due and payable
as
specified in this Agreement or any Related Document.
Representations
and Warranties.
The
representations and warranties set forth in this Agreement, in the Related
Documents, and in any document or certificate delivered to Lender under this
Agreement are true and correct.
No
Event of Default.
There
shall not exist at the time of any Advance a condition which would constitute
an
Event of Default under this Agreement or under any Related
Document.
REPRESENTATIONS
AND WARRANTIES.
Borrower
represents and warrants to Lender, as of the date of this Agreement, as of
the
date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness
exists:
Organization.
Borrower
is a corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing under and by virtue of the laws of
the
State of Delaware. Borrower is duly authorized to transact business in all
other
states in which Borrower is doing business, having obtained all necessary
filings, governmental licenses and approvals for each state in which Borrower
is
doing business. Specifically, Borrower is, and at all times shall be, duly
qualified as a foreign corporation in all states in which the failure to
so
qualify would have a material adverse effect on its business or financial
condition. Borrower has the full power and authority to own its properties
and
to transact the business in which it is presently engaged or presently proposes
to engage. Xxxxxxxx maintains an office at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx,
XX
00000. Unless Borrower has designated otherwise in writing, the principal
office
is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will
notify
Lender prior to any change in the location of Borrower’s state of organization
or any change in Borrower’s name. Borrower shall do all things necessary to
preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental or quasi-governmental authority or
court
applicable to Borrower and Borrower’s business activities.
Assumed
Business Names.
Xxxxxxxx
has filed or recorded all documents or filings required by law relating to
all
assumed business names used by Xxxxxxxx. Excluding the name of Xxxxxxxx,
the
following is a complete list of all assumed business names under which Borrower
does business: None.
Authorization.
Borrower’s execution, delivery, and performance of this Agreement and all the
Related Documents have been duly authorized by all necessary action by Borrower
and do not conflict with, result in a violation of, or constitute a default
under (1) any provision of (a) Borrower’s articles of incorporation or
organization, or bylaws, or (b) any agreement or other instrument binding
upon
Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower’s properties.
Financial
Information.
Each of
Xxxxxxxx’s financial statements supplied to Xxxxxx truly and completely
disclosed Xxxxxxxx’s financial condition as of the date of the statement, and
there has been no material adverse change in Borrower’s financial condition
subsequent to the date of the most recent financial statement supplied to
Lender. Borrower has no material contingent obligations except as disclosed
in
such financial statements.
Legal
Effect.
This
Agreement constitutes, and any instrument or agreement Borrower is required
to
give under this Agreement when delivered will constitute legal, valid, and
binding obligations of Borrower enforceable against Borrower in accordance
with
their respective terms.
Properties.
Except
as contemplated by this Agreement or as previously disclosed in Xxxxxxxx’s
financial statements or in writing to Lender and as accepted by Xxxxxx, and
except for property tax liens for taxes not presently due and payable, Borrower
owns and has good title to all of Borrower’s properties free and clear of all
Security Interests, and has not executed any security documents or financing
statements relating to such properties. All of Xxxxxxxx’s properties are titled
in Borrower’s legal name, and Xxxxxxxx has not used or filed a financing
statement under any other name for at least the last five (5)
years.
Hazardous
Substances.
Except
as disclosed to and acknowledged by Xxxxxx in writing, Borrower represents
and
warrants that: (1) During the period of Borrower’s ownership of the Collateral,
there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on,
under, about or from any of the Collateral. (2) Borrower has no knowledge
of, or
reason to believe that there has been (a) any breach or violation of any
Environmental Laws; (b) any use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance on, under,
about or from the Collateral by any prior owners or occupants of any of the
Collateral; or (c) any actual or threatened litigation or claims of any kind
by
any person relating to such matters. (3) Neither Borrower nor any tenant,
contractor, agent or other authorized user of any of the Collateral shall
use,
generate, manufacture, store, treat, dispose of or release any Hazardous
Substance on, under, about or from any of the Collateral; and any such activity
shall be conducted in compliance with all applicable federal, state, and
local
laws, regulations, and ordinances, including without limitation all
Environmental Laws. Borrower authorizes Lender and its agents to enter upon
the
Collateral to make such inspections and tests as Lender may deem appropriate
to
determine compliance of the Collateral with this section of the Agreement.
Any
inspections or tests made by Lender shall be at Borrower’s expense and for
Lender’s purposes only and shall not be construed to create any responsibility
or liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower’s due
diligence in investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future claims against
Lender for indemnity or contribution in the event Borrower becomes liable
for
cleanup or other costs under any such laws, and (2) agrees to indemnify and
hold
harmless Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses which Lender may directly or indirectly sustain or
suffer resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release
or
threatened release of a hazardous waste or substance on the Collateral. The
provisions of this section of the Agreement, including the obligation to
indemnify, shall survive the payment of the Indebtedness and the termination,
expiration or satisfaction of this Agreement and shall not be affected by
Lender’s acquisition of any interest in any of the Collateral, whether by
foreclosure or otherwise.
Litigation
and Claims.
No
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially adversely affect Borrower’s
financial condition or properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by Xxxxxx in
writing.
Taxes.
To the
best of Xxxxxxxx's knowledge, all of Xxxxxxxx's tax returns and reports that
are
or were required to be filed, have been filed, and all taxes, assessments
and
other governmental charges have been paid in full, except those presently
being
or to be contested by Borrower in good faith in the
ordinary
course of business and for which adequate reserves have been
provided.
Lien
Priority.
Unless
otherwise previously disclosed to Lender in writing, Xxxxxxxx has not entered
into or granted any Security Agreements, or permitted the filing or attachment
of any Security Interests on or affecting any of the Collateral directly
or
indirectly securing repayment of Borrower’s Loan and Note, that would be prior
or that may in any way be superior to Lender’s Security Interests and rights in
and to such Collateral.
Binding
Effect.
This
Agreement, the Note, all Security Agreements (if any), and all Related Documents
are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with
their respective terms.
AFFIRMATIVE
COVENANTS.
Borrower
covenants and agrees with Xxxxxx that, so long as this Agreement remains
in
effect, Borrower will:
Notices
of Claims and Litigation.
Promptly
inform Xxxxxx in writing of (1) all material adverse changes in Borrower’s
financial condition, and (2) all existing and all threatened litigation,
claims,
investigations, administrative proceedings or similar actions affecting Borrower
or any Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
Financial
Records.
Maintain
its books and records in accordance with GAAP, applied on a consistent basis,
and permit Xxxxxx to examine and audit Xxxxxxxx’s books and records at all
reasonable times.
Financial
Statements.
Furnish
Lender with the following:
Interim
Statements.
As soon
as available, but in no event later than 45 days after the end of each fiscal
quarter, Xxxxxxxx’s balance sheet and profit and loss statement for the period
ended, prepared by Xxxxxxxx.
Tax
Returns.
As soon
as available, but in no event later than ninety (90) days after the applicable
filing date for the tax reporting period ended, Federal and other governmental
tax returns, prepared by a certified public accountant satisfactory to
Lender.
All
financial reports required to be provided under this Agreement shall be prepared
in accordance with GAAP, applied on a consistent basis, and certified by
Borrower as being true and correct.
Additional
Information.
Furnish
such additional information and statements, as Xxxxxx may request from time
to
time.
Insurance.
Maintain
fire and other risk insurance, public liability insurance, and such other
insurance as Lender may require with respect to Borrower’s properties and
operations, in form, amounts, coverages and with insurance companies acceptable
to Lender. Borrower, upon request of Xxxxxx, will deliver to Lender from
time to
time the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished
without at least ten (10) days prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in favor
of
Lender will not be impaired in any way by any act, omission or default of
Borrower or any other person. In connection with all policies covering assets
in
which
Lender
holds or is offered a security interest for the Loans, Borrower will provide
Lender with such lender’s loss payable or other endorsements as Lender may
require.
Insurance
Reports.
Furnish
to Lender, upon request of Lender, reports on each existing insurance policy
showing such information as Lender may reasonably request, including without
limitation the following: (1) the name of the insurer; (2)
the
risks
insured; (3) the amount of the policy; (4) the properties insured; (5) the
then
current property values on the basis of which
insurance
has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however
not
more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid
by
Borrower.
Guaranties.
Prior to
disbursement of any Loan proceeds, furnish executed guaranties of the Loans
in
favor of Xxxxxx, executed by the guarantor named below, on Xxxxxx’s forms, and
in the amount and under the conditions set forth in
those
guaranties.
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Name
of Guarantor
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Amount
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Xxxx
X. Xxxx
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Unlimited
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Other
Agreements.
Comply
with all terms and conditions of all other agreements, whether now or hereafter
existing, between Borrower and any other party and notify Lender immediately
in
writing of any default in connection with any other such
agreements.
Loan
Proceeds.
Use all
Loan proceeds solely for Xxxxxxxx’s business operations, unless specifically
consented to the contrary by Xxxxxx in writing.
Taxes,
Charges and Liens.
Pay and
discharge when due all of its indebtedness and obligations, including without
limitation all assessments, taxes, governmental charges, levies and liens,
of
every kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all lawful
claims that, if unpaid, might become a lien or charge upon any of Borrower’s
properties, income, or profits.
Performance.
Perform
and comply, in a timely manner, with all terms, conditions, and provisions
set
forth in this Agreement, in the Related Documents, and in all other instruments
and agreements between Borrower and Lender. Borrower shall notify Xxxxxx
immediately in writing of any default in connection with any
agreement.
Operations.
Maintain
executive and management personnel with substantially the same qualifications
and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel;
conduct its business affairs in a reasonable and prudent manner.
Environmental
Studies.
Promptly
conduct and complete, at Borrower’s expense, all such investigations, studies,
samplings and testings as may be requested by Lender or any governmental
authority relative to any substance, or any waste or by-product of any substance
defined as toxic or a hazardous substance under applicable federal, state,
or
local law, rule, regulation, order or directive, at or affecting any property
or
any facility owned, leased or used by Borrower.
Compliance
with Governmental Requirements.
Comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all
governmental authorities applicable to the conduct of Borrower’s properties,
businesses and operations, and to the use or occupancy of the Collateral,
including without limitation, the Americans With Disabilities Act. Borrower
may
contest in good faith any such law, ordinance, or regulation and withhold
compliance during any proceeding, including appropriate appeals, so long
as
Borrower has notified Lender in writing prior to doing so and so long as,
in
Xxxxxx’s sole opinion, Xxxxxx’s interests in the Collateral are not jeopardized.
Lender may require Borrower to post adequate security or a surety bond,
satisfactory to Lender, to protect Xxxxxx’s interest.
Inspection.
Permit
employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Xxxxxxxx’s other properties and to examine
or audit Xxxxxxxx’s books, accounts, and records and to make copies and
memoranda of Xxxxxxxx’s books, accounts, and records. If Borrower now or at any
time hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of Xxxxxx,
shall notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it may
request, all at Borrower’s expense.
Environmental
Compliance and Reports.
Borrower
shall comply in all respects with any and all Environmental Laws; not cause
or
permit to exist, as a result of an intentional or unintentional action or
omission on Borrower’s part or on the part of any third party, on property owned
and/or occupied by Borrower, any environmental activity where damage may
result
to the environment, unless such environmental activity is pursuant to and
in
compliance with the conditions of a permit issued by the appropriate federal,
state or local governmental authorities; shall furnish to Lender promptly
and in
any event within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower’s part in connection with any
environmental activity whether or not there is damage to the environment
and/or
other natural resources.
Additional
Assurances.
Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of
trust,
security agreements, assignments, financing statements, instruments, documents
and other agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security
Interests.
RECOVERY
OF ADDITIONAL COSTS.
If the
imposition of or any change in any law, rule, regulation or guideline, or
the
interpretation or application of any thereof by any court or administrative
or
governmental authority (including any request or policy not having the force
of
law) shall impose, modify or make applicable any taxes (except federal, state
or
local income or franchise taxes imposed on Lender), reserve requirements,
capital adequacy requirements or other obligations which would (A) increase
the cost to Lender for extending or maintaining the credit facilities to
which
this
Agreement relates, (B) reduce the amounts payable to Lender under this Agreement
or the Related Documents, or (C) reduce the rate of return on Lender’s
capital as a consequence of Lender’s obligations with respect to the credit
facilities to which this Agreement relates, then Borrower agrees to pay Lender
such additional amounts as will compensate Lender therefor, within five (5)
days
after Xxxxxx’s written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a calculation
in reasonable detail of the additional amounts payable by Borrower, which
explanation
and calculations shall be conclusive in the absence of manifest
error.
XXXXXX’S
EXPENDITURES.
If any
action or proceeding is commenced that would materially affect Xxxxxx’s interest
in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower’s
failure to discharge or pay when due any amounts Borrower is required to
discharge or-pay under this Agreement or any Related Documents, Lender on
Borrower’s behalf may (but shall not be obligated to) take any action that
Lender deems appropriate, including but not limited to discharging or paying
all
taxes, liens, security interests, encumbrances and other claims, at any time
levied or placed on any Collateral and paying all costs for insuring,
maintaining and preserving any Collateral. All such expenditures incurred
or
paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of repayment
by Xxxxxxxx. All such expenses will become a part of the Indebtedness and,
at
Xxxxxx’s option, will (A) be payable on demand; or (B) be added to the balance
of the Note and be apportioned among and be payable with any installment
payments to become due during either (1) the term of any applicable insurance
policy; or (2) the remaining term of the Note.
NEGATIVE
COVENANTS.
Borrower
covenants and agrees with Lender that while this Agreement is in effect,
Borrower shall not, without the prior written consent of Lender:
Indebtedness
and Liens.
(1)
Except for trade debt incurred in the normal course of business and indebtedness
to Lender contemplated by this Agreement, create, incur or assume indebtedness
for borrowed money, including capital leases, (2) sell, transfer, mortgage,
assign, pledge, lease, grant a security interest in, or encumber any of
Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with
recourse any of Borrower’s accounts, except to Xxxxxx.
Continuity
of Operations.
(1)
Engage in any business activities substantially different than those in
which
Borrower
is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, change its name, dissolve or transfer
or
sell Collateral out of the ordinary course of business, or (3) pay any dividends
on Borrower’s stock (other than dividends payable in its stock), provided,
however that notwithstanding the foregoing, but only so long as no Event
of
Default has occurred and is continuing or would result from the payment of
dividends, if Borrower is a “Subchapter S Corporation” (as defined in the
Internal Revenue Code of 1986, as amended), Borrower may
pay
cash
dividends on its stock to its shareholders from time to time in amounts
necessary to enable the shareholders to pay income taxes and make estimated
income tax payments to satisfy their liabilities under federal and state
law
which arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership of shares of Borrower’s stock, or
purchase or retire any of Borrower’s outstanding shares or alter or amend
Borrower’s capital structure.
Loans,
Acquisitions and Guaranties.
(1)
Loan, invest in or advance money or assets to any other person, enterprise
or
entity, (2) purchase, create or acquire any interest in any other enterprise
or
entity, or (3) incur any obligation as surety or guarantor other than in
the
ordinary course of business.
Agreements.
Borrower
will not enter into any agreement containing any provisions which
would
be
violated or breached by the performance of Borrower’s obligations under this
Agreement or in connection herewith.
CESSATION
OF ADVANCES.
If
Lender has made any commitment to make any Loan to Borrower, whether under
this
Agreement or under any other agreement, Lender shall have no obligation to
make
Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor
is
in default under the terms of this Agreement or any of the Related Documents
or
any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower
or any Guarantor dies, becomes incompetent or becomes insolvent, files a
petition in bankruptcy or similar proceedings, or is adjudged a bankrupt;
(C)
there occurs a material adverse change in Borrower’s financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing
any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor’s guaranty of the Loan or any other loan with
Lender; or (E) Lender in good xxxxx xxxxx itself insecure, even though no
Event
of Default shall have occurred.
RIGHT
OF SETOFF.
To the
extent permitted by applicable law, Lender reserves a right of setoff in
all
Borrower’s accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone
else
and all accounts Borrower may open in the future. However, this does not
include
any IRA or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Xxxxxxxx authorizes Xxxxxx, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts, and, at Xxxxxx’s option, to administratively freeze
all such accounts to allow Lender to protect Xxxxxx’s charge and setoff rights
provided in this paragraph.
DEFAULT.
Each of
the following shall constitute an Event of Default under this
Agreement:
Payment
Default.
Xxxxxxxx
fails to make any payment when due under the Loan.
Other
Defaults.
Borrower
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Agreement or in any of the Related Documents
or to
comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.
Default
in Favor of Third Parties.
Borrower
or any Grantor defaults under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor
of
any
other creditor or person that may materially affect any
of
Borrower’s or any Grantor’s property or Borrower’s or any Grantor’s ability to
repay the Loans or perform their respective obligations under this Agreement
or
any of the Related Documents.
False
Statements.
Any
warranty, representation or statement made or furnished to Lender by Borrower
or
on Borrower’s behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
Insolvency.
The
dissolution or termination of Borrower’s existence as a going business, or a
trustee or receiver is appointed for Borrower or for all or a substantial
portion of the assets of Borrower, or Borrower makes a general assignment
for
the benefit of Xxxxxxxx’s creditors, or Borrower files for bankruptcy, or an
involuntary bankruptcy petition is filed against Borrower and such involuntary
petition remains undismissed for sixty (60) days.
Defective
Collateralization.
This
Agreement or any of the Related Documents ceases to be in full force and effect
(including failure of any collateral document to create a valid and perfected
security interest or lien) at any time and for any reason.
Creditor
or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor
of
Borrower or by any governmental agency against any collateral securing the
Loan.
This includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there
is a good faith dispute by Xxxxxxxx as to the validity or reasonableness
of the
claim which
is
the
basis of the creditor or forfeiture proceeding and if Borrower gives Xxxxxx
written notice of the creditor or forfeiture proceeding and deposits with
Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an
amount
determined by Lender, in its sole discretion, as being an adequate reserve
or
bond for the dispute.
Events
Affecting Guarantor.
Any of
the preceding events occurs with respect to any Guarantor of any of the
Indebtedness or any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any Guaranty of the Indebtedness.
In the event of a death, Lender, at its option, may, but shall not be required
to, permit the Guarantor’s estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender, and, in doing
so,
cure any Event of Default.
Change
In Ownership.
Any
change in ownership of twenty-five percent (25%) or more of the common stock
of
Borrower.
Adverse
Change.
A
material adverse change occurs in Borrower’s financial condition, or Xxxxxx
believes the prospect of payment or performance of the Loan is
impaired.
Insecurity.
Lender
in good faith believes itself insecure.
EFFECT
OF AN EVENT OF DEFAULT.
If any
Event of Default shall occur, except where otherwise provided in this Agreement
or the Related Documents,
all commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate
(including any obligation to make further Loan Advances or disbursements),
and,
at Lender’s option, all sums owing in connection with the Loans, including all
principal, interest, and all other fees, costs and charges, if any, will
become
immediately due and payable, all without notice of any kind to Borrower,
except
that in the case of an Event of Default of the type described in
the
“Insolvency” subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies provided
in
the Related Documents or available at law, in equity, or otherwise. Except
as
may be prohibited by applicable law, all of Lender’s rights and remedies shall
be cumulative and may be exercised singularly or concurrently. Election by
Xxxxxx to pursue any remedy shall not exclude pursuit of any other remedy,
and
an election to make expenditures or to take action to perform an obligation
of
Borrower or of any Grantor shall not affect Xxxxxx’s right to declare a default
and to exercise its rights and remedies.
PRIMARY
DEPOSIT ACCOUNT.
Xxxxxxxx agrees and covenants with Lender that while this Agreement is in
effect, Borrower shall maintain a primary deposit account with
Lender.
NET
INCOME.
Beginning one year after the note date of this note, the Borrower shall maintain
Net Income tested on a monthly basis of not less than $145,000.00 per year
with
a minimum shareholders equity of $600,000.00. For purposes hereof, “Net Income”
means, for any period of determination, the after tax net income (or deficit)
of
the Borrower, determined in conformity with generally accepted accounting
principles in the United States of America in effect from time to time
consistently applied (“GAAP’).
RENT
ROLL AND COPIES OF LEASES.
Xxxxxxxx
agrees and covenants with Lender that while this Agreement is in effect,
Borrower shall provide
Lender
with a Rent Roll and copies of leases on an annual basis.
LOAN
TO VALUE RATIO MAINTENANCE REQUIREMENT.
The
outstanding principal balance under this Promissory Note shall not exceed
75%
of
the “as
is” appraised value of the property. For purposes hereof, “Loan to Value Ratio”
means the ratio of the outstanding balance of the loan to the value of the
collateral, as determined by the Lender.
MISCELLANEOUS
PROVISIONS.
The
following miscellaneous provisions are a part of this Agreement:
Amendments.
This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in
this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys’
Fees; Expenses.
Xxxxxxxx
agrees that if Xxxxxx hires an attorney to help enforce this Agreement, Borrower
will pay, subject
to any limits under applicable law, Xxxxxx’s attorneys’ fees equal to 15.000% of
the principal balance due on the Loan and all of Xxxxxx’s other collection
expenses, whether or not there is a lawsuit and including without limitation
additional legal expenses for bankruptcy proceedings.
Caption
Headings.
Caption
headings in this Agreement are for convenience purposes only and are not
to be
used to interpret or define the provisions of this Agreement.
Consent
to Jurisdiction.
Borrower
irrevocably submits to the jurisdiction of any state or federal court sitting
in
the State of Maryland over any suit, action, or proceeding arising out of
or
relating to this Agreement. Borrower irrevocably waives, to the fullest extent
permitted by law, any objection that Borrower may now or hereafter have to
the
laying of venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought in
any
such court has been brought in an inconvenient forum. Final judgment in any
such
suit, action, or proceeding brought in any such court shall be conclusive
and
binding upon Borrower and may be enforced in any court in which Borrower
is
subject to jurisdiction by a suit upon such judgment provided that service
of
process is effected upon Borrower as provided in this Agreement or as otherwise
permitted by applicable law.
Consent
to Loan Participation.
Xxxxxxxx
agrees and consents to Xxxxxx’s sale or transfer, whether now or later, of one
or more participation interests in the Loan to one or more purchasers, whether
related or unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any other
matter relating to the Loan, and Borrower hereby waives any rights to privacy
Borrower may have with respect to such matters. Borrower additionally waives
any
and all notices of sale of participation interests, as well as all notices
of
any repurchase of such participation interests. Xxxxxxxx also agrees that
the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale
of
such participation interests. Borrower further waives all rights of offset
or
counterclaim that it may have now or later against Lender or against any
purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Xxxxxxxx’s obligation under the Loan
irrespective of the failure or insolvency of any holder of any interest in
the
Loan. Xxxxxxxx further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Xxxxxx.
BUSINESS
LOAN AGREEMENT
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Loan
No: 2000564
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(Continued)
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Page
9
|
Governing
Law. This Agreement will be governed by federal law applicable to Lender
and, to
the extent not preempted by federal law, the laws
of the State of Maryland
without regard
to its conflicts of law provisions. This Agreement
has been accepted by Xxxxxx in the
State
of Maryland.
Choice
of Venue.
If there
is a lawsuit, Xxxxxxxx agrees upon Xxxxxx’s request to submit to the
jurisdiction of the courts of Xxxxxxxxxx County, State of Maryland.
JURY
WAIVER. XXXXXX AND BORROWER EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
OR
PROCEEDING TO WHICH LENDER OR
BORROWER MAY BE PARTIES, ARISING OUT OF, OR IN ANY WAY PERTAINING TO, THIS
AGREEMENT. IT IS AGREED THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY
OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS WAIVER
IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY XXXXXX AND XXXXXXXX, AND XXXXXX
AND
BORROWER EACH
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE
BY
ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY
OR
NULLIFY ITS EFFECT. XXXXXXXX FURTHER REPRESENTS THAT XXXXXXXX
HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF
THIS
WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF XXXXXXXX’S OWN FREE WILL, AND
THAT XXXXXXXX HAS HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH COUNSEL.
No
Waiver by Xxxxxx.
Lender
shall not be deemed to have waived any rights under this Agreement unless
such
waiver is given in writing and signed by Xxxxxx. No delay or omission on
the
part of Lender in exercising any right shall operate as a waiver of such
right
or any other right. A waiver by Xxxxxx of a provision of this Agreement shall
not prejudice or constitute a waiver of Lender’s right otherwise to demand
strict compliance with that provision or any other provision of this Agreement.
No prior waiver by Xxxxxx, nor any course of dealing between Xxxxxx and
Borrower, or between Lender and any Grantor, shall constitute a waiver of
any of
Lender’s rights or of any of Borrower’s or any Grantor’s obligations as to any
future transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent
is
required and in all cases such consent may be granted or withheld in the
sole
discretion of Lender.
Notices.
Any
notice required to be given under this Agreement shall be given in writing,
and
shall be effective when actually delivered, if hand delivered, when
actually
received
by telefacsimile (unless otherwise required by law), when deposited with
a
nationally recognized overnight courier, or, if mailed, when deposited in
the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of
the
notice is to change the party’s address. For notice purposes, Xxxxxxxx agrees to
keep Xxxxxx informed at all times of Xxxxxxxx’s current address. Unless
otherwise provided or required by law, if there is more than one Borrower,
any
notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.
Severability.
If a
court of competent jurisdiction finds any provision of this Agreement to
be
illegal, invalid, or unenforceable as to any circumstance, that finding shall
not make the offending provision illegal, invalid, or unenforceable as to
any
other circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity,
or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this
Agreement.
BUSINESS
LOAN AGREEMENT
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Loan
No: 2000564
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(Continued)
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Page
10
|
Subsidiaries
and Affiliates of Borrower.
To the
extent the context of any provisions of this Agreement makes it appropriate,
including without limitation any representation, warranty or covenant, the
word
“Borrower” as used in this Agreement shall include all of Borrower’s
subsidiaries and affiliates. Notwithstanding the foregoing however, under
no
circumstances shall this Agreement be construed to require Lender to make
any
Loan or other financial accommodation to any of Borrower’s subsidiaries or
affiliates.
Successors
and Assigns.
All
covenants and agreements by or on behalf of Borrower contained in this Agreement
or any Related Documents shall bind Borrower’s successors and assigns and shall
inure to the benefit of Lender and its successors and assigns. Borrower shall
not, however, have the right to assign Borrower’s rights under this Agreement or
any interest therein, without the prior written consent of Lender.
Survival
of Representations and Warranties.
Xxxxxxxx
understands and agrees that in making the Loan, Xxxxxx is relying on all
representations, warranties, and covenants made by Borrower in this Agreement
or
in any certificate or other instrument delivered by Borrower to Lender under
this Agreement or the Related Documents. Xxxxxxxx further agrees that regardless
of any investigation made by Xxxxxx, all such representations, warranties
and
covenants will survive the making of the Loan and delivery to Lender of the
Related - Documents, shall be continuing in nature, and shall remain in full
force and effect until such time as Borrower’s Indebtedness shall be paid in
full, or until this Agreement shall be terminated in the manner provided
above,
whichever is the last to occur.
Time
is of the Essence.
Time is
of the essence in the performance of this Agreement.
DEFINITIONS.
The
following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words
and
terms not otherwise defined in this Agreement shall have the meanings assigned
to them in accordance with generally accepted accounting principles as in
effect
on the date
of
this Agreement.
Advance.
The word
“Advance” means a disbursement of Loan funds made, or to be made, to Borrower or
on Borrower’s behalf on a line of credit or multiple advance basis under the
terms and conditions of this Agreement.
Agreement.
The word
“Agreement” means this Business Loan Agreement, as this Business Loan Agreement
may be amended or modified from time to time, together with all exhibits
and
schedules attached to this Business Loan Agreement from time to
time.
Borrower.
The word
“Borrower” means Xxxxxxxxx Holdings, Inc. and includes all co-signers and
co-makers signing the Note and all their successors and assigns.
Collateral.
The word
“Collateral” means all property and assets granted as collateral security for a
Loan, whether real or personal property, whether granted directly or indirectly,
whether granted now or in the future, and whether granted in the form of
a
security interest, mortgage, collateral mortgage, deed of trust, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien,
charge, lien or title retention contract, lease or consignment intended as
a
security device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.
BUSINESS
LOAN AGREEMENT
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Loan
No: 2000564
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(Continued)
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Page
11
|
Environmental
Laws.
The
words “Environmental Laws” mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or
the
environment, including without limitation the Comprehensive Environmental
Response, Compensation, and liability Act of 1980, as amended, 42 U.S.C.
Section
9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 (“XXXX”), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act,
42
U.S.C. Section 6901, et seq., or other applicable state or federal laws,
rules,
or regulations adopted pursuant thereto.
Event
of Default.
The
words “Event of Default” mean any of the events of default set forth in this
Agreement in the default section of this Agreement.
GAAP.
The word
“GAAP” means generally accepted accounting principles.
Grantor.
The word
“Grantor” means each and all of the persons or entities granting a Security
Interest in any Collateral for the Loan, and their personal representatives,
successors and assigns.
Guarantor.
The word
“Guarantor” means any guarantor, surety, or accommodation party of any or all of
the Loan.
Guaranty.
The word
“Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.
Hazardous
Substances.
The
words “Hazardous Substances” mean materials that, because of their quantity,
concentration or physical, chemical or infectious characteristics, may cause
or
pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. The words “Hazardous Substances” are used in
their very broadest sense and include without limitation any and all hazardous
or toxic substances, materials or waste as defined by or listed under the
Environmental Laws. The term “Hazardous Substances” also includes, without
limitation, petroleum and petroleum by-products or any fraction thereof and
asbestos.
Indebtedness.
The word
“Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under
this
Agreement or under any of the Related Documents.
Lender.
The word
“Lender” means Fidelity & Trust Bank, its successors and
assigns.
Loan.
The word
“Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including
without limitation those loans and financial accommodations described herein
or
described on any exhibit or schedule attached to this Agreement from time
to
time.
Note.
The word
“Note” means the Note executed by Xxxxxxxxx Holdings, Inc. in the principal
amount of $525,000.00 dated June 29, 2006, together with all modifications
of
and renewals, replacements, and substitutions for the note or credit
agreement.
Permitted
Liens.
The
words “Permitted Liens” mean (1) liens and security interests securing
Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments,
or
similar charges either not yet due or being contested in good faith; (3)
liens
of materialmen, mechanics, warehousemen, or carriers, or other like liens
arising in the ordinary course of business and securing obligations which
are
not yet delinquent; (4) purchase money liens or
purchase
money security interests upon or in any property acquired or held by Borrower
in
the ordinary course of business to secure indebtedness outstanding on the
date
of this Agreement or permitted to be incurred under the paragraph of this
Agreement titled “Indebtedness and Liens”; (5) liens and security interests
which, as of the date of this Agreement, have been disclosed to and approved
by
the Lender in writing; and (6) those liens and security interests which
in
the
aggregate constitute an immaterial and insignificant monetary amount with
respect to the net value of Xxxxxxxx’s assets.
BUSINESS
LOAN AGREEMENT
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Loan
No: 2000564
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(Continued)
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Page
11
|
Related
Documents.
The
words “Related Documents” mean all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all
other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Loan.
Security
Agreement.
The
words “Security Agreement” mean and include without limitation any agreements,
promises, covenants, arrangements, understandings or other agreements, whether
created by law, contract, or otherwise, evidencing, governing, representing, or
creating a Security Interest.
Security
Interest.
The
words “Security Interest” mean, without limitation, any and all types of
collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge,
crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s
lien, equipment trust, conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device, or any other
security or lien interest whatsoever whether created by law, contract, or
otherwise.
XXXXXXXX
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT
AND
XXXXXXXX AGREES TO ITS
TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE 29, 2006.
THIS
AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT
OF
A SEALED INSTRUMENT ACCORDING TO LAW.
BORROWER:
XXXXXXXXX
HOLDINGS, INC.
By: ______
/s/
Xxxx X. Xxxx ___________________(Seal)
Xxxx
X. Xxxx,
President of Xxxxxxxxx Holdings, Inc.
LENDER:
FIDELITY
& TRUST BANK
By: _________________________________________(Seal)
Authorized
Signer
PROMISSORY
NOTE
|
Principal
$525,000.00
|
Loan
Date
06-29-2006
|
Maturity
06-29-2009
|
Loan
No. 00000000
|
Call
/ Call
|
Account
|
Officer
CS
|
Initials
|
|
References
in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item
above containing “***” has been omitted due to text length
limitations.
|
|||||||
|
Borrower: Xxxxxxxxx
Holdings, Inc.
000
Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
|
Lender: Fidelity
& Trust Bank
0000
Xxxxxxx Xxx.
Bethesda,
MD 20814-9930
|
|
Principal
Amount: $525,000.00
|
Interest
Rate: 9.375%
|
Date
of Note: June 29, 2006
|
PROMISE
TO PAY. Xxxxxxxxx Holdings, Inc. (“Borrower”) promises to pay to Fidelity &
Trust Bank (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Five Hundred Twenty-five Thousand & 00/100
Dollars ($525,000.00), together with Interest at the rate of 9.375% per annum
on
the unpaid principal balance from June 29, 2006, until paid in full. The
interest rate may change under the terms and conditions of the “INTEREST AFTER
DEFAULT” section.
PAYMENT.
Borrower
will pay this loan in 35 regular payments of $4,591.52 each and one irregular
last payment estimated at $511,798.47. Xxxxxxxx's first payment is due July
29,
2006, and all subsequent payments are due on the same day of each month after
that. Xxxxxxxx's final payment will be due on June 29, 2009, and will be
for all
principal, accrued interest, and all other applicable fees, costs and charges,
if any, not yet paid. Payments include principal and interest. Unless otherwise
agreed or required by applicable law, payments will be applied first to any
accrued unpaid interest; then to principal; then to any late charges; and
then
to any unpaid collection coats. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Xxxxxx's address shown above or
at such
other place as Lender may designate in writing.
PREPAYMENT.
Borrower may pay without penalty all or a portion of the amount owed earlier
than it is due. Early payments will not, unless agreed to by Xxxxxx in writing,
relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to make payments under
the
payment schedule. Rather, early payments will reduce the principal balance
due
and may result in Borrower's making fewer payments. Xxxxxxxx agrees not to
send
Lender payments marked “paid in full”, “without recourse”, or similar language.
If Borrower sends such a payment, Xxxxxx may accept it without losing any
of
Xxxxxx's rights under this Note, and Borrower will remain obligated to pay
any
further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that
the
payment constitutes “payment in full” of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: Fidelity & Trust Bank, 0000 Xxxxxxx
Xxx. Bethesda, MD 20814-9930.
LATE
CHARGE.
If a
payment is 10 days or more late, Borrower will be charged 5.000%
of the unpaid portion of the regularly scheduled payment.
INTEREST
AFTER DEFAULT.
Upon
default, including failure to pay upon final maturity, the interest rate
on this
Note shall be increased by 5.000 percentage points. However, in no event
will
the interest rate exceed the maximum interest rate limitations under applicable
law.
DEFAULT.
Each of
the following shall constitute an event of default (“Event of Default') under
this Note:
Payment
Default.
Borrower fails to make any payment when due under this Note.
PROMISSORY
NOTE
|
Loan
No: 1000564
|
(Continued)
|
Page
2
|
Other
Defaults.
Borrower fails to comply with or to perform any other term, obligation, covenant
or condition contained in this Note or in any of the related documents or
to
comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.
Default
in Favor of Third Parties.
Borrower or any Grantor defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor
of any
other creditor or person that may materially affect any of Borrower's property
or Borrower's ability to repay this Note or perform Borrower's obligations
under
this Note or any of the related documents.
False
Statements.
Any
warranty, representation or statement made or furnished to Lender by Borrower
or
on Borrower's behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
Insolvency.
The
dissolution or termination of Borrower's existence as a going business, or
a
trustee or receiver is appointed for Borrower or for all or a substantial
portion of the assets of Borrower, or Xxxxxxxx makes a general assignment
for
the benefit of Xxxxxxxx's creditors, or Borrower files for bankruptcy, or
an
involuntary bankruptcy petition is filed against Borrower and such involuntary
petition remains undismissed for sixty (60) days.
Creditor
or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor
of
Borrower or by any governmental
agency against any collateral securing the loan. This includes a garnishment
of
any of Xxxxxxxx's accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by
Xxxxxxxx as to the validity or reasonableness of the claim which is the basis
of
the creditor or forfeiture proceeding and if Borrower gives Xxxxxx written
notice of the creditor or forfeiture proceeding and deposits with Lender
monies
or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or
bond for the dispute.
Events
Affecting Guarantor.
Any of
the preceding events occurs with respect to any Guarantor of any of the
indebtedness or any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note. In the event of a death, Lender, at its option, may,
but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of
Default.
Change
In Ownership.
Any
change in ownership of twenty-five percent (25%) or more of the common stock
of
Borrower.
Adverse
Change.
A
material adverse change occurs in Borrower's financial condition, or Xxxxxx
believes the prospect of payment or performance of this Note is
impaired.
Insecurity.
Lender
in good faith believes itself insecure.
LENDER'S
RIGHTS.
Upon
default, Xxxxxx may declare the entire unpaid principal balance under this
Note
and all accrued unpaid interest, together with all other applicable fees,
costs
and charges, if any, immediately due and payable, and then Borrower will
pay
that amount.
ATTORNEYS'
FEES; EXPENSES.
Subject
to any limits under applicable law, upon default, Xxxxxxxx agrees to pay
Xxxxxx's attorneys'
fees
equal to 15.000% of the principal balance due on the loan and all of Xxxxxx's
other collection expenses, whether or not there is a lawsuit, including without
limitation legal expenses for bankruptcy proceedings.
PROMISSORY
NOTE
|
Loan
No: 1000564
|
(Continued)
|
Page
3
|
JURY
WAIVER. XXXXXX AND BORROWER EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
OR
PROCEEDING TO WHICH LENDER OR BORROWER MAY BE PARTIES, ARISING OUT OF, OR
IN ANY
WAY PERTAINING TO, THIS NOTE. IT IS AGREED THAT THIS WAIVER CONSTITUTES A
WAIVER
OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
XXXXXX
AND XXXXXXXX, AND XXXXXX AND BORROWER EACH HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
XXXXXXXX FURTHER
REPRESENTS THAT XXXXXXXX HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE
AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF
XXXXXXXX'S OWN
FREE WILL, AND THAT XXXXXXXX HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH
COUNSEL.
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and,
to the
extent not preempted by federal law, the laws of the State of Maryland without
regard to its conflicts of law provisions. This Note has been accepted by
Xxxxxx
in the State of Maryland.
CHOICE
OF VENUE.
If
there is a lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to submit to the
jurisdiction of the courts of Xxxxxxxxxx County, State of Maryland.
CONFESSED
JUDGMENT.
UPON THE OCCURRENCE OF A DEFAULT, XXXXXXXX HEREBY AUTHORIZES ANY ATTORNEY
DESIGNATED BY XXXXXX OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR FOR BORROWER
IN ANY COURT OF RECORD AND CONFESS JUDGMENT WITHOUT PRIOR HEARING AGAINST
BORROWER IN FAVOR OF XXXXXX FOR, AND IN THE AMOUNT OF, THE UNPAID BALANCE
OF THE
PRINCIPAL AMOUNT OF THIS NOTE, ALL INTEREST ACCRUED AND UNPAID THEREON, ALL
OTHER AMOUNTS PAYABLE BY BORROWER TO LENDER UNDER THE TERMS OF THIS NOTE
OR ANY
OTHER AGREEMENT, DOCUMENTS, INSTRUMENT EVIDENCING, SECURING OR GUARANTYING
THE
OBLIGATIONS EVIDENCED BY THIS NOTE, COSTS OF SUIT, AND
ATTORNEYS'
FEES OF FIFTEEN PERCENT (15%) OF THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT
OF
THIS NOTE AND INTEREST THEN DUE HEREUNDER.
Borrower
hereby releases, to the extent permitted by applicable law, all errors and
all
rights of exemption, appeal, stay of execution, inquisition, and other rights
to
which Borrower may otherwise be entitled under the laws of the United States
or
of any state or possession of the United States now in force and which may
hereafter be enacted. The authority and power to appear for and enter judgment
against Borrower shall not be exhausted by one or more exercises thereof
or by
any imperfect exercise thereof and shall not be extinguished by any judgment
entered pursuant thereto. Such authority may be exercised on one or more
occasions or from time to time in the same or different jurisdictions as
often
as Lender shell deem necessary or desirable, for all of
which this
Note shell be a sufficient warrant.
DISHONORED
ITEM FEE.
Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on
Borrower's loan and the check with which Borrower pays is later
dishonored.
RIGHT
OF SETOFF.
To the
extent permitted by applicable law, Lender reserves a right of setoff in
all
Borrower's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone
else
and all accounts Borrower may open in the future. However, this does not
include
any IRA or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Xxxxxx, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against
any and all such accounts, and, at Xxxxxx's option, to administratively freeze
all such accounts to allow Lender to protect Xxxxxx's charge and setoff rights
provided in this paragraph.
COLLATERAL.
Xxxxxxxx acknowledges this Note is secured by the following collateral described
in the security instruments listed herein:
PROMISSORY
NOTE
|
Loan
No: 1000564
|
(Continued)
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Page
4
|
(A)
a
Deed of Trust dated June 29, 2006, to a trustee in favor of Lender on real
property located in Augusta County, Commonwealth of Virginia. The Real Property
or its address is commonly known as 33.522 acres on State Route 000 Xxxx,
Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxx, XX 00000.
(B)
an
Assignment of All Rents to Lender on real property located in Augusta County,
Commonwealth of Virginia. The Real Property or its address is commonly known
as
33.522 acres on State Route 000 Xxxx, Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxx, XX
00000.
(C)
fixtures described in a Commercial Security Agreement dated June 29,
2006.
CONSENT
TO JURISDICTION.
Borrower irrevocably submits to the jurisdiction of any state or federal
court
sitting in the State of Maryland over any suit, action, or proceeding arising
out of or relating to this Note. Borrower irrevocably waives, to the fullest
extent permitted by law, any objection that Borrower may now or hereafter
have
to the laying of venue of any such suit, action, or proceeding brought in
any
such court and any claim that any such suit, action, or proceeding brought
in
any such court has been brought in an inconvenient forum. Final judgment
in any
such suit, action, or proceeding brought in any such court shall be conclusive
and binding upon Borrower and may be enforced in any court in which Borrower
is
subject to jurisdiction by a suit upon such judgment provided that service
of
process is effected upon Borrower as provided in this Note or as otherwise
permitted by applicable law.
SUCCESSOR
INTERESTS.
The
terms of this Note shall be binding upon Xxxxxxxx, and upon Xxxxxxxx's heirs,
personal representatives, successors and assigns, and shall inure to the
benefit
of Lender and its successors and assigns.
NOTIFY
US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES.
Please
notify us if we report any inaccurate information about your account(s) to
a
consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: Fidelity &
Trust Bank 0000 Xxxxxxx Xxx. Bethesda, MD 20814-9930.
GENERAL
PROVISIONS.
If any
part of this Note cannot be enforced, this fact will not affect the rest
of the
Note. Borrower does not agree or intend to pay, and Xxxxxx does not agree
or
intend to contract for, charge, collect, take, reserve or receive (collectively
referred to herein as “charge or collect”), any amount in the nature of interest
or in the nature of a fee for this loan, which would in any way or event
(including demand, prepayment, or acceleration) cause Lender to charge or
collect more for this loan than the maximum Lender would be permitted to
charge
or collect by federal law or the law of the State of Maryland (as applicable).
Any such excess interest or unauthorized fee shall, instead of anything stated
to the contrary, be applied first to reduce the principal balance of this
loan,
and when the principal has been paid in full, be refunded to Borrower. Lender
may delay or forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs, guarantees
or
endorses this Note, to the extent allowed by law, waive presentment, demand
for
payment, and notice of dishonor. Upon any change in the terms of this Note,
and
unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Xxxxxx's
security interest in the collateral; and take any other action deemed necessary
by Xxxxxx without the consent of or notice to anyone. All such parties also
agree that Xxxxxx may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
PRIOR
TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS
NOTE. XXXXXXXX AGREES TO THE TERMS OF THE NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE.
THIS
NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO
LAW.
PROMISSORY
NOTE
|
Loan
No: 1000564
|
(Continued)
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Page
5
|
BORROWER:
XXXXXXXXX
HOLDINGS, INC.
By: _____
/s/
Xxxx X. Xxxx____________________(Seal)
Xxxx
X. Xxxx,
President of Xxxxxxxxx Holdings, Inc.
COMMERCIAL
GUARANTY
|
Principal
|
Loan
Date
|
Maturity
|
Loan
No.
|
Call
/ Call
|
Account
|
Officer
CS
|
Initials
|
|
References
in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item
above containing “***” has been omitted due to text length
limitations.
|
|||||||
|
Borrower: Xxxxxxxxx
Holdings, Inc.
000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
|
Lender: Fidelity
& Trust Bank
0000
Xxxxxxx Xxx.
Bethesda,
MD 20814-9930
|
|
Guarantor:
Xxxx
X. Xxxx
000
Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
|
|
CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE.
For
good and valuable consideration, Guarantor absolutely and unconditionally
guarantees full and punctual payment and satisfaction of the Indebtedness
of
Borrower to Lender, and the performance and discharge of all Borrower's
obligations under the Note and the Related Documents. This is a guaranty
of
payment and performance and not of collection, so Lender can enforce this
Guaranty against Guarantor even when Xxxxxx has not exhausted Xxxxxx's remedies
against anyone else obligated to pay the Indebtedness or against any collateral
securing the Indebtedness, this Guaranty or any other guaranty of the
Indebtedness. Guarantor will make any payments to Lender or its order, on
demand, in legal tender of the United States of America, in same-day funds,
without set-off or deduction or counterclaim, and will otherwise perform
Borrower's obligations under the Note and Related Documents. Under this
Guaranty, Guarantor's liability is unlimited and Guarantor's obligations
are
continuing.
INDEBTEDNESS.
The
word “Indebtedness” as used in this Guaranty means all of the principal amount
outstanding from time to time and at any one or more times, accrued unpaid
interest thereon and all collection costs and legal expenses related thereto
permitted by law, attorneys' fees, arising from any and all debts, liabilities
and obligations of every nature or form, now existing or hereafter arising
or
acquired, that Borrower individually or collectively or interchangeably with
others, owes or will owe Lender. “Indebtedness” includes, without limitation,
loans, advances, debts, overdraft indebtedness, credit card indebtedness,
lease
obligations, liabilities and obligations under any interest rate protection
agreements or foreign currency exchange agreements or commodity price protection
agreements, other obligations, and liabilities of Borrower, and any present
or
future judgments against Borrower, future advances, loans or transactions
that
renew, extend, modify, refinance, consolidate or substitute these debts,
liabilities and obligations whether: voluntarily or involuntarily incurred;
due
or to become due by their terms or acceleration; absolute or contingent;
liquidated or unliquidated; determined or undetermined; direct or indirect;
primary or secondary in nature or arising from a guaranty or surety; secured
or
unsecured; joint or several or joint and several; evidenced by a negotiable
or
non-negotiable instrument or writing; originated by Lender or another or
others;
barred or unenforceable against Borrower for any reason whatsoever; for any
transactions that may be voidable for any reason (such as infancy, insanity,
ultra xxxxx or otherwise); and originated then reduced or extinguished and
then
afterwards increased or reinstated.
If
Lender
presently holds one or more guaranties, or hereafter receives additional
guaranties from Guarantor, Lender's rights under all guaranties shall be
cumulative. This Guaranty shall not (unless specifically provided below to
the
contrary) affect or invalidate any such other guaranties. Guarantor's liability
will be Guarantor's aggregate liability under the terms of this Guaranty
and any
such other unterminated guaranties.
COMMERCIAL
GUARANTY
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Loan
No: 1000564
|
(Continued)
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Page
2
|
CONTINUING
GUARANTY.
THIS IS
A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND
PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER
TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND
CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL
NOT
DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY
FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE
OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.
DURATION
OF GUARANTY.
This
Guaranty will take effect when received by Lender without the necessity of
any
acceptance by Xxxxxx, or any notice to Guarantor or to Borrower, and will
continue in full force until all the indebtedness incurred or contracted
before
receipt by Lender of any notice of revocation shall have been fully and finally
paid and satisfied and all of Guarantor's other obligations under this Guaranty
shall have been performed in full. If Guarantor elects to revoke this Guaranty,
Guarantor may only do so in writing. Guarantor's written notice of revocation
must be mailed to Lender, by certified mail, at Xxxxxx's address listed above
or
such other place as Lender may designate in writing. Written revocation of
this
Guaranty will apply only to advances or new Indebtedness created after actual
receipt by Xxxxxx of Guarantor's written revocation. For this purpose and
without limitation, the term “new Indebtedness” does not include the
Indebtedness which at the time of notice of revocation is contingent,
unliquidated, undetermined or not due and which later becomes absolute,
liquidated, determined or due. This Guaranty will continue to bind Guarantor
for
all the Indebtedness incurred by Xxxxxxxx or committed by Xxxxxx prior to
receipt of Guarantor's written notice of revocation, including any extensions,
renewals, substitutions or modifications of the Indebtedness. All renewals,
extensions, substitutions, and modifications of the Indebtedness granted
after
Guarantor's revocation, are contemplated under this Guaranty and, specifically
will not be considered to be new Indebtedness. This Guaranty shall bind
Guarantor's estate as to the Indebtedness created both before and after
Guarantor's death or incapacity, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in
the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty
of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall
not
affect the liability of any remaining Guarantors under this Guaranty.
It
is anticipated that fluctuations may occur in the aggregate amount of the
Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges
and agrees that reductions in the amount of the Indebtedness, even to zero
dollars ($0.00), prior to Guarantor's written revocation of this Guaranty
shall
not constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of
the
Indebtedness remains unpaid and even though the Indebtedness may from time
to
time be zero dollars ($0.00).
GUARANTOR'S
AUTHORIZATION TO LENDER.
Guarantor authorizes Lender, either before or after any revocation hereof,
without
notice or demand and without lessening Guarantor's liability under this
Guaranty, from time to time:
(A)
prior to revocation as set forth above, to make one or more additional secured
or unsecured loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time
for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
(C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not
to
perfect, and release any such security, with or without the substitution
of new
collateral; (D) to release, substitute, agree not to sue, or deal with any
one
or more of Borrower's sureties, endorsers, or other guarantors on any terms
or
in any manner Lender may choose; (E) to determine how, when and what
application of payments and credits shall be made on the Indebtedness; (F)
to
apply such security and direct the order or manner of sale thereof, including
without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its discretion
may
determine; (G) to sell, transfer, assign or grant participations in all or
any
part of the Indebtedness; and (H) to assign or transfer this Guaranty in
whole
or in part.
COMMERCIAL
GUARANTY
|
Loan
No: 1000564
|
(Continued)
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Page
3
|
GUARANTOR'S
REPRESENTATIONS AND WARRANTIES.
Guarantor represents and warrants to Lender that (A) no representations or
agreements of any kind have been made to Guarantor which would
limit or qualify in any way the terms of this Guaranty; (B) this Guaranty
is
executed at Borrower's request and not at the request of Lender; (C) Guarantor
has full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a default under
any agreement or other instrument binding upon Guarantor and do not result
in a
violation of any law, regulation, court decree or order applicable to Guarantor;
(E) Guarantor has not and will not, without the prior written consent of
Lender,
sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose
of
all or substantially all of Guarantor's assets, or any interest therein;
(F)
upon Lender's request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information
which currently has been, and all future financial information which will
be
provided to Lender is and will be true and correct in all material respects
and
fairly present Guarantor's financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred in
Guarantor's
financial condition since the date of the most recent financial statements
provided to Lender and no event has occurred which may materially adversely
affect Guarantor's financial condition; (H) no litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes)
against Guarantor is pending or threatened; (I) Lender has made no
representation to Guarantor as to the creditworthiness of Borrower; and (J)
Guarantor has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower's financial condition. Guarantor
agrees to keep adequately informed from such means of any facts, events,
or
circumstances which might in any way affect Guarantor's risks under this
Guaranty, and Guarantor further agrees that, absent a request for information,
Xxxxxx shall have no obligation to disclose to Guarantor any information
or
documents acquired by Lender in the course of its relationship with
Borrower.
GUARANTOR'S
FINANCIAL STATEMENTS.
Xxxxxxxxx agrees to furnish Lender with the following:
Tax
Returns.
As soon
as available, but in no event later than ninety (90) days after the applicable
filing date for the tax reporting period ended, Federal and other governmental
tax returns, prepared by a certified public accountant satisfactory to
Lender.
Additional
Requirements.
Guarantor will provide PERSONAL FINANCIAL STATEMENTS on an annual
basis.
All
financial reports required to be provided under this Guaranty shall be prepared
in accordance with GAAP, applied on a consistent basis, and certified by
Guarantor as being true and correct.
GUARANTOR'S
WAIVERS.
Except
as prohibited by applicable law, Guarantor waives any right to require Lender
(A) to continue lending money or to extend other credit to Borrower; (B)
to make
any presentment, protest, demand, or notice of any kind, including notice
of any
nonpayment of the Indebtedness or of any nonpayment related to any collateral,
or notice of any action or nonaction on the part of Borrower, Lender, any
surety, endorser, or other guarantor in connection with the Indebtedness
or in
connection with the creation of new or additional loans or obligations; (C)
to
resort for payment or to proceed directly or at once against any person,
including Borrower or any other guarantor; (D) to proceed directly against
or
exhaust any collateral held by Xxxxxx from Borrower, any other guarantor,
or any
other person; (E) to give notice of the terms, time, and place of any public
or
private sale of personal property security held by Xxxxxx from Borrower or
to
comply with any other applicable provisions of the Uniform Commercial Code;
(F)
to pursue any other remedy within Lender's power; or (G) to commit any act
or
omission of any kind, or at any time, with respect to any matter
whatsoever.
COMMERCIAL
GUARANTY
|
Loan
No: 1000564
|
(Continued)
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Page
4
|
Guarantor
also waives any and all rights or defenses based on suretyship or impairment
of
collateral including, but not limited to, any rights or defenses arising
by
reason of (1) any election of remedies by Xxxxxx which destroys or otherwise
adversely affects Guarantor's subrogation rights or Guarantor's rights to
proceed against Borrower for reimbursement, including without limitation,
any
loss of rights Guarantor may suffer by reason of any law limiting, qualifying,
or discharging the Indebtedness; (2) any disability or other defense of
Borrower, of any other guarantor, or of any other person, or by reason of
the
cessation of Borrower's liability from any cause whatsoever, other than payment
in full in legal tender, of the Indebtedness; (3) any right to claim discharge
of the Indebtedness on the basis of unjustified impairment of any Collateral
for
the Indebtedness; or (4) any statute of limitations, if at any time any action
or suit brought by Lender against Guarantor is commenced, there is outstanding
Indebtedness which is not barred by any applicable statute of limitations.
Guarantor acknowledges and agrees that Guarantor's obligations under this
Guaranty shall apply to and continue with respect to any amount paid to Lender
which is subsequently recovered from Lender for any reason whatsoever (including
without limitation as a result of bankruptcy, insolvency or fraudulent
conveyance proceeding), notwithstanding the fact that all or a part of the
Indebtedness may have been previously paid, or this Guaranty may have been
terminated, or both.
Guarantor
further waives and agrees not to assert or claim at any time any deductions
to
the amount guaranteed under this Guaranty for any claim of setoff, counterclaim,
counter demand, recoupment or similar right, whether such claim, demand or
right
may be asserted by the Borrower, the Guarantor, or both.
Guarantor's
Understanding With Respect To Waivers.
Guarantor warrants and agrees that each of the waivers set forth above is
made
with Guarantor's full knowledge of its significance and consequences and
that,
under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
Right
of Setoff.
To the
extent permitted by applicable law, Lender reserves a right of setoff in
all
Guarantor's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Guarantor holds jointly with someone
else
and all accounts Guarantor may open in the future. However, this does not
include any IRA or Xxxxx accounts, or any trust accounts for which setoff
would
be prohibited by law. Guarantor authorizes Xxxxxx, to the extent permitted
by
applicable law, to hold these funds if there is a default, and Lender may
apply
the funds in these accounts to pay what Guarantor owes under the terms of
this
Guaranty.
Subordination
of Xxxxxxxx's Debts to Guarantor.
Guarantor agrees that the Indebtedness, whether now existing or hereafter
created, shall be superior to any claim that Guarantor may now have or hereafter
acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower,
upon any account whatsoever, to any claim that Lender may now or hereafter
have
against Borrower. In the event of insolvency and consequent liquidation of
the
assets of Borrower, through bankruptcy, by an assignment for the benefit
of
creditors, by voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both Xxxxxx and Guarantor shall
be
paid to Lender and shall be first applied by Lender to the Indebtedness.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a
legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Xxxxxxxxx agrees, and Xxxxxx is hereby authorized, in the name of Guarantor,
from time to time to file financing statements and continuation statements
and
to execute documents and to take such other actions as Lender deems necessary
or
appropriate to perfect, preserve and enforce its rights under this
Guaranty.
COMMERCIAL
GUARANTY
|
Loan
No: 1000564
|
(Continued)
|
Page
5
|
CONFESSED
JUDGMENT.
UPON THE OCCURRENCE OF A DEFAULT ON THE INDEBTEDNESS, GUARANTOR HEREBY
AUTHORIZES ANY ATTORNEY DESIGNATED BY XXXXXX OR ANY CLERK OF ANY COURT OF
RECORD
TO APPEAR FOR GUARANTOR IN ANY COURT OF RECORD AND CONFESS JUDGMENT WITHOUT
PRIOR HEARING AGAINST GUARANTOR IN FAVOR OF XXXXXX FOR, AND IN THE AMOUNT
OF,
THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY, ALL INTEREST
ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS PAYABLE BY GUARANTOR TO LENDER
UNDER THE TERMS OF THIS GUARANTY OR ANY OTHER AGREEMENT, DOCUMENTS, INSTRUMENT
EVIDENCING, SECURING OR GUARANTYING THE OBLIGATIONS EVIDENCED BY THIS GUARANTY,
COSTS OF SUIT, AND ATTORNEYS' FEES OF FIFTEEN PERCENT (15%) OF THE UNPAID
BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY AND INTEREST THEN DUE
HEREUNDER.
Guarantor
hereby releases, to the extent permitted by applicable law, all errors and
all
rights of exemption, appeal, stay of execution, inquisition, and other rights
to
which Borrower may otherwise be entitled under the laws of the United States
or
of any state or possession of the United States now in force and which may
hereafter be enacted. The authority and power to appear for and enter judgment
against Guarantor shall not be exhausted by one or more exercises thereof
or by
any imperfect exercise thereof and shall not be extinguished by any judgment
entered pursuant thereto. Such authority may be exercised on one or more
occasions or from time to time in the same or different jurisdictions as
often
as Lender shall deem necessary or desirable, for all of which this Guaranty
shall be a sufficient warrant.
Miscellaneous
Provisions.
The
following miscellaneous provisions are a part of this Guaranty:
Amendments.
This
Guaranty, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in
this
Guaranty. No alteration of or amendment to this Guaranty shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys'
Fees; Expenses.
Xxxxxxxxx agrees that if Xxxxxx hires an attorney to help enforce this Guaranty,
Guarantor will pay, subject to any limits under applicable law, Xxxxxx's
attorneys' fees equal to 15.000% of the amount due under this Guaranty and
all
of Xxxxxx's other collection expenses, whether or not there is a lawsuit
and
including without limitation additional legal expenses for bankruptcy
proceedings.
Caption
Headings.
Caption
headings in this Guaranty are for convenience purposes only and are not to
be
used to interpret or define the provisions of this Guaranty.
Governing
Law.
This
Guaranty will be governed by federal law applicable to Lender and, to the
extent
not preempted by federal law, the laws of the State of Maryland without regard
to its conflicts of law provisions. This Guaranty has been accepted by Lender
in
the State of Maryland.
Choice
of Venue.
If
there is a lawsuit, Xxxxxxxxx agrees upon Xxxxxx's request to submit to the
jurisdiction of the courts of Xxxxxxxxxx County, State of Maryland.
COMMERCIAL
GUARANTY
|
Loan
No: 1000564
|
(Continued)
|
Page
6
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Integration.
Xxxxxxxxx further agrees that Guarantor has read and fully understands the
terms
of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's
attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's
intentions and parol evidence is not required to interpret the terms of this
Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all
losses, claims, damages, and costs (including Xxxxxx's attorneys' fees) suffered
or incurred by Xxxxxx as a result of any breach by Guarantor of the warranties,
representations and agreements of this paragraph.
Interpretation.
In all
cases where there is more than one Borrower or Guarantor, then all words
used in
this Guaranty in the singular shall be deemed to have been used in the plural
where the context and construction so require; and where there is more than
one
Borrower named in this Guaranty or when this Guaranty is executed by more
than
one Guarantor, the words “Borrower” and “Guarantor” respectively shall mean all
and any one or more of them. If a court finds that any provision of this
Guaranty is not valid or should not be enforced, that fact by itself will
not
mean that the rest of this Guaranty will not be valid or enforced. Therefore,
a
court will enforce the rest of the provisions of this Guaranty even if a
provision of this Guaranty may be found to be invalid or unenforceable. If
any
one-or
more
of Borrower or Guarantor are corporations, partnerships, limited liability
companies, or similar entities, it is not necessary for Lender to inquire
into
the powers of Borrower or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting to act on their behalf, and
any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.
JURY
WAIVER. LENDER AND BORROWER AND GUARANTOR EACH HEREBY WAIVE TRIAL BY JURY
IN ANY
ACTION OR PROCEEDING TO WHICH LENDER OR BORROWER OR GUARANTOR MAY BE PARTIES,
ARISING OUT OF, OR IN ANY WAY PERTAINING TO, THIS GUARANTY. IT IS AGREED
THAT
THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS WAIVER IS KNOWINGLY, WILLINGLY
AND
VOLUNTARILY MADE BY XXXXXX AND XXXXXXXX AND GUARANTOR, AND XXXXXX AND BORROWER
AND GUARANTOR EACH HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. XXXXXXXX AND GUARANTOR EACH FURTHER
REPRESENT THAT EACH HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY
AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF EACH'S
OWN
FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
Notices.
Any
notice required to be given under this Guaranty shall be given in writing,
and,
except for revocation notices by Guarantor, shall be effective when actually
delivered, if hand delivered, when actually received by telefacsimile (unless
otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail,
as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Guaranty. All revocation notices
by
Guarantor shall be in writing and shall be effective upon delivery to Lender
as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.” Any
party may change its address for notices under this Guaranty by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Xxxxxxxxx agrees to
keep
Xxxxxx informed at all times of Guarantor's current address. Unless otherwise
provided or required by law, if there is more than one Guarantor, any notice
given by Lender to any Guarantor is deemed to be notice given to all
Guarantors.
COMMERCIAL
GUARANTY
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7
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No
Waiver by Xxxxxx.
Lender
shall not be deemed to have waived any rights under this Guaranty unless
such
waiver is given in writing and signed by Xxxxxx. No delay or omission on
the
part of Lender in exercising any right shall operate as a waiver of such
right
or any other right. A waiver by Xxxxxx of a provision of this Guaranty shall
not
prejudice or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty. No
prior
waiver by Xxxxxx, nor any course of dealing between Xxxxxx and Guarantor,
shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of Lender
is
required under this Guaranty, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances
where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
Successors
and Assigns.
Subject
to any limitations stated in this Guaranty on transfer of Guarantor's interest,
this Guaranty shall be binding upon and inure to the benefit of the parties,
their heirs, personal representatives, successors and assigns.
Definitions.
The
following capitalized words and terms shall have the following meanings when
used in this Guaranty. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:
Borrower.
The
word “Borrower” means Xxxxxxxxx Holdings, Inc. and includes all co-signers and
co-makers signing the Note and all their successors and assigns.
GAAP.
The
word “GAAP” means generally accepted accounting principles.
Guarantor.
The
word “Guarantor” means everyone signing this Guaranty, including without
limitation Xxxx X. Xxxx, and in each case, any signer's successors and
assigns.
Guaranty.
The
word “Guaranty” means this guaranty from Guarantor to Lender.
Indebtedness.
The
word “Indebtedness” means Xxxxxxxx's indebtedness to Lender as more particularly
described in this Guaranty.
Lender.
The
word “Lender” means Fidelity & Trust Bank, its successors and
assigns.
Note.
The
word “Note” means and includes without limitation all of Borrower's promissory
notes and/or credit agreements evidencing Borrower's loan obligations in
favor
of Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for promissory notes
or
credit agreements.
Related
Documents.
The
words “Related Documents” mean all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all
other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS
THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN
THE
MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL
ACCEPTANCE BY XXXXXX IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED JUNE 29, 2006.
COMMERCIAL
GUARANTY
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Loan
No: 1000564
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(Continued)
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8
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THIS
GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND
SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO
LAW.
GUARANTOR:
X
/s/
Xxxx X. Xxxx (Seal)
Xxxx
X.
Xxxx
INDIVIDUAL
ACKNOWLEDGMENT
STATE
OF_____________________)
)
COUNTY
OF___________________)
On
this
day before me, the undersigned Notary Public, personally appeared Xxxx X.
Xxxx,
to me known to be the individual described in and who executed the Commercial
Guaranty, and acknowledged that he or she signed the Guaranty as his or her
free
and voluntary act and deed, for the uses and purposes therein
mentioned.
Given
under any hand and official seal this ____ day
of ___________,
20__ .
By
_______________________________ Residing
at _____________________________________
Notary
Public in and for _______________ My
commission expires ___________________________
