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EXHIBIT 10.4
COMMERCIAL SECURITY AGREEMENT
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PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL / COLL ACCOUNT OFFICER INITIALS
$4,000,000.00 03-28-2003 04-30-2006 55032 6001 360
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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: NORTH & SOUTH ASPEN, LLC (TIN: 00-0000000) LENDER: WESTSTAR BANK
SARDY HOUSE, LLC (TIN: 00-0000000) ASPEN XXXXXX
000 X. XXXXX XXXXXX XX XXX 00000
XXXXX, XX 00000 000 XXXX XXXX XXXXXX XXXXX 000
XXXXX, XX 00000
(000) 000-0000
THIS COMMERCIAL SECURITY AGREEMENT dated March 28, 2003, is made end executed
between North & South Aspen, LLC; and Sardy House, LLC ("Grantor") and WestStar
Bank ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this
Agreement:
ALL IMPROVEMENTS, FIXTURES, EQUIPMENT, CONSTRUCTION MATERIALS, AND OTHER ITEMS
AS LOCATED ON THE PROPERTY.
In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements of and additions to any of the collateral described
herein, whether added now or later.
(B) All products and produce of any of the property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral
section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's
insurer, whether due to judgment, settlement or other process.
COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 2
(E) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until
such a notice is given.
Some or all of the Collateral may be located on the following described real
estate:
ALL THE LOTS P, Q, R, AND S AND LOTS F, G, H AND I LESS THE NORTHERLY
75 FEET THEREOF AND THAT PART OF THE VACATED ALLEY BOUNDED BY THE
EXTENSION OF THE EASTERLY LOT LINES OF LOTS I AND S AND THE WESTERLY
LOT LINES OF LOTS F AND P, ALL IN XXXXX 00, XXXX XXX XXXXXXXX XX XXXXX,
XXXXXX OF PITKIN, STATE OF COLORADO.
CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all
Obligations, debts and liabilities, plus interest thereon, of Grantor to Lender,
or any one or more of them, as well as all claims by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated whether Grantor may be liable
individually or jointly with others, whether obligated as guarantor, surety,
accommodation party or otherwise, and whether recovery upon such amounts may be
or hereafter may become barred by any statute of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise
unenforceable.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any XXX or Xxxxx accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute financing
statements and to take whatever other actions are requested by Lender
to perfect and continue Lender's security interest in the Collateral.
Upon request of Lender, Grantor will deliver to Lender any and all of
the documents evidencing or constituting the Collateral, and Grantor
will note Lender's interest upon any and all chattel paper if not
delivered to Lender for possession by Lender. This is a continuing
Security Agreement and will
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 3
continue in effect even though all or any part of the Indebtedness is
paid in full and even though for a period of time Grantor may not be
Indebted to Lender.
NOTICES TO LENDER. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's name;
(2) change in Grantor's assumed business name(s); (3) change in the
management or in the members or managers of the limited liability
company Grantor; (4) change in the authorized signer(s); (5) change in
Grantor's principal office address; (6) change in Grantor's state of
organization; (7) conversion of Grantor to a new or different type of
business entity; or (8) change in any other aspect of Grantor that
directly or indirectly relates to any agreements between Grantor and
Lender. No change in Grantor's name or state of organization will take
effect until after Lender has received notice.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party, and its membership agreement does not prohibit any term or
condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance
with its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral
have authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral. At the time any Account becomes
subject to a security interest in favor of Lender, the Account shall be
a good and valid account representing an undisputed, bona fide
Indebtedness incurred by the account debtor, for merchandise held
subject to delivery instructions or previously shipped or delivered
pursuant to a contract of sale, or for services previously performed by
Grantor with or for the account debtor. So long as this Agreement
remains in effect, Grantor shall not, without Lender's prior written
consent, compromise, settle, adjust, or extend payment under or with
regard to any such Accounts. There shall be no setoffs or counterclaims
against any of the Collateral, and no agreement shall have been made
under which any deductions or discounts may be claimed concerning the
Collateral except those disclosed to Lender in writing.
LOCATION OF THE COLLATERAL. Except in the ordinary course of Grantor's
business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general
intangibles, the records concerning the Collateral) at Grantor's
address shown above or at such other locations as are acceptable to
Lender. Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral
locations relating to Grantor's operations, including without
limitation the following: (1) all real property Grantor owns or is
purchasing; (2) all real property Grantor is renting or leasing; (3)
oil storage facilities Grantor owns, rents, leases, or uses; and (4)
all other properties where Collateral is or may be located.
REMOVAL OF THE COLLATERAL. Except in the ordinary course of Grantor's
business, including the sales of inventory, Grantor shall not remove
the Collateral from its existing location without Lender's prior
written consent. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit
any action which would require application for certificates of title
for the
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 4
vehicles outside the State of Colorado, without Lender's prior written
consent. Grantor shall, whenever requested, advise Lender of the exact
location of the Collateral.
TRANSACTIONS INVOLVING COLLATERAL. Except for Inventory sold or
accounts collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell, offer
to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A
sale in the ordinary course of Grantor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale.
Grantor shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any lien, security interest, encumbrance,
or charge, other than the security interest provided for in this
Agreement, without the prior written consent of Lender. This includes
security Interests even if junior in right to the security interests
granted under this Agreement. Unless waived by Lender, all proceeds
from any disposition of the Collateral (for whatever reason) shall be
held in trust for Lender and shall not be commingled with any other
funds; provided however, this requirement shall not constitute consent
by Lender to any sole or other disposition. Upon receipt, Grantor shall
immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral free and clear of all liens
and encumbrances except for the lien of this Agreement. No financing
statement covering any of the Collateral is on file in any public
office other than those which reflect the security interest created by
this Agreement or to which Lender has specifically consented. Grantor
shall defend Lender's rights in the Collateral against the claims and
demands of all other persons.
REPAIRS AND MAINTENANCE. Grantor agrees to keep and maintain, and to
cause others to keep and maintain, the Collateral in good order, repair
and condition at all times while this Agreement remains in effect.
Grantor further agrees to pay when due all claims for work done on, or
services rendered or material furnished in connection with the
Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
INSPECTION OF COLLATERAL. Lender and Lender's designated
representatives and agents shall have the right at all reasonable times
to examine and inspect the Collateral wherever located.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral is
not jeopardized in Lender's sole opinion. If the Collateral is
subjected to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or other security satisfactory to Lender in an amount adequate to
provide for the discharge of the lien plus any interest, costs,
attorneys' fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 5
shall defend itself and Lender and shall satisfy any final adverse
judgment before enforcement against the Collateral. Grantor shall name
Lender as an additional obligee under any surety bond furnished in the
contest proceedings. Grantor further agrees to furnish Lender with
evidence that such taxes, assessments, and governmental and other
charges have been paid in full and in a timely manner. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's Interest in the Collateral is
not jeopardized.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to the
ownership, production, disposition, or use of the Collateral, including
all laws or regulations relating to the undue erosion of
highly-erodible land or relating to the conversion of wetlands for the
production of an agricultural product or commodity. Grantor may contest
in good faith any such law, ordinance or regulation and withhold
compliance during any proceedings including appropriate appeals, so
long as Lender's interest in the Collateral, in Lender's opinion, is
not jeopardized
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of
any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Collateral for Hazardous Substances. Grantor hereby (1) releases and
waives any future claims against Lender for indemnity or contribution
in the event Grantor becomes liable for cleanup or other costs under
any Environmental Laws, and (2) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a breach of
this provision of this Agreement. This obligation to indemnify shall
survive the payment of the Indebtedness and the satisfaction of this
Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender, 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 and not
including any disclaimer of the insurer's liability for failure to give
such a notice. 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 Grantor or any other person. In
connection with all policies covering assets in which Lender holds or
is offered a security interest, Grantor will provide Lender with such
loss payable or other endorsements as Lender may require. If Grantor at
any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such
insurance as Lender deems appropriate, including if Lender so chooses
"single interest insurance," which will cover only Lender's interest in
the Collateral.
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 6
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender
of any lose or damage to the Collateral. Lender may make proof of loss
if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed
Collateral, Lender shall, upon satisfactory proof of expenditure, pay
or reimburse Grantor from the proceeds for the reasonable cost of
repair or restoration. If Lender does not consent to repair or
replacement of the Collateral, Lender shall retain a sufficient amount
of the proceeds to pay all of the Indebtedness, and shall pay the
balance to Grantor. Any proceeds which have not been disbursed within
six (6) months after their receipt and which Grantor has not committed
to the repair or restoration of the Collateral shall be used to prepay
the Indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender
to be sufficient to produce, at least fifteen (15) days before the
premium due date, amounts at least equal to the insurance premiums to
be paid. If fifteen (15) days before payment is due, the reserve funds
are insufficient, Grantor shall upon demand pay any deficiency to
Lender. The reserve funds shall be held by Lender as a general deposit
and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by
Grantor as they become due. Lender does not hold the reserve funds in
trust for Grantor, and Lender is not the agent of Grantor for payment
of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor's sole
responsibility.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of
the policy; (4) the property insured; (5) the then current value on the
basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
FINANCING STATEMENTS. Grantor authorizes Lender to file a UCC-1
financing statement, or alternatively, a copy of this Agreement to
perfect Lender's security interest. At Lender's request, Grantor
additionally agrees to sign all other documents that are necessary to
perfect, protect, and continue Lender's security interest in the
Property. This includes making sure Lender is shown as the first and
only security interest holder on the title covering the Property.
Grantor will pay all filing fees, title transfer fees, and other fees
and costs involved unless prohibited by law or unless Lender is
required by law to pay such fees and costs. Grantor irrevocably
appoints Lender to execute licensing statements and documents of title
in Grantor's name and to execute all documents necessary to transfer
title if there is a default. Lender may file a copy of this Agreement
as a financing statement. If Grantor changes Grantor's name or address,
or the name or address of any person granting a security interest under
this Agreement changes, Grantor will promptly notify the Lender of such
change.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 7
property and beneficial use of all the Collateral and may use it in any lawful
manner not inconsistent with this Agreement or the Related Documents, provided
that Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. Until otherwise notified
by Lender, Grantor may collect any of the Collateral consisting of accounts. At
any time and even though no Event of Default exists, Lender may exercise its
rights to collect the accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness. If Lender at any time
has possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve or maintain
any security interest given to secure the Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amount;
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying oil taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the 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 Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (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; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
PAYMENT DEFAULT. Grantor fails to make any payment when due under the
Indebtedness.
OTHER DEFAULTS. Grantor 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 Grantor.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default 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 Grantor's
property or Grantor's or any Grantor's ability to repay the
Indebtedness or perform their respective obligations under this
Agreement or any of the Related Documents.
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LOAN NO. 55032 (CONTINUED) PAGE 8
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor'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.
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.
INSOLVENCY. The dissolution of Grantor (regardless of whether election
to continue is made), any member withdraws from the limited liability
company, or any other termination of Grantor's existence as a going
business or the death of any member, the insolvency of Grantor, the
appointment of a receiver for any part of Grantor's 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 Grantor.
CREDITOR OR FORECLOSURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any collateral securing the Indebtedness.
This includes a garnishment at any of Grantor's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender 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 Guarantor of any of the Indebtedness or Guarantor dies or
becomes Incompetent or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
INSECURITY. Lender in good faith believes itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. In an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Colorado Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice of any kind to
Grantor.
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 9
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral, Lender may
require Grantor to assemble the Collateral and make it available to
Lender in a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession of
and remove the Collateral. If the Collateral contains other goods not
covered by this Agreement at the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes reasonable
efforts to return them to Grantor after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
Lender's own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale. Unless the Collateral threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor, and other persons as
required by law, reasonable notice of the time and place of any public
sale, or the time after which any private sale or any other disposition
of the Collateral is to be made. However, no notice need be provided to
any person who, after Event of Default occurs, enters into and
authenticates an agreement waiving that person's right to notification
of sale. The requirements of reasonable notice shall be met if notice
is given at least ten (10) days before the time of the sale or
disposition. All expenses relating to the disposition of the
Collateral, including without limitation the expenses of retaking,
holding, insuring, preparing for sale end selling the Collateral, shall
become a part of the Indebtedness secured by this Agreement and shall
be payable on demand, with interest at the Note rate from date of
expenditure until repaid.
APPOINT RECEIVER. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Collateral, with
the power to protect and preserve the Collateral, to operate the
Collateral preceding foreclosure or sale, and to collect the Rents from
the Collateral and apply the proceeds, over and above the cost of the
receivership, against the Indebtedness. The receiver may serve without
bond if permitted by law. Lender's right to the appointment of a
receiver shall exist whether or not the apparent value of the
Collateral exceeds the Indebtedness by a substantial amount. Employment
by Lender shall not disqualify a person from serving as a receiver.
Receiver may be appointed by a court of competent jurisdiction upon ex
parte application and without notice, notice being expressly waived.
COLLECT REVENUES, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion transfer
any Collateral into Lender's own name or that of Lender's nominee and
receive the payments, rents, income, and revenues therefrom and hold
the same as security for the Indebtedness or apply it to payment of
this Indebtedness in such order of preference as Lender may determine,
insofar as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, choses in action, or
similar property, Lender may demand, collect, receipt for, settle,
compromise, adjust, xxx for, foreclose, or realize on the Collateral as
Lender may determine, whether or not indebtedness or Collateral is then
due. For these purposes, Lender may, on behalf of and in the name of
Grantor, receive, open and dispose of mail addressed to Grantor; change
any address to which mail and payments are to be sent; and endorse
notes, checks, drafts, money orders, documents of title, instruments
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 10
and items pertaining to payment, shipment, or storage of any
Collateral. To facilitate collection, Lender may notify account debtors
and obligors on any Collateral to make payments directly to Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and remedies
it may have available at law, in equity, or otherwise.
ELECTION AT REMEDIES. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by
Lender 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 Grantor under this Agreement, after Grantor's
failure to perform, shall not affect Lenders right to declare a default
and exercise its remedies.
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; EXPANSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including Lender's attorneys' fees and
Lender's legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may hire or pay someone else to help enforce
this Agreement, and Grantor shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender's attorneys' fees and
legal expenses whether or not there is a lawsuit, including attorneys
fees and legal expenses for bankruptcy proceedings including efforts to
modify or vacate any automatic stay or injunction, appeals, and any
anticipated post-judgment collection services. Grantor also shall pay
all court costs and such additional fees as may be directed by the
court.
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.
GOVERNING LAW. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
Colorado. This Agreement has been accepted by Lender in the State of
Colorado.
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 11
JOINT AND SEVERAL LIABILITY. All obligations of Grantor under this
Agreement shall be joint and several, and all references to Grantor
shall mean each and every Grantor. This means that each Grantor signing
below is responsible for all obligations in this Agreement. Where any
one or more of the parties is a corporation, partnership, limited
liability company or similar entity, it is not necessary for Lender to
inquire into the powers of any of the officers, directors, partners,
members, or other agents acting or purporting to act on the entity's
behalf, and any obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this
Agreement.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and
signed by Lender. 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 Lender 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 Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of 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, 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, Grantor agrees
to keep Lender informed at all times of Grantor's current address.
Unless otherwise provided or required by law, if there is more than one
Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.
POWER OF ATTORNEY. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest
granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or other
reproduction of any financing statement or of this Agreement for use as
a financing statement. Grantor will reimburse Lender for all expenses
for the perfection and the continuation of the perfection of Lender's
security interest in the Collateral.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be illegal, invalid, or unenforceable as to any
person or circumstances, that finding shall not make the offending
provision illegal, invalid, or unenforceable as to any other person or
circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. It 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
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 12
Agreement shall not affect the legality, validity or enforceability of
any other provision of this Agreement.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Collateral becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Agreement and the
Indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
Indebtedness.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect until
such time as Grantor's Indebtedness shall be paid in full.
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:
ACCOUNT. The word "Accounts" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Grantor (or to a third party grantor acceptable to
Lender).
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified (from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
BORROWER. The word "Borrower" means North & South Aspen, LLC; and Sardy
House, LLC, and all other persons and entities signing the Note in
whatever capacity.
COLLATERAL. The word "Collateral" means all of Grantor's right, title
and interest in and to all the Collateral as described in the
Collateral Description section of this Agreement.
DEFAULT. The word "Default" means the Default set forth in this
Agreement in the Section titled "Default".
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
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 13
and Reauthorization Act of 1988. Pub. L. No. 99499 ("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.
GRANTOR. The word "Grantor" means North & South Aspen, LLC; and Sardy
House, LLC.
GUARANTOR. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Indebtedness.
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
Grantor is responsible under this Agreement or under any of the Related
Documents.
LENDER. The word "Lender" means WestStar Bank, its successors and
assigns.
NOTE. The word Note means the Note executed by North & South Aspen,
LLC; and Sardy House, LLC in the principal amount of $4,000,000.00
dated March 28, 2003, together with all renewals of. extensions of,
modifications of, refinancings of, consolidations of, and substitutions
for the note or credit agreement.
PROPERTY. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
RELATED DOCUMENTS. The words "Related Documents" mean oil 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.
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COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032 (CONTINUED) PAGE 14
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 28, 2003.
GRANTOR:
NORTH & SOUTH ASPEN, LLC
By: /S/ XXXXXX X. XXXXXX By: /S/ XXXXX X. XXXXXX
------------------------------------------------ ------------------------------------------------
Xxxxxx X. Xxxxxx, Manager of Xxxxx X. Xxxxxx, Manager of
North & South Aspen, LLC North & South Aspen, LLC
SARDY HOUSE, LLC
BLOCK 66, LLC Manager of Sardy House, LLC
By: /S/ XXXXXX X. XXXXXX By: /S/ XXXXX X. XXXXXX
------------------------------------------------ ------------------------------------------------
Xxxxxx X. Xxxxxx, Manager of Block 66, LLC Xxxxx X. Xxxxxx, Manager of Block 66, LLC
