LOAN AGREEMENT EXHIBIT 10-13
THIS AGREEMENT is made as of this 30th day of August, 1995 by and
between the following parties:
SOUTHERN TIER ECONOMIC GROWTH, INC., a corporation duly organized
under the laws of the State of New York, having its principal office and place
of business at The Xxxx Xxxxx Building, 000 Xxxx Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
(hereinafter "STEG"); and
ARTISTIC GREETINGS, INC., a Delaware corporation with a principal
place of business at One Xxxxx Center, Elmira, New York, (hereinafter
"Artistic")
W I T N E S S E T H:
WHEREAS, the City of Elmira, New York (the "City") is a recipient of
Community Development Block Grant Funding through the U.S. Department of
Housing and Urban Development ("HUD"); and
WHEREAS, the purpose of the Community Development Block Grant
Program ("Program") is to promote sound community development; to revitalize
distressed cities; to reverse urban decay; to promote programs for housing
rehabilitation; to assist low and moderate income persons; and to stimulate
growth in a manner as to promote the aforementioned purposes; and
WHEREAS, all activities funded under the Program must meet at least
one of the three statutory objectives of the Program as set forth by Congress:
(1) directly benefit low to moderate income persons; (2) aid in the prevention
or elimination of slum and blight; or (3) meet community development needs
having a particular urgency and for which no other source of funding is
available; and
WHEREAS, The City has contracted with STEG to implement and
administer economic development activities utilizing funds from the City's
Community Development Block Grant Funding; and
WHEREAS, at least sixty percent (60%) of the funds received by the
City under the Program must be used for activities that principally benefit
low and moderate income persons; and
WHEREAS, an activity will be considered to benefit low and moderate
income persons ONLY if it meets one of the following tests: (1) the activity
must be carried out in a neighborhood consisting predominatelyof persons of
low to moderate incomes and provide services for such persons; (2) the
activity must involve facilities which are designated for use predominately by
low to moderate income persons; or (3) THE ACTIVITY MUST INVOLVE EMPLOYMENT OF
PERSONS, A MAJORITY OF WHICH ARE LOW TO MODERATE INCOME; and
WHEREAS, Artistic has requested that STEG provide financial
assistance to assist in the expansion of its check printing business at the
former Diven Plaza, Elmira, New York, thus creating new job opportunities,
particularly for persons of low to moderate incomes (hereinafter the
"Project"); and
WHEREAS, Artistic has indicated that it will initially employ full
time persons and will hire additional full time persons upon completion of the
Project and will have created approximately 80 new jobs; and
WHEREAS, Artistic has indicated that the total project cost is
approximately Ten Million and 00/100ths Dollars ($10,000,000.00) and that it
needs STEG's participation in the amount Two Hundred Thousand and 00/100ths
Dollars ($200,000.00) to successfully undertake this Project; and
WHEREAS, STEG has relied on these representations in authorizing the
allocation of Community Development Block Grant funds for loan to Artistic.
NOW, THEREFORE, in consideration of a $200,000.00 Loan from STEG to
Artistic and the promises, covenants and agreements contained herein, the
parties hereto covenant and agree as follows:
SECTION 1
DEFINITIONS
For the purpose of this Agreement, the following words and terms
shall have the respective meanings set forth as follows:
"BASE EMPLOYMENT" means the number of full time persons employed by
Artistic within the City, for the period commencing July 1, 1994 and ending
June 30, 1995 using the New York State Department of Labor WRS-2 forms filed
by Artistic for such period. The "Base Employment" shall be computed by
taking the sum total of the quarterly WRS-2 forms applicable for said year and
dividing it by four (4).
"BUSINESS DAY" means any day other than a Saturday, Sunday, or
public holiday in the State of New York or day upon which the banks in the
County of Chemung, State of New York are authorized or ordered to remain
closed.
"CITY OF ELMIRA" means the corporate limits of the City of Elmira.
"FAMILY" means all persons living in the same household who are
related by birth, marriage or adoption.
"FULL TIME JOB" is equal to one person working thirty-five (35)
hours per week for a calendar quarter, or two or more part time persons whose
combined working hours per week are equal
to 35 hours per week for a calendar quarter. Full time jobs shall be computed
by taking Artistic's total hours worked in a calendar quarter less all
overtime hours in said quarter and dividing said total by 455.
"LOAN DOCUMENTS" shall mean all of the documentation executed and
delivered by Artistic to STEG in connection with the $200,000.00 Loan from
STEG to Artistic, including without limitation this Agreement and the Note.
"LOW TO MODERATE INCOME FAMILY" means a family having an income
equal to or less than the Section 8 Income limits established by the U.S.
Department of Housing and Urban Development, as the same may be amended from
time to time. Attached hereto in Exhibit A is a listing of the Section Income
guidelines as they exist as of the date hereof.
"LOW TO MODERATE INCOME JOB". A job will be considered to be
available to low to moderate income persons only if: (1) special skills that
can only be acquired with substantial training or work experience or education
beyond high school are not a prerequisite to fill such jobs, unless the
business agrees to hire unqualified persons and provide training; and (2) the
business takes actions to ensure that low and moderate income persons receive
first consideration for filling such jobs.
"NET EMPLOYMENT GAIN" means the remainder of a calculation made by
subtracting the "Base Employment" from the number of full time persons
employed by Artistic in the City of Elmira for the most recent four quarters
using the New York State Department of Labor WRS-2 forms filed by Artistic for
such period.
"NEW JOB" means the creation of a new full-time position at Artistic
in the City of Elmira. For purposes of this definition lateral transfers of
Artistic employees who were employed by Artistic in any location during the
last four quarters shall not be counted. Lateral transfer includes the
reemployment of any employee who was on Artistic payroll at any time during
the previous four (4) quarters.
"PROJECT" means the expansion of Artistic's check printing business
at the former Diven Plaza, Elmira, New York; the retention of jobs by Artistic
within the City of Elmira; and the creation by Artistic of no less than eighty
(80) new jobs, fifty-one percent (51%) of which shall be classified as "Low to
Moderate Income Jobs" and made available to persons of low to moderate income
families.
SECTION II
OBLIGATIONS OF THE PARTIES
1. STEG shall:
A. Loan to Artistic the sum of Two Hundred Thousand and 00/100ths
Dollars ($200,000.00) to be repaid with interest thereon at a rate
of seven percent (7.00%) per annum, pursuant to the Terms of the
Note attached hereto as Exhibit "C".
2. Artistic shall:
A. REPAYMENT OF INDEBTEDNESS: Artistic shall repay the sum of Two
Hundred Thousand and 00/100ths Dollars ($200,000.00) to be repaid
with interest thereon at the rate of seven percent (7.00%) per annum
pursuant to the terms of the Note attached hereto as Exhibit "C".
B. DOCUMENTATION: Artistic shall supply such documentation to STEG as
is reasonably required by STEG to administer the Loan pursuant to
governmental regulations promulgated in connection with the City's
Community Block Grant Funding and this Agreement.
C. EXPANSION OF PROPERTY: Artistic shall expand the property as set
forth in the description of the Project herein.
D. CREATION OF JOBS:
(a) Retention of Jobs: As of the date of acquisition of the Project
by Artistic there were _____ employees;
(b) Artistic warrants that it will create a "Net Employment Gain",
on or before June 30, 1998, of not less than eighty (80) new full
time jobs; and
(c) Artistic warrants that of the not less than eighty (80) new
jobs, Artistic will use its best efforts to employ, or make
available employment opportunities, for not less than fifty-one
(51%) of the new full time jobs to persons of low to moderate income
families.
E. LOAN COLLATERAL: As Collateral security for the repayment of the Two
Hundred Thousand and 00/100 Dollar ($200,000.00) indebtedness,
Artistic will execute and deliver or cause to be executed and
delivered to STEG the following documents in form acceptable to
Counsel to STEG:
i. This Loan Agreement.
ii. A Promissory Note in the sum of Two Hundred Thousand
Dollars ($200,000.00) in form substantiallysimilar to Exhibit C
annexed hereto.
iii. A Security Agreement and Financing Statement in form
substantially similar to Exhibit D annexed hereto.
SECTION III
REPORTS
All reports required to be sent under this section shall be sent to
STEG; 000 Xxxx Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxx, Xxx Xxxx 00000-0000.
1. COMPLETION OF REDEVELOPMENT REPORTING: At the end of every calendar
quarter, throughout the duration of this Agreement and further upon
completion of the expansion and redevelopment of the property,
Artistic shall furnish a report to STEG which shall contain an
accurate figure for the cost of such expansion and redevelopment,
substantially in the form of Exhibit B hereto, together with a copy
of the Certificate of Occupancy furnished by the City's Department
of Inspection Services if the Loan is secured by a Mortgage.
2. RETENTION OF JOBS REPORTING: Within thirty (30) days of the
execution of this Agreement, Artistic shall furnish to STEG copies
of the New York State Department of Labor WRS-2 forms filed by
Artistic for the period commencing July 1, 1994 and ending June 30,
1995. Upon receipt, STEG shall compute the "Base Employment" as
defined herein. This computation shall be attached hereto as
Exhibit E and from the "Base Employment" figure which shall be
relied upon by STEG and Artistic in measuring employment retention
and compliance under the terms of this Agreement.
3. CREATION OF JOBS REPORTING: Commencing with the calendar quarter
ending September 30, 1995 and within forty-five (45) days after each
quarter thereafter, Artistic shall submit a report to STEG setting
forth the "Net Employment Gain" of Artistic with supporting
documentation which shall include copies of the more recent WRS-2
forms filed by Artistic identifying those individuals being counted
in the "Net Employment Gain".
4. EMPLOYMENT OF PERSONS IN A "LOW TO MODERATE INCOME FAMILY REPORTING:
Artistic shall provide to STEG, commencing with the calendar quarter
ending September 30, 1995 and within forty-five (45) days of each
quarter thereafter, documentation which adequately describes the
efforts undertaken by Artistic to hire qualified persons for the
jobs available. This documentation shall include, but not be
limited to: advertisements specifically requesting persons of low
and moderate incomes to apply; the job descriptions and job titles
which meet the requirements of a "Low to Moderate Income Job"
described in Section I hereof; and the notification of the job
opportunities to agencies and organizations which could reasonable
be construed as being able to assist Artistic in locating such
persons. Additionally, Artistic shall provide documentation, in the
form of an income certification, substantially in the form of
Exhibit A hereto, or similar documentation, for each employee hired
that Artistic is counting in meeting the required low to moderate
income jobs which result from the Project.
5. CERTIFICATE OF COMPLIANCE: Upon the completion of the "Project" by
Artistic and upon receipt of such documentation as may be required
to evidence that Artistic has fulfilled all of its obligations under
this Agreement, STEG shall issue a "Certificate of Compliance" for
the Project. The Certificate shall recite that the Project has been
completed in accordance with the approved plans and that Artistic
has fulfilled all of its obligations under this Agreement.
SECTION IV
ADDITIONAL REPORTING REQUIREMENTS
It is understood and acknowledged by Artistic that these funds are
made available through the use of Community Development Block Grant monies
awarded to the City of Elmira by the U.S. Department of Housing and Urban
Development (HUD). Artistic understands and acknowledges that the City of
Elmira and/or HUD may require additional documentation to be provided by
Artistic to ensure compliance with the conditions of this Agreement, and
Artistic agrees to promptly provide such documentation as may be reasonably
requested.
SECTION V
DEFAULTS AND REMEDIES
1. In the event that Artistic fails to comply with any of the obligations,
terms and conditions set forth herein, in the Loan Documents, or in any
other agreement with STEG regarding this loan and executed simultaneously
herewith, Artistic shall be in default under this Agreement and STEG may
in addition to other remedies it may have, may take one or more of the
following remedial steps:
X. XXXX, upon written notice to Artistic, may cause all principal
installments payable under this loan for the remainder of the term
of the Loan Agreement to be immediately due and payable, whereupon
the same shall become immediately due and payable.
X. XXXX may take whatever action at law or in equity as may appear
necessary or desirable to collect the amounts then due and
thereafter to become due, or to enforce the performance or
observance of any obligations, agreements or covenants of Artistic
under this Agreement. In the event that Artistic fails to make any
payment required under the terms of the Promissory Note executed
simultaneously herewith, the installment so in default shall
continue as an obligation of Artistic until the amount in default
shall have been paid.
C. At its option, and if this loan is secured by a real property
mortgage, STEG may pay real property taxes and discharge real
property liens or other liens superior to STEG's interest at any
time levied or placed on the premises and Artistic agrees to
reimburse STEG on demand for any payment made or any expenses
incurred thereby, provided, with respect to real property taxes,
that said real property taxes are not paid by Artistic within thirty
(30) days of their due date.
D. If such default is solely by reason of Artistic's failure to file
with STEG, reports as required herein or to provide information or
documentation as required herein, then Artistic shall have thirty
(30) days to cure the default.
E. In the event of a default, STEG shall provide written notice to
Artistic of said default mailed certified mail, return receipt
requested to Artistic at Xxx Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx,
Xxx Xxxx 00000-0000, or such other address as they may designated,
in writing, giving Artistic thirty (30) days to cure said default.
Any notice required to be given to STEG shall be mailed certified
mail return receipt requested to Southern Tier Economic Growth,
Inc., 000 Xxxx Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxx, Xxx Xxxx 14902-
1510.
2. REMEDIES CUMULATIVE: The rights and remedies of STEG under this
Agreement shall be cumulative and shall not exclude any rights and
remedies of STEG allowed by law with respect to any default under this
Agreement. Failure by STEG to insist upon the strict performance of any
of the covenants and agreements herein set forth or to exercise any
rights or remedies upon default by Artistic hereunder shall not be
considered or taken as a waiver or relinquishment for the future of the
right to insist upon and to enforce by mandamus or other appropriate
legal remedy a strict compliance by Artistic with all of the covenants
and conditions hereof or of the rights to exercise any such rights or
remedies if such default by Artistic be continued or repeated or of the
right to recover possession of the project by reason thereof.
3. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER: In the event any covenant or
agreement contained in this Agreement should be breached by either party
and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any
other breach hereunder. No waiver shall be binding unless it is in
writing and signed by the party making such waiver. No course of dealing
between STEG and Artistic or any delay or omission on the part of STEG in
exercising any rights hereunder shall operate as a waiver.
4. EFFECT ON DISCONTINUANCE OF PROCEEDINGS: In the event any proceeding
taken by STEG under this Agreement on account of any Event of Default
hereunder shall have been discontinued or abandoned for any reason or
shall have been determined adversely to STEG, the and in every such case,
STEG shall be restored, respectively, to its former position and rights
hereunder, and all rights, remedies, powers and duties of STEG shall
continue as in effect prior to the commencement of such proceedings.
5. AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES: In the event that
Artistic should default under any of the provisions of this Agreement and
STEG should employ attorneys or incur other expense for the collection of
amounts payable hereunder or the enforcement of performance or observance
of any obligation or agreement on the part of Artistic herein contained,
Artistic agrees that it will, on demand, therefore pay to STEG the
reasonable fees and disbursements of such attorneys and such other
expenses so incurred.
6. FURTHER ASSURANCES: Artistic will cooperate with STEG for the purpose of
protecting STEG's interest in the project, and the sums due under this
Agreement and including, without limitation, the execution of all Uniform
Commercial Code financing statements requested by STEG. STEG is
authorized if permitted by applicable law to file one or more Uniform
Commercial Code financing statements disclosing any security interest in
the project and the sums due under this Agreement without the signature
of Artistic or signed by STEG as attorney-in-fact for Artistic. Artistic
will pay all costs of filing and financing, continuation or termination
statements with respect to the project and this Agreement. Artistic
shall execute and deliver the instruments and assurances as STEG deems
necessary or advisable for the implementation, effectuation, confirmation
or perfection of this Agreement and any rights of STEG hereunder.
SECTION VI
EQUAL EMPLOYMENT OPPORTUNITY
Artistic shall not discriminate against employees or applicants for
employment because of race, creed, color, national origin, sex, age,
disability or marital status and will undertake or continue existing programs
of affirmative action to ensure that minority group members and women are
afforded equal employment opportunities without discrimination. Artistic
shall state in all solicitations or advertisements for employees, that, in the
performance of this Agreement all qualified applicants will be afforded equal
employment opportunities without discrimination because of race, creed, color,
national origin, sex, age, disability or marital status. Artistic shall upon
request furnish to STEG evidence that such language was used in all
advertisements for employment.
SECTION VII
MODIFICATIONS, ALTERATIONS OR CHANGES TO THIS AGREEMENT
This Agreement may not be altered, modified, amended or changed in
any manner without the expressed written consent of the STEG.
SECTION IX
RECORDING
In the event of default by Artistic that remains uncured for thirty
(30) days, STEG shall have the right to record this Agreement in the Office of
the Chemung County Clerk and all costs associated with such recording shall be
added to the principal amount owed by Artistic to STEG.
SECTION X
BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of
each of the parties, their successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and date first written above.
SOUTHERN TIER ECONOMIC GROWTH, INC.
/s/ Xxxxxx X. Xxxxx, President
By: Xxxxxx X. Xxxxx, President
Artistic Greetings, Inc.
By:/s/ Xxxxxx X. Xxxxxxx
Its General Counsel
State of New York, )
: ss.
County of Chemung. )
On the 30th day of August, 1995, before me, personally came Xxxxxx
X. Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at_______________________________, in the _______ of ___________,
Chemung County, New York; that he is the President of Southern Tier Economic
Growth, Inc., the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation and that he signed his name thereto
by like order.
___________________________
Notary Public.
State of New York, )
: ss.
County of Chemung. )
On the 30th day of August, 1995, before me, personally came
____________________________________, to me known, who being by me duly sworn,
did depose and say that _he resides at ________
_______________________________, in the _______ of ___________, _________
County, New York; that _he is the _____________________ of Artistic Greetings,
Inc., the corporation described in and which executed the foregoing
instrument; that _he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation and that _he signed h__ name
thereto by like order.
___________________________
Notary Public.
LIST OF EXHIBITS
A. New Employee Income Certification and Low to Moderate IncomeGuidelines
B. Project Budget
C. Note
D. Security Agreement and Financing Statement
E. Base Employment Computation
EXHIBIT A.
NEW EMPLOYEE INCOME CERTIFICATION
In order to make it economically feasible to expand property located
at Diven Plaza, Elmira, New York, Artistic obtained a loan from STEG. As a
condition of this loan, Artistic agreed to hire at least forty-one low to
moderate income persons, as defined below.
In order for STEG to be able to provide the City of Elmira with
documentation regarding our efforts in meeting this goal, it is requested that
you complete this form. PLEASE BE ADVISED THAT THIS INFORMATION IS BEING USED
SOLELY FOR THE PURPOSE OF PROVIDING THE REQUIRED DOCUMENTATION TO THE CITY AND
IN NO WAY AFFECTS YOUR EMPLOYMENT OPPORTUNITY AT ARTISTIC.
To complete the form you must:
1. Look at the chart below. Determine you family size. Note: "Family"
means all persons living in the same household who are related to you by
birth, marriage, or adoption.
2. Look at the "Total Annual Income" column directly across from your family
size. IF YOUR FAMILY INCOME IS EQUAL TO OR LESS THAN THIS AMOUNT, THEN
YOU FALL "WITHIN" THE INCOME GUIDELINES. IF YOUR INCOME IS GREATER THAN
THIS AMOUNT YOU "DO NOT FALL WITHIN" THE INCOME GUIDELINES. Note: Total
Family Income means the total income received during the past year by all
members of your family including wages, tips, social security, pension,
child support, etc.
3. Check the appropriate box at the bottom of this form and sign it.
LOW TO MODERATE INCOME GUIDELINES
FAMILY SIZE TOTAL ANNUAL INCOME
1 $19,950
2 $22,800
3 $25,650
4 $28,500
5 $30,250
6 $32,650
( ) I, _____________, hereby certify that my family income is EQUAL TO OR
LESS THAN the total annual income listed above for my family size.
OR
( ) I, _____________, hereby certify that my family income is GREATER than
the amount indicated above for my family size.
SIGNATURE:______________________________ DATE:______________________
ADDRESS: ______________________________ SIZE OF FAMILY:____________
EXHIBIT B
PROJECT BUDGET
PROJECT DESCRIPTION:
Site Acquisition $
Purchase of Machinery
and Equipment
Working Capital
Purchase of Inventory
PROJECT FINANCING:
PERCENT SOURCE
STEG $
Artistic (equity)
Bank
CCIDA
EXHIBIT E
BASE EMPLOYMENT COMPUTATION
To be completed by Artistic and STEG on a quarterly basis.
_____________________________________________________________________
PROMISSORY NOTE
August 30, 1995
Elmira, New York $200,000.00
For valuable consideration received, ARTISTIC GREETINGS, INC., a
Delaware corporation, maintaining a place of business at Xxx Xxxxx Xxxxxx,
X.X. Xxx 0000, Xxxxxx, Xxx Xxxx 00000-0000 (the "Borrower"), does hereby
acknowledge that it is indebted to SOUTHERN TIER ECONOMIC GROWTH, INC., with
an office at 000 Xxxx Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, (the "Lender"), in
the principal sum of Two Hundred Thousand and 00/100ths Dollars ($200,000.00),
which sum the Borrower does hereby agree to Pay To The Order Of the Lender
with interest thereon at a rate of seven percent (7.00%) per annum until said
principal sum and interest are paid in full. Borrower shall pay interest only
on the principal sum from the date hereof to August 31, 1995. Borrower shall
then make a monthly payment of principal and interest to Lender in the amount
of Three Thousand Nine Hundred Sixty and 24/100ths Dollars ($3,960.24) on
October 1, 1995 and the same amount on the 1st day of each and every month
thereafter until the principal indebtedness is paid in full. In any event,
all unpaid principal and all accrued interest shall be paid in full by
September 1, 2000. Payments shall be applied first to interest then owing,
then to the unpaid principal balance.
In the event that any monthly payment shall become past due for a
period of ten (10) days, a "late charge" of two percent for each monthly
payment so past due may be charged by the Lender, for the purpose of defraying
the expenses incident thereto.
Any of the following shall constitute a default:
(1) Failure to pay any monthly payment within thirty (30) days of the due
date; (2) default in or breach of any other agreement or obligation with the
Lender; (3) the furnishing of false information to the Lender in connection
with this Note; (4) the commencement or institution of bankruptcy proceedings,
any assignment for the benefit of creditors, or any other proceedings for the
relief from, or adjustment of, debts by or against the Borrower; (5) if the
Borrower sells, leases, transfers, conveys or otherwise alienates any interest
in any collateral or security which secures this Note; and (6) if the Borrower
moves the primary place of its business or the collateral which secures this
Note to a location outside of the City of Elmira.
Borrower hereby waives presentment, notice of dishonor and protest.
Borrower shall make all payments at Lender's office set forth above
or at such other place as Lender may require.
Borrower shall have the right to make prepayments of principal in
whole or in part at any time without penalty.
The terms of this Note cannot be changed, nor may this Note be
discharged, in whole or part, except by a writing executed by Lender. Any
acceptance by Lender of partial payment shall not constitute waiver of the
right to accelerate payment of the Note, nor shall any delay or failure of
Lender to enforce any provision of this Note act as waiver, nor shall it
prevent Lender from later enforcing any provision hereof.
Borrower agrees to pay all reasonable costs and expenses incurred by
Lender in enforcing this Note, including but not limited to reasonable
attorney's fees and costs.
This Note shall be binding upon the successors, assigns and personal
representatives of the Borrower.
This Note shall be construed and enforced in accordance with the
laws of the State of New York.
Any reference herein to the Lender shall be deemed to include and
apply to every subsequent holder of this Note and any reference herein to the
Borrower shall be deemed to include and apply to every person now or hereafter
liable under this Note.
In Witness, the Borrower has executed this Note as of the day and
year first above written.
Artistic Greetings, Inc.
By: /s Xxxxxx X. Xxxxxxx
Its: General Counsel
________________________________________________________________________
SECURITY AGREEMENT
(EQUIPMENT)
AGREEMENT, dated August 30, 1995, by and between ARTISTIC GREETINGS,
INC., having an office located at Xxx Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx, Xxx
Xxxx, 00000-0000 (the "Debtor") and SOUTHERN TIER ECONOMIC GROWTH, INC.,
having an office located at Xxxx Xxxxx Building, 000 X. Xxxx Xxxxxx, X.X. Xxx
000, Xxxxxx, XX 00000-0000 (the "Secured Party").
I. Creation of Security Interest.
1. Debtor hereby grants to Secured Party a security interest in:
the equipment described in Schedule A to this
agreement
Debtor should
initial one
line all equipment which the Debtor now owns or may
hereafter acquire, and,
in either case, all substitutions, additions, and accessories therefor or
thereto and the proceeds thereof ( the "Collateral").
(If neither line or both lines are initialed, it is agreed that all equipment
which the Debtor now owns or may hereafter acquire is subject to this
agreement.)
2. The Collateral is given to secure the payment of a Two Hundred
Thousand Dollar ($200,000.00) obligation of Debtor to Secured Party of even
date herewith, and any and all renewals, modifications or extensions thereof,
and any sums advanced by Secured Party under the provisions of this Security
Agreement.
II. Debtor's Covenants, Representations and Warranties.
The Debtor covenants, represents and warrants that:
1. If Debtor maintains a place or places of business in New York State,
they are situated in the County of Chemung.
2. The Collateral is located at the following locations(s):
City of Elmira, Chemung County, New York
3. The Collateral is not and shall not be attached or affixed to real
estate without permission of Secured Party; and it is and shall be kept at the
above locations(s) or other locations(s) designated to and agreed to in
writing by Secured Party. Debtor will not remove the Collateral from said
location(s) without the prior written consent of Secured Party. The
Collateral will not be or suffered to be wasted, misused, abused or to
deteriorate, except for ordinary wear and tear, and will not be used in
violation of any law, ordinance or regulation of any governmental authority.
4. Except for the security interest granted hereby, Debtor is the sole
owner of the Collateral; it is free and will remain free of any lien, security
interest or encumbrance; and Debtor will defend the Collateral against all
claims and demands of any person at any time claiming the same or any interest
therein.
5. If this agreement is security for a loan to be used to pay a part or
all of the purchase price of any Collateral, Debtor agrees to use the proceeds
of the loan to pay the purchase price, filing fees and insurance premiums.
The Secured Party, however, may pay the proceeds directly to the seller of the
Collateral.
6. The Collateral shall be insured with such carriers and in such
amounts and against such risks as shall be satisfactory to Secured Party, with
policies payable to both Secured Party and Debtor, as their interest may
appear. All policies of insurance shall provide for thirty days prior written
notice of cancellation to Secured Party and Secured Party shall be furnished
with duplicate policies or other evidence of compliance with the foregoing
insurance provisions. Debtor hereby appoints Secured Party the attorney for
the Debtor in obtaining, adjusting and cancelling any such insurance and
endorsing settlement drafts and hereby assigns to Secured Party all sums which
may become payable under such insurance, including return premiums and
dividends, as additional security for the indebtedness.
7. Debtor will pay when due all taxes and assessments upon the
Collateral or its operation or use.
8. At its option, and without any obligation to do so, Secured Party
may discharge or pay any taxes, liens, security interest, or other
encumbrances at any time levied or placed on or against the Collateral or
Debtor, and may pay for insurance on the Collateral and may pay for the
Collateral's maintenance and preservation. Debtor agrees to reimburse Secured
Party on demand for any such payment made, or expense incurred pursuant to the
foregoing authorizations.
9. The Collateral will not without the prior written consent of Secured
Party be sold, transferred, substantially modified or disposed of. Secured
Party shall have the right upon reasonable notice to inspect and examine the
Collateral. Debtor shall immediately notify Secured Party of any partial or
complete loss, destruction, or theft of the Collateral.
10. Debtor hereby irrevocably appoints Secured Party as its lawful
attorney and agent to execute financing statements on its behalf, and hereby
further authorizes Secured Party to file on its behalf such financing
statements in any appropriate public office. Debtor also shall execute from
time to time, alone or with Secured Party, any financing statements or other
documents and do such other act or acts considered by Secured Party to be
necessary or desirable to perfect or protect the security interest hereby
created, and pay all costs and expenses (including without limitation
reasonable fees and expenses of counsel and filing fees) related to the
preparation and filing of any financing statements, continuation statements or
other documents related to the perfection or protection of the security
interest hereby created.
III. Events of Default.
Occurrence of any of the following events shall, at the option of Secured
Party, constitute a default hereunder: default by Debtor in the payment, when
due, whether by acceleration or otherwise, of any debt, liability, or
obligation to Secured Party; default by Debtor in the terms of any note or
agreement with Secured Party; default by Debtor in performance of any term of
this Security Agreement: if any representation or warranty made by Debtor
herein shall prove to have been incorrect in any material respect when made;
loss, theft, substantial damage to or destruction of the Collateral; the
making of any levy, seizure or attachment of or on the Collateral.
IV. Secured Party's Remedies.
Upon the default in payment of any obligation, liability or claim secured
hereby, Secured Party shall have the rights and remedies of a secured party
under the Uniform Commercial Code as in effect in the State of New York at the
date hereof. Without limiting the generality of the foregoing, Secured Party
may exercise the following rights and remedies:
1. Secured Party may peacefully by its own means or with judicial
assistance enter Debtor's premises and take possession of the Collateral, or
render it unusable, or dispose of the Collateral on Debtor's premises, and
Debtor will not resist or interfere with such action.
2. Secured Party may require Debtor to assemble all or any part of the
Collateral and make it available to Secured Party at any place designated in a
Notice sent to Debtor.
3. Debtor hereby agrees that a notice sent to it at least ten days
before the time of any intended public sale, or of the time after which any
private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such or other disposition.
4. Secured Party may incur reasonable attorney's fees and expenses in
exercising any of its rights and remedies upon default which shall become part
of Secured Party's reasonable expenses of retaking, holding, preparing for
sale of the like. Debtor will reimburse Secured Party for all such expenses.
After payment of such expenses or deduction of same by Secured Party from
proceeds
of collection or sale of Collateral, the residue of any such proceeds shall be
applied to the payment of principal and interest on liabilities in such order
of preference as Secured Party may determine.
5. The Debtor shall remain liable for any deficiency resulting from a
sale of the Collateral and shall pay any such deficiency forthwith on demand.
V. Miscellaneous.
1. No failure on the part of Secured Party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise by Secured Party of any right or
remedy hereunder preclude any other or future exercise thereof or the exercise
of any other right or remedy. All rights and remedies of Secured Party
hereunder are cumulative.
2. This Security Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the
laws of the State of New York.
3. Any notice or notification required to be given by mailing such
notice, postage prepaid, to Debtor's address as it appears at the beginning of
this Security Agreement or to the Debtor's last known address.
4. The terms "Secured Party" and "Debtor" as used herein shall include
the heirs, executors, administrators, successors, or assigns of those parties.
5. If more than one Debtor executes this Security Agreement, the term
"Debtor" shall include each as well as all of them and their obligations,
warranties and representations hereunder shall be joint and several.
6. This Security Agreement may not be changed orally, but only by an
agreement in writing and signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
7. This Security Agreement is not delivered upon any condition and
constitutes the entire agreement between the parties with regard to the
collateral and secured Party's security interest therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.
Southern Tier Economic Growth, Inc.
By /s/ Xxxxxx X. Xxxxx
Its President
Artistic Greetings, Inc.
By /s/ Xxxxxx X. Xxxxxxx
Its General Counsel
WARNING: IT IS A CRIMINAL OFFENSE IN NEW YORK STATE FOR A DEBTOR TO
KNOWLINGLY SELL OR OTHERWISE DISPOSE OF COLLATERAL IN CONTRAVENTION OF THE
TERMS OF A SECURITY AGREEMENT.
SCHEDULE A
One Xxxxxx Checkbinder Type 380 including Drive, Central
Lubrication, and Electrical Equipment, with 12 Hohner Stitching
Heads, Serial No. 0000-000-0.
Artistic Greetings, Inc.
By
Its
Date: AUGUST 30, 1995
(If this schedule is completed, Debtor should sign above to indicate that this
schedule contains an accurate description of the equipment covered by the
Security Agreement)
