Microlog Corp · 10-K/A · For 10/31/95 · EX-10.9
Filed On 2/29/96 · SEC File 0-14880 · Accession Number 1005150-96-27
As Of Filer Filing On/For/As Docs:Pgs Issuer Agent
2/29/96 Microlog Corp 10-K/A 10/31/95 5:89 1005150
Document/Exhibit Description Pages Size
1: 10-K/A Amendment to Annual Report 23 140K
2: EX-10.9 Promissory Note 34± 168K
3: EX-13 Annual Report to Shareholders 30 184K
4: EX-24 Consent of Price Waterhouse Llp 1 5K
5: EX-27 FDS -- 1 6K
EXHIBIT 10.9
Farmers and Mechanics National Bank
Promissory Note
PROl~EISSORY NOTE
Borrower:
'or
Iliorolog COrp-Ion5 MIciolog Cor;lo'et~ of
1--. old Doivinion Syatema incoreoreteel of
'I--WI -Ii Gleicale Ac~ialtion corpnaoa~
Jointly and
3O~7~ Oo~olt Lane
Gemsan~m 20W71
document 10
tnd~r: Fimiem and ~ National ~nik
COIIImeilal Lendin. De;~~nt
p~itor51e
Fredetda,MO 21705
Priricipal Amount: $210005000.00 Enmal Rate: 10.OOO~~ Date of Note: December 14,
1995 PROMISE TO ~V. Microlog Coupo~ioo, Wcmiog Oooorailon Of 'kr-. Old Dominion
Syalenia lncorr~ted 0' Muiffand. --~ Geneils A~qotatton Cof~IWI, JOEIIPV - ~ ~
pNaLI~ to -, to Farmwa and Neh~ica National Bwi~ ~ or onier, 115 luwlill money
of U'. Unitod Statae 0' AmfIce, 'he ~ mount 0' Two ~on & WIOO Dollara (*2~~OOO~)
or ao ~~ch aemy be oiiIaIMdEIIu tolo-har with inluest on the imp-d out~ding pd-I
~ance of mc?' evance. interesi shall be calculated Ire. the dale 0' each advulce
'Mill' fm~EIfnant of mcli advance.
PAY~. U~ WE tiai' list. ~ in en. ~mni of all eIiIda~ng princip.' PlEA. all
accw'i WIpl~d inIemt en FebiuMy 2851917.115 addition, ~ WE pq set-mr nenIh~ ~ Of
~ ~d intered bu~ning Jmwa'y 28, 1n, and - ei~aeiienl inierasi ~~anta are dua en
theam day 0' each nont?' after tlie~ interm~ on tIle Note is oompubd on a
3861360 si~~ie interast bass; that Is, by apPlying the rato of 'he annual irrte~
rate over a year 0,360 days, muipled by the outsWdng Pd- be~enaa, mit~ied by thu
-'4"''' number of days 'he pTfn- beianoa Is outsIandIng. Bon'ower wilt pay
Len~mr at IAndr'i address Wiown above or ii su~h othef as Lender 'flay del~nalo
in wvttIng~ uviess o'he~ a~ or ruqlered by ap-abla law5 payments WI be appled I~
to accrued unpaid Intws~ then to pdrtclpai, and any la'aif*ig amount to any
unpaid colecton ocitli and late ~
VARIABLE IKTEIitEST RATL The interest nate on this Nole is subj~ct to change
loin Eme to L.e based on changes in an fridpendert index which is the Prirne
rate as published 115Th. Wall ~eet Jownat Money Ratea Table. or the hg heal nate
if more than one mlii' p~lshed (the ~nda'). The index is not rmcisarity the
lowest nate char- by Lender on Is loans. if the index beco,naa Unavailable
dunrrt the lam' of tttta loan, Lender may da-rate a subalituta Index after
nottoe to Bwmwer. Lender will tell Borrower the current index late upon
Borr~~Nir's ~ Borrower understands that Lender ray meke loana bmed on other mias
as weL The irterest late change WI nol occir wwre oflen than each day. The Index
ciniently IC L75~ perI-NEL The interest rate to be a-.d to the un~ Pri-al
balance of vita Nole will be at a rate of 1~ percenlage PDkita ever Ilsa Index,
maiifllig in an ini of 1g~O% per -InWIL NOTiCE: Under no crcums~es WI the
Int~est late on ~ Note be more than the inmamurn rate allowed by ap~~te law.
PREPAYMENT. Boivower -___that all ioaii teca and other p~d finance charom ate
earned ~ as of ihe date of 'he loan and WE not be si*~Jmct Ic retund upon eaey
paynwit (wheiher veitifliwy or as a raselt of dutaull). eo~ as otherwise
required by lew. IEeept tor the tor~Ing, Borrower may pay without Pe~ all or a
-015 of the ano'ml owed eatlier Ilian I Ia due. Eady payments WE not, unleas
agreed to by Lander in WrHi~ ~WIeve Sor'Owgr of 30~TD~s eltll~ton to continua to
make payments ~' coorued u~ lnterm~ Rithef, they will ~uci 'he ~drot- balance
due.
LATE CKII,RGL lie payment Ia 15 dive or meee Imle, Bonewer wilt be charged I~O%
0' the wi~ portion of 'he regularly ed~UIed pwment or *2.co, wilkilever le
greater.
DEFAULT. Borecaer WI be In dolallit If any of Ih tolow~ig IaiOpens: (a) Borrower
falls Ia make any payment when due. {b) Brrower bmiks any promise Borrower has
made to Lender, or Borrower talls to ~ with or to ~ when due any oIlier tern's
001loa10n5 cc~ranI. or conditlon contained In 'he Note or any aoraen,t raea'et
to this Note, or In any other agniemeni or loan Borrower has with Lender. (c)
B~ir oefauils under any loan, eatension of cr~ securIty atrree~nt, pixciwee or
ulea ~eemenL or any other agreement, in favor of 'any other creltor or pwson
that 'flay naIwti~~ efledl any' of Borroweds propety or sorrewerss abIlity to
repay this Note or ~em Borrower's obigatons under this Note or any of the
Related DocIRn-L (d) My mpreeentaUon or titatemeni made or furnished to Lender
by Borrower or on Bcr~ers behal is false or ir~sIoading In any material rssoect
elie' now, or at 'he time wade or lirnsh~ (0) BoreeWer beconeea ~~nt, a ~eiver
is eppoinled for any - of Bocmw~~
properly, Borrower makes an ~nnerl fort'. beneEl 0, creditors, or any pnomding
is camn'inced either by Bonoar or -nat Borrow' under any bankruptcy or
lnsoh'ency EawL (I) Any credltor tries to laise any 0, 3orr~ pmpny on or in
which Lunder has a lien or secudly InlereaL ~ Includes a garns'vn- - any -
Borrower's acceunts with Lender. (0) Myof 'he ovents ~ ow~nlor of thill Note.
(11)A meterlal adverse change occwi in Borrowers financial codition.
LENOIDR'il RIORrI. L~n ~ Lender may dedam theenire unpaid pdnc~ai b~e onthis
Note and aN arcri~d unpaid intera, to;ie"5er w~h at olher ap-able fees. cestu
and chi-, il any, immuitaty due and Pa-ge, witt'oul nolic~~ and then B~~~wer WI
pay that amou~ Firlhwmo'e. subjod to any Emits under ~ law, '~-, dilauti.
Ileorrowef also agreee to pay Lender's allorneys' i~, and as Of Lend,r1a other
colecuon expersas, whether or not thum Is a lawsuit and in;fuding without
limitation - aoenaoe for bankruptcy p'oceed~~ I,,,,, Note shall be governed by,
construed and enfo'oed In aocordenoe wtththe laws 0, the Slate of Ma~d, LENDER
AND BORROWER EACH HEREBY WAIVE TRIAL BY J'JRY IN ANY ACTION OR PROCEEDING TO
WHICH LENDER OR BOROWER NIAY PE PARTIES1 ARISING OIIT OF1 OR IN ANY WAY
PERTAINING TO, THIS NOTE, IT IS AGREED ThAT THIS WMVER CONSTITUrES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINOL
THIS WAIVER IS KNOWINGLY, WILLINGLY AND YOU~ARDLY MADE Dy LENDEIR AND BORROWER.
AND LENDER AND DORROWIER EACH IIEREIISY REPRESENT TIIAT NO REPRESENTATIONIS OF
PACT OR OPiNiON HAVE BEEN MADE BY ANY IIODIVIIDIt~ TO INOUCE THIS WAIVER OF
TRiAL BY JURY OR TO IN ANY WAY MODIFY OR NILLIPY ITS IlFI'ECT. BORROWER RJRTIIER
REPRESD~S ThAT BORROWER HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN
THE MAKiNG OF This WAIVER BY INDEPENDENT LEGAL COIIINSEL5 SELECTED OF
IBetROWER~S OWN FREE WILL, AND ThAT BORROWER HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIEER WITh COtINSEL
CONFESSED JL~GMENT. UPON THE OCCURR~E OF A DEFAULT, BORROWER HEREBY AI'THORIZES
ANY ATTORNEY DESIGIIATED BY LENDER OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR
FOR BORROWER IN ANY COURT OF RECORD ANO CONFESS JUDGMEIT I 12-1~1995 PROI~1SSORY
NOTE Page 2 Loan No 00001 (Conllnu.~
PRiOR IAiARIND A~ST BORROWER IN FAYOR OF LENDER FOR. AND IN THE AMO~ OF. THE
UNPAID BALANCE CF ThE PRINCIPAL AMOUNT OF THIS NO~ ALL UITEREIT ACCRUED AND
IRWAlO THEREON, ALL OTtER AMOUNTS PAYABL~ BY NORROWER TO LENDER UNDER THE ~~Me
OF THIS Nom OR ANY uiI~ AWIEBtiENT, DOCUM~iTh~ INSTR~IE~ ~Y~aNG. SECICliNG OR
GUARMIrYING THE Q~UQATtOI~ EiiIDENCRD BY THIS NO~ COST. CF Su~9 AND ATTORNEYS'
FRIES OF FIItTlEN PEROE~ (11%) OF THE WIPAID BALANCE OF THE PRINCIPAL AMOWIT OF
THIS awE AND IMTRliIT iI~ DUE tiREIWFi.
Boameer hrnmtly 1~-a so U'. ~teel ~ ~ ~ EUWI all wiem m' all vWil8 0' uwimpiton,
~ 'w .1 exi~~n, hiqiiWIuoq~ and elher iWji te WinII 8onewer mw ethemlee he
eDillilleet ultir U. laws.' the LWImd stales if Amutite er 0' fliv iii. or ~. 0'
U'. IieiEmd Ugmeel Amnic. n~w 1' jbice and wtich mw hereuller he mIlkL The suth~
and te appear ter and enter -I-I -- Umuewer 'hall a.' he uzhuuulel iw en~ er mei
emvetaee 1-el er by my hnp~ -wonolee Uwnuel Mid ehaili not he ez:-ieheil by my ~
eutand isiumni MIU-- Such -I- -w he Ii on one er mom eccaitoil. er.. WEe to n.e
In U'. mm or jiflrersl ~ - eltei es Lander lIME dmiii nm-elf or deelra~. ter all
0' which lihie Note aheli he a 8utlliciunl wuruiL
DISHONORED ITETI PEL ileiower WE pay a lea to L.nder of $1~ if B~ower makes a
payment on ~ loin and the check or prmutorlorl charge with wtich Sanower Ia
later ishonoied.
REGKT OF SEITOFF. 9o'rwer ti's-s to lender a nolliractuel popsemawy securtly
intamul Ir', and hereby as~rs, comay.. dlyers, ~ e~d Innate's to Lender all
8orrowe~ light. U. and In',-' in and tc, Bagrower's accounts with Lender
(whather ch.ckmg~ saalnga, Or some other mccoIJnD, in~ WNhcul tetaton all
anceuna held jokiy withaemeone elm end all anceuns 9orrowar may opun inliw
tutors, UWLP*~O ~ all ~A i~-:~' end kiul acoowiL Baivower aulherbtea Lender. to
the mdent ~nteti by ~ i"w. 10 chaq~ or aetoff all swins owl~ on this Note igrnl~
any' and all such aoo~.
COLLATERAL Tilis Note Ia by. in addItion toany other coEm~~, a Oeeei otTmsl
outed December T41 1995. to a trulim in tavor of Lander on raul pmpwtV iooaleei
in M~- Coonly' Slut. ~'-Ind. all the terms end cordilons of which as hereby
inoorooated and made a pait of Its Non, Tb. Ilmi Preperty orb addeaa is commonly
Imown as WO Goideneel Lane, Germantown, MO WS.
LINE OF C-IT. This Note :~ a myoh'Ing tine - ~ Advanoee under ~ Nola, - wel -
for peynmid *om Barmw~~a anceuis, may he mqLirngI,d er-br in wilung by Boirer or
by an a'iIhorlsad person, Lender may. but need not, i~ie Itast all oral requeds
be cw*med in ~ Thu ~l~wing itarty or trari- ate a~ithodsed to request - under
'he line of oedll until Lender -~ trom Borrower al Land's adateua ihown aboi~
wri.' notoe of neoooaIion - their a~~: Joe ~ Lym, Richard ~ m.mp~ir' and Slum R
Ineiruer. 9orrower agaes to he Umble for all al-u uIthar: (a) ~ in -~~- with 'he
inancins - an auIhoiorl PWSOfl or ~) eteteled to any' of ~~.,,-::p.s mounta with
Lander. Thu impelilPIg- Owing en this Note at any lime flay he -duoed by
endoesemonts on this Note or by Lender's inlemel - - duiiycwv~ter pik:~y'a leder
WE ha~ no ~atn to adymicce fthndi under this Note ~ (a) Bomower or any guarsn~or
is in deluit under the temnsefIiius Note or any eomint that Bwii~ or any' ~ has
with Lander, Induding any' agruemeri mad' In conneclon with the ~ - lids Noi; ~
sorrower or any' guarantor ceaaea doing liusiness or is insotneni; (c) any
gummnlor~ Glaima or -. atteulipta to L. ~, or iwiloke such gu~ntor'a gL-antm ol
this or other with La ~ in-ant toni. Hole tor piw-. other than these aullued by
Lencor'
CON~ To .15~SWCflC~ ~ bryeroabiy sutWN~ta to the jurisilictlo:' ofany Iltate or
terlerat ccorl siWuig In the Slate of Mn- over any SIA acilon, or pmceeding
ansing out of or misting 10 this NOIL Borrower Irrevocably wasss, to the ~est
adeni perin~Id by law, any' ob-ion ihal BWYCwer may now, or teueefeur have te
the laying - 'eunue of any' such SLit, acilon. or pioceir~ brougit in any suon
ocixi aft' any otam ttaal any such suit, acilon. or____~ b'oi~hi inani' such
aourl has b'-t~ in an lgic~~mniwi lerum. lanai iuci-nl in any such suit, acilon.
or pfoc..ing bm~~hi in any' auch couri shall be conduslye and binding upon
Borrower and may be enioroed in any court in wuch Bon~wer is Subject to IL~itoa
by a sult '~.. such ju~nt ~ded that srnrdce of ~coms Is ellcctod upon Borrower
as prootoed '1' this Note or aa :~~~;::
p.m'mmd by ~ law.
GENEIAL ~OVISlONL ThEa loan Is ~ made under the ~ and ~ of the Maryland Interest
and lisury Law. V 'any - of this Note cannot he ~ this tect WE not elliot 'he
weul of the IIo~ In parkular, this secllon means (among other thTrtgs) that
Bonuer does not agi.. or Inlend to ~y. and Lender dom not agree or ireend to
coi*~ tor. cha~ colecit, t.ke, 'esenfe or receive (coseclelly re~rr~ to hereki
as "charge or any amouni in the .-~-- of iritereal or in the ~ture of a lea lor
this loan. which would In any way or e"enI ~n~ng demand, pfetteymert, or
a~ce~w'at~) oaum Lwider to clie or cotect more for this loin than the mammum
Lender would be pennilled to chaine or cotect by Ied'rai law or the law oft'.
Stats of Iauila~ (as ap~~b), Any such eiom inluast or unautieeied toe shell,
Instead of anylhing ~ted to the ~ be aetied lirsl to .-~""" the ~~' Ioaianoe of
this loan, and when the hue been - in tuli, he netunded to Borrower iesnder may
delay or forgo enl~clng any of h itg~ or mimim under this Note without losing
them. Borrower and any other ierrson who ~, g~aiintou or endorses this Note.
tot'. esilent allowed by law. wmhiw ~miw*mn'~ deinand for payment, prnirnsl and
noilbe of ..ioonor. tipon any' -oe in the tenns of this Note, and Wim ~iareise
u~VuIy SIted in ~ no -V who agna this Note, 'wttether as makir, gusiantor,
aicoiinodalion a'k~ or endorser. uhall he naie-eei from Imbimy. M ~-ieaaeneethai
Lender may nenew or 1 (rn--and torany i-ft of time) this loan, or nulese any
i,a,ty or gInaiW~ or oeilaler~ cr ~~tuiltomrnl~ upon or pullect i,unoer,s
s,cLrtty intest in the collateral; and Iske any' other acilon deemed neomawy by
Lender wiliout the coneant of or noitoe to an~ M such PffRIms also eeree thai
Lender may modify this loan without the Consent of or to anyone other Itaun the
-V with whom the modlilcalon is MaciL
PRIOR TO SIGNING THIS IiOTiE, BORROWEM READ AND UNDERSTOOD ALL THE PROViSiONS OF
THIS NOTE, INCIWING THE YARIALLE Ji(TEFIEST IlIATE itt~ISIONL DORROWEFI AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTL OLD ~ F&M LOAN AGREEMENT
· Enlarge/Download Table
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$2,000,000.00 12-14-1995 02-28-1997 00001 220 B3 New LPA
References in the shaded area are for Lender's use ony and do not limit the
applicabillity of this document to any particular loan or item.
Borrower: Microlog Corporation, Microlog Corporation of Lender: Farmers and Mechanics National Bank
Maryland, Old Dimonion Systems incorporated of Commercial Lending Department
Maryland, and Genesis Acquisition Corporation P.O. Box 618
jointly and severally Frederick, MD 21705
20270 Goldenrod Lane
Germantown, MD 20876
============================================================================================================
THIS LOAN AGREEMENT between Microlog Corporation, Microlog Corporation of
Maryland, Old Dominion Systems Incorporated of Maryland, and Genesis Acquisition
Corporation, jointly and severally ("Borrower") and Farmers and Mechanics
National Bank ("Lender") is made on the following terms and conditions. Borrower
has received prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans and other financial accommodations, including those
which may be described on any exhibit or schedule attached t this Agreement. All
such loans and financial accommodations, together with all future loans and
financial accommodations from Lender to Borrower, are referred to in this
Agrteement individually as the "Loan" and collectively as the "Loans." Borrower
understands and agrees that: (a) in gaining, renewing, or extending any Lan,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in this Agreements: (b) the granding, renewing, r extending of any
Loan by Lender at all times shakl be subject to Borrower's continuied compliance
with this agreement; and (c) all such loans shall be and shall remain subject to
the following terms and conditions of this Agreement.
TERM. This Agreements shall be effective as of December 14, 1995, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in fuill and the parties termainte this Agreement in writing.
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 Commerical Code. All references
to dollar amounts shall mean amounts in lawfulf money of the United States of
America.
Agreement. The word "Agreement" means this Loan Agreement, as this Loan
Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Loan Agreement from time to time.
Account. The word "Accunt" means a trade account, acccount receivable, or other
right to payment for goods sold or services rendered owing to Borrower (or to a
third parter grantor acceptable to Lender).
Account Debtor. The words "Account Debtor" mean the person or entitly obligated
upon an Account.
Advance. The word "Advance" means a disbursement of Loan funds under this
Agreement.
Borrower. The word "Borrower" means Microlog Corporation, Microlog Corporation
of Maryland, Old Dominion Systems Incorporated if Maryland, and Genesis
Acquisition Corporation, jointly and severally and its successors and assigns.
The word "Borrower" also includes, as acclicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled "Subsidiaries
and Affiliates."
Borrowing Base. The words "Borrowing Base" mean, as determined by Lender from
time to time, the lessor of (a) $2,000.000.00; or (b) 70,000% of the aggregate
amount of Eligible Accounts.
Business Day. The words "Business Day" mean a day on which commercial banks are
open for business in the State of Maryland.
CERCLA. The world "CERCLA" means the Comprehensive Environment Response,
Cmpensation, and Liability Act of 1980, as amended.
Cash Flow. The words "Cash Flow" mean net income after taxes, and exclusive of
extraordinary gains and income, plus depreciation and amoritization.
Collateral. The word "Collateral" means andincludes without limitation all
property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgagej, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt lien, charge,
lien or ftitle retention contract, lease or consignment intended as a security
device, or any other security or lien interest whathsaoever, whther cretaed by
law, contract, or otherwise. The word "Collateral" includes without limitation
all collateral described below in the section titled "COLLATERAL."
Debt. The word "Debt" means all of Borrower's liabilities excluding Subordinated
Debt.
Eligible Accounts. The words "Eligible Accounts" mean, at any time, all f
Borrower's Accounts which contain selliong terms and conditions acceptable to
Lender. The net amount of any Eligible Account against which Borrower may borrow
shall exclude all returns, discounts, credits, and offsets of any nature. Unless
otherwise agreed to by Lender in writing, Eligible Accounts do not include:
(a) Accounts with respect to which the Account Debtor is an officer, an
employee or agent of Borrower.
(b) Accounts with respect to which the Account Debtor is a subsidiary of,
or affiliated with or related to Borrower or its shareholoders,
officers, or directors.
(c) Accounts with respect to which goods are placed on consaignment,
guarantted sale, or other terms by reason of which the payment by the
Account Debtor may be conditional.
(d) Accounts with respect to whch Borrower is or may become liable to the
Account Debtor for goods sold or services rendered by the Account
Debtor to Borrower.
(e) Accounts which are subject to dispute, counterclaim, or setoff.
(f) Accounts with respect to which the goods have not been shipped or
delivered, or the services have not been rendered, to the Account
Debtor.
(g) Accounts with respect to which Lender, in its sole discretion, deems
the creditworthiness or financial condition of the Account Debtor to
be unsatisfactory.
(h) Accounts of any Account Debtor who has filed or has had filed against
it a petitin in bankruptcy or an applicabtion for rellief under any
provision of any state ir federal bankruptcy, insolvency, or
debtory-in-relief acts; or which has had appointed a trustee,
custodian, or receiver for the assets of such Account Debtor; or who
has made an assignbment for the benefit of creditors or has become
insolvent or fails generally to pay its debts (including its payrolls)
as such debts become due.
(i) Accounts with respect to which the Account Debtor is the United States
government or any department or agency of the United States with the
exception of those accounts which aggregate to less than $100,000.00
during any one fiscal year of the Borrower.
(j) Accounts which have not been paid in full iwthin 90 days from the
invoice date.
ERISA. The word "ERISA" means the Employee Retirement Income Suecirty Act of
1974, as amended.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events if Default set forth below in the section titled
"EVENTS OF DEFAULT."
Expiration Date. The words "Expiration Date" mean the maturity date or earlier
date of termination of Lender's commitment to lend under this Agreement.
Grantor. The word "Grantor" means and includes without limitation each and all
of the persons or entitles granting a Security interest in any Collateral for
the indebtedness, and their personal representatives, successors and assigns.
Gurantor. The word "Guarantor" means and includes without limitation each and
all of the gurantors, sureties, and accommodation parties in connection with
any indebtedness and their personal representatives, successors and assigns.
Indebtedness. The word "Indebtedness" means and includes without limitation all
Loans, including all principal, interest and other fees, costs and charges, if
any, toghether with all other present and future liabilities and obligations of
Borrower, or any one or more of them, to Lender whether direct or indirect,
matured or unmatured, and whether absolute or contingent, joint, several, or
joint and several, and no matter how the same may be evidenced or shall arise.
Lender. The word "Lender" means Farmers and MEchanics National Bank, its
successors and assigns.
Line of Credit. The words "Line of Credit" mean the credit facility described in
the Section titled "LINE OF CREDIT" below.
Liquid Assets. The words "Liquid Assets" mean Borrower's cash on hand plus
Borrower's receivables.
Loan. The word "Loan" or "Loans" means and includes without limitation any and
all commercial loans and financial accommodations from Lender Borrower, whether
now or hereafter existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.
Note. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing note jor
notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interest securing indebtedness owed by Borrower to Lender; (b) liens for taxes,
assessments, or similaR charges either not yet due or being contested in good
faith; (c) liens or materialmen, mechanics, warehousemen, or carriers,or other
like liens arising in the ordinary couse of business and securign oblligations
whicha re not yet delinquent; (d) purchase money lliens or purchase money
security interest upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreementor permitted to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens," (e) liens and security interest which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (f) those liens and security interest which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower's assets.
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.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings or
other agreements, whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean and include without
limitatIon any and all types of liens and encumbrances, whether created by law,
contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendements and Reauthorization Act of
1966 as now or hereafter amended.
Subordinated Debt. The words "Subordinated Debt" mean Indebtedness and
liabilities of Borrower which have been subordinated by written agreement to
indebtedness owedby Birriwer to Lenderinformand substandce acceptable to Lender.
Tangible Net Worth. The words "Tangible Net Worth" mean Borrower's total assets
excluding all intangible assets (i.e., goodwill, trademarks, patents,
copyrights, organizational expenses, and similar intangible items, but including
leaseholds and leasehold improvements) less total Debt.
Working Capital. The words "Working Capital" mean Borrower's current assets,
excluding prepaid expenses, less Borrower's current liabilities.
LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amunt of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows.
Conditons precedent to Each Advance. LEnder's obligation to make any Advance to
or for the account of Borrower under this Agreement is subject to the following
conditions precedent, with all documents, instruments, opinions, reports, and
other items required under this Agreement to be in form aNd substance
satisfactory to Lender:
(a) Lender shall have received evidence that this AGreementand all Related
Documents haVe been duly authorized, executed, and delivered by
Borrower to Lender.
(b) Lender shall haVe received such documents as Lender may request.
(c) The security interests in the Collateral shall be been duly
authorized, created, and perfected with first llien pririty and shall
be in full force and effect.
(e) Lender, at its option and for its sole benefit, shall have conducted
an audit of Borrower's Accounts, books, records, and operations, and
Lender shall be satisfied as to their condition.
(f) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then due
and payable.
(g) There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for in the paragraph below titled "Compliance Certificate."
Making Loan Advances. Advances under the credit facility, as well as directions
for payment from Borrower's accounts, may be requested orally or in writing by
authorized persons. Lender may, but need not, require that all oral requests be
confirmed in writing. Each Advance shall be conclusively deemed to haVe been
made at the quest if and for the benefit of Borrower (a) when credited to any
deposit account of Borrower maintained with Lender or (b) when advanced idn
accordance with the instructions of an authorized person. Lender, all its
option, amy set a cutoff time, after which all requests for Advances will be
treated as having been requested on the next succeeding Business Day.
Mandatory Loan Repayments. If at any time the aggregate principal amount of the
oustanding Advances shall exceed the applicable Borrowing Base, Borrower,
Immediately upon written or oral notice from Lender, shakl pay to Lender an
amunt equal to the difference between the oustanding principal balance of the
Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to
Lender in full the aggregate upaind principal amount of all Advances then
outstanding and all accrued lupaind interest, together with all other applicaBle
fees, costs and charges, if any, not yet paid.
Loan Account. Lender shall maintain onits books a record of account in which
Lender shall make entries for each Advance and suchother debits and credits as
shall be appripriate in connection with the credit facility. Lender shall
provide Borrower with peridic statements of Borrower's account, wich statements
shall be considered to be correct and conclusively binding on Borrower unkess
Borroer notifies Lender to the contrary with thirty (30) days afterj Borrower's
receipt of any such statement which Borrower deems to be incorrect.
COLLATERAL. To secure payment of the Line of Credit and performace of all other
Loans, obligations and duties owed by Borrower to LEnder. Borrower shall grant
to Lender Security Interests in such property and assets as Lender may require
(the "Collateral"), including without limitation Borrower's present and future
Accounts and general intangibles. Lender's Security interests in the COllateral
shall be continuing lliens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respedct to the Collateral, Borrower agrees and represents and warrants to
Lender:
Perfection of Security Interests. Borrower agrees to execute such financing
statements and to take whatever other actions are requested by Lender to perfect
and continue Lender's Security Interests in the Collateral. Upon request of
LEnder, Borrower will deliver to Lender any and all of the documents evidencing
or constituting the Collateral, and Borrower will note Lender's Interest upnany
and all chattel paper if not delivered to Lender for possession by Lender.
Contemporaneous with the execution of this AGreement, Brrower will execute one
or more UCC financing statem,enmts and any similar statements as may be required
by applicaBle law, and will file such financing statements and all such similar
statements documents necessary to perfect or to continue any Security Interest.
Lender may at any time, and without futher authorization from Borrower, file a
carbon, photograph, facsimile, or other reproduction of any financing statement
for use as a financing statement. Birrower will reimburse Lender for all
expenses for the perfection, termination, and the continuation of the perfection
of Lender's security interest in the Collateral. Borrower promtply will notify
Lender of any change in Borrower's name including any change to the assumed
business names of Borrower. Borrower also prmptly will notify Lender of any
change in Borrower's Social Security Number of Employer Identification Number.
Borrower futher agrees to notify Lender in writing prior to any change in
address or location of Borrower's principal governance office or should Borrower
merge or consolidate with any other entity.
Collateral Records. Borrower does now, and at all times hereafter shall, keep
correct and accurate records of the Collaterla, all of wich records shall be
available to Lender or Lender's representative upon demand for inspection and
copying at any reasonable time. jWith respect to the Accounts, Borrower agrees
to keep and maintain such records as Lender may require, including without
limitation information concerning Eligible Accounts and Account balances and
agings.
Collateral Schedules. Cuncurrently with the execution and delivery of this
Agreement, Borrower shall execute and deliver to Lender a schedule of Accounts
and Eligible Accounts,in form and substance satisfactory to the Lender.
Thereafter Borrower shall execute and deliver to Lender suchd supplemental
schedules of Eligible Accounts and such other matters and information relating
to Borrower's Accounts as Lender may request. Supplemental schedules sahll be
delivered according the following schedule: within fifteen (15) days if each
month end. Schedules shall itemize Accounts and Eligible Accounts in the
following categories: 0-30 days, 31-60 days, 61-90 days.
Representation and Warranties Concerning Accounts. With respect to the Accounts,
Borrower represents and warrants to Lender: (a) Each Account represented by
Borrower to be an Eligible Account for purposes of this Agreement conforms to
the requirements of the definintion of an Eligible Account; (b) All Account
information listed on schedules delivered to Lender will be true and correct,
subject to immaterial variance; and (c) Lender, its assigns, ir agents shall
haVe the right at any time and at Borrower's expense to inspect, examine, and
audit Borrower's records and to confirm with Account Debtorsthe accurancy of
such Accounts.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:
Organization. Borrower is a corporatin which is duly organized, validity
existing, and in good standing under the laws of the State of Maryland and is
validity existing and in good standing in all states in which Borrower is doing
business. Borrower has the full power and authority to own its properties and to
transact the businesses in which it is presently engaged or presently proposes
to engage. Borrower also is duly qualified as a foreign corporation and is in
good standing in all states in which the failure to so qualify would have a
material adverse effect on its businesses or financial condition.
Authorization. The execution, delivery, and performance of this Agreement and
all Related Documents by Borrower, to the extent to be executed, dellivered or
performed by Borrower, have been duly authorized by all necessary action by
Borrower; do not require the consent or approval of any other person, regulatory
authority or governmental body; and do not conflict with, result in a violation
of, or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other instrument
binding upon Borrower or (b) any law, governmental regulation, court decree, or
order applicable to Borrower.
Financial Information. Each financial statement of Borrower supplied to Lender
truly and completey disclosed Borrower's financial condition as of the date of
the statement and there has been no material adverse change in Borrower's
financial conditon subsequent to the date of the most recent financial statement
supplied to Lender, Borrower has no material
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceale against Borrower in
accordance with their respective terms.
Properties. Except for Permitted Liens, Borrower owns and has good titke to all
of Borrower's properties free and clear of all Security Interests, and has not
exectued any secuyrity documents or financing statements relating to such
properties. ALl of Borrower's properties are titked in Borrower's legal name and
Borrower has not used, or filed a financing statement under, any other name for
at least the last five (5) years.
Hazardus Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., or other
applicable state or Federal laws, rules or regulations adopted pursuant to any
of the foregoing. Except as disclosed to and acknowledged by Lender in writing,
Borrower represents and warrants that: (a) During the period of Borrower's
ownership of the properties, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any hazardous
waste or substance by any person on, under, about or from any of the properties.
(b) Borrower has no knowlege of, or reason to believe that there has been (i)
any use, generation, manufacture, storage, treatment, disposal, releate, or
threatened relase of any hazardous waste or substance on, under, abut or from
the properties by any prior owners or occupants of any of the properties, or
(ii) any actual or threatened litigation or claims of any kind by any person
rleating to such matters. (c) Neither Borrower nor any tenant, contractor, agent
or other authorized user of any of the prperties shall use, generate,
manufacture, store, treat, dispose, of, or release any hazardous waste or
substance on, under, abo;ut or from any of the properties; and any such activity
shall be conducted in compliance wioth all applicable federal, state, and local
laws, regulations, and ordinances, including witout limitation those kaws,
regulations and ordinances described above. Borrower authorized Lender and its
agents to enter upon the properties to make such inspections and tests as Lender
may deem appropriate to determine compliance of the properties with this section
of the Agreement. Any inspections or tests made by Lender shall be at Borrower's
expense and for Lender's purposes only and shall not be construed to create any
responsibility or liabilty in the part of Lender to Borrower or to any other
person. The representations and warranties contained herein are based on
Borrower's due diligence in investigating the properties for hazardous waste and
hazardous substances. Borrower hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Borrower 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, losses,
liabilities, damages penalities, and expenses which Lender may directly or
indirectly suystain or suffer resulting from a breachof this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disopsal, release or threatened release occuring prior to Borrower's ownership
or interest in the properties, whether ir not the same was or should have been
known to Borrower. The provisions of this section of the Agreement, including
the obligation to indemnify, shall survive the payment of the indebtedness and
the termination or expiration of this Agreement and shall not be affected by
Lender's acquistion of any interest in any of the properties, whether by
foreclosure or otherwise.
Ungatlon end CI~ No Ut-on. cwn~ ir,veeu~on, adminlainalve proceeding or simlier
adon (~g thorn for unxaat taxes) Sgainat Borrower is pending or tiresateriad.
and no other event has occurred which may mairilty ~ aI~md Borrower's 'Inanciat
condition or Pm-I. other than Egaton, claims, or other events, if any, that have
been cllsclosesl to and acknowledged by Lander in wrttfng. Turn. To the best ci
Borrower's knowtedg~. all tax netuens and -sorts of Borrower that are or warn
required to be ftlsd, have bean lied, and 'Ir taxes, aaeaas and ether
governmental charges have been paid in ft~ esoept those presently being or 10 be
oontesbd by Borroer in good faftil in the ordinary Coum. of business and for
which adequate reserves have been ~ced. U." Prlodt~. Unim otherwiss prevlc~ -I-
to Lendar in "rittr,g, Borrower has nol enis'ed into or granted My smaurty
Agreements, or the Ung or altacimeant of any Security Inlereeta on or etheUng
any of the Colateral dreciy or indima- securing repayment of Borrower's Loan and
Mote. that wourd be prior or that raay in any wsr be suresor to Lender's Securry
~ and lights in and to such Cokteral~ Uing EffeoL This -I-nt, the Note, all
S~urlty Agraements d'dtv or ini-ify sectakig repayment of Borrower's Loan and
Nola and all of the ieelated Documents are binding upon Borrower as well U Upon
~ower'a sccceaaors, rep'esenllativea and assigns. and are legally nIorcmbls in
accordanes with their resceetive ~,.- C~~clal Pw~L BorrOwer Inendi to use the
Loan proceeds sefey for business or commorcimi related purpOeeL
Einployee Benefit Plans. Each employm benell plan as to which Borrower may have
~V ilabilly com-es in all material respeos with all app~alle requrrets of law
and iggutettons, and (i) no Reporabie Event nor IrroNibed Transaction (as dened
in ERISA) has occurred with resi- 10 any such -. (1) Borrower has nol 'ttlhdrnwn
from any such - or Initiated stopa to do so. and (11l) no steps have been ~aken
te trtrrate any such ~L
Locatton of Borrower's Offices and Recortlie. BorrO~rs pisce of burinees, or
Borrower's chW :.-ll onion, if Borrower has more than ore place of business, is
iccated at wt'D Bokienrod inane, Geranwitown, MD WL uraesa Borrower has
designated ofherwtse In writing this location is aiso the cittos or oetces wise
Borrower keups its .,,,~ us ~ the ColeteraL
twitortoeleL M infomnallen hanaloatre or conteporancousty harewith t~id~hed by
Borroirer to lesnoer for the purposes of or in cow.cIion wUil this Agreement or
any' iran-dion conlemptaled trereby is, and all information laaeabr ~nishekl by
or en behaif of Borrower to Lender will be, true and accurate in every material
mspect on the date -of which such information la elated or cermed; and none of
such inlormation is or will be Irmompisee by omttinlf to state any ~ fect
nacessary to n,ake such loformalion not misladling.
Survival of Representations and Wasasnilpa- Borroor understands and agirses that
teander. without indefsndent Irn-alon, is rehing upon the above representattons
and ~ietes in asiending Lowi Advances to Borrower. Borrower luther agrees that
the tofeg~ Iep~ntatiors and warranties shall be corilnuing in nature and shall
rensain in full foroe and enact until such tithe as Borr~ Indeotedness shall be
- In fuit. or uni this Agreement shall be terfunated in the manner ~derl a~
wivehever is the last to cocor.
AFFIttMATIVE COVENANT:. Borrower' c~rats and agrees with Lender thet, w~~e this
Ag,ee- is in elbaf, Borrower w; Utitiot~ Prompity ~ Lander in wrttlng of (a) all
material adverse dilanees in Borrower's financial condition, and ~) all esising
and all tl'reatened litigation, cw~ investigatons, admirtistalive procoedings or
stmllar acttons ~tcctirg Borrower or any Gueranlor wllch co~d mat~ aftuct the
unanctal ccndtion of Borrower or the ilnancial corolition of any Guarantor.
FinanaW IOecO~a- llaintaln lis bcoks and reoords In ecoordaocs wllhger~ly wasp
led accounting prtnctptes, applied on a ~slstent basis, and permit Lanclar to
earnire and audit Borrower's books and records at all raascnabb Um~ lccnclal
SWenenia- Furrish tender WII~ as acon as avalable. but In no event later than
on. hundmd twenty (120) days alter the end of eacl' fiscal year, Borrower's
balence sleest and income slalernent for the year -ti audited by a certtod
pubilo accountant Saustactory to Lender, end, U Soon U mmkbie, but in no event
later than thirty (30) days alter the and of each ltscet qualter, ~ balance
shesi and profit and loss sa~t for the -ied ended, prepared and apriled as
correct to the best kn-sdge and beluf by Borrower's chic' financial cfker or
other -Eb.rioer or person aconittabis to Lender. M itnancal mpods 'qutred to be
prc,,lded under this Agreement shall be prepared In accordance with pun-dy
acoepted accounllng pfln~ apIsUed en a cor,sstent basts, and rerttaxl by
Sorroweras being trrre and coract. Addittoarni informatton. Furelsil such
addlionel Wormation and stalemurtis, lists of asasla end '-~~f, agl~u of
raevablas and psyables, Invenlory schediius, bu~t~ ~casts, tax nefwns, and other
reports wilh respeci to Borrower's financial rondilon and busIness operation" a"
tender may r~quest from ume to Iftie. Financial Covenants and RatioL Co~ly with
the following covenants and ratios:
Tengilee Ne~WDnh. Reflect a, m,,',,,~Te~~1e Ne?Woith8fnof ieee th~ 9~.520.OOO.~O
by January 31. 15I~ end Inc~~a.ing the minimum Tangible NetWorth by e2OO.OOO~Oo
each quarter therealte,. U 12~1~199S L~un No 00001 LOAN AGREEMENT Page 5
(ConUmied) I ~ ~ Net Worili Rallo. lialsiIn a silo ci Total lasbEtles
toTa~~~lalfel Worth of tern than US to ISL
cunani Ratio. Ntalnleln a silo of Cimunt A-mt' 10 CuIttani Umblililas in eem of
iao to i~ ~mpt as ~ded a~oyw. alit con-ahona ma~to ~ comollance with tile
netiUkWments centained in INs t:aragm~ shall be mmd. in accordance wlIh
ganenally acoceed accounting ~les. api:lled on a coruistent baste, and ceeliled
by Borowerm being trim and su,~:
iiwwance~ Maintain Ilire and other 115k Insunance. P'-~~u liabItEy ~msnce, and
such other Inswance as Lender may lirom Ime to lime
IUI$Onet~ re:lirlre with naspentlo ~ properties and epersUone,, in lorrn,
amotanla. covensees and with InsLiuflO. compan~ ~ to ~mncler. ~tower,- upon re~
ci Lencler. wit daleer to Lender from lime to lime tile policies or ceruficafes
of Insurance in
lorm saistactory 10 Lencier. ln~ding sliptiliattons that ~:: wit not be
Cancellel or diminishafi without at laaat Ilitty ~) days' - wrfIen noflorn to
Lender. Each insisanom polley alao thai Incltidi an endorsement pr~ding that
noterage in fever Of Lender wi' not be "n-md in any way by any act, omlaelon or
deatilit of Borrower or any other person. in connection with alit pcllciea -mit.
'mets in whi EAndier heios or Is .. a sacLNftv inlerest for tile Loans. Borrower
will prov~e Lender with such loss pnyatlle or other endorsements as Lender may
laattrwicu U-IL Furrish Ia Lender, upon raci- ci Lender,m~ on each aesing
in,~nom ~Icy aloowing such i#Ww~stlen as Lander may masnabty nae-. Inciwding
without llmftton the following: (a) tilem of the irsurar, ~) the risks insured:
(c) tile amo~ ci the poi~~; (d) the properlim ln:ur~: (a) the then oturent
peopety vlitues on tile basis ci wtycn fruwance has been Obtalnad, and tile
mannur of detorntinlno tilesa varrn~ and (1) the -ration dete ci tilep~. in
adillon, upon reqLiesI of t"ander ~ow~ notmore often than arnua~ly), Borrower WE
have an indq~~rt appiubw uhftectorr' to Lender dotmine, as appicable, 'he actual
cash value or r-.fcerr.nt cost of any
Coateral. The cost ci such appraisal shill be palel by Borrower.
Other ~ ~ with afl tmC und aoi'dklora ef as other matartaf aenlenanti whether
flow er heimifter exbtlng. between ionte'~ - any ~,,4 paity efti ro"'yL8f~er
kuwefately fri wTftkig of any defaut in IoMig~Im~n with any J~- uucli
agreements.
Loan Proceeds. Us. all Loan proceeds solely '0' tile lottowing sPcEc purocaes:
to srotrlde at3ort term wofictog c-tel. Tacis, Citargug end tlte~ Pay and d~rge
when due all of ifs lnd~ladress and Obigationa. including witheut ilvitaton alit
assessments, taxes, g~mmental char!-, levies and tie'., of every kind and
nature, -osad upon Bo'mwar or 115 properties. income, or proftis, priorto tile
date on which -ties would atlach, and all tewiul cirnirni that. if unpaid, might
become a lien or charge upon any ci Borrower's pro-.s, income, or cr~ Provided
howevter. Boroower wit not be required to pay and discharge any such naeeirmant,
tax. charg., levy. lien or claim 50 long as (a) the legmitly of the sam, shalt
be contested in go~ fisith by appropriele proaa:llngi, and (b) Borrower shall
have establlshad on its beaks adequale reeervea with naspect to such contested
aisessment, tar. cherge. ~,, tian, or cialm in accordance with ~ accepted
accounting pracli. Borrower, upon demand of Lender. will futTlish to Lender
evidence of payment of tile assessments, taxes. ciages. tev:ei~ ~ and claims and
wit authort~ the appropriate governmental official to deilver to Lender at any
time a written statement of any assessments, till,, charges, ~ lief~ and caima
sgalnsl Borrower's properties. income, or profits.
Performance. Perl'rm and compry with ill terms. conditiona, and provisions set
forth in this -I-ni and In tile Relai~ Documents in a Mfm~ manner, and promptly
notify Lender if Borrower learns ci tile occunence of any event which
constitutes an Event of Default under this Agreornent or under any of the
Related Oocument~
Operationa. Melntain eeecullve and management pemonni' with subsianialty tile
sarn, qumlicalons and expedence as tile pnsaent executive and management
personreel: ~de written neltoe to Lender ci any change in executive and
na~e,r'ent p~mannel; condud its businam aflii~ in a reaao~le and prudent manner
and in corn-Ice with alit app~a:le federal. state and municipal laws,
oroinancea, rules and reglidions respecting its properbm, charters, busi~aes end
Operalons, inctuding ~out limitation, c~aro:e with the Americana Wih Disaltiltea
Ad and with all minimum funding standards and other requlrements ci EIIIISA and
other laws appicatila to Borrcwers employee benelit i:la~
Inspecuon. Permit employms or agents of Lender at any ~onable lime 10 Inspect
any and alit Collateral for the Loan or Loans and Bortower's ether properlies
and to ~ or audit Borrower's books. accounts, and records and to make copies and
menroranda of Borrower's books, accounts, and recordL if Bcrronee now or at any
time hereafter maintains any records ~ncludlng without Imitaliton computer
generated records and cornputer softwane programs for the generation of ~uch
necords) in tile poeeessiion cia third -V. Borrower, upon request of Lender.
shalt flout' such party Ia permit Lander free access to such rucords at alit
reasonable times and to provide Lender with cooles of any ri~ttls U may request.
all at Borrower's e:q:,nss,
Compliance Cenitficate. Uniess waived In writing by leder, provide Lender at
least annually and at the tima of each disbursement ci Loan proceeds with a
certificate executed by Borrower's oteaf finencimi olftcer, or other ortlcer or
I:erson acceptacle to Lender, aertlying that the representations and warranitee
set forth in this Agreement are true and correct as of the date ci the
certifteate and further certielnill that. as of the date of the certlilcate, no
Event of Default asists under tills Agreement
Environmental Contilo-ance and Raporta. Borrower shall ccmpiy In all nesp~ with
alit environmental proteetlon ladosil, state and local laws. statutes,
regtlations and ordinances: not osulse or penn to exist, as a ."s'~ of an
Intentional or unlintentional action or omission on its - or on the part of any
third patty, on pro-V owned andfor cocupied by Borrower, any em~onmental
aattvtty where damage may nasult to tile en~onment, uniess such envlnonmentai
acivilyis pursuent to and In co~Ian~~ with tile contiltions of a permit lesued
by tile aporapriato federal, state or local governreental authorilies: shall
turnish to Lander promptly and in any event wtihin thity ~) days after receipt
themof a copy of any notice, summons, Ian, cielon, diractive, latter or other
communication tram any gc"ernmental agency or instrumentallty concerning any
inlenUonal or unintentional ~ion or omission en Borrower's part in connection
with any environmental ~ whether or not there is damage Ia the environment
andlor other nalural nasGWc~
Additional Amura,,c~ Make, exu'cute and delivar to Lender such prcmlsscry notes,
mcrtgages, deits of trust, securtty agfn~rts, inancing statements, instruments,
documents and other agreements as Lender or its attorneys may reasonably request
to evidence and aecure the Loans and to perfect alit ~trtly inleresta.
RECOVERY OF ADDiTIONAL COSTS. if the Imposition of or any change in any law.
rule. regulation or gui:telira, or the Interpratatton or applicalion of any
thereof by any court or udmirsa live or governnaantal authodly (including any
request or policy not having the force of law) shall impose. madly or mako
applicable any taxes (except U.S. federal, slate or tacal Income or franchise
taxes imposed on Lender), nesar"e requirements. -~' adequacy requirements or
other obligations which would (a) incrasse tile cost to Lender for extending or
raelntaining the credit facilities to which tills Agreement relates, ~) reduce
the amounts payable to Lender under tills -I-nt or tile Related Documents, or
(c) reduce tile rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facIlities to which this Agremnt relates.
Ihen Borrower agnees to pay Lender such addlUonal amounts as wit compensate
Lender itteafor, w.*i Uve (5) days atter Lender's written demand for such
payment, which demand shsU be accompanied by an eppianation ci such l,nposition
or chw~ and a calculation in reasonable deteif of the additional amounts pavable
by Borrower, which erparation and caicuetions shall be conclusive In the absence
of manifest error.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is In effect, Borrower shall not, without the IOlcr wrttten consent of
Lender:
indebtedness and Liena. (a) Except for trade debt incurred In ihe normal course
of business and indebtedness to Lender contemplated by this
U 1 2-1~1995 LOAN AGREEMENT Page 6 Loati ND 00001 - (ConUmi.d) A'wn.n~ Oea~ ~ Cr
assume iteebtedness for b~EYowW money. Iftoluding C- ""'- ~) -epi as allowedas a
Parirrited u.n, :.'~ inansfer. morl~ge, assign, -cige, ~ grant a aecurily iniest
in, or any of 8wmw~~ mu~%r (0)... withnecoue any of ~ mogowis, to leandar. "~m
aeg~~ "~ in -w .n. taraeaa,,, e~- 20.OOO.OO Oon~ of O-omL (a) Erigeog in any
buelnees ~ aialsuii~ eellanant than thorn in whoh sorrow~ Ia prasently angageel
~) orceaseSsil ~teralEonR. Equidmia, "~h ~ acqdlre or cioidsle with anyother ~,
- nwn~ iwove or transfer out el the ortllnary course of bwinm, Co) pay any ohis
en B~ywier'e afok (other than ~ pm~ In as st~dc). ~ that outwIiluIm~ the ~ but
only ee fooli as no Event of D~bij has o~wi and IC ecotinuing or would result
Irom the payment of ~ V ~ tea ~$ub-tar $ Corporrtlien~ - daithati in the ~ ""-
Coda - 1~ as en~n;ied), ilonower may pay cash ~ on illa 'toll. shrn~~wm *wn urn
to lima in minourie naoeeeey to enaille the aharehokters topay incaoe taxi. and
-ake ~n'ated kiobma fa'r payments to ~ their "'~ undar '~' and state tear which
aissa - - their ea~ - ~ of a ~ohi~ $ COvpWdon bmum of their ow~ of ~raa of stook
of Boiv~wur, or (d) pINchum or naera any of uorr~ autsta~~ng haaaa or aMer or
amend 8orroww'e C- ekuci~~
-~. Aee-Im and ~eraali~ (a) Loan, Insset in or ed~ai~ rnoney or aeaete, ~ p~eae,
cnaafe or acquire any lnierestinanv oiher n~f~ Or Wily, or (c) iflOLv any
~ltgaton ass-or guarantor ether then in the ~ course of bUII-L
CEBSATION OF ~~MIICEI. if leandar his made any oommlrnent to malee any Loan to
~mowar, whelter undor thip -I-nt or under any other agraament~ ~dar ahit have no
o~llon to make Loan Aduenoas or to dieburee Lean pmmeeda V'. (a) 9on'orer or any
Oue~nior is in delauri under the terms of Ihie Ag~ or any of the flawed
Documenis Or any ether aiire~ that Berreer or any Guarantor has wilh Lender; ~)
Borrower or any ~wnatoor Inaavt, ill-a -Eon in bankruptcy or similar pm--. or IC
~u;lgnd a bankrupt; (c) there occurs a material ~ change in Boirowere llaanlai
cond~ in Rh. Unanclal oo~IIOn of any Guarantor, or in the value of any
Collateral ee'~ any Loan; (dl arw Guarantor i.eks, deima Or otl'eh-ee ~ to
llmlt. madifr or ~voke such Gimrrnnr'a guaranty of the Loan or any other loan
with Lender
NON~~~OE ~ Borrower aems lopay Lender ragutar q~terry payments of d aoorued un~d
naf~~ge lees due as of each payrnent dale, ~ 10.1906 with all sueeect- no~~ge
toe payments due on the mme - of each ~tor, ~raaflor. m. daly noi~~ge tee is
compofef on a 3851~ ~e Intrest basis; that Is, by ipplying the ratio of 03%
annuai nor~e rate over a year of 355 days, Inultipied by the unused --ilisal
liaia~
RIGKr OF SETOFF, Borrewer grants to Lender a contractual posmm~ mcis~ lIlSareat
in, and ftereby aeatgna, convays, delh,w:~ pJadges, and ~stare to Lender all
Borrower'. vighi. III. and Interest In and to, Bwt~ socourts with Lender
(whether olkoking, sa'4"g:~ Or eome other account), Endudng ~ 5mllatlen all
aooounts bald Jolnity with someone ellea and all accounte Borrower may open in
the hiure, ecoluding ho~~~ever all RA, Keogh. end Irsart anceunte. Iloorrowe'
LIIhwsia Lender1 to the extent permitled by appkbte law, to charge Cr seloff all
sums owing on the lndebtadr~ against any and a' such anceunts.
EVDITS OF DEFAILT. Each of the tolawing shall constit~j an EvenI of Defeut under
thie ~
Defeuft on ~bledlneas, Fallure of Borivwgr to make any payment when due on the
Indebt~~
Other ~. Fallure of Borrower or any Grantor to co-v with or to irerlorm when due
any other terrn, obligetion, cove~mrt or condi~on conlalned in lie Agree- or in
any of the Related Documeria, or liallure of Borrower to co'npty with or to ~rn
any other terrn, obfpation, covenant or ~ onrtte'ned in any other aQreanant
between Lender and lerewer.
Deltaull in Favor of Thlnf l",,~-t Skoidd Bormw'ar or any Grsnlor deteult under
any loan. exteraslon of or~~ security agreement, pursh~ or satee agfi~ or any
ether egreggent. in llaor of any other or pemon tfaat "lay mmiu~mly ..I any of
aorrowarrt propeny or Bwr~r'p or any ~aiir'a ibmv to rppay the Loin. or ~,,,,..,
their 'uapeclh. onggalons under tt,ts -I-nt or any of the Related Documw~
Fallee 8talemats, Anr' warranty, -raaenta- or utaterr~ made or turniphed to
Lender by or on behalf of Boreower or any Grantor under this Agreement or the
Related Documents la false or rnielmding in any malitat -tat the tirn made or
ftwrished, Cr beooroos jelse or misloading at any time l,,,,--'6.
DeItfOItrre COBfl~fall~Ion. This Agrewnpnt or any of the Related Dccurrents
ceeees 10 be in t% force and effect (Including allure of any ~ec'1ItV Agreement
to create a Vald and pml~ctd ~ interest) al any Iu and for any rrns~
loeolYenaV. The diaolution or lenninsiton of Borrowr~ uditeos as a golog
busfneas, or a trustee or ..~ is appointed for Borrower or for alt Ore a~tatiei
porlon of the of Borrower, or Borrower makes age- ~reeent for the benuft of
Borrower's oreditom or B~ur film for Ixi.Ir~y, or en InOoluntery bsrk~ -Eon is
tilad agalnst Borrower and such Involuntary pgan rerttalns un~~lad for ~bdV (60)
days,
Ciedilor or Forteflum P~Ocein~ Commanoernent of foreclosure Or fortlittre
proomings, whether by ~ pmc~n~ sef~,
raposseasion or any ether ~titd, by any creditor of Borrower, any ofedlor of any
Grantor against any oollateral securtng the Indebtednes, or by any governmental
~ancy. Tha includesa I;arnlshmw~ attach-I, or levy on or of any of Borrower's
deposit accounis wth Lerider.
AEe,rera,e CIimii~AmaIrlal adverpe onange ~ in lorrower'e Ir"arcal.cond~~on,~
EFFECT OF AN EVENT OF DEFAIAILT. if any ~vant of Iieieuit shall coolir, m'oept
wares otherwisa prvvi~ in it'is Agrernineni or the F~lated 0ocixn~, all com~ntns
and Dbligattons of Lender under this -'II- or the Related OocWTI.a or any other
agreement ir',medlatellr wil terMInate (including any obligelon to make Loan
Advanoas or disbureamants), and, al l"ender,a optioo, allaun's owing in
connecuon with the Loans, indudng all p'fr- lr,iereat. and all other laes' costs
and clesrges, if any, wllll becorn lmmantsleiy due and payable, all without
nollorn of any kind to o,,ower, except that in the - of en Event of Dofault of
the typa dmoribe:l in the ~reef',e~ subsectIon ibowa, such mocelaration shall be
automulic and flot optionaL in addItion, Lender shall have all the rights and
,u..w51 provided in the Related Daurents or avallable at law, In equty, or
otherwe. Exoe- as may be proIiltt~ by aooIlcable law, all of Lender's rights and
remulee shall be cumulative and may be execteed singularly Cr concurrentty.
Election by Lender to pursue any remady Shall not eaclude pws,'tl of anyothor
remedy, and an elecion to make ewpDndltures or to take ~on to -~orm a,,
obigallon of Borrower or or any Grantor shall not aftoct Lender's right to ~LC a
detaul and to axerolse Its ~hts and remedies.
MISCELLANEOUS PROVISIOIIS. The fofowing miscellaneous prov~sicns are a pert ci
this Agreement:
Amen'fmentL This Agreemerif, together wjth any R~lated Documents, consUtutes Ihe
entire understandluig and agreement of thu parties as to the
I
I
1~-1~1995 LOAN AGREEMENT Page 7
Lo.nHoOO~~1 (ConUiwed~.
metier,..' toth in Itil Agneemeni No alteralon of or amendment to thls AGreement
shati be elbdve unim grvmn w' wrling and "oneel by the party or-i--Il to be
char- or bound by the alteration or anieridmeriL
Appllcbllle La.. ml. Agreement shalt be Oovernd by. con*u.d and e~meel in ~-
with the laws of the slat. of Ma~Mmr-L LENDER AND BORROWER EACH ilEREBY WAIVE
ThIAL BY ~RNiY IN MW ATTION OR PROEEDIN~ TO WIIICK LENDER OR BORIIIDWIR MAY BE
PAliiITI~ ARISING our OF, OR itl ANY WAY PERTAINING To, TilIlS ~ IT 18 AGREED
TIIIAT THIS WAIVER CON&rn~S A WAIVER OF TRIAL IllY JWIY OF ALL. CLAIMS A~EIST
ALL PARTIES TO aUCH ACTIORS OR PROCEEDIMG8. THIS WAIVER IS KNOWINGLY, WILILINGLY
AND VOLWIrARILY MA~ BY LIND~ AND BORROWER, AND LENDER AND IIloRROWER EACH
IIEREBY EIlEI'RESIBlT TIIIAT ND REPRESENTATIONS OF FACT OR OPINiON HAVE BEEN
MADE IBY ANY INDIVIDLIAL TO INDUCE THIS WAIVER OF TRIAL BY JWUY OR To EN ANY WAY
MODIFY OR NILUFY ITS EFFECT. BORROWER RJRT~~ RIltRAISENTS THAT DOF~WIER HAS
BIDEN REPRE~ED IN TIE SIGNING OF THIS AOREEMIBNT AND IN ml MAAING OF THIS WAIVER
BY INOEPEI~ IEGAL COLPIS~ SELECTED OF BORROWER'S OWN FREE WILL, AND TIIIAT
BORROWER HAS HAD THE OPt,OIIIIIINITY TO DISCUSS THIS WAIVER WITh COUNS~ CapIlon
Heedin~~ Caption lecadings in this -I-nt are for convenience purposes only and
are not 10 be used to in'.- or define iha of the AgreemmnL
Niumpia Parties, Cor;-e Authority. A" obligations of Borrower under Ills
Agraement sIsali be jolnt~and several, and all retirrencea to BorrOwer shall
mean each and every Borrower. Thts means Ihat each of the Borrowem sigrrrg below
Is miponsibte for WI obNgetton. in this Agreement.
ConaenI to ~xtm~Ictlon. Borrower Irrevocably submits to the Jwisdlcllon of any
state or bderal cowt aitting in the Stale of IaarI-nd over any suit, motion, or
pr-dlng arIsing rut of or relatlng to this AgreewienL Borrower irrevocably
welvea, to the issleat m(ient pefmied by law. any ob~n thai Borrower may now or
irereafter have to the taying of venue of any such suit, action. or procmdtrg
brought in any such court and any claim Ihal any such suit, action. or pro~~oing
brought in any such Cowl ha. been braught In an Inconvenlenl looi~ Rnal Judgment
in any such suit, edion, or prooci'irg bnougl"l in any such court shall be
conclusive and binding upon Borrower and may be enforced in any cowl In which
Borrower is subject to jurtsCSclion by a sull upon such judgment provided that L
of procea, Is e~ctett upon Borrower as provided in this -I-nt or as oth~se
per,nlttetl by applicable law.
Consent to Lean ParUcipalion. Borrower agrees and consenis to Lendet's Sale or
trarster. ~ now Or laler. of one or more particifetion interests in ihe Loans to
one or more purchasers, whether reatal or unrelated to Lender. Lender may
provide. without any Unitatori whaIscevet, to any one or nrore purchasers. or
potential p~asers. eny information or knowtedge Lender may have about Borrower
or about any other matter relating to the Loan, and Borrower hereby wah~as any
rghts to -lacy it may have wiih nesoeci to such matte's. Borrower additionally
waives any and at notices of sate of l'artclpailon Interests, as well as an
noticm of any ripurciusa of such panielpation interests. Borrower also agrees
that the purchases of any such partlcipallan interests witi be considered as the
tbsol~ owners of such Interests In the Loans and win have all the rights granted
under the partielpation agreemeni or aereernents governing the sale of such
participation interes~ Borrower hxther wihms at rights of olfset or counterclaim
that II may have now or laler agaInst Lender or against any purchaser of such a
piatl~aIon intersst and unconditionally agrees that either Lender or such
purchaser may intorce liorrower's obIloation under the Loans ir'anpactva of the
failure or Insolvency of any holder of any interest in the Loans. Borrower ~iher
agrees thai the purchaser of any such pattielpation Interests may enforoe its
interests irr',Spective of any persoraal dalme or deferises that Borrower may
have against Lender. 4
Cosie - Expenese. Borrower agrees to pay upon demand alt ol ~ incurred in
connection with this Agreement \ or in connection with the Loans made pursrrant
10 this Agreement. ~ject to any uffis under applicable dew, if Lender hines an
attorney to haip enforce this Agreement or to colect any Indebtedness, Borrower
agrees to pay Lender's altorneys' tees, and all of Lender's olher collection
expenses whether or not Ifteig is a lawsuit ansi PncIi~~ng legal ~cpnses lor
bankruptcy pro~ecingL
NoticeL M notices required to be -~ under this Agreement ahel be given in
wiling, may be sent by tetelscsimi1, and staill be el~mctve when actually
delivered if hand deilvered or when deposhed witi, a nationally reeognI~d
~vefliglil courter or deposited as certilied or mgiiteeed rrieil in the United
s'atea mat, lirsI clasa, p-- prepaiil. addressed to the -V to wiurt the notlee
is to be given at the addmm shown abovL Any ~ may change Its address for
r,otices under this Agreement by giving tornael wiffiwi nottee to the other
parties, specifying that the purpose of tP'e notice is to change the patty's
address. To the m~ant pennined by applicabte law, Ii there is more than one
Borrower, notice to any Borrower will constitute notice to all Borrowers. For
notIce purposes. Borrower agrees lo keep Lender Informed at ati limes of
9orrower's cunent addressias).
&evereblldiy. If a court of cornpeterttt JurisdIction Inds any provision of it's
Agreement 10 lii in~i~Ud or unenforceable as to any person or circumstance, such
Ilndtng shall not render that provtsion Invatid or unenforceabte as to any other
persons or circumstances, if lea~le, any such offending provIsion shalt be
deemsd to be m~ied to be within the Imits of enfoeceability or vafldiiy;
however, if the offending peoyI$E.on canrict be so modified, If shall be
siricken and all OIlier provIsIons of this Agreement In all other respects shall
remain valId and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the conled of any
provIsions of this Agreement makes it appropriate, including without Iimi~iott
any ruoresenlation, warranty or coveaant, the word "Itorrower' - used herein
shalt Include all subsidiaries and aUlates of Borrower. Notwithstanditg the
foregoing however, under no circumstances shalt this Agreement be consirued to
require Lender 10 make any Loan or other tinancii,I accommodalion to any
subsidlary or affIlIate of Borrower.
Succassiors end Assigns. M covenants and agmenerts contained by or on behalf of
Borrower shall bind its successors and assigns and shall inure to the benefit of
Lender, Its successors and assigns. Borrower shall not. however, have the right
to assign its rights under this Agreement or any interest therein, without the
prior written consent of Lender.
SurvIval. M warranties, represenlatlons, and agreements of Borrower in this
Agreement shall survive the mal~ng of the Loan or Loans conte~~lated hereby, and
shall be deemed made and redated by Borrower at the time of the ma~ng of each
disbursement of Loan proceeds. Time Is of the Essence. Time is of the essence in
the performance of this -I-ni.
Waiver. indugacce by Lender with respect to any of the terms and conditions of
this Agreement or the failure of Lender to exencstt any of its rights under this
Agneernent shall not Constitute a waiver thereof, and Borrower shall remain
liable for the strict pwformanc~ ol such terms and conditions unti this
Agreement shall be terminated. No provision of this Agreement may be walved or
modfted orally, but all such waivers or modifications shalt be In writing.
Whenever the consent of Lender is requimd under this A~nwit, the granting of
such conaent by Landw in one Instance shal not constifute Lendet's continuing
consent in subsequent instance's, and In eti ceaes such consent rnsy be gmnied
or withheld in the sole discretion of Lender. 1~-1~1995 LOAN AGREEMENT Page 7
LnanNoOOOOl (ConUmi.d~.
matters aet torth ~ this AgreumwnL No alteration of or amandment to this A'eem~
sIasIl be eIb~e unlem ~n in wrung and SlEnesi by the party or pwIiee IOU~ht lobe
char- or bowid by tha alteration or amendment.
ApplIcab~ Lalir. ml: Aoresrnertt shil be goverieri by. rrors~erl and u:l~rcri in
locordence with the "WI oft. State of M-InCL LENDER AND BORROWER EACH ~RElBY
WAIVE ThIAL BY ~AIY IN ANY ATTION OR PA~IEEEDliG TO WIliCH LENDER OR BORl'tO~
MAY BE PARTIES, ARISING our OF, OR IN ANY WAY PERTAIIfING To, ThIS AilI-MEN~. IT
IS AGREED THAT TIfES WA~VER CONSTETurES A WAIVER OF TRIAL BY JLMIY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCIt ACTIONS OR PFIOCEIBDIMG5. THIS WAIVER IS KNOWINGLY1
WILLINGLY AND VOLWrrARLY MADE By IlIENDER AND 8O~IIOWE~ AND L~ER AND BORROWER
IEACII IIIIEREBY REPRESENT THAT NO ~PRESENTATIONS OF FACT OR OPINIOII HAVE DEEN
MADE BY AMY IMOIVIDIIiAL To I~CE THIS WAIEER OF ThIAL BY ~Y OR TO EN ANY WAY
MODIFY OR NILIUFY ITS EFFECT. BORROWER FURTHER R~IIBell'S THAT BORROWER IlAtti
BEEN REPRESENTED IN ThE SIGNING OF This AGREEMENT AND IN THE MAKING OF ThIS
WAIVER BY INDEPENDENT I,E~AL COWISEL, SELECTED OF BORROWER'S OWN FREE WILL, AND
THAT BORROWER HAS KAD TrIE OPPOFmMITY TO DISCUSS THIS WAIVER WITh COIINSEIL,
Caption IllsedIn~ Caption headings in this Agnaement are tor conventence
purposes oriy and are not to be used 10 interpret or define thu provisions of
this -I-~
Multipla Partles, Co~e Authority. M obtigallons of Borrower under this Agreement
shell be jdnt~and several, and all relerenoes to Borrower shatirroan each and
every Borrower. Tills means that each of the Borrowers signing below is
nesponsillis for all obtigelons in lils ~ement.
Conamit 30 ~wimdictlon. Bovevww Irrevocably submIts to the jwlsdiion of any
tltate or federal court ~ in thu Slate of Mag$and over any suil, action, or
prcoerl~ artelng cut of or nelaling to this Agreewmnt. Borrower ~ waives1 to the
fuest urtent ~,,,,,I:j by law, any abjedian that Borrower may now or teseefter
have to the Taying of venue of any such suit, action, or proseeding brought in
any such court and
any claim that any such suit, action. or prooeeding brougI't in any such Court
has haer, brought in an Inconvenient forum. Rnai Judgment in any such suit.
act,on, or prooseing brought in any such court shall be conclusive and tindirg
upon Borrower and may be ent~n~d in any court In which Borrower Is sub~ to
MiEdiction bye suit upon such Iudgment provideet that sorvIoe of process ts
efected upon Borrower as provtded In this Agreement or as otherwise perrnttterl
hy appiloable law.
Consent to Loan PartIcipsilon. Borrower agrees and consents to Lender's sale or
transfer. whether now or later. of one or more part~pation interests in thu
Loans to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any umitatten whaisoaver, to any one or more puechasers, or
potential purchasers, any information or kno*~ge Lender may have about Borrower
or about any other matter relating to the Loan, and Borrower i~uLy waives any
rrghts to prlvaoy itmay have with respect to such matters. Borrower additionally
welves any and a' notices of sale of participation interests, as well as a'
notices of any repurchase of such pailiepation interests. Borrower also agrees
that the purchasers of any such participalon inlerests wiil be con:idersd as thu
absolute owners of such Inierests In the Loans end wit have a~ the rights graht~
under the particlpatfon agreement or agreements govuaning the sate of such
participation intenes~ Borrower ttrther waives all rights of cilset or
counterclaim that Ii may have now or later agaInst Lender or against any
purchaser of such a participalon intersst and unconditionally agrees that either
Lender or such purchaser may intwc Borrower's oblicatlon under the Loans
insspactivi of the failure or irncnc'ency of any holder of any intreat in the
LoariL Borrower further agrees tiat the purchaser of any such participation
Interests may enforce, its interests irresteective of any personal olain's or
defsnses that Borrower may have against Lender.
Coate and Expanase. Borrower aorses to pay upon demand all of
tender's*~~~I~perses incurred in connection with this Agreement \ or In
connection with the loans made pursuant to this AgreemenL Sub~ to any Ilmas
under applicable iew, if Lender hses an attorney to help enforce this Agreemant
or to ooilect any Intlebtedness, Borrower agrees to pay Lefiders aftorneys'
tees. end a' of Lender's other cotoction expenses. whether or not there Is a
lawsulI and lnciuotng legal axpenaes for bankruptcy proc~~~
NoticeL All roticas r'estuired to be given under 11,15 Agreement shall be given
in writlng. may be sent by tetefscsii~ie, and shalt be eftecli"e when actu,ty
delivered if hand delivered or when deposited with a nationally recogrilsed
overnight courier or deposited as certilled or rggisteent maD in the Unted
Stales mel, first class, P05-a prepaid, addressed to the party to whom the
notice is to be gIven at the address shown above. Any pa'rr may change 115
address for nokes under this Agreement by giving format Wrfflen notice to the
other partles, apeoifvirg Ihal the purpose of t~ig notice is to change the
patty's address. To the extent permilled by applicable law, if tirera Is more
than one Borrower, notice to any Borrower w'U constitute notice to all
Borrowers. For notice purposes. Borrower agrees to keep Lender informed at CU
times of Borrower's current address(es).
SeverablIfty. If a court of Oonpetent jurisdiction md: any provision of Ihis
Agreemeni 10 be Invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or Linenforceabte as to any
other persons or circumstances, if ~aslble, any such offending provision shalt
be deereed to be moditted to be within the llmlts of enforceability or veidlly;
however, H the offending provision cannot be so modIfied, it shalt be Sfricken
end a' other provslons of this Agreement in all other nespects shell remaIn
"slid and enforceable.
Subakitarlee a,,,f Affillataa of Bormwer. To the extent the ~tie't of any
provisions of this Agreement mekes it appropriate. including wuhout limlIstlon
any representation, warranty or covenant, the word "lIOrroWW~ as used leren
still Include all eubeldiu~ and atellalea of Borrower. ~olwitsanding the
foregoing however, under no circumstances shall this Agreement be consfruef to
restule Lender to make any Loan or other financial accommodation to any
subeldiary or affiata of Borrower.
Succaaaors and Asaigna. All covenants and agreements contained by or on behalf
of Borrower shall bind Its successors and assigns and shalt inure to the benefit
of Lender, Its suooessors and assigns. Borrower shall not, howevur, have the
eight to assign its rights under this Agreemeni or any interest therein, without
the prior wrltten consent of Lender.
SurvIval. All warranties, represenlations, and agreements of Borrower in this
Agreement shalt survive the r,,ai,ing of the Loan or Loans conter"piated hereby.
and shalt be deemed made and reclateol by Borrower at the time ol the maidng of
eech disbursement of Loan proceeds.
Time 1101 the Essence. Time is of the essence In the performance of this
AgreemenI,
Waiver. Indutgerice by Lender with respect to any of the terms and conditiors of
this Agreernent or the falure of Lender to e~~se any of its rights under this
Agremant shalt not constitute a waiver ihereof, and Borrower shall remain Ilable
for the strict performance of such terms and conditions unIl this Agreement
shall be terminated. l'lo provision of this Agreement may be waived or modified
orally, bul at such waivsrs or moditteations shalt be In writing. Whenever the
consent of Lender is required under this Agree-I, the granting of such consent
by Lander in one instance shall not constitute Lende~ continwing corssenl in
subsequent inutancss, and In ati cases such consent nay be granted or wilineid
in the sole discretion of Lender. I
Ungatlon end CI~ No Ut-on. cwn~ ir,veeu~on, adminlainalve proceeding or simlier
adon (~g thorn for unxaat taxes) Sgainat Borrower is pending or tiresateriad.
and no other event has occurred which may mairilty ~ aI~md Borrower's 'Inanciat
condition or Pm-I. other than Egaton, claims, or other events, if any, that have
been cllsclosesl to and acknowledged by Lander in wrttfng. Turn. To the best ci
Borrower's knowtedg~. all tax netuens and -sorts of Borrower that are or warn
required to be ftlsd, have bean lied, and 'Ir taxes, aaeaas and ether
governmental charges have been paid in ft~ esoept those presently being or 10 be
oontesbd by Borroer in good faftil in the ordinary Coum. of business and for
which adequate reserves have been ~ced. U." Prlodt~. Unim otherwiss prevlc~ -I-
to Lendar in "rittr,g, Borrower has nol enis'ed into or granted My smaurty
Agreements, or the Ung or altacimeant of any Security Inlereeta on or etheUng
any of the Colateral dreciy or indima- securing repayment of Borrower's Loan and
Mote. that wourd be prior or that raay in any wsr be suresor to Lender's Securry
~ and lights in and to such Cokteral~ Uing EffeoL This -I-nt, the Note, all
S~urlty Agraements d'dtv or ini-ify sectakig repayment of Borrower's Loan and
Nola and all of the ieelated Documents are binding upon Borrower as well U Upon
~ower'a sccceaaors, rep'esenllativea and assigns. and are legally nIorcmbls in
accordanes with their resceetive ~,.- C~~clal Pw~L BorrOwer Inendi to use the
Loan proceeds sefey for business or commorcimi related purpOeeL
Einployee Benefit Plans. Each employm benell plan as to which Borrower may have
~V ilabilly com-es in all material respeos with all app~alle requrrets of law
and iggutettons, and (i) no Reporabie Event nor IrroNibed Transaction (as dened
in ERISA) has occurred with resi- 10 any such -. (1) Borrower has nol 'ttlhdrnwn
from any such - or Initiated stopa to do so. and (11l) no steps have been ~aken
te trtrrate any such ~L
Locatton of Borrower's Offices and Recortlie. BorrO~rs pisce of burinees, or
Borrower's chW :.-ll onion, if Borrower has more than ore place of business, is
iccated at wt'D Bokienrod inane, Geranwitown, MD WL uraesa Borrower has
designated ofherwtse In writing this location is aiso the cittos or oetces wise
Borrower keups its .,,,~ us ~ the ColeteraL
twitortoeleL M infomnallen hanaloatre or conteporancousty harewith t~id~hed by
Borroirer to lesnoer for the purposes of or in cow.cIion wUil this Agreement or
any' iran-dion conlemptaled trereby is, and all information laaeabr ~nishekl by
or en behaif of Borrower to Lender will be, true and accurate in every material
mspect on the date -of which such information la elated or cermed; and none of
such inlormation is or will be Irmompisee by omttinlf to state any ~ fect
nacessary to n,ake such loformalion not misladling.
Survival of Representations and Wasasnilpa- Borroor understands and agirses that
teander. without indefsndent Irn-alon, is rehing upon the above representattons
and ~ietes in asiending Lowi Advances to Borrower. Borrower luther agrees that
the tofeg~ Iep~ntatiors and warranties shall be corilnuing in nature and shall
rensain in full foroe and enact until such tithe as Borr~ Indeotedness shall be
- In fuit. or uni this Agreement shall be terfunated in the manner ~derl a~
wivehever is the last to cocor.
AFFIttMATIVE COVENANT:. Borrower' c~rats and agrees with Lender thet, w~~e this
Ag,ee- is in elbaf, Borrower w; Utitiot~ Prompity ~ Lander in wrttlng of (a) all
material adverse dilanees in Borrower's financial condition, and ~) all esising
and all tl'reatened litigation, cw~ investigatons, admirtistalive procoedings or
stmllar acttons ~tcctirg Borrower or any Gueranlor wllch co~d mat~ aftuct the
unanctal ccndtion of Borrower or the ilnancial corolition of any Guarantor.
FinanaW IOecO~a- llaintaln lis bcoks and reoords In ecoordaocs wllhger~ly wasp
led accounting prtnctptes, applied on a ~slstent basis, and permit Lanclar to
earnire and audit Borrower's books and records at all raascnabb Um~ lccnclal
SWenenia- Furrish tender WII~ as acon as avalable. but In no event later than
on. hundmd twenty (120) days alter the end of eacl' fiscal year, Borrower's
balence sleest and income slalernent for the year -ti audited by a certtod
pubilo accountant Saustactory to Lender, end, U Soon U mmkbie, but in no event
later than thirty (30) days alter the and of each ltscet qualter, ~ balance
shesi and profit and loss sa~t for the -ied ended, prepared and apriled as
correct to the best kn-sdge and beluf by Borrower's chic' financial cfker or
other -Eb.rioer or person aconittabis to Lender. M itnancal mpods 'qutred to be
prc,,lded under this Agreement shall be prepared In accordance with pun-dy
acoepted accounllng pfln~ apIsUed en a cor,sstent basts, and rerttaxl by
Sorroweras being trrre and coract. Addittoarni informatton. Furelsil such
addlionel Wormation and stalemurtis, lists of asasla end '-~~f, agl~u of
raevablas and psyables, Invenlory schediius, bu~t~ ~casts, tax nefwns, and other
reports wilh respeci to Borrower's financial rondilon and busIness operation" a"
tender may r~quest from ume to Iftie. Financial Covenants and RatioL Co~ly with
the following covenants and ratios:
Tengilee Ne~WDnh. Reflect a, m,,',,,~Te~~1e Ne?Woith8fnof ieee th~ 9~.520.OOO.~O
by January 31. 15I~ end Inc~~a.ing the minimum Tangible NetWorth by e2OO.OOO~Oo
each quarter therealte,. U 12~1~199S L~un No 00001 LOAN AGREEMENT Page 5
(ConUmied) I ~ ~ Net Worili Rallo. lialsiIn a silo ci Total lasbEtles
toTa~~~lalfel Worth of tern than US to ISL
cunani Ratio. Ntalnleln a silo of Cimunt A-mt' 10 CuIttani Umblililas in eem of
iao to i~ ~mpt as ~ded a~oyw. alit con-ahona ma~to ~ comollance with tile
netiUkWments centained in INs t:aragm~ shall be mmd. in accordance wlIh
ganenally acoceed accounting ~les. api:lled on a coruistent baste, and ceeliled
by Borowerm being trim and su,~:
iiwwance~ Maintain Ilire and other 115k Insunance. P'-~~u liabItEy ~msnce, and
such other Inswance as Lender may lirom Ime to lime
IUI$Onet~ re:lirlre with naspentlo ~ properties and epersUone,, in lorrn,
amotanla. covensees and with InsLiuflO. compan~ ~ to ~mncler. ~tower,- upon re~
ci Lencler. wit daleer to Lender from lime to lime tile policies or ceruficafes
of Insurance in
lorm saistactory 10 Lencier. ln~ding sliptiliattons that ~:: wit not be
Cancellel or diminishafi without at laaat Ilitty ~) days' - wrfIen noflorn to
Lender. Each insisanom polley alao thai Incltidi an endorsement pr~ding that
noterage in fever Of Lender wi' not be "n-md in any way by any act, omlaelon or
deatilit of Borrower or any other person. in connection with alit pcllciea -mit.
'mets in whi EAndier heios or Is .. a sacLNftv inlerest for tile Loans. Borrower
will prov~e Lender with such loss pnyatlle or other endorsements as Lender may
laattrwicu U-IL Furrish Ia Lender, upon raci- ci Lender,m~ on each aesing
in,~nom ~Icy aloowing such i#Ww~stlen as Lander may masnabty nae-. Inciwding
without llmftton the following: (a) tilem of the irsurar, ~) the risks insured:
(c) tile amo~ ci the poi~~; (d) the properlim ln:ur~: (a) the then oturent
peopety vlitues on tile basis ci wtycn fruwance has been Obtalnad, and tile
mannur of detorntinlno tilesa varrn~ and (1) the -ration dete ci tilep~. in
adillon, upon reqLiesI of t"ander ~ow~ notmore often than arnua~ly), Borrower WE
have an indq~~rt appiubw uhftectorr' to Lender dotmine, as appicable, 'he actual
cash value or r-.fcerr.nt cost of any
Coateral. The cost ci such appraisal shill be palel by Borrower.
Other ~ ~ with afl tmC und aoi'dklora ef as other matartaf aenlenanti whether
flow er heimifter exbtlng. between ionte'~ - any ~,,4 paity efti ro"'yL8f~er
kuwefately fri wTftkig of any defaut in IoMig~Im~n with any J~- uucli
agreements.
Loan Proceeds. Us. all Loan proceeds solely '0' tile lottowing sPcEc purocaes:
to srotrlde at3ort term wofictog c-tel. Tacis, Citargug end tlte~ Pay and d~rge
when due all of ifs lnd~ladress and Obigationa. including witheut ilvitaton alit
assessments, taxes, g~mmental char!-, levies and tie'., of every kind and
nature, -osad upon Bo'mwar or 115 properties. income, or proftis, priorto tile
date on which -ties would atlach, and all tewiul cirnirni that. if unpaid, might
become a lien or charge upon any ci Borrower's pro-.s, income, or cr~ Provided
howevter. Boroower wit not be required to pay and discharge any such naeeirmant,
tax. charg., levy. lien or claim 50 long as (a) the legmitly of the sam, shalt
be contested in go~ fisith by appropriele proaa:llngi, and (b) Borrower shall
have establlshad on its beaks adequale reeervea with naspect to such contested
aisessment, tar. cherge. ~,, tian, or cialm in accordance with ~ accepted
accounting pracli. Borrower, upon demand of Lender. will futTlish to Lender
evidence of payment of tile assessments, taxes. ciages. tev:ei~ ~ and claims and
wit authort~ the appropriate governmental official to deilver to Lender at any
time a written statement of any assessments, till,, charges, ~ lief~ and caima
sgalnsl Borrower's properties. income, or profits.
Performance. Perl'rm and compry with ill terms. conditiona, and provisions set
forth in this -I-ni and In tile Relai~ Documents in a Mfm~ manner, and promptly
notify Lender if Borrower learns ci tile occunence of any event which
constitutes an Event of Default under this Agreornent or under any of the
Related Oocument~
Operationa. Melntain eeecullve and management pemonni' with subsianialty tile
sarn, qumlicalons and expedence as tile pnsaent executive and management
personreel: ~de written neltoe to Lender ci any change in executive and
na~e,r'ent p~mannel; condud its businam aflii~ in a reaao~le and prudent manner
and in corn-Ice with alit app~a:le federal. state and municipal laws,
oroinancea, rules and reglidions respecting its properbm, charters, busi~aes end
Operalons, inctuding ~out limitation, c~aro:e with the Americana Wih Disaltiltea
Ad and with all minimum funding standards and other requlrements ci EIIIISA and
other laws appicatila to Borrcwers employee benelit i:la~
Inspecuon. Permit employms or agents of Lender at any ~onable lime 10 Inspect
any and alit Collateral for the Loan or Loans and Bortower's ether properlies
and to ~ or audit Borrower's books. accounts, and records and to make copies and
menroranda of Borrower's books, accounts, and recordL if Bcrronee now or at any
time hereafter maintains any records ~ncludlng without Imitaliton computer
generated records and cornputer softwane programs for the generation of ~uch
necords) in tile poeeessiion cia third -V. Borrower, upon request of Lender.
shalt flout' such party Ia permit Lander free access to such rucords at alit
reasonable times and to provide Lender with cooles of any ri~ttls U may request.
all at Borrower's e:q:,nss,
Compliance Cenitficate. Uniess waived In writing by leder, provide Lender at
least annually and at the tima of each disbursement ci Loan proceeds with a
certificate executed by Borrower's oteaf finencimi olftcer, or other ortlcer or
I:erson acceptacle to Lender, aertlying that the representations and warranitee
set forth in this Agreement are true and correct as of the date ci the
certifteate and further certielnill that. as of the date of the certlilcate, no
Event of Default asists under tills Agreement
Environmental Contilo-ance and Raporta. Borrower shall ccmpiy In all nesp~ with
alit environmental proteetlon ladosil, state and local laws. statutes,
regtlations and ordinances: not osulse or penn to exist, as a ."s'~ of an
Intentional or unlintentional action or omission on its - or on the part of any
third patty, on pro-V owned andfor cocupied by Borrower, any em~onmental
aattvtty where damage may nasult to tile en~onment, uniess such envlnonmentai
acivilyis pursuent to and In co~Ian~~ with tile contiltions of a permit lesued
by tile aporapriato federal, state or local governreental authorilies: shall
turnish to Lander promptly and in any event wtihin thity ~) days after receipt
themof a copy of any notice, summons, Ian, cielon, diractive, latter or other
communication tram any gc"ernmental agency or instrumentallty concerning any
inlenUonal or unintentional ~ion or omission en Borrower's part in connection
with any environmental ~ whether or not there is damage Ia the environment
andlor other nalural nasGWc~
Additional Amura,,c~ Make, exu'cute and delivar to Lender such prcmlsscry notes,
mcrtgages, deits of trust, securtty agfn~rts, inancing statements, instruments,
documents and other agreements as Lender or its attorneys may reasonably request
to evidence and aecure the Loans and to perfect alit ~trtly inleresta.
RECOVERY OF ADDiTIONAL COSTS. if the Imposition of or any change in any law.
rule. regulation or gui:telira, or the Interpratatton or applicalion of any
thereof by any court or udmirsa live or governnaantal authodly (including any
request or policy not having the force of law) shall impose. madly or mako
applicable any taxes (except U.S. federal, slate or tacal Income or franchise
taxes imposed on Lender), nesar"e requirements. -~' adequacy requirements or
other obligations which would (a) incrasse tile cost to Lender for extending or
raelntaining the credit facilities to which tills Agreement relates, ~) reduce
the amounts payable to Lender under tills -I-nt or tile Related Documents, or
(c) reduce tile rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facIlities to which this Agremnt relates.
Ihen Borrower agnees to pay Lender such addlUonal amounts as wit compensate
Lender itteafor, w.*i Uve (5) days atter Lender's written demand for such
payment, which demand shsU be accompanied by an eppianation ci such l,nposition
or chw~ and a calculation in reasonable deteif of the additional amounts pavable
by Borrower, which erparation and caicuetions shall be conclusive In the absence
of manifest error.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is In effect, Borrower shall not, without the IOlcr wrttten consent of
Lender:
indebtedness and Liena. (a) Except for trade debt incurred In ihe normal course
of business and indebtedness to Lender contemplated by this
U 1 2-1~1995 LOAN AGREEMENT Page 6 Loati ND 00001 - (ConUmi.d) A'wn.n~ Oea~ ~ Cr
assume iteebtedness for b~EYowW money. Iftoluding C- ""'- ~) -epi as allowedas a
Parirrited u.n, :.'~ inansfer. morl~ge, assign, -cige, ~ grant a aecurily iniest
in, or any of 8wmw~~ mu~%r (0)... withnecoue any of ~ mogowis, to leandar. "~m
aeg~~ "~ in -w .n. taraeaa,,, e~- 20.OOO.OO Oon~ of O-omL (a) Erigeog in any
buelnees ~ aialsuii~ eellanant than thorn in whoh sorrow~ Ia prasently angageel
~) orceaseSsil ~teralEonR. Equidmia, "~h ~ acqdlre or cioidsle with anyother ~,
- nwn~ iwove or transfer out el the ortllnary course of bwinm, Co) pay any ohis
en B~ywier'e afok (other than ~ pm~ In as st~dc). ~ that outwIiluIm~ the ~ but
only ee fooli as no Event of D~bij has o~wi and IC ecotinuing or would result
Irom the payment of ~ V ~ tea ~$ub-tar $ Corporrtlien~ - daithati in the ~ ""-
Coda - 1~ as en~n;ied), ilonower may pay cash ~ on illa 'toll. shrn~~wm *wn urn
to lima in minourie naoeeeey to enaille the aharehokters topay incaoe taxi. and
-ake ~n'ated kiobma fa'r payments to ~ their "'~ undar '~' and state tear which
aissa - - their ea~ - ~ of a ~ohi~ $ COvpWdon bmum of their ow~ of ~raa of stook
of Boiv~wur, or (d) pINchum or naera any of uorr~ autsta~~ng haaaa or aMer or
amend 8orroww'e C- ekuci~~
-~. Aee-Im and ~eraali~ (a) Loan, Insset in or ed~ai~ rnoney or aeaete, ~ p~eae,
cnaafe or acquire any lnierestinanv oiher n~f~ Or Wily, or (c) iflOLv any
~ltgaton ass-or guarantor ether then in the ~ course of bUII-L
CEBSATION OF ~~MIICEI. if leandar his made any oommlrnent to malee any Loan to
~mowar, whelter undor thip -I-nt or under any other agraament~ ~dar ahit have no
o~llon to make Loan Aduenoas or to dieburee Lean pmmeeda V'. (a) 9on'orer or any
Oue~nior is in delauri under the terms of Ihie Ag~ or any of the flawed
Documenis Or any ether aiire~ that Berreer or any Guarantor has wilh Lender; ~)
Borrower or any ~wnatoor Inaavt, ill-a -Eon in bankruptcy or similar pm--. or IC
~u;lgnd a bankrupt; (c) there occurs a material ~ change in Boirowere llaanlai
cond~ in Rh. Unanclal oo~IIOn of any Guarantor, or in the value of any
Collateral ee'~ any Loan; (dl arw Guarantor i.eks, deima Or otl'eh-ee ~ to
llmlt. madifr or ~voke such Gimrrnnr'a guaranty of the Loan or any other loan
with Lender
NON~~~OE ~ Borrower aems lopay Lender ragutar q~terry payments of d aoorued un~d
naf~~ge lees due as of each payrnent dale, ~ 10.1906 with all sueeect- no~~ge
toe payments due on the mme - of each ~tor, ~raaflor. m. daly noi~~ge tee is
compofef on a 3851~ ~e Intrest basis; that Is, by ipplying the ratio of 03%
annuai nor~e rate over a year of 355 days, Inultipied by the unused --ilisal
liaia~
RIGKr OF SETOFF, Borrewer grants to Lender a contractual posmm~ mcis~ lIlSareat
in, and ftereby aeatgna, convays, delh,w:~ pJadges, and ~stare to Lender all
Borrower'. vighi. III. and Interest In and to, Bwt~ socourts with Lender
(whether olkoking, sa'4"g:~ Or eome other account), Endudng ~ 5mllatlen all
aooounts bald Jolnity with someone ellea and all accounte Borrower may open in
the hiure, ecoluding ho~~~ever all RA, Keogh. end Irsart anceunte. Iloorrowe'
LIIhwsia Lender1 to the extent permitled by appkbte law, to charge Cr seloff all
sums owing on the lndebtadr~ against any and a' such anceunts.
EVDITS OF DEFAILT. Each of the tolawing shall constit~j an EvenI of Defeut under
thie ~
Defeuft on ~bledlneas, Fallure of Borivwgr to make any payment when due on the
Indebt~~
Other ~. Fallure of Borrower or any Grantor to co-v with or to irerlorm when due
any other terrn, obligetion, cove~mrt or condi~on conlalned in lie Agree- or in
any of the Related Documeria, or liallure of Borrower to co'npty with or to ~rn
any other terrn, obfpation, covenant or ~ onrtte'ned in any other aQreanant
between Lender and lerewer.
Deltaull in Favor of Thlnf l",,~-t Skoidd Bormw'ar or any Grsnlor deteult under
any loan. exteraslon of or~~ security agreement, pursh~ or satee agfi~ or any
ether egreggent. in llaor of any other or pemon tfaat "lay mmiu~mly ..I any of
aorrowarrt propeny or Bwr~r'p or any ~aiir'a ibmv to rppay the Loin. or ~,,,,..,
their 'uapeclh. onggalons under tt,ts -I-nt or any of the Related Documw~
Fallee 8talemats, Anr' warranty, -raaenta- or utaterr~ made or turniphed to
Lender by or on behalf of Boreower or any Grantor under this Agreement or the
Related Documents la false or rnielmding in any malitat -tat the tirn made or
ftwrished, Cr beooroos jelse or misloading at any time l,,,,--'6.
DeItfOItrre COBfl~fall~Ion. This Agrewnpnt or any of the Related Dccurrents
ceeees 10 be in t% force and effect (Including allure of any ~ec'1ItV Agreement
to create a Vald and pml~ctd ~ interest) al any Iu and for any rrns~
loeolYenaV. The diaolution or lenninsiton of Borrowr~ uditeos as a golog
busfneas, or a trustee or ..~ is appointed for Borrower or for alt Ore a~tatiei
porlon of the of Borrower, or Borrower makes age- ~reeent for the benuft of
Borrower's oreditom or B~ur film for Ixi.Ir~y, or en InOoluntery bsrk~ -Eon is
tilad agalnst Borrower and such Involuntary pgan rerttalns un~~lad for ~bdV (60)
days,
Ciedilor or Forteflum P~Ocein~ Commanoernent of foreclosure Or fortlittre
proomings, whether by ~ pmc~n~ sef~,
raposseasion or any ether ~titd, by any creditor of Borrower, any ofedlor of any
Grantor against any oollateral securtng the Indebtednes, or by any governmental
~ancy. Tha includesa I;arnlshmw~ attach-I, or levy on or of any of Borrower's
deposit accounis wth Lerider.
AEe,rera,e CIimii~AmaIrlal adverpe onange ~ in lorrower'e Ir"arcal.cond~~on,~
EFFECT OF AN EVENT OF DEFAIAILT. if any ~vant of Iieieuit shall coolir, m'oept
wares otherwisa prvvi~ in it'is Agrernineni or the F~lated 0ocixn~, all com~ntns
and Dbligattons of Lender under this -'II- or the Related OocWTI.a or any other
agreement ir',medlatellr wil terMInate (including any obligelon to make Loan
Advanoas or disbureamants), and, al l"ender,a optioo, allaun's owing in
connecuon with the Loans, indudng all p'fr- lr,iereat. and all other laes' costs
and clesrges, if any, wllll becorn lmmantsleiy due and payable, all without
nollorn of any kind to o,,ower, except that in the - of en Event of Dofault of
the typa dmoribe:l in the ~reef',e~ subsectIon ibowa, such mocelaration shall be
automulic and flot optionaL in addItion, Lender shall have all the rights and
,u..w51 provided in the Related Daurents or avallable at law, In equty, or
otherwe. Exoe- as may be proIiltt~ by aooIlcable law, all of Lender's rights and
remulee shall be cumulative and may be execteed singularly Cr concurrentty.
Election by Lender to pursue any remady Shall not eaclude pws,'tl of anyothor
remedy, and an elecion to make ewpDndltures or to take ~on to -~orm a,,
obigallon of Borrower or or any Grantor shall not aftoct Lender's right to ~LC a
detaul and to axerolse Its ~hts and remedies.
MISCELLANEOUS PROVISIOIIS. The fofowing miscellaneous prov~sicns are a pert ci
this Agreement:
Amen'fmentL This Agreemerif, together wjth any R~lated Documents, consUtutes Ihe
entire understandluig and agreement of thu parties as to the I I 1~-1~1995 LOAN
AGREEMENT Page 7 Lo.nHoOO~~1 (ConUiwed~.
metier,..' toth in Itil Agneemeni No alteralon of or amendment to thls AGreement
shati be elbdve unim grvmn w' wrling and "oneel by the party or-i--Il to be
char- or bound by the alteration or anieridmeriL
Appllcbllle La.. ml. Agreement shalt be Oovernd by. con*u.d and e~meel in ~-
with the laws of the slat. of Ma~Mmr-L LENDER AND BORROWER EACH ilEREBY WAIVE
ThIAL BY ~RNiY IN MW ATTION OR PROEEDIN~ TO WIIICK LENDER OR BORIIIDWIR MAY BE
PAliiITI~ ARISING our OF, OR itl ANY WAY PERTAINING To, TilIlS ~ IT 18 AGREED
TIIIAT THIS WAIVER CON&rn~S A WAIVER OF TRIAL IllY JWIY OF ALL. CLAIMS A~EIST
ALL PARTIES TO aUCH ACTIORS OR PROCEEDIMG8. THIS WAIVER IS KNOWINGLY, WILILINGLY
AND VOLWIrARILY MA~ BY LIND~ AND BORROWER, AND LENDER AND IIloRROWER EACH
IIEREBY EIlEI'RESIBlT TIIIAT ND REPRESENTATIONS OF FACT OR OPINiON HAVE BEEN
MADE IBY ANY INDIVIDLIAL TO INDUCE THIS WAIVER OF TRIAL BY JWUY OR To EN ANY WAY
MODIFY OR NILUFY ITS EFFECT. BORROWER RJRT~~ RIltRAISENTS THAT DOF~WIER HAS
BIDEN REPRE~ED IN TIE SIGNING OF THIS AOREEMIBNT AND IN ml MAAING OF THIS WAIVER
BY INOEPEI~ IEGAL COLPIS~ SELECTED OF BORROWER'S OWN FREE WILL, AND TIIIAT
BORROWER HAS HAD THE OPt,OIIIIIINITY TO DISCUSS THIS WAIVER WITh COUNS~ CapIlon
Heedin~~ Caption lecadings in this -I-nt are for convenience purposes only and
are not 10 be used to in'.- or define iha of the AgreemmnL
Niumpia Parties, Cor;-e Authority. A" obligations of Borrower under Ills
Agraement sIsali be jolnt~and several, and all retirrencea to BorrOwer shall
mean each and every Borrower. Thts means Ihat each of the Borrowem sigrrrg below
Is miponsibte for WI obNgetton. in this Agreement.
ConaenI to ~xtm~Ictlon. Borrower Irrevocably submits to the Jwisdlcllon of any
state or bderal cowt aitting in the Stale of IaarI-nd over any suit, motion, or
pr-dlng arIsing rut of or relatlng to this AgreewienL Borrower irrevocably
welvea, to the issleat m(ient pefmied by law. any ob~n thai Borrower may now or
irereafter have to the taying of venue of any such suit, action. or procmdtrg
brought in any such court and any claim Ihal any such suit, action. or pro~~oing
brought in any such Cowl ha. been braught In an Inconvenlenl looi~ Rnal Judgment
in any such suit, edion, or prooci'irg bnougl"l in any such court shall be
conclusive and binding upon Borrower and may be enforced in any cowl In which
Borrower is subject to jurtsCSclion by a sull upon such judgment provided that L
of procea, Is e~ctett upon Borrower as provided in this -I-nt or as oth~se
per,nlttetl by applicable law.
Consent to Lean ParUcipalion. Borrower agrees and consenis to Lendet's Sale or
trarster. ~ now Or laler. of one or more particifetion interests in ihe Loans to
one or more purchasers, whether reatal or unrelated to Lender. Lender may
provide. without any Unitatori whaIscevet, to any one or nrore purchasers. or
potential p~asers. eny information or knowtedge Lender may have about Borrower
or about any other matter relating to the Loan, and Borrower hereby wah~as any
rghts to -lacy it may have wiih nesoeci to such matte's. Borrower additionally
waives any and at notices of sate of l'artclpailon Interests, as well as an
noticm of any ripurciusa of such panielpation interests. Borrower also agrees
that the purchases of any such partlcipallan interests witi be considered as the
tbsol~ owners of such Interests In the Loans and win have all the rights granted
under the partielpation agreemeni or aereernents governing the sale of such
participation interes~ Borrower hxther wihms at rights of olfset or counterclaim
that II may have now or laler agaInst Lender or against any purchaser of such a
piatl~aIon intersst and unconditionally agrees that either Lender or such
purchaser may intorce liorrower's obIloation under the Loans ir'anpactva of the
failure or Insolvency of any holder of any interest in the Loans. Borrower ~iher
agrees thai the purchaser of any such pattielpation Interests may enforoe its
interests irr',Spective of any persoraal dalme or deferises that Borrower may
have against Lender. 4
Cosie - Expenese. Borrower agrees to pay upon demand alt ol ~ incurred in
connection with this Agreement \ or in connection with the Loans made pursrrant
10 this Agreement. ~ject to any uffis under applicable dew, if Lender hines an
attorney to haip enforce this Agreement or to colect any Indebtedness, Borrower
agrees to pay Lender's altorneys' tees, and all of Lender's olher collection
expenses whether or not Ifteig is a lawsuit ansi PncIi~~ng legal ~cpnses lor
bankruptcy pro~ecingL
NoticeL M notices required to be -~ under this Agreement ahel be given in
wiling, may be sent by tetelscsimi1, and staill be el~mctve when actually
delivered if hand deilvered or when deposhed witi, a nationally reeognI~d
~vefliglil courter or deposited as certilied or mgiiteeed rrieil in the United
s'atea mat, lirsI clasa, p-- prepaiil. addressed to the -V to wiurt the notlee
is to be given at the addmm shown abovL Any ~ may change Its address for
r,otices under this Agreement by giving tornael wiffiwi nottee to the other
parties, specifying that the purpose of tP'e notice is to change the patty's
address. To the m~ant pennined by applicabte law, Ii there is more than one
Borrower, notice to any Borrower will constitute notice to all Borrowers. For
notIce purposes. Borrower agrees lo keep Lender Informed at ati limes of
9orrower's cunent addressias).
&evereblldiy. If a court of cornpeterttt JurisdIction Inds any provision of it's
Agreement 10 lii in~i~Ud or unenforceable as to any person or circumstance, such
Ilndtng shall not render that provtsion Invatid or unenforceabte as to any other
persons or circumstances, if lea~le, any such offending provIsion shalt be
deemsd to be m~ied to be within the Imits of enfoeceability or vafldiiy;
however, if the offending peoyI$E.on canrict be so modified, If shall be
siricken and all OIlier provIsIons of this Agreement In all other respects shall
remain valId and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the conled of any
provIsions of this Agreement makes it appropriate, including without Iimi~iott
any ruoresenlation, warranty or coveaant, the word "Itorrower' - used herein
shalt Include all subsidiaries and aUlates of Borrower. Notwithstanditg the
foregoing however, under no circumstances shalt this Agreement be consirued to
require Lender 10 make any Loan or other tinancii,I accommodalion to any
subsidlary or affIlIate of Borrower.
Succassiors end Assigns. M covenants and agmenerts contained by or on behalf of
Borrower shall bind its successors and assigns and shall inure to the benefit of
Lender, Its successors and assigns. Borrower shall not. however, have the right
to assign its rights under this Agreement or any interest therein, without the
prior written consent of Lender.
SurvIval. M warranties, represenlatlons, and agreements of Borrower in this
Agreement shall survive the mal~ng of the Loan or Loans conte~~lated hereby, and
shall be deemed made and redated by Borrower at the time of the ma~ng of each
disbursement of Loan proceeds. Time Is of the Essence. Time is of the essence in
the performance of this -I-ni.
Waiver. indugacce by Lender with respect to any of the terms and conditions of
this Agreement or the failure of Lender to exencstt any of its rights under this
Agneernent shall not Constitute a waiver thereof, and Borrower shall remain
liable for the strict pwformanc~ ol such terms and conditions unti this
Agreement shall be terminated. No provision of this Agreement may be walved or
modfted orally, but all such waivers or modifications shalt be In writing.
Whenever the consent of Lender is requimd under this A~nwit, the granting of
such conaent by Landw in one Instance shal not constifute Lendet's continuing
consent in subsequent instance's, and In eti ceaes such consent rnsy be gmnied
or withheld in the sole discretion of Lender. 1~-1~1995 LOAN AGREEMENT Page 7
LnanNoOOOOl (ConUmi.d~.
matters aet torth ~ this AgreumwnL No alteration of or amandment to this A'eem~
sIasIl be eIb~e unlem ~n in wrung and SlEnesi by the party or pwIiee IOU~ht lobe
char- or bowid by tha alteration or amendment.
ApplIcab~ Lalir. ml: Aoresrnertt shil be goverieri by. rrors~erl and u:l~rcri in
locordence with the "WI oft. State of M-InCL LENDER AND BORROWER EACH ~RElBY
WAIVE ThIAL BY ~AIY IN ANY ATTION OR PA~IEEEDliG TO WIliCH LENDER OR BORl'tO~
MAY BE PARTIES, ARISING our OF, OR IN ANY WAY PERTAIIfING To, ThIS AilI-MEN~. IT
IS AGREED THAT TIfES WA~VER CONSTETurES A WAIVER OF TRIAL BY JLMIY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCIt ACTIONS OR PFIOCEIBDIMG5. THIS WAIVER IS KNOWINGLY1
WILLINGLY AND VOLWrrARLY MADE By IlIENDER AND 8O~IIOWE~ AND L~ER AND BORROWER
IEACII IIIIEREBY REPRESENT THAT NO ~PRESENTATIONS OF FACT OR OPINIOII HAVE DEEN
MADE BY AMY IMOIVIDIIiAL To I~CE THIS WAIEER OF ThIAL BY ~Y OR TO EN ANY WAY
MODIFY OR NILIUFY ITS EFFECT. BORROWER FURTHER R~IIBell'S THAT BORROWER IlAtti
BEEN REPRESENTED IN ThE SIGNING OF This AGREEMENT AND IN THE MAKING OF ThIS
WAIVER BY INDEPENDENT I,E~AL COWISEL, SELECTED OF BORROWER'S OWN FREE WILL, AND
THAT BORROWER HAS KAD TrIE OPPOFmMITY TO DISCUSS THIS WAIVER WITh COIINSEIL,
Caption IllsedIn~ Caption headings in this Agnaement are tor conventence
purposes oriy and are not to be used 10 interpret or define thu provisions of
this -I-~
Multipla Partles, Co~e Authority. M obtigallons of Borrower under this Agreement
shell be jdnt~and several, and all relerenoes to Borrower shatirroan each and
every Borrower. Tills means that each of the Borrowers signing below is
nesponsillis for all obtigelons in lils ~ement.
Conamit 30 ~wimdictlon. Bovevww Irrevocably submIts to the jwlsdiion of any
tltate or federal court ~ in thu Slate of Mag$and over any suil, action, or
prcoerl~ artelng cut of or nelaling to this Agreewmnt. Borrower ~ waives1 to the
fuest urtent ~,,,,,I:j by law, any abjedian that Borrower may now or teseefter
have to the Taying of venue of any such suit, action, or proseeding brought in
any such court and
any claim that any such suit, action. or prooeeding brougI't in any such Court
has haer, brought in an Inconvenient forum. Rnai Judgment in any such suit.
act,on, or prooseing brought in any such court shall be conclusive and tindirg
upon Borrower and may be ent~n~d in any court In which Borrower Is sub~ to
MiEdiction bye suit upon such Iudgment provideet that sorvIoe of process ts
efected upon Borrower as provtded In this Agreement or as otherwise perrnttterl
hy appiloable law.
Consent to Loan PartIcipsilon. Borrower agrees and consents to Lender's sale or
transfer. whether now or later. of one or more part~pation interests in thu
Loans to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any umitatten whaisoaver, to any one or more puechasers, or
potential purchasers, any information or kno*~ge Lender may have about Borrower
or about any other matter relating to the Loan, and Borrower i~uLy waives any
rrghts to prlvaoy itmay have with respect to such matters. Borrower additionally
welves any and a' notices of sale of participation interests, as well as a'
notices of any repurchase of such pailiepation interests. Borrower also agrees
that the purchasers of any such participalon inlerests wiil be con:idersd as thu
absolute owners of such Inierests In the Loans end wit have a~ the rights graht~
under the particlpatfon agreement or agreements govuaning the sate of such
participation intenes~ Borrower ttrther waives all rights of cilset or
counterclaim that Ii may have now or later agaInst Lender or against any
purchaser of such a participalon intersst and unconditionally agrees that either
Lender or such purchaser may intwc Borrower's oblicatlon under the Loans
insspactivi of the failure or irncnc'ency of any holder of any intreat in the
LoariL Borrower further agrees tiat the purchaser of any such participation
Interests may enforce, its interests irresteective of any personal olain's or
defsnses that Borrower may have against Lender.
Coate and Expanase. Borrower aorses to pay upon demand all of
tender's*~~~I~perses incurred in connection with this Agreement \ or In
connection with the loans made pursuant to this AgreemenL Sub~ to any Ilmas
under applicable iew, if Lender hses an attorney to help enforce this Agreemant
or to ooilect any Intlebtedness, Borrower agrees to pay Lefiders aftorneys'
tees. end a' of Lender's other cotoction expenses. whether or not there Is a
lawsulI and lnciuotng legal axpenaes for bankruptcy proc~~~
NoticeL All roticas r'estuired to be given under 11,15 Agreement shall be given
in writlng. may be sent by tetefscsii~ie, and shalt be eftecli"e when actu,ty
delivered if hand delivered or when deposited with a nationally recogrilsed
overnight courier or deposited as certilled or rggisteent maD in the Unted
Stales mel, first class, P05-a prepaid, addressed to the party to whom the
notice is to be gIven at the address shown above. Any pa'rr may change 115
address for nokes under this Agreement by giving format Wrfflen notice to the
other partles, apeoifvirg Ihal the purpose of t~ig notice is to change the
patty's address. To the extent permilled by applicable law, if tirera Is more
than one Borrower, notice to any Borrower w'U constitute notice to all
Borrowers. For notice purposes. Borrower agrees to keep Lender informed at CU
times of Borrower's current address(es).
SeverablIfty. If a court of Oonpetent jurisdiction md: any provision of Ihis
Agreemeni 10 be Invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or Linenforceabte as to any
other persons or circumstances, if ~aslble, any such offending provision shalt
be deereed to be moditted to be within the llmlts of enforceability or veidlly;
however, H the offending provision cannot be so modIfied, it shalt be Sfricken
end a' other provslons of this Agreement in all other nespects shell remaIn
"slid and enforceable.
Subakitarlee a,,,f Affillataa of Bormwer. To the extent the ~tie't of any
provisions of this Agreement mekes it appropriate. including wuhout limlIstlon
any representation, warranty or covenant, the word "lIOrroWW~ as used leren
still Include all eubeldiu~ and atellalea of Borrower. ~olwitsanding the
foregoing however, under no circumstances shall this Agreement be consfruef to
restule Lender to make any Loan or other financial accommodation to any
subeldiary or affiata of Borrower.
Succaaaors and Asaigna. All covenants and agreements contained by or on behalf
of Borrower shall bind Its successors and assigns and shalt inure to the benefit
of Lender, Its suooessors and assigns. Borrower shall not, howevur, have the
eight to assign its rights under this Agreemeni or any interest therein, without
the prior wrltten consent of Lender.
SurvIval. All warranties, represenlations, and agreements of Borrower in this
Agreement shalt survive the r,,ai,ing of the Loan or Loans conter"piated hereby.
and shalt be deemed made and reclateol by Borrower at the time ol the maidng of
eech disbursement of Loan proceeds.
Time 1101 the Essence. Time is of the essence In the performance of this
AgreemenI,
Waiver. Indutgerice by Lender with respect to any of the terms and conditiors of
this Agreernent or the falure of Lender to e~~se any of its rights under this
Agremant shalt not constitute a waiver ihereof, and Borrower shall remain Ilable
for the strict performance of such terms and conditions unIl this Agreement
shall be terminated. l'lo provision of this Agreement may be waived or modified
orally, bul at such waivsrs or moditteations shalt be In writing. Whenever the
consent of Lender is required under this Agree-I, the granting of such consent
by Lander in one instance shall not constitute Lende~ continwing corssenl in
subsequent inutancss, and In ati cases such consent nay be granted or wilineid
in the sole discretion of Lender. I
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Dates Referenced Herein and Documents Incorporated By Reference
| Referenced-On Page |
|---|
| This 10-K/A Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| For The Period Ended | | 10/31/95 | | | | | | | 10-K, 10-K/A |
| | 12/14/95 | | 1 | | 3 |
| Filed On / Filed As Of | | 2/29/96 |
| | 3/28/96 |
| |
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