Exhibit (10e)
PROMISSORY NOTE
_________________________________________________________________
Principal Loan Date Maturity Loan No. Collateral
$420,700.00 02-18-1998 03-18-2003 8015480006 40
Account Officer Initials
801548 305
_________________________________________________________________
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.
_________________________________________________________________
Borrower: WEB PRESS CORPORATION AND Lender: WASHINGTON FIRST
WEB LEADER INTERNATIONAL INTERNATIONAL BANK
00000 - 00XX XXXXXX XXXXX 0000 Xxxxx Xxxxxx XX
XXXX, XX 00000 Xxxxx 000
Xxxxxxx, XX 00000
=================================================================
Principal Amount: $420,700.00 Date of Note: February 18, 1998
PROMISE TO PAY. WEB PRESS CORPORATION AND WEB LEADER
INTERNATIONAL, ("Borrower") promises to pay to Washington First
International Bank ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Four Hundred
Twenty Thousand Seven Hundred & 00/100 Dollars ($420,700.00),
together with interest on the unpaid principal balance from
February 18, 1998, until paid in full.
PAYMENT. Borrower will pay this loan in accordance with the
following payment schedule:
1 interest payment on March 18, 1998, with interest
calculated on the unpaid principal balances at an interest
rate of 9.000% per annum; 59 consecutive monthly principal
and interest payments of $6,794.31 each, beginning April 18,
1998, with interest calculated on the unpaid principal
balances at an interest rate of 9.000% per annum; and 1
principal and interest payment of $155,675.02 on March 18,
2003, with interest calculated on the unpaid principal
balances at an interest rate of 9.000% per annum. This
estimated final payment is based on the assumption that all
payments will be made exactly as scheduled; the actual final
payment will be for all principal and accrued interest not
yet paid, together with any other unpaid amounts under this
Note.
The annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Xxxxxx's
address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid
collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
PREPAYMENT. Xxxxxxxx agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether
voluntary or as a result of default), except as otherwise
required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than
it is due. Early payments will not, unless agreed to by Xxxxxx
in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to continue
to make payments under the payment schedule. Rather, they will
reduce the principal balance due and may result in Borrower
making fewer payments.
LATE CHARGE. If a payment is 15 days or more late, Borrower will
be charged 5.000% of the regularly scheduled payment or $15.00,
whichever is greater.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to comply with or to perform when due any other
term, obligation, covenant, or condition contained in this Note
or any agreement related to this Note, or in any other agreement
or loan Borrower has with Lender. (c) Borrower defaults 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 Borrower's
property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related
Documents. (d) Any representation or statement made or
furnished to Lender by Borrower or on Xxxxxxxx's behalf is false
or misleading in any material respect either now or at the time
made or furnished. (e) Xxxxxxxx becomes insolvent, a receiver
is appointed for any part of Xxxxxxxx's property, Xxxxxxxx makes
an assignment for the benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (f) Any creditor tries to take
any of Xxxxxxxx's property on or in which Xxxxxx has a lien or
security interest. This includes garnishment of any of
Xxxxxxxx's accounts with Xxxxxx. (g) Any guarantor dies or any
of the other events described in this default section occurs with
respect to any guarantor of this Note. (h) A material adverse
change occurs in Borrower's financial condition, or Xxxxxx
believes the prospect of payment or performance of the
Indebtedness is impaired.
If any default, other than a default in payment, is curable and
if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months,
it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Xxxxxx's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Upon default, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted
under applicable law, increase the interest rate on this Note
5.000 percentage points. The interest rate will not exceed the
maximum rate permitted by applicable law. Lender may hire or pay
someone else to help collect this Note if Borrower does not pay.
Xxxxxxxx also will pay Lender that amount. This includes,
subject to any limits under applicable law, Xxxxxx's attorneys'
fees and Xxxxxx's 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. If not prohibited by applicable
law, Xxxxxxxx also will pay any court costs, in addition to all
other sums provided by law. This Note has been delivered to
Lender and accepted by Xxxxxx in the State of Washington. If
there is a lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to
submit to the jurisdiction of the courts of King County, the
State of Washington. This Note shall be governed by and
construed in accordance with the laws of the State of Washington.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00
if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later
dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys,
delivers, pledges, and transfers to Lender all Borrower's right,
title and interest in and to, Xxxxxxxx's accounts with Lender
(whether checking, savings, or some other account), including
without limitation all accounts jointly with someone else and all
accounts Borrower may open in the future, excluding however all
IRA and Xxxxx accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law.
Borrower authorizes Xxxxxx, to the extent permitted by applicable
law, to charge or setoff all sums owing on this Note against any
and all such accounts.
PROMISSORY NOTE Page 2
(Continued)
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment,
demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this
loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Xxxxxx's security interest in the
collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties
also agree that Xxxxxx may modify this loan without the consent
of or notice to anyone other than the party with whom the
modification is made.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. XXXXXXXX AGREES TO THE TERMS OF THE
NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
WEB PRESS CORPORATION AND WEB LEADER INTERNATIONAL
By: \s\ XXXX X. XXXXXX By: \s\ XXXX X. XXXXXX
XXXX X. XXXXXX, President: XXXX X. XXXXXX, Chairman:
WEB PRESS CORPORATION WEB LEADER INTERNATIONAL
=================================================================
COMMERCIAL SECURITY AGREEMENT
____________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$420,700.00 02-18-1998 03-18-2003 8015480006 40
Account Officer Initials
801548 305
____________________________________________________________________
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.
____________________________________________________________________
Borrower: WEB PRESS CORPORATION AND Lender: WASHINGTON FIRST
WEB LEADER INTERNATIONAL INTERNATIONAL BANK
00000 - 00XX XXXXXX XXXXX 0000 Xxxxx Xxxxxx XX, Xxx 000
XXXX, XX 00000 Xxxxxxx, XX 00000
=================================================================
THIS COMMERCIAL SECURITY AGREEMENT is entered into between WEB
PRESS CORPORATION AND WEB LEADER INTERNATIONAL (referred to below
as "Grantor"); and Washington First International Bank (referred
to below as "Lender"). 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.
DEFINITIONS. The following words shall have the following
meanings when used in this Agreement. Terms not otherwise
defined in this Agreement shall have the meanings attributed to
such terms in the Uniform Commercial Code. All references to
dollar amounts shall mean amounts in lawful money of the United
States of America.
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.
Collateral. The word "Collateral" means the following
described property of Grantor, whether now owned or
hereafter acquired, whether now existing or hereafter
arising, and wherever located:
ONE (1) LP-3021 AWEA DOUBLE COLUMN MACHINE WITH FANUC
OM CONTROL AND STANDARD ACCESSORIES, SERIAL NO. 8222,
ONE (1) 35 HORSE POWER MOTOR, ONE (1) COOLANT THRU THE
TOOL, ONE (1) AUTOMATIC TOOL MEASURING, AND ONE (1) 60
TOOL MAGAZINE - CAT 50; TOGETHER WITH ALL PARTS,
FITTINGS, ACCESSORIES, SPECIAL TOOLS, RENEW OR
REPLACEMENTS OF ALL OR ANY PART THEREOF, EITHER NOW
OWNED OR HEREAFTER ACQUIRED, AND WHEREVER LOCATED, AND
PROCEEDS THEREOF.
In addition, the word "Collateral" includes all the
following, whether now owned or hereafter acquired, wither
now existing or hereafter arising, and wherever located:
(a) All attachments, accessions, accessories, tools,
parts, supplies, increases, and additions to and all
replacements of and substitutions for any property
described above.
(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.
(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.
Event of Default. The words "Event of Default" mean and
include without limitation any of the Events of Default set
forth below in the section titled "Events of Default."
Grantor. The word "Grantor" means WEB PRESS CORPORATION AND
WEB LEADER INTERNATIONAL, its successors and assigns.
Guarantor. The word "Guarantor" means and includes without
limitation each and all of the guarantors, sureties, and
accommodation parties in connection with the indebtedness.
Indebtedness. The word "Indebtedness" means the
indebtedness evidenced by the Note, 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. In
addition, the work "Indebtedness" includes all other
obligations, debts and liabilities, plus interest thereon,
of Grantor, or any one or more of them, to Lender, as well
as all claims by Lender against Grantor, or any one or more
of them, whether existing now or later; whether they are
voluntary or involuntary, due or not due, direct or
indirect, absolute or contingent, liquidated or
unliquidated; whether Grantor may be liable individually or
jointly with others; whether Grantor may be obligated as
guarantor, surety, accommodation party or otherwise; whether
recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether
such indebtedness may be or hereafter may become otherwise
unenforceable.
Lender. The word "Lender" means Washington First
International Bank, its successors and assigns.
Note. The word "Note" means the note or credit agreement
dated February 18, 1998, the principal amount of $420,700.00
from WEB PRESS CORPORATION AND WEB LEADER INTERNATIONAL to
Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of and
substitutions for the note or credit agreement.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust,
and all other instruments, agreements and documents, whether
now or hereafter existing, executed in connection with the
Indebtedness.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual
possessory security interest in and hereby assigns, conveys,
delivers, pledges, and transfers all of Grantor's right, title
and interest in and to Grantor's accounts with Xxxxxx (whether
checking, savings, or some other account), including all accounts
held jointly with someone else and all accounts Grantor may open
in the future, excluding, however, all IRA and Xxxxx accounts,
and all trust accounts for which the grant of a security interest
would be prohibited by law. Grantor authorizes Xxxxxx, to the
extent permitted by applicable law, to charge or setoff all
Indebtedness against any and all such accounts.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender
as follows:
Perfection of Security Interest. Xxxxxxx agrees to execute
such financing statements and to take whatever other actions
are requested by Xxxxxx to perfect and continue Xxxxxx's
security interest in the Collateral. Upon request of
Xxxxxx, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and
Grantor will note Xxxxxx's interest upon any and all chattel
paper if not delivered to
02-18-1998 COMMERCIAL SECURITY AGREEMENT Page 2
(Continued)
Lender for possession by Xxxxxx. Grantor hereby appoints
Xxxxxx as its irrevocable attorney-in-fact for the purpose
of executing any documents necessary to perfect or to
continue the security interest granted in this Agreement.
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 Xxxxxx's security interest
in the Collateral. Grantor promptly will notify Lender
before any change in Grantor's name including any change to
the assumed business names of Grantor. This is a continuing
Security Agreement and will 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.
No Violation. The execution and delivery of this Agreement
will not violate any law or agreement covering Grantor or to
which Grantor is a party, and its certificate or articles of
incorporation and bylaws do 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,
the Collateral is enforceable in accordance with its terms,
is genuine, and complies with applicable laws 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.
Location of the Collateral. Grantor, upon request of
Lender, will deliver to Lender in form satisfactory to
Lender a schedule of real properties and Collateral
locations relating to Grantor' operations, including without
limitation the following: (a) all real property owned or
being purchased by Grantor; (b) all real property being
rented or leased by Grantor, (c) all storage facilities
owned, rented, leased, or being used by Grantor; and (d)
all other properties where Collateral is or may be located.
Except in the ordinary course of its business, Grantor shall
not remove the Collateral from its existing locations
without the prior written consent of Lender.
Removal of Collateral. Grantor shall keep the Collateral
(or to the extent the Collateral consists of intangible
property such as accounts, the records concerning the
Collateral) at Grantor's address shown above, or at such
other locations as are acceptable to Lender. Except in the
ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its
existing locations without the prior written consent of
Lender. 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 vehicles outside the State of
Washington, without the prior written consent of Lender.
Transactions involving Collateral. Except for inventory
sold or accounts collected in the ordinary course of
Grantor's business, 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 Xxxxxxx'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 Xxxxxx, 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 sale or other
disposition. Upon receipt, Grantor shall immediately
deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that it
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 Xxxxxx's rights in the Collateral
against the claims and demands of all other persons.
Collateral Schedules and Locations. Insofar as the
Collateral consists of inventory, Grantor shall deliver to
Lender, as often as Lender shall require, such lists,
descriptions, and designations of such Collateral as Lender
may require to identify the nature, extent, and location of
such Collateral. Such information shall be submitted for
Grantor and each of its subsidiaries or related companies.
Maintenance and Inspection of Collateral. Grantor shall
maintain all tangible Collateral in good condition and
repair. Grantor will not commit or permit damage to or
destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall
have the right at all reasonable times to examine, inspect,
and audit the Collateral wherever located. Grantor shall
immediately notify Lender of all cases involving the return,
rejection, repossession, loss or damage of or to any
Collateral; of any request for credit or adjustment or of
any other dispute arising with respect to the Collateral;
and generally of all happenings and events affecting the
Collateral or the value or the amount of the Collateral.
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 Xxxxxx's interest in the
Collateral is not jeopardized in Xxxxxx'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 shall defend itself and Xxxxxx and shall
satisfy any final adverse judgment before enforcement
against the Collateral. Grantor shall name Xxxxxx as an
additional obligee under any surety bond furnished in the
contest proceedings.
Compliance With Governmental Requirements. Grantor shall
comply promptly with all laws, ordinances, rules and
regulations of all government authorities, now or hereafter
in effect, applicable to the ownership, production,
disposition, or use of the Collateral. Grantor may contest
in good faith any such law, ordinance or regulation and
withhold compliance during any proceeding, including
appropriate appeals, so long as Xxxxxx's interest in the
Collateral, in Xxxxxx'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 for
the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any
hazardous waste or substance, as those terms are defined in
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("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 to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also
include, without limitation, petroleum and petroleum by-
products or any fraction thereof and asbestos. The
representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for
hazardous wastes and substances. Grantor hereby (a)
releases and waives any future claims against Xxxxxx for
indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and
(b) agrees to indemnify and hold harmless Lender against any
and all claims and losses resulting from 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
02-18-1998 COMMERCIAL SECURITY AGREEMENT Page 3
(Continued)
reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon
request of Xxxxxx, 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 canceled 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 it
so chooses "single interest insurance," which will cover
only Xxxxxx's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly
notify Lender of any loss 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 Xxxxxx 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 Xxxxxx, shall
furnish to Lender reports on each existing policy of
insurance showing such information as Lender may reasonably
request including the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy
(d) the property insured; (3) the then current value on the
basis of which insurance has been obtained and the manner of
determining that value; and (f) 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.
XXXXXXX'S RIGHT TO POSSESSION. Until default, Grantor may have
possession of the tangible personal 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. 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 Xxxxxx'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.
EXPENDITURES BY XXXXXX. If not discharged or paid when due,
Lender may (but shall not be obligated to) discharge or pay any
amounts required to be discharged or paid by Grantor under this
Agreement, including without limitation all taxes, liens,
security interests, encumbrances, and other claims, at any time
levied or placed on the Collateral. Lender also may (but shall
not be obligated to) pay 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 Guarantor. All such expenses
shall become a part of the indebtedness and, at Xxxxxx'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 (i) the term of any
applicable insurance policy or (ii) 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. This Agreement also will
secure payment of these amounts. Such right shall be in addition
to all other rights and remedies to which Xxxxxx may be entitled
upon the occurrence of an Event of Default.
EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
Default on Indebtedness. Failure of Grantor to make any
payment when due on the Indebtedness.
Other Defaults. Failure of Grantor 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 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 Borrower's property or
Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or
any of the Related Documents.
False Statements. Any warranty, representation or statement
made or furnished to Lender by or on behalf of Grantor under
this Agreement, the Note or the Related Documents is false
or misleading in any material respect, either now or at the
time made or furnished.
Defective Collateralization. This Agreement or any of the
Related Documents ceases to be in full force and effect
(including failure of any collateral documents to create a
valid and perfected security interest or lien) at any time
and for any reason.
Insolvency. The dissolution or termination of Xxxxxxx's
existence as a going business, 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.
Credit or Forfeiture 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 the Collateral or any other collateral securing the
Indebtedness. This includes a garnishment of any of
Grantor's deposit accounts with Xxxxxx. 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 Xxxxxx 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 any Guarantor of any of the
Indebtedness or such Guarantor dies or becomes incompetent.
Lender, at its option, may, but shall not be required to,
permit the Guarantor's estate to assume unconditionally the
obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of
Default.
Adverse Change. A material adverse change occurs in
Grantor's financial condition, or
02-18-1998 COMMERCIAL SECURITY AGREEMENT Page 4
(Continued)
Xxxxxx believes the prospect of payment or performance of
the Indebtedness is impaired.
Insecurity. Lender, in good faith, deems itself insecure.
Right to Cure. If any default, other than a Default on
Indebtedness, is curable and if Grantor has not been given a
prior notice of a breach of the same provision of this
Agreement, it may be cured (and no Event of Default will
have occurred) if Grantor, after Xxxxxx sends written notice
demanding cure of such default, (a) cures the default within
() days; or (b), if the cure requires more than () days,
immediately initiates steps which Lender deems in Lender's
sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as
reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs
under this Agreement, at any time thereafter, Lender shall have
all the rights of a secured party under the Washington Uniform
Commercial Code. In addition and without limitation, Lender may
exercise any one or more of the following rights and remedies:
Accelerate Indebtedness. Xxxxxx may declare the entire
Indebtedness, including any prepayment penalty which Grantor
would be required to pay, immediately due and payable,
without notice.
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 at a place to be
designated by Lender. Xxxxxx 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 Xxxxxx 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 its 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 reasonable notice of the time after
which any private sale or any other intended disposition of
the Collateral is to be made. The requirements of
reasonable notice shall be met if such 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 and 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. To the extent permitted by applicable
law, Xxxxxx shall have the following rights and remedies
regarding the appointment of a receiver: (a) Lender may
have a receiver appointed as a matter of right, (b) the
receiver may be an employee of Xxxxxx and may serve without
bond, and (c) all fees of the receiver and his or her
attorney shall become 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.
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
its discretion transfer any Collateral into its own name or
that of its nominee and receive the payments, rents, income,
and revenues therefrom and hold the sale as security for the
Indebtedness or apply it to payment of the Indebtedness in
such order of preference as Lender may determine. Insofar
as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, chooses in
action, or similar property, Lender may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose,
or realize on the Collateral as Lender may determine,
whether or not Indebtedness or Collateral is then due. For
these purposes, Xxxxxx 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 and items pertaining to
payment, shipment, or storage of any Collateral. To
facilitate collection, Xxxxxx may notify account debtors and
obligors on any Collateral to make payments directly to
Lender.
Obtain Deficiency. If Xxxxxx 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 applications of all amounts received from the
exercise of the rights provided in this Agreement Grantor
shall be liable for 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.
Cumulative Remedies. All of Xxxxxx's rights and remedies,
whether evidenced by this Agreement or the Related Documents
or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Xxxxxx 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 Xxxxxxx's failure to perform, shall not
affect Xxxxxx's right to declare a default and to 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.
Applicable Law. This Agreement has been delivered to Lender
and accepted by Xxxxxx in the State of Washington. If
there is a lawsuit, Xxxxxxx agrees upon Xxxxxx's request to
submit to the jurisdiction of the courts of King County,
the State of Washington. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Washington.
Attorneys' Fees; Expenses. Xxxxxxx agrees to pay upon
demand all of Xxxxxx's costs and expenses, including
attorneys' fees and Xxxxxx's legal expenses, incurred in
connection with the enforcement of this Agreement. Lender
may pay someone else to help enforce this Agreement, and
Grantor shall pay the costs and expenses of such
enforcement. Costs and expenses include Xxxxxx's attorneys'
fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy
proceedings (and 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.
Multiple Parties; Corporate Authority. 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 of the persons signing below is
responsible for all obligations in this Agreement.
Notices. All notices required to be given under this
Agreement shall be given in writing, may be sent by
telefacsimile (unless otherwise required by law), and shall
be effective when actually delivered or when deposited with
a nationally recognized overnight courier or deposited in
the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at
the address shown above. 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. To the extent
permitted by applicable law, if there is more than one
Grantor, notice to any Grantor will
02-18-1998 COMMERCIAL SECURITY AGREEMENT Page 5
(Continued)
constitute notice to all Grantors. For notice purposes,
Grantor will keep Xxxxxx informed at all times of Grantor's
current address(es).
Power of Attorney. Grantor hereby appoints Lender as its
true and lawful attorney-in-fact, irrevocably, with full
power of substitution to do the following: (a) to demand,
collect, receive, receipt for, sue and recover all sums of
money or other property which may now or hereafter become
due, owing or payable from the Collateral; (b) to execute,
sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in payment for the
Collateral; (c) to settle or compromise any and all claims
arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement
for the claim; and (d) to file any claim or claims or to
take any action or institute or take part in any
proceedings, either in its own name or in the name of
Grantor, or otherwise, which in the discretion of Lender may
seem to be necessary or advisable. This power is given as
security for the Indebtedness, and the authority hereby
conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Xxxxxx.
Preference Payments. Any monies Lender pays because of an
asserted preference claim in Xxxxxxxx's bankruptcy will
become a part of the Indebtedness and, at Xxxxxx's option,
shall be payable by Borrower as provided above in the
"EXPENDITURES BY XXXXXX" paragraph.
Severability. If a court of competent jurisdiction finds
any provision of this Agreement to be invalid or
unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as
to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to
be within the limits of enforceability or validity; however,
if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Successor Interests. Subject to the limitations set forth
above on transfer of the Collateral, this Agreement shall be
binding upon and inure to the benefit of the parties, their
successors and assigns.
Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in
writing and signed by Xxxxxx. 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 Xxxxxx
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 Xxxxxx, nor any
course of dealing between Xxxxxx 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.
Waiver of Co-obligor's Rights. If more than one person is
obligated for the indebtedness, Borrower irrevocably waives,
disclaims and relinquishes all claims against such other
person which Borrower has or would otherwise have by virtue
of payment of the Indebtedness or any part thereof,
specifically including but not limited to all rights of
indemnity, contribution or exoneration.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS.
THIS AGREEMENT IS DATED FEBRUARY 18, 1998.
GRANTOR:
WEB PRESS CORPORATION AND WEB LEADER INTERNATIONAL
By: \s\ XXXX X. XXXXXX By: \s\ XXXX X. XXXXXX
_____________________________ _________________________
XXXX X. XXXXXX, President: XXXX X. XXXXXX, Chairman:
WEB PRESS CORPORATION WEB LEADER INTERNATIONAL
____________________________________________________________________________
