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ASSUMPTION OF LOAN AND SECURITY AGREEMENT
THIS ASSUMPTION OF LOAN AND SECURITY AGREEMENT (the "Assumption") is made
and entered into to be effective the 26th day of February, 1997, by and among
THE PROVIDENT BANK (the "Bank"), and LEXFORD PROPERTIES, INC. ("Lexford").
RECITALS
I. The following Companies: Cardinal Realty Services, Inc., Cardinal
Apartment Management Group, Inc., fka Cardinal Acceptance Corporation, Cardinal
GP VIII Corporation, Cardinal GP X Corporation, Cardinal GP XI Corporation,
Cardinal GP XII Corporation, Cardinal Industries Development Corporation,
Cardinal Ancillary Insurance Agency, Inc., fka Cardinal Industries Insurance
Agencies, Inc., Cardinal Industries of Florida Services Corporation, Cardinal
Industries of Georgia Services Corporation, Cardinal Industries of Texas, Inc.,
Cardinal Industries Services Corporation, Cardinal Realty Company, Cardinal
Regulatory of Kentucky, Inc., Cardinal Regulatory of West Virginia, Inc., CII of
Pennsylvania, Inc., R/E Management Services, Inc., and Xxxxxx Place Limited
Liability Company, jointly and severally (herein each a "Company" or
collectively, the "Companies"), and the Bank entered into a Loan and Security
Agreement dated August 11, 1995 (the "Loan Agreement") and various loan
documents executed in connection therewith (the "Loan Documents"); and
II. The Companies and the Bank have agreed to extend the due date for the
$3,000,000.00 Operating Revolving Line Note provided for in the Loan Agreement,
which extension is hereafter included in the reference to Loan Documents; and
III. The Companies, Lexford and the Bank desire to acknowledge Lexford's
joint and several obligation with the Companies to repay the loans evidenced by
the Loan Agreement and related Loan Documents.
NOW, THEREFORE, in consideration of the extension of the Operating
Revolving Line, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Assumption of Joint and Several Liability. Lexford has become an
affiliate of Cardinal Realty Services, Inc. and the other Companies following
execution of the Loan Agreement on August 11, 1995. Lexford acknowledges the
receipt of valuable consideration as a result of the now existing extensions of
credit under the Loan Agreement. Therefore, Lexford hereby assumes and promises
to pay, jointly and severally with the other Companies, any now existing or
hereafter arising obligation due under the terms of the Loan Agreement,
including, without limitation, any promissory note executed by one or more of
the Companies payable to the Bank.
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Section 2. Collateral. The Companies and the Bank are negotiating certain
terms and conditions of the Loan Agreement and Loan Documents related to the
Companies' grant of security interests in their Collateral as that term is
defined in the Loan Agreement. Notwithstanding its assumption to repay the loans
due the Bank, Lexford does not grant a security interest in any of its
Collateral until such time as the negotiations are complete and documented.
Nevertheless, Lexford represents and warrants that there is no existing security
interest in any of its Collateral and Lexford further agrees it shall not grant
any security interest to any creditor other than the Bank in any of its
Collateral.
Section 3. Ratification of Loan Documents. Lexford agrees the Loan
Agreement and Loan Documents are and shall remain in full force and effect.
Except as related to its Collateral, Lexford hereby ratifies, confirms and
approves the Loan Agreement and Loan Documents, agrees that the Loan Agreement
and Loan Documents constitutes the valid and binding obligations and agreements
of Lexford and the Companies, enforceable by the Bank in accordance with their
terms; and affirms each of the representations and warranties provided for in
the Loan Agreement effective as of the execution of this Assumption. Nothing in
this Assumption shall be deemed to impair or otherwise affect the lien of the
Loan Agreement and Loan Documents on the Collateral of the Companies.
Section 4. Governing Law. This Assumption shall be governed by and
construed and enforced in accordance with the laws of the State of Ohio.
Section 5. Successors and Assigns Bound. This Assumption is binding upon
and shall inure to the benefit of the parties hereto, and their respective
successors and assigns.
Section 6. Entire Agreement. This Assumption, in addition to the Loan
Agreement and the Loan Documents, constitutes the sole and entire agreement
between Lexford and the Bank with respect to the subject matter hereof. Neither
this Assumption nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of such change, waiver, discharge or termination is
sought.
Section 7. Warrant of Attorney. With full knowledge of all constitutional
rights, if any payment under the Notes, as defined in the Loan Agreement, is not
paid on or before the date when due, or should default be made in the
performance or observance of any of the covenants or agreements of the Loan
Documents or this Assumption, Lexford hereby authorizes and empowers any
attorney of any court of record within the United States of America or elsewhere
to appear for Lexford and confess judgment or a series of judgments against
Lexford and/or any or all of the Companies in favor of the holder of the Notes
as of any time, present or future, for the then due and unpaid balance or
balances of the principal, interest, late charges and collection expenses
evidenced by the Notes, or any part thereof, together with the costs of the
suit, and to waive and release all errors in said proceedings and petitions in
error and the right to appeal from the judgment rendered, on which judgment or
judgments one or more executions may issue forthwith; and for so doing the Note
or a copy thereof and this Assumption or a copy hereof verified by affidavit
shall be a sufficient warrant.
IN WITNESS WHEREOF, the Bank and Lexford have executed this Assumption at
Columbus, Franklin County, Ohio, or caused it to be executed by their duly
authorized representatives, intending to be legally bound as of the date first
above written.
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WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR, WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE. (SEC. 2323.13, O.R.C.).
Lexford Properties, Inc.
By: /s/ Xxxx X. Xxxxxxxx, Xx.
--------------------------
Xxxx X. Xxxxxxxx, Xx.
Its: President and CEO
THE BANK:
The Provident Bank
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Xxxxxxx X. XxXxxxxx
Its: Vice President
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