Exhibit 10.7
SECOND LIMITED FORBEARANCE AGREEMENT
THIS SECOND LIMITED FORBEARANCE AGREEMENT (this "Agreement") is made as of
the 28th day of February, 2003, by and among XXXXXX INDUSTRIES, INC., a
corporation organized and existing under the laws of the State of Maryland (the
"Borrower"); OBSIDIAN ENTERPRISES, INC., a corporation organized and existing
under the laws of the State of New York (the "Guarantor"; the Borrower and the
Guarantor are sometimes herein collectively referred to as the "Obligors" and
individually as an "Obligor"); and BANK OF AMERICA, N.A., a national banking
association (the "Lender").
RECITALS
A. The Borrower applied to the Lender for revolving loans, advances and
other financial accommodations under the provisions of a certain Business Loan
Agreement (Asset Based) dated August 15, 2001 by and between the Borrower and
the Lender (as amended, restated, supplemented and modified at any time and from
time to time, the "Financing Agreement"). Under and subject to the provisions of
the Financing Agreement, the Lender agreed to make loans (collectively, the
"Revolving Credit Loans" and each individually, a "Revolving Credit Loan") to
the Borrower under a revolving credit facility in a principal amount not to
exceed, in the aggregate, One Million Dollars ($1,000,000). The Revolving Credit
Loans are evidenced by, and repaid with interest in accordance with, the terms
and conditions of that certain Promissory Note dated August 15, 2001, from the
Borrower, as maker, payable to the order of the Lender in the maximum principal
amount of One Million Dollars ($1,000,000) (as amended, restated, supplemented
and modified at any time and from time to time, the "Revolving Credit Note").
B. The Borrower applied to the Lender for a term loan in the original
principal amount of One Million Dollars ($1,000,000) (the "Term Loan"; the
aggregate Revolving Credit Loans and the Term Loan are herein sometimes
collectively referred to as the "Loans"). The Term Loan is evidenced by, and
repaid with interest in accordance with, the terms and conditions of a certain
Promissory Note dated August 15, 2001 from the Borrower, as maker, payable to
the order of the Lender in the original principal amount of the Term Loan (as
amended, restated, supplemented and modified at any time and from time to time,
the "Term Note"; the Revolving Credit Note and the Term Note are sometimes
herein sometimes collectively referred to herein as the "Notes").
C. The "Indebtedness" (as defined in the Financing Agreement), including,
without limitation, the Loans, is secured by, among other things (i) the
"Collateral", as defined in a certain Security Agreement dated August 15, 2001
executed by the Borrower for the benefit of the Lender (as amended, restated,
supplemented and modified at any time and from time to time, the "Security
Agreement"), (ii) the "Property" as defined in a certain Deed of Trust,
Assignment and Security Agreement recorded in the land records of Washington
County, Maryland, dated August 15, 2001 executed by the Borrower in favor of
PRLAP, Inc., as trustee, for the benefit of the Lender (as amended, restated,
supplemented and modified at any time and from time to time, the "Deed of
Trust") (iii) a certain Commercial Guaranty dated August 15, 2001 from the
Guarantor to the Lender (as amended, restated, supplemented and modified at any
time and from time to time, the "Guaranty") and (iv) various Uniform Commercial
Code Financing Statements filed with the Maryland State Department of
Assessments and Taxation and in the land records of Washington County, Maryland
listing the Borrower as debtor.
D. The Lender has previously advised each of the Obligors of material
defaults under the Financing Agreement, the Guaranty, the Loans and the other
Financing Agreements (as hereinafter defined) and the Borrower, the Guarantor
and the Lender entered into a Limited Forbearance Agreement dated October 14,
2002 (as amended, restated, supplemented and modified at any time and from time
to time, the "First Forbearance Agreement") whereby the Lender agreed, subject
to the terms, conditions and understandings expressed in the First Forbearance
Agreement, to refrain and forbear temporarily from exercising and enforcing any
of its remedies against either or both of the Obligors with respect to the
Indebtedness relating to the Loans, under the Financing Documents, or under
applicable laws for a period commencing on the date of the First Forbearance
Agreement and ending on, and including the Forbearance Termination Date (as
defined in the First Forbearance Agreement) in order to allow the Obligors the
opportunity to obtain alternate financing.
E. The Lender has subsequently advised each of the Obligors of the
following material defaults under the Financing Agreement, the Guaranty, the
Loans, the First Forbearance Agreement and the other Financing Documents: (a)
the Borrower's failure to maintain a Debt to Worth Ratio (as defined in the
Financing Agreement) not exceeding 3.25:1.0 as required by the terms of the
Financing Agreement (the "Debt to Worth Ratio Covenant") for: (i) the period of
determination ending on and including October 31, 2002 and (ii) the period of
determination ending on and including January 31, 2003; and (b) the Borrower's
failure to furnish Lender with the Borrower's balance sheet and income statement
for the Borrower's fiscal year 2002, audited by a certified public accountant
satisfactory to the Lender (the "Annual Statements") within the ninety (90) day
time period tolling from the end of the Borrower's fiscal year, as required by
the Financing Agreement ((a) and (b) above, together with their various
subparts, collectively referred to herein as the "Existing Defaults").
E. The Lender has agreed, subject to the terms, conditions and
understandings expressed in this Agreement, to refrain and forbear temporarily
from exercising and enforcing any of its remedies against any or all of the
Obligors with respect to the Indebtedness relating to the Loans, under the
Financing Agreement, the Notes, the Deed of Trust, the Guaranty, under any of
the other "Related Documents" (as defined in the Financing Agreement) and/or the
First Forbearance Agreement (the Financing Agreement, the Notes, the Security
Agreement, the Deed of Trust, the Guaranty, the Related Documents, the First
Forbearance Agreement and any and all other documents evidencing or securing the
Loans are collectively referred to herein as the "Financing Documents"), or
under applicable laws for a period commencing on the date of this Agreement and
ending on, and including, the earlier of the date of a "Forbearance Default"
under the terms of this Agreement (as hereinafter defined) or March 31, 2003
(such earlier date being referred to herein as the "Forbearance Termination
Date") in order to allow the Obligors the opportunity to obtain alternate
financing; provided that, among other things, the Obligors execute and deliver
this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Lender and the Obligors hereby agree as follows:
AGREEMENTS
1. Recitals Incorporated. The Borrower and the Lender agree that the
Recitals above are a part of this Agreement.
2. Forbearance. Subject to the terms, conditions and understandings
contained in this Agreement, and for so long as there does not exist a
Forbearance Default, the Lender hereby agrees to: (a) refrain and forbear
temporarily from exercising and enforcing its rights and remedies under the
Financing Agreement, under the Notes, under the Security Agreement, under the
Deed of Trust, under the Guaranty, under the First Forbearance Agreement, under
any of the other Financing Documents, or under applicable laws with respect to
the Existing Defaults. Lender's limited forbearance agreements contained in the
foregoing sentence of this Section 2 shall be effective commencing on the date
of this Agreement and ending on, and including the Forbearance Termination Date
(the "Forbearance Period"). The Lender shall have no obligation to refrain and
forbear from exercising or enforcing any of its rights or remedies during the
Forbearance Period or at any time thereafter upon the occurrence and during the
continuance of a Forbearance Default.
3. Interest Rate During Forbearance. Subject to the terms, conditions and
understandings contained in this Agreement, and for so long as there does not
exist a Forbearance Default the accrued but unpaid principal balance of the
Loans shall bear interest as set forth in the First Forbearance Agreement.
4. Repayments During Forbearance. The Obligors shall make payments on the
Loans during the Forbearance Period as set forth in the First Forbearance
Agreement.
5. Advances During Forbearance Period. Lender may in its sole and absolute
discretion, make Revolving Credit Loans during the Forbearance Period as set
forth in the First Forbearance Agreement.
6. Collateral Reporting During Forbearance, Appraisal. The Borrower shall
furnish/continue to furnish Lender such schedules, certificates, appraisals and
other reports in accordance with the terms and provisions of the First
Forbearance Agreement.
7. Waiver of Default Under Debt to Worth Ratio Covenant. Notwithstanding
anything in the financing documents to the contrary, the Lender hereby waives
the Borrower's past noncompliance with the Debt to Worth Ratio Covenant.
8. Annual Statements. The Obligors shall provide the Annual Statements as
soon as available, but in no event later than February 28, 2003.
9. Conditions Precedent to Lender's Forbearance and Waiver. The agreements
of the Lender under this Agreement are subject to the following terms and
conditions, time being of the essence:
(a) The Borrower shall pay the Lender a forbearance fee of Nine Thousand
Seven Hundred Fifty Dollars ($9,750) (the "Forbearance Fee"). The Forbearance
Fee shall be due and payable on the date of this Agreement.
(b) At the time this Agreement is executed, the Obligors shall pay all
costs, fees, and expenses incurred by the Lender and its agents in connection
with the preparation and dissemination of this Agreement, including, but not
limited to all reasonable attorneys' fees of Lender's counsel.
(c) At the time this Agreement is executed, the Obligors shall pay Three
Hundred Six Thousand Five Hundred Sixty-Three Dollars and Thirteen Cents
($306,563.13) to the Lender as a mandatory repayment of the Revolving Credit
Loans and the Revolving Credit Note, which amount shall be in addition to the
Forbearance Fee.
10. Acknowledgements, Representations and Warranties. In order to induce
the Lender to enter into this Agreement, each of the Obligors jointly and
severally, for itself, himself or herself and for its, his or her heirs,
personal representatives, successors and assigns, hereby acknowledges,
represents, warrants and agrees as follows:
(a) The unpaid balance of the Indebtedness as of February 13, 2003 is One
Million Seven Hundred Forty-Five Thousand Fifty-Nine Dollars and Thirty-Four
Cents ($1,745,059.34); which unpaid balance consists of
(i) an unpaid principal balance on the Revolving Credit Loans equal to
Eight Hundred Forty Thousand Four Hundred Ninety-Two Dollars and Seventy Cents
($840,492.70); plus
(ii) unpaid and accrued interest on the Revolving Credit Loans at the
current contract rate in the amount of Two Thousand Two Hundred Dollars and
Forty Six Cents ($2,200.46); plus
(iii) an unpaid principal balance on the Term Loan equal to Nine Hundred
Thousand Ten Dollars and Zero Cents ($900,010.00); plus
(iv) unpaid and accrued interest on the Term Loan at the current contract
rate in the amount of Two Thousand Three Hundred Fifty-Six Dollars and
Twenty-Eight Cents ($2,356.28); plus
(v) unpaid fees and expenses due and owing to the Lender, including,
without limitation, unpaid attorneys' fees and expenses incurred by the Lender
in connection with the collection and enforcement of the Indebtedness. The
Obligors each acknowledge and agree that interest shall continue to accrue on
the unpaid principal balance of the Indebtedness at either the Financing
Documents Default Rate or the Forbearance Rates, pursuant to the terms of the
First Forbearance Agreement.
(b) Each of the Obligors is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation and
each has the corporate power to own its properties and to carry on its business
as now being conducted, and each is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes such
qualification necessary.
(c) Each of the Obligors has full corporate power and authority to enter
into this Agreement and to incur and perform all obligations and covenants
contained herein, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of shareholders of, or
lenders to, either of the Obligors and no consent, approval, filing or
registration with or notice to any governmental authority is required as a
condition to the validity of this Agreement or the performance of any of either
of the Obligors' obligations hereunder. (d) The Obligors each are in default
under and with respect to the Indebtedness pursuant to the Existing Defaults.
The Obligors each acknowledge and agree that the Existing Defaults constitute
material defaults under the Financing Documents and that the ExistingDefaults
have not been, are not hereby and shall not be deemed, waived by the Lender,
expressly, impliedly, through course of conduct or otherwise, unless as
otherwise set forth herein. The agreement of the Lender to refrain and forbear
from exercising any rights and remedies by reason of any existing default or any
future default shall not constitute a waiver of, consent to, or condoning of,
any existing or future default.
(e) All understandings, representations, warranties and recitals contained
or expressed in this Agreement, the Financing Agreement, the Notes, the Deed of
Trust, the Guaranty, the First Forbearance Agreement and the other Financing
Documents are and remain true, accurate, complete and correct in all respects;
and, no such understanding, representation, warranty or recital fails or omits
to state or otherwise disclose any material fact or information necessary to
prevent such understanding, representation, warranty or recital from being
misleading. The Obligors acknowledge and agree that the Lender has been induced
in part to enter into this Agreement based upon the Lender's justifiable
reliance on the truth, accuracy, and completeness of all understandings,
representations, warranties and recitals contained in this Agreement, the First
Forbearance Agreement, the Financing Agreement, the Notes, the Deed of Trust,
the Guaranty and the other Financing Documents. The recitals are deemed to be
part of this Agreement. There is no fact known to any Obligor or which should be
known to any Obligor which the Obligors have not disclosed to the Lender in
writing on or prior to the date of this Agreement which would or could
materially and adversely affect the understandings of the Lender expressed in
this Agreement or any representation, warranty or recital contained in this
Agreement, the First Forbearance Agreement, the Financing Agreement, the Notes,
the Deed of Trust, the Guaranty and the other Financing Documents. The Obligors
hereby issue, ratify and confirm the representations, warranties and covenants
contained in the Financing Agreement, the Notes, the Deed of Trust, the
Guaranty, the First Forbearance Agreement and the other Financing Documents, as
amended hereby. The Borrower agrees that this Agreement is not intended to and
shall not cause a novation with respect to any or all of the obligations
contained in the Financing Agreement, the Notes, the Deed of Trust, the
Guaranty, the First Forbearance Agreement and/or the other Financing Documents.
(f) Each of the Financing Documents (including, without limitation, the
First Forbearance Agreement) continues in full force and effect notwithstanding
the execution and delivery of this Agreement. Each of the Obligors hereby
reissues, ratifies and confirms the enforceability and validity of all Financing
Documents to which it is a party and agree that this Agreement and each of the
Financing Documents constitute the legal, valid and binding obligations of each
of the Obligors to the extent such Obligor is party thereto, enforceable in
accordance with their respective terms. In addition, the Obligors each
acknowledge and agree that neither the execution and delivery of this Agreement
nor any of the terms, provisions, covenants or agreements contained in this
Agreement shall in any manner release, impair, lessen, modify, waive or
otherwise affect the liability and obligations of the Obligors under the terms
of the Financing Documents (including, without limitation, the First Forbearance
Agreement). The Obligors acknowledge and confirm the Lender's duly perfected
first priority security interest to and against the Collateral and the Lender's
rights and first priority security interest as to the Property pursuant to the
Deed of Trust, the Security Agreement, the other Financing Documents and
financing statements.
(g) The Lender has acted in good faith and has conducted itself in a
commercially reasonable manner in its relationships with each of the Obligors in
connection with this Agreement and in connection with the Loans, the
Indebtedness and the Financing Documents (including, without limitation, the
First Forbearance Agreement), the Obligors each hereby waiving and releasing any
claims to the contrary. The Obligors have no defenses, affirmative or otherwise,
rights of setoff, rights of recoupment, claims, counterclaims, actions or causes
of action of any kind or nature whatsoever against the Lender or any past,
present or future agent, attorney, legal representative, predecessor in
interest, affiliate, successor, assign, employee, director or officer of the
Lender (collectively, the "Lender Group"), directly or indirectly, arising out
of, based upon, or in any manner connected with, any transaction, event,
circumstance, action, failure to act, or. occurrence of any sort or type,
whether known or unknown, which occurred, existed, was taken, permitted, or
begun prior to the execution of this Agreement and occurred, existed, was taken,
permitted or begun in accordance with, pursuant to, or by virtue of the
Indebtedness or any of the terms or conditions of the Financing Documents, or
which directly or indirectly relate to or arise out of or in any manner are
connected with the Indebtedness or any of the Financing Documents; to the extent
any such defenses, affirmative or otherwise, rights of setoff, rights of
recoupment, claims, counterclaims, actions or causes of action exist or existed,
such defenses, rights, claims, counterclaims, actions and causes of action are
hereby forever waived, discharged and released. The Obligors hereby acknowledge
and agree that the execution of this Agreement by the Lender shall not
constitute an acknowledgment of or admission by the Lender or any member of the
Lender Group of the existence of any claims or of liability for any matter or
precedent upon which any claim or liability may be asserted. The Obligors
further acknowledge and agree that, to the extent any such claims may exist,
they are of a speculative nature so as to be incapable of objective valuation
and that, in any event, the value to each of the Obligors of the covenants and
obligations of the Lender contained in this Agreement and the other documents
executed and delivered in connection with this Agreement substantially and
materially exceeds any and all value of any kind or nature whatsoever of any
such claims. The Obligors further acknowledge and agree that Lender is not in
any way responsible or liable for the previous, current or future condition or
deterioration of the business operations and/or financial condition of any of
the Obligors and that the Lender has not breached any agreement or commitment to
loan money or otherwise make financial accommodations available to the Borrower
or to fund any operations of the Borrower at any time.
(h) THE OBLIGORS EACH HEREBY ACKNOWLEDGE THAT THEY HAVE FREELY AND
VOLUNTARILY ENTERED INTO THIS AGREEMENT AFTER AN ADEQUATE OPPORTUNITY AND
SUFFICIENT PERIOD OF TIME TO REVIEW, ANALYZE AND DISCUSS (I) ALL TERMS AND
CONDITIONS OF THIS AGREEMENT, (II) ANY AND ALL OTHER DOCUMENTS EXECUTED AND
DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AND (III) ALL FACTUAL AND LEGAL MATTERS RELEVANT TO THIS AGREEMENT AND/OR ANY
AND ALL SUCH OTHER DOCUMENTS, WITH COUNSEL FREELY AND INDEPENDENTLY SELECTED BY
THE OBLIGORS. THE OBLIGORS FURTHER ACKNOWLEDGE AND AGREE THAT THEY HAVE ACTIVELY
AND WITH FULL UNDERSTANDING PARTICIPATED IN THE NEGOTIATION OF THIS AGREEMENT
AND ALL OTHER DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AGREEMENT
AFTER CONSULTATION AND REVIEW WITH THEIR COUNSEL, THAT ALL OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND THE O'T'HER DOCUMENTS EXECUTED AND DELIVERED IN
CONNECTION WITH THIS AGREEMENT HAVE BEEN NEGOTIATED AT ARM'S-LENGTH, AND THAT
THIS AGREEMENT AND ANY ALL SUCH OTHER DOCUMENTS HAVE BEEN NEGOTIATED, PREPARED
AND EXECUTED WITHOUT FRAUD, DURESS, UNDUE INFLUENCE, OR COERCION OF ANY KIND OR
NATURE WHATSOEVER HAVING BEEN EXERTED BY OR IMPOSED UPON ANY PARTY TO THIS
AGREEMENT UPON ANY OTHER PARTY NO PROVISION OF THIS AGREEMENT OR SUCH OTHER
DOCUMENTS SHALL BE CONSTRUED AGAINST OR INTERPRETED TO THE DISADVANTAGE OF ANY
PARTY TO THIS AGREEMENT BY ANY COURT OR OTHER GOVERNMENTAL OR JUDICIAL AUTHORITY
BY REASON OF SUCH PARTY HAVING OR BEING DEEMED TO HAVE STRUCTURED, DICTATED OR
DRAFTED SUCH PROVISION.
(i) Except as otherwise disclosed to the Lender in writing on Exhibit "A"
attached hereto and made a part hereof, there are no proceedings or
investigations pending or, so far as the Obligors know, threatened before any
court or arbitrator or before or by, any governmental, administrative or
judicial authority or agency, or arbitrator, against any of the Obligors.
(j) There is no statute, regulation, rule, order or judgment, no charter,
by-law, or preference stock provision of any Obligor, and no provision of any
mortgage, indenture, contract or other agreement binding on any Obligor or any
of its or their respective properties, which would prohibit or cause a default
under or in any way prevent the execution, delivery, performance, compliance or
observance of any of the terms and conditions of this Agreement and/or any of
the other documents executed and delivered in connection with this Agreement.
11. Releases and Waivers.
(a) The Obligors each hereby jointly and severally, knowingly and
voluntarily, forever release, acquit and discharge the Lender and the Lender
Group from and of any and all claims that the Lender or any of the Lender Group
is in any way responsible for the past, current or future condition or
deterioration of the business operations and/or financial condition of any of
the Obligors, and from and of any and all claims that the Lender or any of the
Lender Group breached any agreement to loan money or make other financial
accommodations available to the Borrower or to fund any operations of the
Borrower at any time. The Obligors each further hereby jointly and severally,
knowingly and voluntarily forever release, acquit and discharge the Lender and
the Lender Group, from and of any and all other claims, damages, losses,
actions, counterclaims, suits, judgments, obligations, liabilities, defenses,
affirmative defenses, setoffs, and demands of any kind or nature whatsoever, in
law or in equity, whether presently known or unknown, which any or all of the
Obligors may have had, now have, or which they can, shall or may have for, upon,
or by reason of any matter, course or thing whatsoever relating to, arising out
of, based upon, or in any manner connected with, any transaction, event,
circumstance, action, failure to act, or occurrence of any sort or type, whether
known or unknown, which occurred, existed, was taken, permitted, begun, or
otherwise related or connected to or with any or all of the Indebtedness, this
Agreement, any or all of the Financing Documents (including, without limitation,
the First Forbearance Agreement), and/or any direct or indirect action or
omission of the Lender and/or any of the Lender Group. The Obligors further
agree that from and after the date hereof, they will not assert to any person or
entity that any deterioration of the business operations or financial condition
of any of the Obligors was caused by any breach or wrongful act of the Lender or
any of the Lender Group.
(b) If the Guarantor is or becomes an "insider" as defined from time to
time in Section 101 of the United States Bankruptcy Code, U.S.C. Title 11 (the
"Bankruptcy Code") with respect to any other Obligor, then each such Guarantor
irrevocably and absolutely waives any and all rights of subrogation,
contribution, indemnification, reimbursement or any similar right against such
Obligor in connection with the Indebtedness and the transactions contemplated
herein, whether such rights arise under an express or implied contract or by
operation of law, it being the intention of the parties that the Guarantor shall
not be deemed a "creditor", as defined in Section 101 of the Bankruptcy Code, of
any Obligor in the event any such Obligor becomes a debtor in any proceeding
under the Bankruptcy Code.
12. Default. The occurrence of any or more of the following events or
occurrences shall constitute a "Forbearance Default" under this Agreement:
(a) The failure of any of the Obligors to observe, perform, or comply with
any of the terms, conditions or provisions of this Agreement and/or any other
document executed and delivered in connection with this Agreement, as and when
required (including, without limitation, the obligation to provide the Lender
with the Annual Statements by February 28, 2003).
(b) If any recital, representation or warranty made herein, in any document
executed and delivered in connection herewith, or in any report, certificate,
financial statement or other instrument or document previously, now or hereafter
furnished by or on behalf of any of the Obligors in connection with this
Agreement or any other document executed and delivered in connection with this
Agreement, shall prove to have been false, incomplete or misleading in any
respect on the date as of which it was made.
(c) The occurrence of a default under any of the Financing Documents
(including, without limitation, the First Forbearance Agreement) other than the
Existing Defaults.
(d) If any of the Obligors commences, institutes or otherwise intervenes in
any proceeding or action against the Lender or any member of the Lender Group in
connection with any of the Indebtedness, any of the Financing Documents
(including, without limitation, the First Forbearance Agreement), this Agreement
or any of the documents executed and delivered in connection with this
Agreement.
13. Remedies. Immediately upon the occurrence of any Forbearance Default,
the obligations, agreements and commitments of the Lender set forth in this
Agreement shall immediately and automatically terminate and be of no further
force or effect without further notice to or consent of any of the Obligors, and
the Lender shall have the right to exercise and enforce any and all rights and
remedies available to the Lender under this Agreement, under any and all
documents executed and delivered in connection with this Agreement, under any
and all Financing Documents (including, without limitation, the First
Forbearance Agreement), and under applicable laws to the same extent as though
this Agreement had never been executed, without regard to any notice or cure
period contained in any of the foregoing or otherwise available under applicable
laws. All rights and remedies available to the Lender under this Agreement,
under any documents executed and delivered in connection with this Agreement,
under any and all of the Financing Documents (including, without limitation, the
First Forbearance Agreement), and under applicable laws, may be asserted,
enforced and exercised concurrently, cumulatively or successively from time to
time and at any time until such time as all of the Indebtedness have been
indefeasibly paid in full.
14. Expenses. The Lender shall be entitled to obtain at the expense of the
Obligors, such appraisals, reports, record searches, and legal and other
opinions and advice as the Lender may from time to time deem necessary with
respect to any or all of Obligors and/or any or all collateral and security now
or hereafter securing any of the Indebtedness. The Obligors agree jointly and
severally to pay all costs, fees and expenses of the Lender in connection with
the preparation, execution and delivery of this Agreement and any and all other
documents executed and delivered in connection with this Agreement and all other
costs, fees and expenses, incurred by, or on behalf of the Lender in connection
with the enforcement, preservation, or collection of the Indebtedness and/or
this Agreement, including, without limitation, attorneys fees and expenses, and
recordation and filing fees and taxes (collectively, the "Enforcement Costs").
Such Enforcement Costs shall be deemed to be part of the Indebtedness and shall
be payable upon demand.
15. CONFESSION OF JUDGMENT. THE OBLIGORS AUTHORIZE ANY ATTORNEY ADMITTED TO
PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES TO APPEAR ON BEHALF OF
THE OBLIGORS IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK
THEREOF OR PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST
THE DEBTOR IN FAVOR OF THE HOLDER OF THIS AGREEMENT IN THE FULL AMOUNT DUE UNDER
THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES,
FEES AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE
AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF DEBTOR
FOR PRIOR HEARING. DEBTOR AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL
BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF
BALTIMORE CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MARYLAND. DEBTOR WAIVES THE BENEFIT OF ANY AND EVERY STATUTE,
ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON DEBTOR
ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR
SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE
ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. THE AUTHORITY
AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST DEBTOR SHALL NOT BE EXHAUSTED
BY ONE OR MORE EXERCISES THEROF, OR BY ANY IMPERFECT EXERCISE THEROF, AND SHALL
NOT BE EXTINGGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY
AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE
SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS THE HOLDER SHALL DEEM NECESSARY,
CONVENIENT, OR PROPER.
16. WAIVER OF JURY TRIAL. THE OBLIGORS AND THE LENDER EACH HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY OR ALL OF THE OBLIGORS
AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A)
THIS AGREEMENT, (B) ANY OF THE DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION
WITH THIS AGREEMENT, (C) ANY OF THE INDEBTEDNESS, AND (D) ANY OF THE FINANCING
DOCUMENTS IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE OBLIGORS
AND THE LENDER, AND THE OBLIGORS AND THE LENDER EACH HEREBY REPRESENT AND
WARRANT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT. THE OBLIGORS FURTHER REPRESENT THAT THEY HAVE BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
17. RELIEF FROM THE AUTOMATIC STAY. THE BORROWER HEREBY ACKNOWLEDGES AND
AGREES THAT THE LENDER HAS AGREED TO ENTER INTO THIS AGREEMENT IN ORDER TO
PERMIT THE BORROWER AN OPPORTUNITY TO REPAY AND SATISFY THE INDEBTEDNESS IN A
MUTUALLY ACCEPTABLE, CONSENSUAL MANNER, RATHER THAN THROUGH THE LENDER'S
EXERCISE AND ENFORCEMENT OF ITS RIGHTS AND REMEDIES UNDER THE FINANCING
AGREEMENT, THE FINANCING DOCUMENTS AND APPLICABLE LAWS. THE BORROWER FURTHER
ACKNOWLEDGES AND AGREES THAT BECAUSE OF THE EXISTING DEFAULTS UNDER AND IN
CONNECTION WITH THE INDEBTEDNESS, THE LENDER WOULD OTHERWISE BE ENTITLED TO
EXERCISE IMMEDIATELY ANY AND ALL SUCH RIGHTS AND REMEDIES IF THE LENDER DID NOT
ENTER INTO THIS AGREEMENT. THE BORROWER FURTHER ACKNOWLEDGES AND AGREES THAT
ALTHOUGH THE LENDER'S INTEREST IN ITS COLLATERAL AND SECURITY IS NOT PRESENTLY
BEING ADEQUATELY PROTECTED, THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT IN RELIANCE UPON THE UNDERSTANDING THAT IN THE EVENT THE LENDER
EXERCISES ANY OF ITS RIGHTS OR REMEDIES UNDER THE FINANCING AGREEMENT AND/OR ANY
OR ALL OF THE FINANCING DOCUMENTS AND/OR UNDER ANY APPLICABLE LAWS UPON THE
OCCURRENCE OF A FORBEARANCE DEFAULT, THE BORROWER WILL COOPERATE WITH THE LENDER
IN THE LENDER'S EFFORTS TO EXERCISE ANY AND ALL SUCH RIGHTS AND REMEDIES
AVAILABLE TO THE LENDER. ACCORDINGLY, IF THE BORROWER BECOMES THE SUBJECT OF A
BANKRUPTCY CASE, THE BORROWER CONSENTS TO ALLOW THE LENDER TO EXERCISE ANY AND
ALL RIGHTS AND REMEDIES AVAILABLE TO THE LENDER WITH RESPECT TO ITS COLLATERAL
AND SECURITY. THE BORROWER HEREBY CONSENTS TO ANY MOTION FILED BY OR ON BEHALF
OF THE LENDER FOR RELIEF FROM THE AUTOMATIC STAY UNDER XXXXXXX 000 XX XXX XXXXXX
XXXXXX BANKRUPTCY CODE. THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS
THE LENDER TO FILE THIS CONSENT WITH THE BANKRUPTCY COURT PRESIDING OVER ANY
SUCH BANKRUPTCY CASE OF THE BORROWER, AND FURTHER AGREES NOT TO OPPOSE ANY SUCH
MOTION FOR RELIEF FROM THE AUTOMATIC STAY FILED BY OR ON BEHALF OF THE LENDER.
FINALLY, THE BORROWER CONSENTS AND AGREES THAT NONE OF THE COLLATERAL (INCLUDING
ANY CASH OR NON-CASH PROCEEDS THEREOF) MAY BE USED TO PAY ANY ACTUAL OR
ESTIMATED FEES INCURRED BY OR ESTIMATED TO BE INCURRED BY THE BORROWER WITH
RESPECT TO ANY FILED OR PROPOSED BANKRUPTCY CASE IN WHICH THE BORROWER IS THE
SUBJECT.
18. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or overnight delivery service or when
mailed by certified mail, postage prepaid, as follows:
If to the Lender: Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
If to the Borrower: Xxxxxx Industries, Inc.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn:Xxx Xxxxxxxx, President
If to the Guarantor: Obsidian Enterprises, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Chief Executive Officer
with a copy to: Xxxx X. Xxxxx, Esq..
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such other address as any party hereto may designate for itself by notice
to the other parties hereto.
19. Other Agreements. The parties to this Agreement further agree:
(a) This Agreement is not a substitute for and does not replace or cause a
novation of the First Forbearance Agreement. The representations, warranties,
covenants, promises and other obligations of each of the Obligors contained in
this Agreement are in addition to those contained in the First Forbearance
Agreement and the First Forbearance Agreement remains in full force and effect.
(b) The Obligors expressly warrant, represent, covenant, acknowledge and
agree that this Agreement and the First Forbearance Agreement are hereby
expressly cross-defaulted such that: (i) a Forbearance Default pursuant to the
terms and provisions of the First Forbearance Agreement shall be a Forbearance
Default under this Agreement and (ii) a Forbearance Default under this Agreement
shall be a Forbearance Default pursuant to the terms and provisions of the First
Forbearance Agreement.
(c) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland. In any litigation in connection with or to
enforce this Agreement, the Obligors each irrevocably consents to and confers
personal jurisdiction on the courts of the State of Maryland or the United
States located within the State of Maryland and expressly waives any objections
as to venue in any such courts. Nothing contained herein shall, however, prevent
Lender from bringing action or exercising any rights within any other state or
jurisdiction or from obtaining personal jurisdiction by any other means
available under applicable law.
(d) In case one or more provisions contained in this Agreement shall be
invalid, illegal, or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions contained in this
Agreement shall remain effective and binding and shall not be affected or
impaired thereby.
(e) If there is any conflict between the terms of this Agreement, any of
the documents executed and delivered in connection with this Agreement, and any
of the Financing Documents, the terms of this Agreement shall prevail.
(f) This Agreement may be amended, modified or supplemented only by written
agreement of the parties hereto. No provision of this Agreement may be waived
except in writing signed by the party against whom such waiver is sought to be
enforced.
(g) This Agreement sets forth the final and entire agreement and
understanding of the parties hereto, superseding all prior representations,
understandings and agreements, written or oral, not expressly set forth in this
Agreement or in any other documents executed and delivered in connection
herewith.
(h) The Obligors agree to execute and deliver to Lender any and all further
amendments, modifications, notes, financing statements, instruments, agreements
and documents which Lender may reasonably require in connection with the terms
and provisions of this Agreement or any of the other Financing Documents.
(i) As used in this Agreement, the singular number shall include the
plural, the plural the singular and the use of the masculine, feminine or neuter
gender shall include all genders, as the context may require. Reference in this
Agreement to any one or more of the Obligors shall mean the same, jointly and
severally.
(j) The headings, titles and captions of this Agreement are for the
convenience only and are not part of this Agreement.
(k) Time is of the essence of this Agreement with respect to each of the
Obligors.
(1) This Agreement shall be binding upon and inure to the benefit of the
Obligors, the Lender and each of their respective heirs, personal
representatives, successors, and assigns. None of the Obligors shall however,
assign any of their respective rights or obligations under this Agreement.
(m)This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
agreement. The parties agree that their respective signatures may be delivered
by fax. Any party who chooses to deliver its signature by fax agrees to provide
promptly to the other parties a counterpart of this Agreement with its inked
signature.
[Signatures Follow on Next Page]
SIGNATURE PAGE TO
SECOND LIMITED FORBEARANCE AGAREEMENT
BY AND BETWEEN BANK OF AMERICA, X.X.
XXXXXX INDUSTRIES, INC. AND OBSIDIAN ENTERPRISES, INC.
IN WITNESS WHEREOF, the Obligors and the Lender have executed this
Agreement under seal as of the date first written above.
WITNESS: BANK OF AMERICA, N.A.
/s/ Xxxx Xxxxxxxxxxxx By: /s/ Xxxxx X. Xxxx (SEAL)
-------------------------- --------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
Title:
--------------------------------------
WITNESS: XXXXXX INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxxxxx (SEAL)
-------------------------- -------------------------------------
Name: Xxx X. Xxxxxxxx
-------------------------------------
Title: President
-------------------------------------
WITNESS: OBSIDIAN ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxx (SEAL)
-------------------------- -------------------------------------
Name: Xxxxx X. Xxxx
-------------------------------------
Title: EVP/Chief Financial Officer
-------------------------------------
EXHIBIT "A" TO
SECOND LIMITMED FORBEARANCE AGREEMENT
BY AND BETWEEN BANK OF AMERICA, N.A.,
XXXXXX INDUSTRIES, INC. AND OBSIDIAN ENTERPRISES, INC.
Litigation
(ATTACHED, IF APPLICABLE)
