LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement"), dated as of October 17, 2001
(the "Closing Date"), is between FLEET NATIONAL BANK ("Lender"), with
an address of One Bethlehem Plaza, Bethlehem, Pennsylvania and D. Xxx
XxXxxxxx and Xxxxx X. XxXxxxxx (individually and collectively, jointly
and severally, the "Borrower"), Individuals, with an address of 1512
Broad Run Road, Landenberg, Pennsylvania 19350. The Loan Agreement and
all of the other agreements, notes, instruments, guarantees, amendments,
certificates, financing statements, and other documents that are or may
later be entered into between any one or more of Borrower, Lender, and/or
any Guarantor (as defined below) are sometimes referred to in this
Agreement as the "Loan Documents." With this in mind, Lender and Borrower,
each intending to be legally bound by the provisions of this Agreement
and the other Loan Documents, agree as follows:
ARTICLE I
CREDIT ACCOMMODATIONS
1.1 Loan. On the Closing Date, Lender will make a loan (the
"Loan") to Borrower in the amount Sixty Three Thousand and 00/100
($63,000.00) and under the repayment terms described in the promissory
note executed by Borrower on the date hereof (such promissory note,
together with all replacements and renewals of and amendments to, the
"Note") in conjunction with this Agreement. Capitalized terms contained
herein and not otherwise defined shall have the meanings ascribed to
such terms in the Note.
1.2 Repayment and Prepayment. Borrower will pay the amounts due
under this Agreement and the Note directly to Lender at the address of
Lender listed above. Lender will apply any payments received from Borrower
first to interest due and payable and then to the outstanding principal
balance of the Loan. Unless otherwise provided on Schedule 1.2 to this
Agreement, Borrower may make payments and prepayments of the Loan at any
time without penalty or premium. Lender will apply any principal
prepayments to installments of principal due under the Note in the
inverse order of their maturity.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants to Lender as of the Closing Date:
2.1 Good Standing of Borrower: Authorization. If not an individual,
Borrower is a _ corporation partnership _ sole proprietorship _ limited
liability company _ limited liability partnership, duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its organization or formation, is duly qualified and is in good
standing under the laws of each jurisdiction in which it is required to
be qualified, and has the necessary power and authority to enter into
and perform its obligations under the Loan Documents. If an individual,
Borrower is an adult and is legally competent. The execution and
performance of the Loan Documents have been duly authorized by all
necessary proceedings on the part of Borrower, and, upon their
execution and delivery, the Loan Documents will be valid, binding,
and enforceable in accordance with their terms. Borrowers execution
and performance of the Loan Documents will not violate any orders,
laws or regulations applicable to Borrower, any organizational
documents of Borrower, or any instruments, indentures or agreements
to which Borrower is a party or by which Borrower or any of its
properties are bound; and all consents and approvals required in
connection with this Agreement, the other Loan Documents have been
obtained and are in full force and effect. Borrowers subsidiaries and
affiliates, if any, are duly organized, validly existing, and in good
standing under the laws of the jurisdictions of their organization.
2.2 Compliance with Laws and Other Agreements. Borrower is in
compliance with all laws, rules, regulations, judgments, decrees,
orders, agreements and requirements which materially affect Borrower,
its assets or the operation of its business.
2.3 No Conflict; Governmental Approvals. The execution, delivery,
and performance of this Agreement and each of the Loan Documents will not
(i) conflict with, violate or result in a breach of any provision of any
applicable law, rule, regulation, judgment, decree, order, instrument or
other agreement, (ii) conflict with or result in a breach of any provision
of the certificate of incorporation, by-laws, partnership agreement,
operating agreement or charter (as applicable) of Borrower. No
authorization, permit, consent or approval of or other action by, and no
filing, registration or declaration with, any governmental authority or
regulatory body is required to be obtained or made by Borrower for the
due execution, delivery and performance of this Agreement or any of the
Loan Documents, except such as have been duly obtained or made prior to
the Closing Date and which are in full force and effect as of the Closing
Date (copies of which have been delivered to Lender on or before the
Closing Date).
2.4 Taxes. Except as disclosed by Borrower to Lender in writing,
Borrower is not delinquent in payment of any income, property or other
tax, except for any delinquency in the payment of a tax which is contested
in good faith by Borrower and for which appropriate reserves have been
established in accordance with generally accepted accounting principles,
consistently applied ("GAAP").
2.5 Encumbrances and Guaranties.
(a) All properties and assets of Borrower are owned by Borrower
free and clear of all liens and encumbrances except liens and
encumbrances: (i) for taxes or other government changes not yet
delinquent; (ii.) arising in connection with indebtedness that does
not materially impair the use or value of the properties or assets of
Borrower in the conduct of its businesses; or (iii) otherwise permitted
under any other Loan Document, all of which have been disclosed to Lender
in writing.
(b) Borrower is not obligated under any guaranty, surety
agreement or any other contingent liability with respect to any
obligation of another person or entity.
2.6 Pending Litigation. Except as disclosed by Borrower to
Lender in writing, there are no actions, suits, proceedings or
investigations pending, or, to the knowledge of Borrower, threatened
against or affecting Borrower, before any court, arbitrator or
administrative or governmental body which, in the aggregate, might
materially adversely affect Borrower or the ability of Borrower to
perform its obligations under this Agreement and the other Loan
Documents.
2.7 Valid, Binding and Enforceable. This Agreement and the Loan
Documents have been duly and validly executed and delivered and
constitute valid and legally binding obligations enforceable in
accordance with their respective terms, except as enforcement of this
Agreement and the other Loan Documents may be limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights and except as
enforcement is subject to general equitable principles.
2.8 Environmental Matters. (i) Borrower has performed all of
its obligations under, has obtained all necessary approvals, permits,
authorizations and other consents required by, and is not in material
violation of, any Environmental Laws. (ii) Borrower has not received
any notice, citation, summons, directive, order or other communication,
written or oral, from, and Borrower has no knowledge of the filing or
giving of any such notice, citation, summons, directive, order or other
communication by, any governmental or quasi-governmental authority or
agency or any other person concerning the presence, generation, treatment,
storage, transportation, transfer, disposal, release or other handling of
any Hazardous Materials within, on, from, related to, or affecting any
real property owned or occupied by Borrower. (iii) To the best of
Borrowers knowledge, after reasonable inquiry, no real property owned
or occupied by Borrower has ever been used, either by Borrower or any
of its predecessors in interest, to generate, treat, store, transport,
transfer, dispose of, release or otherwise handle any Hazardous Material
in violation of any applicable Environmental Laws. (iv) To the best of
Borrower's knowledge, after due inspection, there are no Hazardous
Materials within, on or under any real property owned or occupied by
Borrower in violation of any applicable Environmental Laws. As used in
this Agreement, the phrase "Environmental Laws" means the Federal
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. sect. 9601, et. seq., the Federal Resource Conservation and
Recovery Act, 42 U.S.C. section 6901 et. seq., the Hazardous Materials
Transportation Act, 49 U.S.C. section 1801, et. seq., all other federal,
state and local environmental or health laws applicable to Borrower or
its business, operations or assets now or hereafter enacted, and all
rules, regulations, orders and publications adopted or promulgated
pursuant thereto from time to time and the phrase "Hazardous Materials"
means all materials which are flammable, explosive, toxic, radioactive
or otherwise hazardous to animal or plan life or the environment,
including, without limitation, "hazardous wastes," "hazardous
substances" and "contaminants" as such terms are defined by
Environmental Laws.
2.9 Year 2000 Compliance. The performance of the software used by
Borrower in the management and operation of its business (the "Software")
will not be adversely affected by the transition from the year 1999 to
the year 2000 and subsequent years ("Year 2000 Issue").
2.10 ERISA Compliance. No employee benefit plan established or
maintained by Borrower which is subject to the Employee Retirement Income
Security Act, 29 U.S.C. sect. 1001 et seq. ("ERISA") has an accumulated
funding deficiency (as such term is defined in ERISA). No material
liability to the Pension Benefit Guaranty Corporation (or any successor
thereto under ERISA) has been incurred by Borrower with respect to any
such plan and no Reportable Event under ERISA has occurred. Borrower has
no actual or anticipated liability under Section 4971 of the Internal
Revenue Code ("Code") (relating to tax on failure to meet the minimum
funding standard of Section 412 of the Code) with respect to any employee
benefit plan to which it contributes but which is not maintained or
established by it.
2.11 No Untrue Statements. Neither this Agreement, the Loan
Documents nor any other document, certificate or statement furnished or
to be furnished by Borrower or by any other party to Lender in connection
herewith contains, or at the time of delivery will contain, any untrue
statement of any material fact or omits orwill omit any material fact
necessary in order to make the statements contained herein and therein
not misleading.
ARTICLE III
AFFIRMATIVE COVENANTS OF BORROWER
In addition to the affirmative covenants set forth in the Note,
Borrower hereby covenants and agrees that from the Closing Date and
until satisfaction In full of all Obligations, unless Lender otherwise
agrees in writing, Borrower shall do the following:
3.1 Financial Statements and Information. Furnish to Lender: (i)
within a reasonable time after the end of each fiscal year, as
determined by Lender, financial statements of Borrower, which shall be
audited, reviewed, compiled, management prepared or prepared on such
other basis as Lender shall require, and which shall include a balance
sheet, statement of income, statement of cash flows arid such other
Financial statements of Borrower in such detail as Lender may reasonably
request. Such financial statements shall be prepared in accordance with
GAAP, and, if required to be audited, shall be accompanied by the
opinion, satisfactory in form and substance to Lender, of an
independent certified public accountant acceptable to Lender; (ii)
within a reasonable time after the end of each fiscal quarter, as
determined by Lender, a balance sheet, statement of income, statement
of cash flows and such other financial statements in such detail as
Lender may reasonably request, which shall be prepared in accordance
with GAAP by Borrower's management and certified by the chief financial
officer of Borrower; and (iii) within a reasonable time after the
end of each fiscal quarter, as determined by Lender, a detailed aging
of Borrower's accounts receivable and accounts payable together with
a detailed inventory report all in form and substance satisfactory to
Lender.
3.2 Ordinary Course of Business: Records. Conduct its business
only in the ordinary course and keep accurate and complete books and
records of its assets, liabilities and operations consistent with sound
business practices and in accordance with GAAP.
3.3 Insurance. Keep and maintain extended coverage, general
liability, business interruption, hazard, property and other insurance
in amounts and with carriers deemed acceptable by Lender and as is
customary for businesses similar to Borrower's business, and deliver
to Lender certificates of all such insurance in effect- and cause all
such policies covering any collateral and business interruption to
contain loss payee endorsements in favor of Lender and, in the case of
real property, insurance mortgagee/loss payee endorsements in favor of
Lender, and to be subject to cancellation or reduction in coverage only
upon 30 days prior written notice thereof to Lender at its address set
forth in this Agreement.
3.4 Maintenance. Maintain its equipment, real property and other
properties in good condition and repair (normal wear and tear excepted)
and pay and discharge the cost of repairs thereto or maintenance thereof.
3.5 Taxes. Pay all taxes, assessments, charges and levies imposed
upon it or on any of its property, or which it is required to withhold
and pay over, and provide evidence of payment thereto to Lender if Lender
so requests, except where contested in good faith by lawful and
appropriate proceedings and where adequate reserves therefor have been
set aside on its books.
3.6 Leases. Pay when due all rent or other sums required by every
lease to which Borrower is a party arid perform all obligations as
tenant or lessee and keep all Such leases at all times in full force
and effect.
3.7 Corporate Existence; Certain Rights; Law . Do all things
necessary to preserve and keep in full force and effect in each
jurisdiction in which it conducts business the business existence,
licenses, permits, rights, patents, trademarks, trade names and
franchises of Borrower and comply with all present and future taws,
ordinances, rules, regulations, judgments, orders and decrees which
affect in any material way Borrower, its assets or the operation of
its business.
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3.8 Notice of Litigation or Other Proceedings. Give immediate
notice to Lender of (i) the existence of any dispute, (ii) the
institution of any litigation, administrative proceeding or governmental
investigation involving Borrower; (iii) the details of any Reportable
Events (as defined in ERISA) which have occurred; or (iv) the entry of
any judgment, decree or order against or involving Borrower, any of
which might materially and adversely affect the operation, financial
condition, property or business of Borrower or affect the
enforceability of this Agreement or any of the other Loan Documents.
3.9 Indebtedness. Pay or cause to be paid when due (or within
applicable grace periods) all obligations, liabilities, and/or other
indebtedness of Borrower to any person or entity (such obligations,
liabilities, and indebtedness are referred to collectively in this
Agreement as "Indebtedness").
3.10 Notice of Events of Default. Give immediate notice to Lender
of the occurrence of any Event of Default.
3.11 Further Actions. Cooperate with Lender, at its own expense,
in taking such further actions as Lender deems necessary to carry out
the provisions of the Loan Documents.
3.12 Change In Key Personnel. Give immediate notice to Lender of
any change in Borrower's key management personnel, including, as the
case may be, any change in Borrower's officers, directors, chief
executive officers, chief financial officers, general partners,
managing partners, or authorized members.
3.13 Compliance with Environmental Laws. Comply fully with all
Environmental Laws and not use any property which it owns or occupies
to generate, treat, store, transport, transfer, dispose of, release or
otherwise handle any Hazardous Material, except in compliance with all
Environmental Laws.
3.14 Year 2000 Compliance. Complete any modifications to its
Software necessary to address the Year 2000 Issue in order to assure
that Borrower will completely and timely address its Year 2000 Issue
prior to January 1, 2000, and give Immediate notice to Lender of any
failure to comply with the requirements of this provision.
3.15 Lender As Only Bank. Except as otherwise agreed in writing
by Lender, maintain all of its depository, savings, checking and other
accounts exclusively with Lender.
3.16 Additional Affirmative Covenants. Perform any other
affirmative covenants set forth on Schedule 3.16
ARTICLE IV
NEGATIVE COVENANTS
In addition to the negative covenants set forth in the Note,
Borrower hereby covenants and agrees that from the Closing Date until
satisfaction in full of the Obligations, it will not do any one or more
of the following without first obtaining the written consent of Lender:
4.1 Indebtedness. Incur, create, assume or have any Indebtedness
except the Obligations.
4.2 Negative Pledge. Create or allow any lien or encumbrances to
be on or otherwise affect any of its property or assets except liens or
encumbrances in favor of Lender.
4.3 Guaranties. Directly or indirectly make any guaranty, agreement
to be a surety or other contingent liability, direct or indirect, with
respect to any obligation of another person or entity.
4.4 Debt to Equity Ratio Requirements. Permit the ratio of
Consolidated Total Liabilities to Consolidated Tangible Net Worth at any
time to exceed _____ until and including _, _, and _____ at all times
thereafter.
4.5 Consolidated Current Ratio. Permit the ratio of Consolidated
Current Assets to Consolidated C urrent Liabilities at any time to be
less than _____.
4.6 Consolidated Tangible Net Worth. Permit Consolidated Tangible
Net Worth at any time to be less than _____.
4.7 Debt Service Coverage Ratio. Permit its Debt Service Coverage
Ratio as at the end of any fiscal year to be less than _____ for such
fiscal year.
4.8 Additional Negative Covenants. Perform any other affirmative
covenants set forth on Schedule 4.8 to this Agreement.
4.9 Definitions. The following capitalized terms shall have the
following meanings:
"Approved Subordinated Debt" means any indebtedness for borrowed
money permitted by this Agreement and that is subordinated to the
Obligations on terms approved in writing by Lender.
"Consolidated" shall mean an accounting presentation including
Borrower's consolidated subsidiaries.
"Current Assets" shall mean all assets which should be classified as
current assets under GAAP.
"Current Liabilities" shall mean all liabilities which should be
classified as current liabilities under GAAP.
"Debt Service Coverage Ratio" shall mean for any quarter the ratio of:
(a) the sums of (i) Borrower's net income less any paid dividends, (ii)
interest expense, (iii) income taxes, and (iv) depreciation, amortization,
and other non-cash charges for such quarter; to (b) the sum of (i) interest
expense and (ii) scheduled principal payments with respect to funded
indebtedness (including payments under capital leases) for such quarter.
"Tangible Net Worth" shall mean, at any date, as (i) the aggregate
amount at which all assets of Borrower would be shown on a balance sheet
at such date after deducting capitalized research and development costs,
capitalized interest, debt discount and expense, goodwill, patents,
trademarks, copyrights, franchises, licenses, amounts owing from
officers, directors, shareholders, principals, partners or affiliates
of Borrower and any investments in any entities owned or controlled by
any of the foregoing, and such other assets as are properly classified
as "intangible assets" less (ii) the aggregate amount of indebtedness,
liabilities (including tax and other proper accruals) and reserves of
Borrower and its consolidated subsidiaries (excluding Approved
Subordinated Debt).
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"Total Liabilities" shall mean, at any date, all liabilities of
Borrower which would properly appear on the liabilities side of a
balance sheet, other than capital stock, capital surplus, retained
earnings, minority interests, deferred credit, Approved Subordinated
Debt and contingency reserves under GAAP.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
5.1 Events of Default. An event of default ("Event of Default")
under this Agreement and the other Loan Documents shall be deemed to
exist if for any reason any one or more of the following events occurs
and is continuing:
(a) Breach of Covenants or Conditions. Borrower or any person or
entity executing a guaranty of all or any portion of the Obligations
(as the case may be, a "Guarantor") fails to perform or observe any
term, covenant, agreement or condition In this Agreement or any of the
other Loan Documents or is in violation of or noncompliance with any
provision of this Agreement or any of the Loan Documents,
(b) Event of Default Under Note. Any Event of Default (as defined
in the Note) shall have occurred under the Note.
5.2 Remedies. Upon the occurrence of any Event of Default, Lender
shall have all rights available to it under the Note and the other Loan
Documents, together with any other rights available to at law or in equity.
ARTICLE VI
MISCELLANEOUS
6.1 Miscellaneous.
(a) The rights, powers and remedies of Lender provided in this
Agreement and the other Loan Documents are cumulative and not exclusive
of any right, power or remedy provided by law or equity, and no failure
or delay on the part of Lender in the exercise of any right, power, or
remedy shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy.
(b) This Agreement may be executed in any number of counterparts
and by the different parties on separate counterparts. Each such
counterpart shall be deemed to be an original, but all such counterparts
shall together constitute one and the same Agreement. This Agreement
shall be deemed to have been executed and delivered when Lender has
received counterparts hereof executed by all parties listed on the
signature page(s) hereto.
(c) This Agreement shall be construed in accordance with and
governed by the internal laws, and not the law of conflicts, of the
state in which Lenders office designated in the first paragraph of this
Agreement is located.
(d) This Agreement and the other Loan Documents constitute the
sole agreement of the parties with respect to the subject matter hereof
and thereof and supersede all oral negotiations and prior writings with
respect to the subject matter hereof and thereof.
(e) No amendment of this Agreement, and no waiver of any one or
more of the provisions hereof shall be effective unless set forth in
writing and signed by the parties hereto.
(f) In the event that Borrower consists of more than one person
or entity, the Obligations of each such person or entity shall be joint
and several and the word "Borrower' means each of them, any of them
and/or all of them.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed by their duly authorized officers and/or representatives on
the date first above written.
BORROWER: D. Xxx XxXxxxxx and
Xxxxx X. XxXxxxxx WITNESS:
By: /s/ D. Xxx XxXxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------- ----------------------------
Name: D. Xxx XxXxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: idividual
By: /s/ Xxxxx X. XxXxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------- ----------------------------
Name: Xxxxx X. XxXxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: idividual
FLEET NATIONAL BANK ATTEST:
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxxx
Title: Vice President Title: President
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CONTROL AGREEMENT
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Date: October 17, 2001
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Quick & Xxxxxx, a Division of
Fleet Securities, Inc.
26 Broadway
New York, New York 10005
Re: D. Xxx XxXxxxxx and Xxxxx X. XxXxxxxx
Ladies and Gentlemen:
Please be advised that D. Xxx XxXxxxxx (hereinafter "Pledgor") and
Fleet National Bank, a national banking association created and existing
under the laws of the United States of America with a usual place of
business located at 750 Walnut Avenue, Cranford, New Jersey 07016 [ ] a
banking corporation organized under the laws of the State of New
Hampshire [ ] Maine with a usual place of business at (hereinafter the
"Bank") entered into a certain pledge agreement dated September 20, 2001
(the "Pledge Agreement"), pursuant to which Pledgor assigned to and
granted to the Bank a security interest and lien upon non-margin
Securities Account No. 00000000 entitled "Summit Bank Collateral
Account (n/k/a Fleet National Bank) f/b/o D. Xxx XxXxxxxx" (the
"Securities Account") maintained with the Quick & Xxxxxx Division of
Fleet Securities, Inc. ("Securities Intermediary"), and upon any
replacement or successor account, all of the securities, and other
financial assets from the time in the Securities Account, any cash
balances credited to the Securities Account, any and all proceeds of
any thereof, whether now or hereafter existing or arising (the
"Collateral"). The Collateral may consist of, without limitation, (i)
book-entry securities which may consist of uncertificated securities
which are owned by the Pledgor and/or (ii) securities held in the name
of Securities Intermediary by a clearing corporation for the account of
Pledgor, and (iii) proceeds of any of the foregoing.
In connection with the financing arrangement between Pledgor and
the Bank, and in order to establish the Bank's "control" of the
Collateral under and pursuant to the Uniform Commercial Code in
effect in the Governing Law State, as hereafter defined, it is hereby
agreed by and among Pledgor, the Securities Intermediary, and the Bank,
as follows:
1. Securities Account. Pledgor irrevocably directs Securities
Intermediary to make all notations in the records of the Securities
Intermediary pertaining to the Securities Account that are necessary
or appropriate to reflect the pledge described above (the "Pledge").
Securities Intermediary acknowledges and agrees that all of the
Collateral is and will continue to be held by it subject to the first,
perfected security interest of the Bank. Securities Intermediary
certifies that Exhibit A attached hereto is a complete and accurate
list of the securities and financial assets contained in the Securities
Account as of the date of this Agreement.
2. Disclaimer of Interest; Subordination, Securities Intermediary
agrees that it has no present security interest or other lien on the
Collateral, and acknowledges that it has not received notice of any
other security interest in the Collateral. In the event that any
such notice is received, Securities Intermediary shall promptly
(within three business days) notify the Bank. Securities Intermediary
hereby subordinates any lien, encumbrance or claim it may now have or
may have at any time in the future against the Securities Account, or
any financial or other asset credited to the Securities Account, to
the security interest of the Bank.
3. No Liens on Collateral. Pledgor represents to the Bank that the
Collateral is free and clear of any liens or encumbrances, and agrees
that no further or additional liens or encumbrances will be placed on
the Collateral without the express written consent of the Bank.
4. Maintenance of the Account; Setoff and Customary Charges.
Securities Intermediary agrees that unless the Bank consents in writing,
Securities Intermediary will not exercise any right of setoff, or assert
any security interest or other lien against the Collateral that
Securities Intermediary may have on account of any credit or other
obligation owed by Pledgor or any other person. Securities Intermediary
further agrees that it will not invade the assets in the Securities
Account to cover margin debts or calls in any other accounts of Pledgor
without the written consent of the Bank. Securities Intermediary may,
from time to time, debit the Securities Account for customary charges
due to it for maintaining the Account that have not been separately
paid or reimbursed.
5. Account Information. Xxxxxxx irrevocably authorizes and directs
Securities Intermediary to send copies of all notices, statements and
all other communications concerning the Securities Account to the
following address or such other address as may be specified in written
instructions from the Bank:
Fleet National Bank
Attention: Xxxxxxx X. Xxxxxx
7111 Vallev Green Road
Fort Washington, PA 19034
[X] Securities Intermediary agrees to provide to the Bank, with a
duplicate copy to Pleclgor, a monthly statement of assets and a
confirmation statement of each transaction effected in the Securities
Account after such transaction is effected.
6. Instructions; Control. Pledgor irrevocably instructs Securities
Intermediary to follow instructions received from the Bank, furnished in
writing, without further consent of Xxxxxxx, concerning: (1) the payment
or reinvestment of dividends or distributions; and (2) the redemption,
transfer, sale or any other disposition or transaction concerning the
Collateral or the income and principal proceeds, substitutions and
reinvestment thereof. Unless and until Securities Intermediary receives
written notice from the Bank terminating this Agreement, Securities
Intermediary agrees to honor any and all instructions from the Bank
with respect to the Collateral, including any direction from the Bank
to dispose of all or any portion of the Collateral at any time, without
any further consent or instruction from Pledgor. Provided, however:
[THE FOLLOWING SECTION ALLOWS PLEDGOR TO RECEIVE INCOME AND/OR TRADE IN
THE ACCOUNT PROVIDED THAT COLLATERAL OF EQUAL OR GREATER VALUE IS
SUBSTITUTED]
[ ] Pledgor may withdraw all income, including cash dividends and
interest (but not stock splits, stock dividends, cash equity
distributions, liquidating distributions, or other non-cash principal
disbursements) ("Income").
[X] Pledgor may originate trading instructions to Securities
Intermediary to make substitutions for and additions to the Collateral,
all of which are Collateral to be held in the Securities Account subject
to the Pledge in favor of the Bank.
No withdrawal of Collateral from the Securities Account by Pledgor will
be permitted under any circumstances, except to the extent
checked above for the purpose of allowing Pledgor to receive the Income
from the Securities Account and/or to allow for substitution of new
Collateral of equal or greater value, without the prior written consent
of the Bank. Any additional securities delivered to the Securities
Account will be subject to the Pledge, without the necessity for any
further documentation. Any such income or collateral substitution
rights granted to Pledgor may be revoked in writing at any time solely
by the Bank.
[THE FOLLOWING SECTION ALLOWS WITHDRAWAL OF ASSETS SUBJECT TO
MAINTENANCE OF MINIMUM MARKET VALUE AND/OR ASSET QUALITY]
[X] Until written instructions from the Bank are received by
Securities Intermediary to the contrary, Pledgor shall be entitled
to continue to give Securities Intermediary instructions as to the
Collateral and as to the purchase of assets for and disposition of
assets in the Securities Account. Provided, however, that no
transactions may be made on a margin basis and:
[X] Xxxxxxx may not, without the Bank's prior written consent,
withdraw any sums or other assets from the Securities Account if the
aggregate market value of the remaining Collateral would be less than
$220,000.00 ("Minimum Collateral Value").
7. [X] Collateral Value. Pledgor and the Bank acknowledge and agree
that Securities Intermediary shall not be held responsible for any
market decline in the value of the Collateral and that Securities
Intermediary has no obligation to notify Pledgor or the Bank of any
such decline in the market value of the Collateral or to take any action
with regard to the pledged assets except upon the specific written
directions stated herein. Pledgor agrees that the market value of the
Collateral in the Securities Account shall at all times exceed the
minimum market value equal to $220,000.00.
8. No Consent Required; Authority of Bank. Notwithstanding any
separate agreement that Pledgor may have with the Bank or Securities
Intermediary, Pledgor agrees that the Bank shall be entitled, for the
purposes of this Agreement, at any time to give Securities Intermediary
instructions as to the disposition or investment of any of the Collateral,
including instructions to sell, redeem, close open trades or otherwise
liquidate any assets in the account (including instructions to re-register
assets held by a clearing corporation in the name of the Bank or to
transfer assets to, or into an account in the name of the Bank) or as to
any other matters relating to the Securities Account, without the consent
of Pledgor. Securities Intermediary is directed to follow the Bank's
instructions without investigating the reason for any action taken by the
Bank or the existence of any default under the Pledge Agreement (it being
understood and agreed that Securities Intermediary shall have no duty or
obligation whatsoever of any kind or character to have knowledge of
whether or not an event of default exists under the Pledge Agreement).
The Bank's signature alone shall be sufficient authority for the
exercise of any rights by the Bank and a receipt from the Bank alone
will be a full release and discharge for Securities Intermediary.
Checks for all or any part of the Collateral shall be payable to the
order of the Bank if, when and in such amounts as may be requested by
the Bank.
9. Agreement of Securities Intermediary; Conflicting Instructions.
Instructions to the Securities Intermediary shall be in writing and
signed by a Vice President, Senior Vice President, or other senior
officer of the Bank. Pledgor acknowledges and agrees that Securities
Intermediary shall be fully entitled to rely upon instructions from the
Bank given to Securities Intermediary, even if such instructions are
contrary to any instructions or demands that Pledgor may give to
Securities Intermediary. In the event that conflicting instructions as
to the disposition of the Collateral are at any time given by Pledgor
and the Bank, Securities Intermediary agrees that it shall abide by the
instructions of the Bank without consent of Pledgor.
10. Reliance on Instructions; Revocation and Amendment. Neither
Securities Intermediary nor any of its respective partners, trustees,
officers, employees or affiliates will be liable for complying in good
faith with the instructions contained in this Agreement or failing to
comply with any contrary or inconsistent instructions that may be
subsequently issued by Pledgor. The instructions contained in this
Agreement may be revoked and the terms of this Agreement may be
amended by Pledgor only upon the receipt by Securities Intermediary of
the Bank's written consent to such revocation or amendment, or written
notification to Securities Intermediary from the Bank that the Pledge
has been terminated.
11. No Additional Duties; Custody Agreement. This Agreement is not
intended by the parties to impose or create any obligations or duties
upon Securities Intermediary greater than or in addition to the customary
and usual obligations and duties of Securities Intermediary to Pledgor
under the custody agreement(s), except and to the extent that Securities
Intermediary shall henceforth accept instructions in connection with the
Collateral as provided in this Agreement. Pledgor and the Bank
acknowledge that this Agreement supplements Pledgor's existing custody
agreement(s) with Securities Intermediary and in no way is this
Agreement intended to abridge any rights that Securities Intermediary
might otherwise have.
12. Indemnification. Pledgor and the Bank hereby release Securities
Intermediary from any and all liability that may arise as a result of
Securities Intermediary acting in accordance with instructions from the
Bank, and Pledgor and the Bank agree to indemnify and hold harmless
Securities Intermediary, its affiliates, officers and employees from
and against any and all claims, causes of action, liabilities, lawsuits,
demands and/or damages, including, without limitation, any and all court
costs and reasonable attorney's fees, that may arise as a result of
Securities Intermediary acting in accordance with instructions from the
Bank.
13. No Other Control Agreements. Securities Intermediary agrees that
it will not enter into any agreement with any other person or entity by
which Securities Intermediary is obligated to comply with instructions
from such person or entity as to the disposition or other dealings with
any of the Collateral.
14. Bailee in Possession. Securities Intermediary agrees to hold the
Securities Account and all of the contents including any free credit
balances for and on behalf of the Bank as bailee in possession for the
Bank.
15. Reporting of Income. All items of income including dividends,
interest and other income, gain, expense and loss recognized in the
Securities Account shall be reported by Securities Intermediary in the
name and tax identification number of Pledgor.
16. Construction and Amendment; Conflict. If any term or provision
of this Agreement is determined to be invalid or unenforceable, the
remainder of this Agreement shall be construed in all respects as if
the invalid or unenforceable term or provision were omitted. This
Agreement may not be altered or amended in any manner without the
express written consent of Pledgor, the Bank and Securities
Intermediary. This Agreement may be executed in any number of
counterparts all of which shall constitute one original agreement.
In the event of a conflict between this Agreement and any other
agreement between Securities Intermediary and Pledgor, the terms of
this Agreement shall prevail.
17. Termination. This Agreement may be terminated by Securities
Intermediary upon thirty (30) days written notice to Pledgor and the
Bank. Upon delivery of such notice, Securities Intermediary shall be
under no further obligation except to hold the Collateral in accordance
with the terms of this Agreement, pending receipt of written instructions
from the Bank regarding the further disposition of the Collateral. The
rights and powers granted herein to the Bank have been granted in order
to perfect its security interest in the Securities Account, are powers
coupled with an interest and will neither be affected by the death or
bankruptcy of Pledgor nor by the lapse of time.
18. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns, representatives
and heirs, of the respective parties hereto and shall be construed in
accordance with the laws of the State of Pennsylvania (the "Governing
Law State") without regard to its conflict of law principles and the
rights and remedies of the parties shall be determined in accordance
with such laws.
IN WITNESS WHEREOF, Pledgor, the Bank and Securities Intermediary
have caused this Agreement to be executed by their duly authorized
officers all as of the day first above written.
WITNESS: Pledgor R. D Xxx XxXxxxxx
/s/ Xxxxxxx X. Siefred /s/ D. Xxx XxXxxxxx
---------------------- --------------------------------
Xxxxxxx X. Siefred By:D. Xxx XxXxxxxx
Date: October 17, 2001
BANK: FLEET NATIONAL 13ANK
/s/ Xxxxxxx X. Xxxxxx
------------------ --------------------------------
By: Xxxxxxx X. Xxxxxx
Date: October 17, 2001
SECURITIES INTERMEDIARY:
QUICK & Xxxxxx, a division of
FLEET SECURITIES, INC.
/s/ Xxx Xxxxxxxxx /s/ Xxxxxx Xxxxxx
------------------ --------------------------------
Xxx Xxxxxxxxx By: Xxxxxx Xxxxxx
Date 10/29/01
NOTE: IF ANY BOX IS NOT CHECKED IN PARAGRAPHS 5-8, THE PROVISION IS
INAPPLICABLE.
EXHIBIT A
---------
SECURITY ACCOUNT
LIST OF ASSETS
PRO: 40651-1
PRIVATE BANK PLEDGE AND SECURITY AGREEMENT
Pledgor:true
Name(s): D. Xxx XxXxxxxx (Pledgor & Borrower)
Xxxxx X. XxXxxxxx (Borrower)
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
(individually and collectively, jointly and
severally, the "Pledgor")
If Pledgor is not the Borrower, the Borrower is: and Pledgor guarantees
payment of all amounts due under the Note referred to under
"DEFINITIONS" below.
Pledgee:
_FLEET NATIONAL BANK X FLEET NATIONAL BANK _FLEET NATIONAL BANK
("Pledgee") ("Pledgee") ("Pledgee")
000 XXXXXX XXXXXX ONE BETHLEHEM PLAZA 00 XXXX XXXXXX
XXXXXXXX, XX 00000 XXXXXXXXX, XX 00000 XXXXXXX, XX 00000
========================================================================
DATE OF AGREEMENT: October 17, 2001
DEFINITIONS. Capitalized terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Private Bank
Promissory/Credit Note dated October 17, 2001 and executed by Borrower
in connection with the transaction of which this Agreement is a part,
and any extensions, amendments, renewals and replacements thereof (the
"Note"), and if not defined therein, then the Uniform Commercial Code.
All amounts owed by Pledgor (as primary obligor or guarantor) to Pledgee,
of whatever nature, now existing or arising in the future, including any
outstanding principal, accrued and unpaid interest thereon, Pledgee's
expenses and any other sums recoverable by Pledgee, are referred to
herein as the "Indebtedness."
GRANT OF SECURITY INTEREST. To secure payment of the Indebtedness and
performance of Pledgor's obligations to Pledgee (all such Indebtedness
and obligations being hereinafter collectively referred to as the
"Secured Obligations"), Pledgor hereby pledges, assigns and transfers
to Pledgee, and grants to Pledgee a continuing lien on and security
interest in and to the Collateral. "Collateral" means, in addition to
the definition of Security and Investment Property contained in the
Uniform Commercial Code, all securities (certificated or uncertificated),
investment property, financial assets, security entitlements, stock
rights, rights to subscribe, liquidating dividends, stock dividends,
dividends paid in stock, new securities, commodities contracts, any
free credit balance or other money now or hereafter credited to or owing
to Pledgor in respect of:
X Securities Account #(s) 00000000 Summit Bank Collateral Account
(n/k/a Fleet National Bank) f/b/o D. Xxx XxXxxxxx maintained by
Pledgor with Quick & Xxxxxx Division of Fleet Securities, Inc;
_ all certificated securities listed on Schedule A attached hereto
which certificates Pledgor is herewith delivering to Pledgee
accompanied by stock powers duly executed in blank, with
signatures guaranteed;
and any rights incidental to the ownership of any of the foregoing,
including without limitation, voting, conversion and registration
rights and rights of recovery for violations, applicable securities
laws, and cash and non-cash proceeds thereof.
REPRESENTATIONS AND WARRANTIES. With respect to the Collateral, Pledgor
hereby represents, warrants and covenants as follows:
(a) Pledgor agrees to reimburse Pledgee, on demand, for any
amounts paid or advanced by Pledgee for the purpose of
preserving the Collateral or any part thereof and/or any
liabilitiesor expenses incurred by Pledgee as the transferee
or holder of the Collateral;
(b) After the payment of part of the Indebtedness, Pledgee may,
at its option, retain all or any portion of the Collateral as
security for any remaining Secured Obligations and retain this
Agreement as evidence of such security interest. Pledgee shall
exercise reasonable care in the custody and preservation of the
Collateral to the extent required by applicable statue and, so
long as no Event of Default has occurred, use commercially
reasonable efforts to take such action as Pledgor may reasonably
request in wrilting but the failure to do any such act shall not
be deemed a failure to exercise reasonable care;
(c) The fair market value of the Collateral shall at no time be less
than $220,000.00. In the reasonable opinion of Pledgee, Pledgor
is entitled to rely on its own assessment of value for this
purpose and such assessment will be made by Pledgor in the
reasonable exercise of its discretion. If the Collateral shall
at any time, or from time to time, have a value of less than
$220,000.00, or otherwise become unsatisfactory to Pledgee,
Pledgor shall, upon demand, pledge, assign, transfer and deposit
with Pledgee and grant Pledgee a continuing security interest in
and to such additional Securities or Investment Property as is
requested by Pledgee;
(d) Pledgor will not withdraw, sell or offer to sell, or otherwise
transfer any money or property from any securities investment
account in which Pledgee has been granted a security interest,
or any portion of the Collateral held in such account; provided
that an Event of Default has not occurred and is not continuing.
Until and unless Pledgee indicates otherwise, Pledgor may (i)
make trades in such account but in no event may the proceeds
of any such trades be removed from such account, and (ii)
exercise any voting or consensual rights with respect to such
Collateral; and
(e) (i) If the Collateral is comprised of or includes certificated
securities, Pledgor agrees to immediately deliver possession
of the certificate representing the Collateral to Pledgee
accompanied by stock powers duly executed in blank, with
signatures guaranteed;
(ii) If the Collateral is comprised of or includes uncertificated
securities, Pledgor agrees to cause the issuer to register
the securities on the books of the issuer corporation in
the name of Pledgee and further agrees to request the
issuer to note this security interest on an initial
transaction statement to be forwarded to Pledgee;
(iii) If all or any portion of the Collateral is field in a
securities account maintained by Pledgor or on behalf of
Pledgor at a third party, Pledgor will furnish or cause
to be furnished to Pledgee a control agreement signed
by Pledgor and such third party pursuant to which such
third party agrees, among other things, to take
instructions with respect to the securities account from
Pledgee without the consent of Pledgor (the "Control
Agreement").
EVENTS OF DEFAULT. In addition on those events defined to constitute an
Event of Default under the Note, each of the following shall also
constitute an Event of Default under this Agreement: (a) termination of
any account containing Securities or Investment Property constituting
Collateral in which Pledgor has granted Pledgee a security interest;
(b) breach of any covenant contained herein; (c) if any representation
or warranty is or shall become false or misleading in any respect; and
(d) termination of any Control Agreement to which Pledgee is a party
without Pledgee's prior written consent. Upon the occurrence of an Event
of Default, Pledgee may declare all Secured Obligations immediately due
and payable, without notice, protest, presentment or demand, all of
which are hereby expressly waived by Pledgor.
RIGHTS AND REMEDIES. Upon the occurrence of any Event of Default,
Pledgee shall have the rights and remedies provided under the Uniform
Commercial Code, as well as those set forth in the Note and any other
Loan Documents, together with:
(a) The right to enter and/or remain upon the premises of Pledgor
or any other place or places where the Collateral is located,
without any obligation to pay rent to Pledgor or others for
the purpose of removing the Collateral or to maintain, collect,
sell and/or liquidate the Collateral; and use such premises,
together with materials, supplies, books and records of
Pledgor, to obtain possession of the Collateral, and to
prepare the Collateral for sale, liquidation or collection.
Pledgee may require Pledgor to assemble the Collateral and
make it available to Pledgee at a place to be designated by
Pledgee which is reasonably convenient to both parties;
(b) The right to file a copy (including a carbon, photographic or
other reproduction) of this Security Agreement in lieu of a
financing statement;
(c) The right to: (i) deliver a notice of exclusive control, under
any applicable Control Agreement, to the applicable
Intermediary; (ii) exercise all voting or consensual rights
as to any of the Collateral; (iii) cause any applicable
Account to be registered in the sole name of Pledgor; and
(iv) exchange certificates representing any of the Collateral
for certificates of larger or smaller denominations; and (v)
collect, including by legal action, any notes, checks or other
instruments for the payment of money included in the Collateral
and compromise or settle with, any obligor of such instruments;
and
(d) The right to sell all or any portion of the Collateral at a
public or private sale. If notice of the time and place of any
public sale of the Collateral or the time after which any
private sale or other intended disposition is required by the
Uniform Commercial Code, Pledgor acknowledges that five (5)
days advance notice thereof will be a reasonable notice. If
the notice of sale has been given, Pledgee shall not be
obligated to make a sale of any or all of the Collateral at
such a schedu!ed sale. Pledgee may adjourn any public or
private sale from time to time by announcement at the time
and place fixed therefor and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. If, under the Uniform Commercial Code, Pledgee
may purchase any part of the Collateral, it may, in payment
of any part of the purchase price thereof, cancel any part
of the Secured Obligations.
DIVIDENDS AND DISTRIBUTIONS. Unless and until the occurrence of an Event
of Default or unless or until Pledgee indicates otherwise, Pledgor shall
be entitled to receive all cash dividends from the Collateral. Upon the
occurrence of any Event of Default or if Pledgor indicates to Pledgee that
Pledgee wishes to retain as part of the Collateral all cash dividends,
Pledgee shall be entitled to receive all cash dividends and other
dividends or distributions with regard to the Collateral. At any time,
at its option, Pledgee shall have the right to transfer into its name
or that of its nominee any and all of the Collateral.
-2-
FURTHER ASSURANCES. Pledgor shall at any time, and from time to time,
execute and deliver upon the written request of Pledgee further documents
and do further acts and things as Pledgee may reasonably request to
effect the purposes of this Agreement, including, without limitation,
delivering to Pledgee upon the occurrence of an Event of Default
irrevocable proxies with respect to the Collateral in a form
satisfactory to Pledgee. Until receipt thereof, this Agreement shall
constitute Pledgor's proxy to Pledgee or its nominee to vote all of the
Collateral then registered in Pledgor's name at any and all such times
as Pledgee has the right to vote such shares pursuant to the terms of
this Pledge Agreement. The power of attorney granted hereby is coupled
with an interest and is irrevocable.
Pledgee's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to
deal with the Collateral in the same manner as Pledgee deals with
similar securities for its own account. Neither Pledgee nor any of its
directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay
in doing so nor shall Pledgee be under any obligation to sell or
otherwise dispose of the Collateral upon the request of Pledgor or
otherwise. Pledgor shall indemnify Pledgee and its directors, officers,
employees, agents and attorneys against, and hold them harmless from,
any liability, cost or expense, incurred by any of them under the
corporate and securities laws applicable to holding or selling any
of the Collateral, except for liability, cost or expense arising out
of the gross negligence or willful misconduct of the indemnified
parties.
WAIVER OF JURY TRIAL. PLEDGOR HEREBY WAIVES TRIAL BY JURY IN ANY COURT
AND IN ANY SUIT, ACTION OR PROCEEDING, IN ANY MANNER ARISING IN
CONNECTION WITH, OR RELATED TO, THE FINANCIAL TRANSACTION OF WHICH
THIS AGREEMENT IS A PART OR THE ENFORCEMENT OF LENDER'S RIGHTS AND
REMEDIES WITH REGARD TO SUCH TRANSACTION. PLEDGOR EXPRESSLY ACKNOWLEDGES
THAT THE PLEDGOR IS MAKING THIS WAIVER KNOWINGLY AND WILLINGLY.
WAIVER OF PREJUDGMENT REMEDY. PLEDGOR ACKNOWLEDGES THAT THIS TRANSACTION
IS A COMMERCIAL TRANSACTION AND HEREBY WAIVES THE RIGHT TO PRIOR NOTICE
OF, AND A HEARING ON, THE RIGHT OF THE LENDER TO A PREJUDGMENT REMEDY.
A PREJUDGMENT REMEDY ENABLES THE LENDER BY WAY OF ATTACHMENT, FOREIGN
ATTACHMENT, GARNISHMENT OR REPLEVIN, TO DEPRIVE PLEDGOR OF, OR AFFECT
THE USE, POSSESSION OR ENJOYMENT BY PLEDGOR OF ANY OF ITS PROPERTY AT
ANY TIME PRIOR TO JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION
WITH THIS AGREEMENT.
GOVERNING LAW. This Agreement is a security agreement within the meaning
of the Uniform Commercial Code in force in the COMMONWEALTH OF PENNSYLVANIA
and shall be construed in accordance with the laws of such State without
regard to its conflict of laws principles.
PLEDGOR: D. Xxx XxXxxxxx (Pledgor & Borrower) WITNESS:
Xxxxx XxXxxxxx (Borrower)
By: /s/ D. Xxx XxXxxxxx By: /s/ Xxxxxxx X. Siefred
---------------------------- --------------------------
Name: D. Xxx XxXxxxxx (Pledgor & Borrower) Name: Xxxxxxx X. Xxxxxxx
Title: Individual
By: /s/ Xxxxx X. XxXxxxxx By: /s/ Xxxxxxx X. Siefred
---------------------------- --------------------------
Name: Xxxxx X. XxXxxxxx (Borrower) Name: Xxxxxxx X. Xxxxxxx
Title: Individual
PLEDGEE: FLEET NATIONAL BANK ATTEST:
By:/s/ Xxxxxxx X. Xxxxxx By:/s/ Xxxxxx Xxxxxxxx
---------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxxx
Title: Vice President Title: Vice President
-3-
SUPPLEMENT TO ALL PENNSYLVANIA PRIVATE BANKING
CREDITAGREEMENTS, SECURITYAGREEMENTS,
GUARANTYAGREEMENTS AND COLLATERAL SECURITYAGREEMENTS
THIS SUPPLEMENT, dated October 17, 2001, by and between Fleet National
Bank ("Bank") and D. Xxx XxXxxxxx and Xxxxx X. XxXxxxxx ["Borrower"] in
connection with a (check title of document being supplemented):
_____ Loan Agreement _____ Guaranty Agreement
__X__ Pledge and Security Agreement _____ Collatteral Security Agreement
Pledge and Security Agreement Collateral Security Agreement in the
amount of $63,000.00 of even date herewith (the "Transaction").
For good and valuable consideration, receipt of which is acknowledged,
Bank and Borrower or Guarantor hereby agree that the following paragraph
is added to and made a part of the above-referenced document executed as
a part of the transaction:
POWERS OF ATTORNEY. ANY POWERS OF ATTORNEY GRANTED IN THIS AGREEMENT ARE
NOT REVOCABLE AND ARE NOT INTENDED TO BE GOVERNED BY THE PROVISIONS OF
SECTION 5601 OF CHAPTER 56 OF TITLE 20 OF THE PENNSYLVANIA CONSOLIDATED
STATUTES, AS AMENDED. SUCH POWERS SHALL BE EXERCISED FOR THE BENEFIT OF
THE BANK AND NOT FOR THE BENEFIT OF THE BORROWER OR GUARANTOR. IN ACTING
UNDER SUCH POWERS, THE BANK SHALL HAVE NO FIDUCIARY DUTY TO THE BORROWER
OR GUARANTOR.
ATTEST: FLEET NATIONAL BANK
By:/s/ Xxxxxx Xxxxxxxx By: Xxxxxxx X. Xxxxxx
------------------------------------- -------------------------------
Name of Bank Officer: Xxxxxx Xxxxxxxx By: Xxxxxxx X. Xxxxxx
Title of Bank Officer: Vice President Title: Vice President
WITNESS:
By:/s/ Xxxxxxx X. Xxxxxxx By:/s/ D. Xxx XxXxxxxx
------------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx D. Xxx XxXxxxxx (Pledgor&Borrower)
By:/s/ Xxxxxxx X. Xxxxxxx By:/s/ Xxxxx X. XxXxxxxx
------------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx Xxxxx X. XxXxxxxx (Borrower)
WITNESS:
------------------------------------- -------------------------------
Secretary President
------------------------------------- -------------------------------
Manager Manager
PRIVATE BANK PROMISSORY/CREDIT NOTE
(for loans In the principal amount of $250,000 or less)
$63,000 Disbursement on 10-22-01
Lender:
_ FLEET NATIONAL BANK X FLEET NATIONAL BANK _ FLEET NATIONAL BANK
("Lender") ("Lender") ("Lender")
000 XXXXXX XXXXXX ONE BETHLEHEM PLAZA 00 XXXX XXXXXX
XXXXXXXX, XX 00000 XXXXXXXXX, XX 00000 XXXXXXX, XX 00000
Borrower:
Name: D. Xxx XxXxxxxx and Xxxxx X. XxXxxxxx
(individually and collectively, jointly
and severally, the "Borrower")
Address: 0000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
========================================================================
Principal Amount: $63,000.00 Date of Note: October 17, 2001
FOR VALUE RECEIVED, Borrower unconditionally promises to pay to the
order of Lender the above principal amount In U.S. Dollars or, if a line
of credit, such lesser amount of advances made but not repaid (including
the face amount of any letter of credit Issued and such other financial
accommodations as may have been made), together with Interest at the rate
and on the terms provided In this Private Bank Prom issory/C red It Note
(including all renewals, extensions and/or modifications, this "Note").
Any advance(s) shall be conclusively presumed to have been made at the
request of Borrower when (1) deposited or credited to an account of
Borrower with Lender, or (2) made In accordance with the oral or written
Instructions of Borrower, or of anyone on behalf of Borrower. Any such
sums borrowed or reborrowed must be In multiples of 5% of the Principal
Amount. This Note and all documents executed In connection with this
Note are referred to herein as the "Loan Documents."
___ Borrower authorizes Lender to effect payment of sums due hereunder
by debiting Borrower's bank accounts maintained at Lender. If this
box is not checked, Borrower shall pay Lender at Lender's address
shown above or at such other place as Lender may designate from
time to time In writing.
========================================================================
INTEREST RATE. Interest will be calculated on the basis of the actual
number of days elapsed over a year of 360 days, unless prohibited by law.
Interest shall accrue from the date hereof at the rate set forth below.
Interest shall be payable at the following rate on the outstanding balance
due under this Note until the principal balance, together with interest
and other charges due thereon is fully paid whether before or after
acceleration and whether or not any payment is rendered thereon. no
___ Fixed Rate. The rate of ________ percent per annum.
_X_ Variable Rate. Lender's Prevailing Base Rate plus 0.00
percentage points. Lender's Prevailing Base Rate is the rate
announced by Lender from time to time and is subject to
change without prior notice to Borrower. Lender lends at rates
both above and below Lenders Prevailing Base Rate, and Borrower
acknowledges that Lender's Prevailing Base Rate is not
represented or intended to be the lowest or most favorable rate
of interest offered by Lender.
___ The rate of ________.
========================================================================
PAYMENT SCHEDULE. All payments received hereunder will be applied first
to the payment of accrued interest, any expenses or charges payable
hereunder and the balance only applied to principal. Borrower shall pay
in accordance with the following payment schedule:
_X_ OPTION 1: Principal and Interest shall be paid (applicable box(es)
is/are checked):
___ Principal shall be paid on demand.
_X_ Principal shall be paid in a single payment on May 1, 2002.
___ Principal shall be paid in equal _____ installments of $_____
each, commencing on _____ and continuing on the same day of
each successive thereafter, with a final payment of all unpaid
principal, interest and all other amounts recoverable under the
Loan Documents on _____.
_X_ Interest shall be paid in monthly installments commencing on
December 1, 2001, and continuing on the same day of each
successive month thereafter with a final payment of all
unpaid interest and all other amounts recoverable under the
Loan Documents at the time of final payment of unpaid principal.
___ OPTION 2: Principal and Interest shall be paid:
___ ________ in installments of $________ each, commencing on ____,
and continuing on the same day of each successive ________
thereafter, with a final payment of all unpaid principal,
interest and all other amounts recoverable under the Loan
Documents on ________.
LATE CHARGES. If any payment is not received by Lender within TEN (10)
days after its due date, Borrower shall, to the extent permitted by law,
pay Lender a late charge of 5% of the overdue payment (in no event to be
less than $25.00 nor more than $2,500.00). Any such late charge assessed
Is Immediately due and payable.
CROSS-COLLATERALIZATION. All of the assets of Borrower pledged, assigned,
mortgaged or transferred to Lender pursuant to the Loan Documents
(collectively, the "Collateral"), constitute collateral security for
the Borrowers obligations to do each and all of the following
(collectively, the "Obligations"): (1) to pay principal, interest, and
any other amounts due or to become due to Lender under this Note and the
other Loan Documents; and (ii) to satisfy all of the other direct or
indirect liabilities of Borrower to Lender, whether under the Loan
Documents or otherwise, whether now existing or hereafter incurred.
Borrower hereby grants to Lender a continuing security interest in and
lien on the Collateral as well as a security interest in and lien on any
and all funds and/or monies of Borrower or any of them contained in
accounts located with Lender to secure the Obligations.
EVENTS OF DEFAULT AND EFFECT THEREOF. Each of the following shall
constitute an event of default ("Event of Default") under this Note:
(a) failure of Borrower to make any payment to the Lender when due
hereunder; (b) failure of Borrower to comply with or to perform any
term or condition contained In the Loan Documents or the occurrence
of any default or "Event of Default" under any other Loan Document;
(c) any representation, warranty, certification, or other information
furnished by or on behalf of the Borrower was false or misleading in
any material respect when made; (d) the dissolution or termination of
Borrower's existence as a going business, the insolvency of Borrower,
the appointment of a receiver f or any part of Borrowers property, any
assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or Insolvency
laws by or against Borrower; (e) the default of the Borrower under any
other obligation owed to the Lender, or any third party, now existing or
arising after the date of this Note; (f) the filing, entry or Issuance
of any judgment, execution, garnishment, attachment, distraint, or lien
against Borrower or any of Borrowers property, or the entry of any order
enjoining or restraining Borrower and/or restraining or seizing any
property of Borrower; (g) failure of Borrower to furnish any information
requested by Lender or to permit Lender to inspect Borrower's books and
records or property; (h) a material adverse change in Borrowers financial
condition; (i) any change in the ownership or control of the Borrower; j)
If any Borrower is an individual, the death or Incompetency of such
Borrower; or (k) any of the preceding events occurs with respect to any
guarantor of any of the amounts owed to Lender, or any guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any guaranty of the amounts owed to Lender. Upon the occurrence of
an Event of Default, all commitments and obligations of Lender under the
Loan Documents Immediately will terminate and, at Lender's option, all
amounts outstanding will become due and payable Immediately, all without
notice of any kind to Borrower. Borrower grants to Lender a possessory
security interest in, and hereby assigns, conveys, pledges, and transfers
to Lender all of Borrower's right, title, and interest in and to its bank
accounts. Borrower authorizes Lender to charge or set off all sums owing
to Lender against any and all such accounts and, at Lenders option, to
administratively freeze all such accounts to allow Lender to protect
Lender's charge and setoff rights. In addition, Lender shall have all
the rights and remedies provided in the Loan Documents, at law, in equity,
or otherwise. Continued, see Schedule 'A'.
EXPENSES. Borrower agrees to pay to Lender, at closing or otherwise
upon demand, all reasonable costs and expenses incurred by Lender
(including the fees and expenses of In-house and outside counsel)
in connection with (1) the preparation, negotiation, execution,
delivery and administration of this Note and the other related
loan documents and instruments, and any modifications thereto, and
(2) collection of amounts due Lender under the Note or any other related
loan documents and Instruments, or the enforcement or preservation of
Lenders rights under this Note and other related loan documents and
instruments, whether by judicial proceeding or otherwise, including,
without limitation, any court proceeding, bankruptcy or insolvency
case, appeal, or post-judgment collection services, In the absence
of proof by Lender of actual fees and expenses of a greater amount,
Borrower agrees that for any enforcement of Lender's rights under the
Note and other related loan documents and instruments, 25% of the
outstanding balance of the Note is a reasonable amount for Lender's
fees and expenses.
GENERAL PROVISIONS. If this Note is made in connection with a line of
credit, reduce the amount of the outstanding principal under this Note
to zero for one period of thirty consecutive days during each year that
this Note is outstanding. Borrower waives presentment, demand for
payment, protest, notice of dishonor, and notice of default. Upon any
change in the terms of this Note, and unless otherwise expressly stated
in writing, Borrower shall not be released from liability. Borrower
agrees that Lender may renew or extend this Note, or release any party,
guarantor or collateral; or impair, fail to realize upon or perfect
Lenders security interest In any collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone.
Borrower agrees to cooperate and take all necessary steps as reasonably
requested by Lender to carry out the spirit and intent of the Loan
Documents, Including, without limitation, executing or reexecuting any
of the Loan Documents. The Loan Documents shall be binding upon Borrower
and its successors and assigns and shall inure to the benefit of Lender
and its successors and assigns. Borrower may not assign or transfer
Borrowers rights under the Loan Documents without prior written consent
of Lender.
WAIVER OF JURY TRIAL. BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT
AND IN ANY SUIT, ACTION OR PROCEEDING, IN ANY MANNER ARISING IN
CONNECTION WITH, OR RELATED TO, THE FINANCIAL TRANSACTION OF WHICH THIS
NOTE IS A PART OR THE ENFORCEMENT OF LENDER'S RIGHTS AND REMEDIES WITH
REGARD TO SUCH TRANSACTION. BORROWER EXPRESSLY ACKNOWLEDGES THAT THE
BORROWER IS MAKING THIS WAIVER KNOWINGLY AND WILLINGLY.
WAIVER OF PREJUDGMENT REMEDY. BORROWER ACKNOWLEDGES THAT THIS TRANSACTION
IS A COMMERCIAL TRANSACTION AND HEREBY WAIVES THE RIGHT TO PRIOR NOTICE
OF, AND A HEARING ON, THE RIGHT OF THE LENDER TO A PREJUDGMENT REMEDY.
A PREJUDGMENT REMEDY ENABLES THE LENDER BY WAY OF ATTACHMENT, FOREIGN
ATTACHMENT, GARNISHMENT OR REPLEVIN, TO DEPRIVE BORROWER OF, OR AFFECT
THE USE, POSSESSION OR ENJOYMENT BY BORROWER OF ANY OF ITS PROPERTY AT
ANY TIME PRIOR TO JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION
WITH THIS NOTE.
In witness whereof, Borrower, Intending to be legally bound, has executed
this Note as of the date above.
BORROWER: D. Xxx XxXxxxxx and Xxxxx X. XxXxxxxx WITNESS:
BY: /s/ D. Xxx XxXxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- -----------------------------
Name: D. Xxx XxXxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Individual
By: /s/ Xxxxx X. XxXxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- -----------------------------
Name: Xxxxx X. XxXxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Individual
SCHEDULE "A"
EVENTS OF DEFAULT AND EFFECT THERE OF:
If at any time the value of the collateral does not meet the above-
mentioned loan to value requirements, then this loan shall be reduced or
additional liquid collateral, acceptable to the Bank, shall be pledged to
meet the requisite loan to value guidelines. Failure to do so within Two
(2) business days shall constitute an immediate and automatic event of
default under the terms and conditions of this Note.
BORROWER:
/s/ D. Xxx XxXxxxxx
---------------------------
D. Xxx XxXxxxxx Date: October 17, 2001
/s/ Xxxxx X. XxXxxxxx
---------------------------
Xxxxx X. XxXxxxxx Date: October 17, 2001
SUPPLEMENT TO ALL PENNSYLVANIA PRIVATE BANKING
CREDITAGREEMENTS, SECURITYAGREEMENTS,
GUARANTYAGREEMENTS AND COLLATERAL SECURITYAGREEMENTS
THIS SUPPLEMENT, dated October 17, 2001, by and between Fleet National
Bank ("Bank") and D. Xxx XxXxxxxx and Xxxxx X. XxXxxxxx ["Borrower"] in
connection with a (check title of document being supplemented):
__X__ Loan Agreement _____ Guaranty Agreement
_____ Pledge and Security Agreement _____ Collatteral Security Agreement
Pledge and Security Agreement Collateral Security Agreement in the
amount of $63,000.00 of even date herewith (the "Transaction").
For good and valuable consideration, receipt of which is acknowledged,
Bank and Borrower or Guarantor hereby agree that the following paragraph
is added to and made a part of the above-referenced document executed as
a part of the transaction:
POWERS OF ATTORNEY. ANY POWERS OF ATTORNEY GRANTED IN THIS AGREEMENT ARE
NOT REVOCABLE AND ARE NOT INTENDED TO BE GOVERNED BY THE PROVISIONS OF
SECTION 5601 OF CHAPTER 56 OF TITLE 20 OF THE PENNSYLVANIA CONSOLIDATED
STATUTES, AS AMENDED. SUCH POWERS SHALL BE EXERCISED FOR THE BENEFIT OF
THE BANK AND NOT FOR THE BENEFIT OF THE BORROWER OR GUARANTOR. IN ACTING
UNDER SUCH POWERS, THE BANK SHALL HAVE NO FIDUCIARY DUTY TO THE BORROWER
OR GUARANTOR.
ATTEST: FLEET NATIONAL BANK
By:/s/ Xxxxxx Xxxxxxxx By: Xxxxxxx X. Xxxxxx
------------------------------------- -------------------------------
Name of Bank Officer: Xxxxxx Xxxxxxxx By: Xxxxxxx X. Xxxxxx
Title of Bank Officer: Vice President Title: Vice President
WITNESS:
By:/s/ Xxxxxxx X. Xxxxxxx By:/s/ D. Xxx XxXxxxxx
------------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx D. Xxx XxXxxxxx (Borrower)
By:/s/ Xxxxxxx X. Xxxxxxx By:/s/ Xxxxx X. XxXxxxxx
------------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx Xxxxx X. XxXxxxxx (Borrower)
WITNESS:
------------------------------------- -------------------------------
Secretary President
------------------------------------- -------------------------------
Manager Manager
