GENERAL BUSINESS SECURITY AGREEMENT
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The undersigned, AMERIHOST PROPERTIES, INC., a Delaware corporation,
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxx 00000 (the "Borrower"),
for value received, hereby conveys and grants to BRIDGEVIEW BANK AND TRUST,
having offices located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(hereinafter called the "Lender"), a security interest in the following personal
property and all proceeds thereof and all accessories, parts and equipment now
or hereafter affixed thereto or used in connection therewith (hereinafter
collectively called the "Collateral") :
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
The aforesaid security interest is given to secure the payment of the
principal, interest and all obligations of the Borrower evidenced by a Revolving
Acquisition and Development Line of Credit Note in the original principal amount
of Seven Million and No/100 Dollars ($7,000,000.00) dated as of October 15, 1998
executed by the Borrower and payable to the order of the Lender and any
extensions, renewals or modifications thereof, (hereinafter called the "Note").
The Note and all other obligations evidenced thereby are herein collectively
called the "Indebtedness".
1. The Borrower hereby warrants and agrees that:
(a) For the purpose of this Agreement the term "Account Debtor" shall
be defined as any person or entity obligated to the Borrower on or under any
Eligible Account as that term is defined hereunder.
(b) For the purpose of this Agreement and the Notes the term "Eligible
Account" shall mean an Account arising in the ordinary course of the business of
the Borrower which meets and maintains each of the following requirements:
1. if it arises from the sale or lease of goods, such goods have
been shipped or delivered to the Account Debtor under such
Account; if it arises from services rendered, such services have
been performed;
2. it is a valid, legally enforceable obligation of the Account
Debtor thereunder, and is not subject to any offset, counterclaim
or other defense on the part of such Account Debtor or to any
claim on the part of such Account Debtor denying liability
thereunder in whole or in part;
3. it is not subject to any lien or security interest whatsoever
other than the security interest hereunder;
4. it is evidenced by an invoice, dated not later than the date of
shipment or performance, rendered to such Account Debtor or some
other evidence of billing acceptable to Lender and is not
evidenced by any instrument or chattel paper;
5. it is not owing by any Account Debtor whose obligations the
Lender, acting in its sole and reasonable discretion, shall have
notified the Borrower are not deemed to constitute Eligible
Accounts; and
6. it is not past due more than ninety (90) days, nor is it
unacceptable to the Lender for any reason which Lender may
reasonably hereafter adopt without notice.
2. The Borrower further hereby warrants and agrees that the Borrower:
(a) will, upon request of the Lender, execute such financing statements
and other documents (and pay the cost of filing or recording the same in all
public offices deemed necessary by the Lender) and do such other acts and
things, all as the Lender may from time to time request to establish and
maintain a valid perfected security interest in the Collateral (free of all
other liens and claims whatsoever) to secure the payment of the Indebtedness. To
the extent permitted by applicable law, the Borrower hereby grants Lender
authority on its behalf as attorney-in-fact to execute, file or record any
document necessary to perfect the Lender's security interest in the Collateral.
(b) will keep, at the address designated above for its records, all
records concerning the Collateral, including computer records and related
software, which records will be of such character as will enable the Lender or
its designees to determine at any time the status of the Collateral.
(c) will furnish the Lender such information concerning Borrower, the
Collateral, any Account Debtor of the Borrower, Eligible Accounts, as the Lender
may from time to time reasonably request.
(d) will permit the Lender and its designees from time to time during
Borrower's regular business hours, to inspect, audit and make copies of and
extracts from all records and other papers in the possession of the Borrower
pertaining to the Collateral and any Account Debtor, and will upon reasonable
request of the Lender, deliver to the Lender copies of all such records and
papers.
(e) will, upon request of the Lender, stamp on the records of the
Borrower concerning the Collateral, a notation, in form satisfactory to the
Lender, of the security interest of Lender hereunder.
(f) will immediately deliver to the Lender, appropriately endorsed to
the order of the Lender, any note, trade acceptance, chattel paper or other
instrument or writing for the payment of money which shall be received by
Borrower and which may at any time evidence any obligation to Borrower for
payment for Collateral sold or leased or services rendered outside the ordinary
course of Borrower's business or upon the occurrence of a Default.
(g) hereby authorizes Lender as the Borrower's attorney-in-fact to
endorse, in the name of the Borrower, any check or other item, howsoever
received by Lender and whether received before or after any default,
representing any payment on or other proceeds of any of the Collateral sold or
leased outside of the ordinary course of Borrower's business or upon the
occurrence of a Default.
(h) without the prior written consent of the Lender will not sell or
assign any collateral outside of the ordinary course of Borrower's business or
create or permit to exist any lien or security interest in any collateral to or
in favor of, anyone other than the Lender.
(i) will, to the extent that a security interest is granted hereunder
in Inventory as that term is defined under the applicable provisions of the
Uniform Commercial Code, maintain insurance on such Inventory with a company
satisfactory to Lender against such risks and in such amounts as the Lender may
require, such insurance to be payable to the Borrower and Lender as their
interests appear. Lender may act as the Borrower's attorney-in-fact in
obtaining, adjusting, settling and canceling such insurance and endorsing any
drafts in the event that a Default shall have occurred and continues beyond the
expiration of any applicable cure period. If the Borrower fails to provide
insurance as above required, Lender, may, at its option, purchase the same and
the cost thereof (with interest thereon at the highest rate borne by the
Indebtedness) shall be added to the Indebtedness secured hereby.
(j) will reimburse the Lender for all expenses, including reasonable
attorney's fees and legal expenses, incurred by the Lender in seeking to collect
or enforce any rights in, under or to the Collateral and, in case of a Default,
incurred by the Lender in seeking to collect each Notes and all other
Indebtedness and to enforce its rights hereunder.
(k) will not permit the Indebtedness to Lender to exceed the limits
therefore from time to time established by Lender, either as to actual amount or
as to the percentage amount of acceptable Collateral as approved by Lender. In
the event that said percentage requirements shall be exceeded, Borrower shall
promptly reduce the Indebtedness by an amount sufficient to satisfy Lender's
requirement or, at Lender's sole and exclusive option grant Lender a security
interest in such additional collateral as Lender may require.
(l) shall materially comply with all applicable federal, state and
local laws, ordinances, rules and regulations, including, but not limited to,
the rules and regulations of the Federal Communications Commission and any and
all environmental laws, ordinances, rules and regulations and shall keep the
Collateral free and clear of any liens imposed pursuant to such laws,
ordinances, rules and regulations contest the same while at all times preserving
the value of the Collateral.
(m) shall materially comply with all applicable federal, state and
local laws, ordinances, rules and regulations concerning minimum wages, overtime
laws, and payment of withholding taxes, and deliver to Lender such reports and
information in form satisfactory to Lender as Lender reasonably may request from
time to time to establish compliance with such laws.
(n) will execute within seven (7) days of being presented therewith any
documents or instruments, including without limitation, any subordination
agreement which Lender in its sole and exclusive discretion deems necessary to
protect and maintain its interests arising in connection with this transaction.
3. Until such time as the Lender shall notify the Borrower of the revocation of
such authority, upon the occurrence of a Default, the Borrower:
(a) will, at its own expense, endeavor to collect, as and when due, all
amounts due with respect to any Collateral, including the taking of such action
with respect to such collection as the Lender may reasonably request or, in the
absence of such request, as the Borrower may deem advisable;
(b) may grant, in the ordinary course of the business of the Borrower,
to any Account Debtor, any rebate, refund or adjustment to which such Account
Debtor may be lawfully entitled, and may accept, in connection therewith, the
return of Collateral, the sale or lease of which shall have given rise to the
obligation of the Account Debtor;
(c) will, prior to the time of any deposit or delivery, keep segregated
any such checks, drafts, cash, chattel paper or other remittances from any of
the Borrower's funds or property and will hold such checks, drafts, cash,
chattel paper or other remittances in trust for the benefit of the Lender until
delivery thereof, or deposit in the Collateral Account (as hereinafter defined),
if any; and
(d) if requested by the Lender, note the security interest of the
Lender on all records relative to the Collateral, including, without limitation,
any invoice which evidences an Eligible Account.
4. If the Lender requests, after the occurrence of a Default, the Borrower:
(a) will, upon receipt of all checks, drafts, cash and other
remittances in payment of Inventory sold or in payment of accounts receivable of
the Borrower, deposit same in a special collateral account ("Collateral
Account") maintained with the Lender. Such proceeds shall be deposited in the
form received except for the endorsement of the Borrower where required, which
endorsement the Lender is authorized to make on the Borrower's behalf and shall
be held by the Lender as security for all Indebtedness of the Borrower in favor
of the Lender. Lender will, at least once each week, unless otherwise agreed to
in writing by the Borrower and the Lender, apply all or any portion of the funds
on deposit in the Collateral Account, against the principal or any other
indebtedness, or both, of the Borrower in favor of the Lender, the order of
application to be the discretion of the Lender. Any portion of the funds on
deposit in the Collateral Account and not applied as provided herein may, in the
discretion of the Lender, be turned over to the Borrower;
(b) will deliver to the Lender, all chattel paper which constitutes
proceeds from the sale of Collateral subject to delivery of the proceeds
resulting from the sale of such chattel paper which shall be deposited in the
Collateral Account unless such sale occurs outside the ordinary course of
Borrower's business, in which event no such Default shall have had to occurred.
5. The Lender, however, in the event of default by Borrower under any instrument
evidencing the Indebtedness after the expiration of all notice and grace periods
therein provided, if applicable, may, notify all Account Debtors to make payment
directly to Lender of any amounts due or to become due and enforce the
collection of any Account by suit or otherwise and surrender, release or
exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby.
6. If and to the extent that a perfected security interest hereunder in any
Collateral shall cease to be perfected for any reason whatsoever (including,
without limitation, release of all or any balance in the Collateral Account or
use or disposition by Borrower of any proceeds of Collateral), then such
Collateral (referred to in this paragraph as "released Collateral") shall be
deemed thereby released from the security interest hereunder in exchange, as of
the time of such release, for any other Collateral of equivalent value in which
a perfected security interest hereunder is being obtained contemporaneously or
has been most recently obtained, but only to the extent such other Collateral
does not represent either:
(a) Collateral in exchange for which any previously released Collateral
shall have been deemed released, or
(b) Collateral of equivalent value to any loan (otherwise than by
renewal or extension) from the Lender to Borrower in which Collateral, a
perfected security interest hereunder shall have been obtained contemporaneously
with or most recently prior to such loan.
7. The Borrower will monthly and at such additional times as the Lender may
reasonably request, deliver to the Lender an ageing report identifying each
Account (listing the name and address of each Account Debtor) subject to the
security interest hereunder. The Borrower will also, from time to time, deliver
to the Lender such additional ageing reports and such certificates and reports
respecting all or any of the Collateral at the time subject to the security
interest hereunder, listing the items or amounts received by Borrower in full or
partial payment of any of the Collateral, and any goods (the sale or lease of
which by the Borrower shall have given rise to any of the Collateral) possession
of which has been obtained by Borrower, all to such extent as the Lender
reasonably may request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of the Borrower and shall be in such form
and detail as the Lender reasonably may specify. Any such schedule identifying
any Account subject to the security interest hereunder shall be accompanied (if
the Lender so requests) by a true and correct copy of the invoice evidencing
such Account and by evidence of shipment or performance.
8. Borrower covenants and agrees to furnish to the Bank (i) within thirty (30)
days after the end of each fiscal quarter, commencing with the first fiscal
quarter, a quarterly operating statement relating to the operations of Borrower;
(ii) within ninety (90) days after the end of each fiscal year commencing with
the current fiscal year, an annual operating statement containing statements of
income and expenses relating to the Borrower, including without limitation those
financial statements of Borrower setting forth in each case, in comparative
form, the figures for the previous fiscal year, all in form and detail
satisfactory to the Bank; (iii) within ten (10) business days of the date of
their filing any state or federal income tax return filed by or on behalf of
Borrower; and (iv) within ten (10) business days of their filing copies of any
documents or statements required to be filed with the Securities and Exchange
Commission including, without limitation, any 10Q or 10K forms relating to the
Borrower.
9. The occurrence of any of the following events shall constitute a Default (as
such term is used herein): (i) the Bank has not received the full amount of any
of the Borrower's regular installment payments and the full amount of any late
charges due thereon within fifteen (15) calendar days after the date the regular
installment payment is due; (ii) the Borrower fails to perform, keep or observe
any term or condition of this Security Agreement or of any agreement, instrument
or document securing the performance of Borrower's obligations under the Note
and, such default remains uncured at the expiration of any applicable cure
period; (iii) the Borrower fails to execute within seven (7) business days after
presentation of any documents which Lender, in its sole and exclusive
discretion, deems necessary to evidence, preserve and protect its interests,
including without limitation, any documents, instruments or agreements deemed
necessary by Lender to evidence Lender's security interest in any FCC License
issued to Borrower or any proceeds thereof.
10. Whenever a Default shall be existing, the Notes and all other Indebtedness
may (notwithstanding any provisions thereof), at the option of the Lender, and
without demand or notice of any kind, be declared, and thereupon immediately
shall become, due and payable, and the Lender may exercise from time to time any
rights and remedies available to it under applicable law. The Borrower agrees,
in case of Default, to assemble, at its expense, all the Collateral at a
convenient place acceptable to the Lender and to pay all costs of the Lender of
collection of the Notes and all other Indebtedness, and enforcement of Lender's
rights hereunder, including reasonable attorneys fees and legal expenses, and
expenses of any repairs to any realty or other property to which any of the
Collateral may be affixed or be a part.
11. If any notification of intended disposition of any of the Collateral is
required by law, such notification, if mailed, shall be deemed reasonably and
properly given if mailed at least fourteen (14) days before such disposition,
postage prepaid, addressed to the Borrower either at the address shown below, or
at any other address of the Borrower appearing on the records of the Lender. Any
proceeds of any disposition of any of the Collateral may be applied by the
Lender to the payment of expenses in connection with the Collateral, including
reasonable attorneys' fees and legal expenses, and any balance of such proceeds
may be applied by the Lender toward the payment of such of the Indebtedness, and
in such order of application, as the Lender may from time to time elect.
12. No delay an the part of the Lender in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Lender of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy. If more than one party shall
execute this Agreement, the term "Borrower" shall mean all parties signing this
Agreement and each of them and all such parties shall be jointly
BORROWER:
AMERIHOST PROPERTIES, INC., a
Delaware Corporation
By:_________________________________
XXXXXXX X. XXXXX
President
Name:_______________________________
Title:______________________________
