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EXHIBIT 4.7
LOAN AGREEMENT
This Loan Agreement is entered into this 26 day of April, 1996
by and between THE NATIONAL BANK OF SOUTH CAROLINA ("Bank") and AIR SOUTH
AIRLINES, INC., a Delaware corporation ("Borrower").
In consideration of Bank making a loan of Two Million and
00/100 ($2,000,000.00) Dollars (the "Loan"), which is evidenced by that certain
Note of even date herewith, together with all renewals, extensions, or
modifications thereof (the "Note"), and secured by the unconditional guaranty
of payment of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Group, Inc. ("Guarantor"), Borrower agrees as
follows:
1. REPRESENTATIONS AND WARRANTIES. To induce the Bank
to make the Loan, Borrower (and Guarantor, where indicated) makes the following
representations and warranties, which shall survive the execution and delivery
of the Note, provided however, that Borrower makes no representations as to
Guarantor and Guarantor makes no representations as to Borrower:
(a) The financial information furnished to Bank by Borrower
("Borrower's Financial Information") and Guarantor ("Guarantor's Financial
Information") in connection with Borrower's application for the Loan and in the
financial statements submitted to Bank presents fairly the financial position
of Borrower or Guarantor, as the case may be, as of the respective dates
thereof, and Borrower and Guarantor have no material undisclosed direct or
contingent liabilities.
(b) Borrower is duly organized, existing and in good standing
under the laws of the State of Delaware, is authorized to transact business in
South Carolina and all other jurisdictions in which it is required to be so
qualified, has corporate power to carry on the business in which it is engaged,
and the obtaining and performance of the Loan have been duly authorized by all
necessary action of the board of directors of the corporation under applicable
law, and do not and will not (i) violate any provision of law or any of its
organizational or other organic documents, or (ii) result in a breach of,
constitute a default under, require any consent under, or result in the
creation of any lien, charge, or encumbrance upon any property of Borrower
pursuant to any instrument, order, or other agreement to which Borrower is a
party or by which Borrower, any of its officers as such, or any of its property
is bound.
(c) There are no material judgments, liens, encumbrances, or
other security interests outstanding against Borrower or Guarantor other than
those disclosed to Bank in Borrower's Financial Information, Guarantor's
Financial Information or otherwise in writing in connection with Borrower's
request for the Loan, and which in the case of Guarantor would have a material
adverse effect on Bank's ability to enforce the guaranty made by Guarantor in
favor of Bank.
(d) Borrower and Guarantor have not incurred any debts,
liabilities, or obligations and have not committed to incur any debts,
liabilities, or obligations other than those disclosed to Bank in Borrower's
Financial Information or otherwise in writing in connection with Borrower's
request for the Loan, and which in the case of Guarantor would have a material
adverse effect on Bank's ability to enforce the guaranty made by Guarantor in
favor of Bank.
2. USE OF LOAN PROCEEDS. The proceeds of the Loan will
be used only for the purpose of providing working capital for Borrower's
business including the reduction of existing debt and the payment of existing
accounts payable.
3. STATEMENT OF ACCOUNT. Bank shall maintain, in
accordance with its customary procedures, a loan account in the name of the
Borrower in which shall be recorded the date and amount of each advance made by
Bank and the date and amount of each payment in respect thereof; provided,
however, the failure by Bank to record the date and amount of any advance shall
not adversely affect Bank. The records of Bank with
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respect to the loan account shall be prima facie evidence of the amounts of
advances and other changes thereto and of payments applicable thereto.
4. ADDITIONAL PAYMENTS. Any sum expended by Bank under
this Agreement or any other document due to the Borrower's failure to perform
or comply with its obligations under this Agreement or any other document may
be charged to the Borrower's account as an advance.
5. AFFIRMATIVE COVENANTS. Borrower will:
(a) Reserve and keep in force all licenses, permits, and
franchises necessary for the proper conduct of its business and duly pay and
discharge all taxes, assessments, and governmental charges upon Borrower or
against Borrower's property before the date on which penalties attached
thereto, unless and to the extent only that the same shall be contested in good
faith and by appropriate proceedings.
(b) Permit any representative or agent of Bank to examine and
audit any or all of Borrower's books and records when requested by Bank at
Borrower's expense.
(c) Inform Bank immediately of any material adverse change in
the financial condition of Borrower. Borrower will also promptly inform Bank
of any litigation or threatened litigation which might materially adversely
affect Borrower's financial condition.
6. NEGATIVE COVENANTS. Borrower will not, without prior
written consent of Bank, which consent shall not be unreasonably withheld:
(a) Guarantee, endorse, or otherwise become surety for or
upon the obligation of any person, firm, or corporation.
(b) Lend money or credit to or make or permit to be
outstanding loans or advances to any person, firm, or corporation.
(c) Enter into any merger or consolidation, or sell, lease,
transfer, or otherwise dispose of all or any substantial part of its assets
(except in the ordinary course of business), whether now owned or hereafter
acquired.
(d) Change its name or any name in which it does business, or
move its principal place of business without giving written notice thereof to
Bank at least thirty (30) days prior thereto.
7. EVENTS OF DEFAULT. The Bank shall have the option to
declare the entire unpaid amount of the Loan and accrued interest immediately
due and payable, without presentment, demand, or notice of any kind, it any of
the following events occurs before the Loan is fully repaid.
(a) Any payment of principal or interest on the Loan is past
due more than one business day after Bank has notified Borrower that such
default has occurred.
(b) Any provision of this Agreement is breached or proves to
be untrue or misleading in any material respect.
(c) Any warranty, representation, or statement made or
furnished the Bank by Borrower in connection with the Loan and this Agreement
(including any warranty, representation, or statement in the Borrower's
financial statements) or to induce the Bank to make the Loan, is untrue or
misleading in any material respect.
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(d) Any default occurs under any agreement with another
financial institution, which default is not corrected within the cure period
provided in such agreement, if any.
(e) Any voluntary or involuntary bankruptcy, reorganization,
insolvency, arrangement, receivership, or similar proceeding is commenced by or
against Borrower under any federal or state law, or Borrower makes any
assignment for the benefit of creditors.
(f) Any material part of the inventory, equipment, or other
property of the Borrower, real or personal, tangible or intangible, is damaged
or destroyed and the damage or destruction is not covered by collectible
insurance.
In the case of each of each of subsections 8(b) through 8(d)
above, Bank shall give notice of such default to Borrower and, if such default
is curable, allow Borrower ten days in which to cure such default.
8. REMEDIES UPON DEFAULT. Without in any way limiting
the generality of the foregoing, Bank shall also have the following specific
rights and remedies:
(a) To exercise any and all rights of set-off which Bank may
have against any account, fund, or property of any kind, tangible or
intangible, belonging to Borrower which shall be in Bank's possession or under
its control.
(b) To cure such defaults, with the result that all costs and
expenses incurred or paid by Bank in effecting such cure shall be additional
charges on the Loan which bear interest at the interest rate of the Loan and
are payable upon demand.
The proceeds from any exercise of the foregoing rights shall
be used to satisfy the following items in the order they are listed:
(a) The reasonable expenses of exercise the foregoing rights,
including any legal costs and attorney's fees. If the Note is referred to an
attorney for collection, Borrower and all others liable for the Loan jointly
and severally agree to pay reasonable attorneys' fees.
(b) The expense of liquidating or satisfying any liens,
security interests, or encumbrances on the collateral which may be prior to the
obligations of the Borrower to the Bank.
(c) Any unpaid fees, accrued interest, and then the unpaid
principal amount of the Loan.
(d) Any other indebtedness of Borrower to Bank.
9. WAIVER. No failure or delay on the part of Bank in
exercising any power or right hereunder, and no failure of Bank to give
Borrower notice of a default hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power
hereunder. No modification or waiver of any provision of this Agreement or any
instrument executed pursuant hereto or consent to any departure by Borrower
from this Agreement or such instrument shall in any event be effective unless
the same shall be in writing, and such waiver or consent shall be effective
only in the specific instance and for the particular purpose for which given.
10. BENEFIT. This Agreement shall be binding upon and
shall inure to the benefit of Borrower and Bank and their respective successors
and assigns. Bank may assign this Agreement in whole or in part with any
assignment of the Loan. Borrower may not assign this Agreement or its
obligations under the Loan without Bank's written consent.
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11. Governing Law and Jurisdiction. This Agreement and
the other documents pertaining to the Loan, unless otherwise specifically
provided therein, and all matters relating therein shall be governed by and
construed and interpreted in accordance with the laws of the State of South
Carolina. The Borrower hereby submits to the jurisdiction of the state and
federal courts located in that state and agree that the Bank may, at its option,
enforce its rights under the documents pertaining to the Loan in such courts or
in any other jurisdiction in which the Bank is located or in which the Borrower
may be located.
12. Assignment. Bank may assign this Agreement and any
other document pertaining to the Loan, in whole or in part, to any other person
or entity provided that, in the event of such assignment, the Bank shall
thereafter be relieved of all liability hereunder. Borrower hereby authorizes
Bank to disclose all information (including financial) provided to Bank by
Borrower in connection with the Loan to any actual or prospective assignee of
all or part of the Loan.
13. Severability. Invalidity of any one or more of the
provisions of this Agreement shall in no way affect any one of the other
provisions hereof, which shall pertain in full force and effect.
AIR SOUTH AIRLINES, INC.
/s/ By: /s/
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Its Authorized Officer
/s/
------------------------------------
THE NATIONAL BANK OF SOUTH CAROLINA
/s/ By: /s/
------------------------------------ -------------------------------------
Its Authorized Officer
/s/
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ACKNOWLEDGEMENT BY GUARANTOR
Guarantor hereby executes this instrument for the purposes of
acknowledging the foregoing terms and conditions agreed to by Borrower and
confirming all representations and warranties of Guarantor stated herein.
Guarantor has been represented by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
(Palo Alto, California) in connection with the registration and consummation of
its guaranty of the Loan.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ GROUP, INC.
By: /s/
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Its Authorized Signatory
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AIR SOUTH, INC.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
BORROWER'S NAME AND ADDRESS
"I" includes each borrower above, joint and severally.
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National Bank of South Carolina
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
LENDER'S NAME AND ADDRESS
"You" means the lender, its successors and assigns.
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Loan Number 313056450 - 00001
Date April 26, 1996
*Maturity Date December 01, 1996
Loan Amount $2,000,000.00
Renewal Of _________________________________
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For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of **TWO MILLION DOLLARS AND ZERO CENTS**
Dollars $2,000,000.00
[ ] Single Advance: I will receive all of this principal sum on ______________.
No additional advances are contemplated under this note.
[X] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On 04/26/1996 I will receive the
amount of $____________ and future principal advances are contemplated.
Conditions: The conditions for future advances are _______________________
__________________________________________________________________________
__________________________________________________________________________
[X] Open End Credit: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to
all other conditions and expires on 12/01/1996.
[ ] Closed End Credit: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
04/26/1996 at the rate of 10.250% per year until the next change in the
index rate, if any.
[X] Variable Rate: This rate may then change as stated below.
[X] Index Rate: The future rate will be BASED ON the following index rate:
NBSC PRIME RATE PLUS 2.00%
[ ] No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[X] Frequency and Timing: The rate on this note may change as often as
NBSC PRIME RATE CHANGES. A change in the interest rate will take
effect _____________________________________________________________.
[ ] Limitations: During the term of this loan, the applicable annual
interest rate will not be more than _________% or less than________%.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
[X] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ] __________________________________________.
ACCRUAL METHOD: Interest will be calculated on a ACT/ACT basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[X] on the same fixed or variable rate basis in effect before maturity (as
indicated above).
[ ] at a rate equal to __________________________________________________.
[X] LATE CHARGE: If a payment is made more than 10 days after it is due, I
agree to pay a late charge of the lesser of 5% of the payment or $50.
[ ] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [ ] are not included in the principal amount above:
_________________________________________________________________________.
PAYMENTS: I agree to pay this note as follows:
[X] Interest: I agree to pay accrued interest in 7 payment(s) MONTHLY STARTING
June 01, 1996
*[X] Principal: I agree to pay the principal in 1 payment(s) in the amount of
2,000,000.00 AT MATURITY December 01, 1996
[ ] Installments: I agree to pay this note in ____ payments. The first payment
will be in the amount of $____________ and will be due __________________.
A payment of $____________ will be due ___________________________________
thereafter. The final payment of the entire unpaid balance of principal
and interest will be due _____________________.
ADDITIONAL TERMS:
A FINAL PAYMENT EQUAL TO THE OUTSTANDING BALANCE OF PRINCIPAL AND
* ACCRUED INTEREST SHALL BE DUE UPON THE EARLIER OF DECEMBER 1, 1996, OR
THE DATE OF DISTRIBUTION TO THE BORROWER OF THE NET PROCEEDS OF THE
PROPOSED SALE OF UP TO 3,400,000 SHARES OF THE BORROWER'S COMMON STOCK
PURPOSE: The purpose of this loan is SIGNATURES: I AGREE TO THE TERMS OF THIS
WORKING CAPITAL NOTE (INCLUDING THOSE ON PAGE 2). I
------------------------------------. have received a copy on today's date.
Signature for Lender /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ CHAIRMAN
/s/ for ▇▇▇▇ ▇▇▇▇▇
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FLG ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, III
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(page 1 of 2)
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APPLICABLE LAW: The law of the state in which you are located will govern this
note. Any term of this note which is contrary to applicable law will not be
effective, unless the law permits you and me to agree to such a variation. If
any provision of this agreement cannot be enforced according to its terms, this
fact will not affect the enforceability of the remainder of this agreement. No
modification of this agreement may be made without your express written consent.
Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal.
If you and I agree to a different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: If I receive the principal in more than one advance, each advance will
start to earn interest only when I receive the advance. The interest rate in
effect on this note at any given time will apply to the entire principal
advanced at that time. Notwithstanding anything to the contrary, I do not agree
to pay and you do not intend to charge any rate of interest that is higher than
the maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after maturity).
If any notice of interest accrual is sent and is in error, we mutually agree to
correct it, and if you actually collect more interest than allowed by law and
this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the
rate on this note will be the same rate you charge on any other loans or class
of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will
determine the number of days in a "year." If no accrual method is stated, then
you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
schedule payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this note
against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your
possession for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at the
time you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has
not agreed to pay this note, your right to set-off will apply to my interest in
the obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree to
hold you harmless from any such claims arising as a result of your exercise of
your right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without first
notifying you before making such a change; (10) I fail to plant, cultivate and
harvest crops in due season if I am a producer of crops; (11) any loan proceeds
are used for a purpose that will contribute to excessive erosion of highly
erodible land or to the conversion of wetlands to produce an agricultural
commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment
of money from you, subject to the terms of the "Set-Off" paragraph
herein.
(3) You may demand security, additional security, or additional
parties to be obligated to pay this note as a condition for not
using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit
by me.
(5) You may use remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee you
incur with such attorney plus court costs (except where prohibited by law). To
the extent permitted by the United States Bankruptcy Code, I also agree to pay
the reasonable attorney's fees and costs you incur to collect this debt as
awarded by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to do certain things. I will not require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of
dishonor).
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may ▇▇▇ me alone, or anyone else who is
obligated on this note, or any number of us together, to collect this note. You
may do so without any notice that it has not been paid (notice of dishonor).
You may without notice release any party to this agreement without releasing any
other party. If you give up any of your rights, with or without notice, it will
not affect my duty to pay this note. Any extension of new credit to any of us,
or renewal of this note by all or less than all of us will not release me from
my duty to pay it (Of course, you are entitled to only one payment in full.) I
agree that you may at your option extend this note or the debt represented by
this note, or any portion of the note or debt, from time to time without limit
or notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your prior
written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in
writing of any change in my address. I will give any notice to you by mailing
it first class to your address stated on page 1 of this agreement, or to any
other address that you have designated.
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DATE PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(not required) THROUGH
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(page 2 of 2)
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GUARANTY
San Francisco CA
----------------------- -------------------
(City) (State)
April 26, 1996
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and to induce National Bank of South Carolina
(herein, with its participants, successors and assigns, called "Lender"), at
its option, at any time or from time to time to make loans or extend other
accommodations to or for the account of Air South Airlines, Inc. (herein called
"Borrower") or to engage in any other transactions with Borrower, the
Undersigned hereby absolutely and unconditionally guarantees to Lender the full
and prompt payment when due, whether at maturity or earlier by reason of
acceleration or otherwise, of the debts, liabilities and obligations described
as follows:
A. If this [X] is checked, the Undersigned guarantees to Lender the
payment and performance of the debt, liability or obligation of Borrower
to Lender evidenced by or arising out of the following: $2,000,000.00
Note dated April _____, 1996 (hereinafter referred to as the
"Indebtedness").
B. If this [ ] is checked, the Undersigned guarantees to Lender the
payment and performance of each and every debt, liability and obligation
of every type and description which Borrower may now or at any time
hereinafter owe to Lender (whether such debt, liability or obligation
now exists or is hereinafter created or incurred, and whether it is or
may be direct or indirect, due or to become due, absolute or contingent,
primary or secondary, liquidated or unliquidated, or joint, several, or
joint and several; all such debts, liabilities and obligations being
hereinafter collectively referred to as the "Indebtedness"). Without
limitation, this guaranty includes the following described debt(s):
ACCT# _________ NOTE#__________________________________________________
The term "Indebtedness" as used in this guaranty shall not include any
obligations entered into between Borrower and Lender after the date hereof
(including any extensions, renewals or replacements of such obligations) for
which Borrower meets the Lender's standard of creditworthiness based on
Borrower's own assets and income without the addition of a guaranty, or for
which a guaranty is required but Borrower chooses someone other than the
joint Undersigned to guaranty the obligation.
The Undersigned further acknowledges and agrees with Lender that:
1. No act or thing need occur to establish the liability of the Undersigned
hereunder, and no act or thing, except full payment and discharge of all
indebtedness, shall in any way exonerate the Undersigned or modify, reduce,
limit or release the liability of the Undersigned hereunder.
2. This is an absolute, unconditional and continuing guaranty of payment of
the Indebtedness and shall continue to be in force and be binding upon the
Undersigned, whether or not all indebtedness is paid in full, until this
guaranty is revoked by written notice actually received by the Lender, and such
revocation shall not be effective as to indebtedness existing or committed for
at the time of actual receipt of such notice by the Lender, or as to any
renewals, extensions and refinancings thereof. If there be more than one
Undersigned, such revocation shall be effective only as to the one so revoking.
The death or incompetence of the Undersigned shall not revoke this guaranty,
except upon actual receipt of written notice thereof by Lender and then only as
to the decedent or the incompetent and only prospectively, as to future
transactions, as herein set forth.
3. If the Undersigned shall be dissolved, shall die, or shall be or become
insolvent (however defined) or revoke this guaranty, then the Lender shall have
the right to declare immediately due and payable, and the Undersigned will
forthwith pay to the Lender, the full amount of all Indebtedness, whether due
and payable or unmatured. If the Undersigned voluntarily commences or there is
commenced involuntarily against the Undersigned a case under the United States
Bankruptcy Code, the full amount of all Indebtedness, whether due and payable
or unmatured, shall be immediately due and payable without demand or notice
thereof.
4. The liability of the Undersigned hereunder shall be limited to a
principal amount of $2,000,000.00 (if unlimited or if no amount is stated, the
Undersigned shall be liable for all Indebtedness, without any limitation as to
amount), plus accrued interest thereon and all attorneys' fees, collection
costs and enforcement expenses referable thereto. Indebtedness may be created
and continued in any amount, whether or not in excess of such principal amount,
without affecting or impairing the liability of the Undersigned hereunder. The
Lender may apply any sums received by or available to Lender on account of the
Indebtedness from Borrower or any other person (except the Undersigned), from
their properties, or of any collateral security or from any other source to
payment of the excess. Such application of receipts shall not reduce, affect
or impair the liability of the Undersigned hereunder. If the liability of the
Undersigned is limited to a stated amount pursuant to this paragraph 4, any
payment made by the Undersigned under this guaranty shall be effective to
reduce or discharge such liability only if accompanied by a written transmittal
document received by the Lender, advising the Lender that such payment is made
under this guaranty for such purpose.
5. The Undersigned will pay or reimburse Lender for all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by Lender in
connection with the protection, defense or enforcement of this guaranty in any
litigation or bankrupty or insolvency proceedings.
This guaranty includes the additional provisions on page 2, all of which are
made a part hereof.
This guaranty is [X] unsecured; [ ] secured by a mortgage or security agreement
dated _________________; secured by __________________________________________
IN WITNESS WHEREOF, this guaranty has been duly executed by the
Undersigned the day and year first above written.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Group
BY /s/
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BY
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8
ADDITIONAL PROVISIONS
6. Whether or not any existing relationship between the Undersigned
and Borrower has been changed or ended and whether or not this guaranty has
been revoked, Lender may, but shall not be obligated to, enter into
transactions resulting in the creation or continuance of Indebtedness,
without any consent or approval by the Undersigned and without any notice to
the Undersigned. The liability of the Undersigned shall not be affected or
impaired by any of the following acts or things (which Lender is expressly
authorized to do, omit or suffer from time to time, both before and after
revocation of this guaranty, without notice to or approval by the Undersigned);
(i) any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all Indebtedness; (ii) any one or more extensions or
renewals of Indebtedness (whether or not for longer than the original period)
or any modification of the interest rates, maturities or other contractual
terms applicable to any indebtedness; (iii) any waiver, adjustment,
forbearance, compromise or indulgence granted to Borrower, any delay or lack of
diligence in the enforcement of indebtedness, or any failure to institute
proceedings, file a claim, give any required notices or otherwise protect any
indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to ▇▇▇, Borrower or any other guarantor or other person liable in
respect of any Indebtedness; (v) any discharge of any evidence of Indebtedness
or the acceptance of any instrument in renewal thereof or substitution
therefor; (vi) any failure to obtain collateral security (including rights of
setoff) for Indebtedness, or to see to the proper or sufficient
creation and perfection thereof, or to establish the priority thereof, or to
protect, insure, or enforce any collateral security; or any release,
modification, substitution, discharge, impairment, deterioration, waste, or
loss of any collateral security; (vii) any foreclosure or enforcement of any
collateral security; (viii) any transfer of any indebtedness or any evidence
thereof; (ix) any order of application of any payments or credits upon
indebtedness; (x) any election by the Lender under sec. 1717 (b)(2) of the
United States Bankruptcy Code.
7. The Undersigned waives any and all defenses, claims and discharges
of Borrower, or any other obligor, pertaining to indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of
the foregoing, the Undersigned will not assert, plead or enforce against
Lender any defense of waiver, release, statute of limitations, res judicate,
statute of frauds, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other person liable
in respect of any indebtedness, or any setoff available against Lender to
Borrower or any such other person, whether or not on account of a related
transaction. The Undersigned expressly agrees that the Undersigned shall be
and remain liable, to the fullest extent permitted by applicable law, for any
deficiency remaining after foreclosure of any mortgage or security interest
securing indebtedness, whether or not the liability of Borrower or any other
obligor for such deficiency is discharged pursuant to statute or judicial
decision. The undersigned shall remain obligated, to the fullest extent
permitted by law, to pay such amounts as though the Borrower's obligations had
not been discharged.
8. The Undersigned further agrees that the Undersigned shall be and
remain obligated to pay Indebtedness even though any other person obligated to
pay Indebtedness, including Borrower, has such obligation discharged in
bankruptcy or otherwise discharged by law. "Indebtedness shall include
post-bankruptcy petition interest and attorneys' fees and any other amounts
which Borrower is discharged from paying or which do not otherwise accrue to
indebtedness due to Borrower's discharge, and the Undersigned shall remain
obligated to pay such amounts as though Borrower's obligations had not been
discharged.
9. If any payment applied by Lender to indebtedness is thereafter set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this guaranty be deemed to have continued in
existence, notwithstanding such application, and this guaranty shall be
enforceable as to such indebtedness as fully as if such application had never
been made.
11. The Undersigned waives presentment, demand for payment, notice of
dishonor or nonpayment, and protest of any instrument evidencing Indebtedness.
Lender shall not be required first to resort for payment of the Indebtedness to
Borrower or other persons or their properties, or first to enforce, realize upon
or exhaust any collateral security for Indebtedness, before enforcing this
guaranty.
12. The liability of the Undersigned under this guaranty is in addition
to and shall be cumulative with all other liabilities of the Undersigned to
Lender as guarantor or otherwise, without any limitation as to amount unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
13. This guaranty shall be enforceable against each person signing this
guaranty, even if only one person signs and regardless of any failure of other
persons to sign this guaranty. If there be more than one signer, all agreements
and promises herein shall be construed to be, and are hereby declared to be,
joint and several in each of every particular and shall be fully binding upon
and enforceable against either, any or all the Undersigned. This guaranty
shall be effective upon delivery to Lender, without further act, condition or
acceptance by Lender, shall be binding upon the Undersigned and the heirs,
representatives, successors and assigns of the Undersigned and shall inure to
the benefit of Lender and its participants, successors and assigns. Any
invalidity or unenforceability of any provision or application of this guaranty
shall not affect other lawful provisions and application hereof, and to this
end the provisions of this guaranty are declared to be severable. Except as
authorized by the terms herein, this guaranty may not be waived, modified,
amended, terminated, released or otherwise changed except by a writing signed
by the Undersigned and Lender. This guaranty shall be governed by the laws of
the State of South Carolina. The Undersigned waives notice of Lender's
acceptance hereof.
9
ADDENDUM TO GUARANTY
This addendum dated as of April 26, 1996 is made a part of that
certain Guaranty dated of even date (the "Guaranty") given by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Group, Inc. ("Guarantor") to The National Bank of South Carolina ("Lender").
The Lender and Guarantor hereby amend the Guaranty as follows:
1. Notwithstanding any claims, rights or remedies which Guarantor
may have against Borrower or any other person to pay the indebtedness,
including, without limitation, any right of subrogation, contribution,
reimbursement, indemnification or exoneration (the "Reserved Rights"),
Guarantor agrees that it shall not, in any action maintained by Lender against
Guarantor seeking enforcement of the terms hereof, assert or prosecute any
cause of action against Borrower or Lender with respect to the Reserved Rights.
2. In the event the terms of the Guaranty are inconsistent with
the terms of this Addendum, the terms of this Addendum shall control.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ GROUP, INC.
By: /s/ W.R. ?
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Its Authorized Officer
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THE NATIONAL BANK OF SOUTH CAROLINA
By:
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Its Authorized Officer
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