GREATER ATLANTIC BANK
CORPORATE REVOLVING CREDIT FACILITY TO
HARBOURTON FINANCIAL CORP.
CREDIT AND SECURITY AGREEMENT
$2,000,000.00
Dated Effective May 11, 2000
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CREDIT AND SECURITY AGREEMENT
THIS AGREEMENT, dated as of the Agreement Date between HARBOURTON
FINANCIAL CORP., a Delaware corporation with offices at: 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, XxXxxx, XX 00000 (the "Borrower"), and GREATER ATLANTIC BANK, a
federally chartered financial institution, with offices at: 00000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Lender"), evidences:
INTRODUCTION
Borrower shall use the proceeds of the Credit to provide financing to
others, and for such other purposes as may be approved by Lender from time to
time, including general corporate purposes.
ARTICLE I. DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings set forth below:
Advance: A disbursement of a portion of the Credit; see Section 2.1
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Agreement Date: May 11, 2000.
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Business Day: A day upon which Lender is open for the transaction of
business.
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Collateral: As defined in Section 4.1.
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Credit: TWO MILLION AND NO/100 U.S. DOLLARS ($2,000,000.00).
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Credit Agreement: This Agreement.
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Credit Note: The Borrower's Promissory Note to Lender dated
as of the Agreement Date, and all
replacements, modifications, extensions and renewals thereof.
Event of Default: As defined in Article VII.
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GAAP: Those generally accepted accounting principles and practices which
are from time to time recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor).
Maturity Date: May 11, 2001 or such earlier date as is provided for
in this Agreement.
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Lender: Includes Lender, its successors, assigns and/or its agents,
if any.
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Security Interest: The security interest granted by the Borrower to
Lender in the Collateral.
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Subsidiary: Any corporation of which at least 50% of the voting stock
is owned by the Borrower directly, or indirectly through one or more
Subsidiaries. If the Borrower has no Subsidiaries, the provisions of this
Agreement relating to Subsidiaries shall be inapplicable, without affecting the
applicability of such provisions to the Borrower alone.
ARTICLE II. THE CREDIT
2.1 Agreement to Lend. Lender agrees on the terms and conditions and relying on
the representations and warranties set forth herein to lend to the Borrower, and
the Borrower agrees to borrow from Lender, up to the amount of the Credit.
Individual Advances of the Credit shall be made as requested by the Borrower in
writing and on such forms as may be approved by Lender. Individual Advances will
be funded by Lender within three (3) business days of receipt by Lender of
Borrower's written request for funds provided that the Borrower and its
inspector (if applicable) has approved the individual Advance and Borrower is
not in default. Evidence of both Borrower's and its designated inspector's
approval (if applicable) shall accompany each funding request. The aggregate
amount of all Advances shall not exceed the Credit. Following repayments of
Advances, Lender will make re-advances under the same terms and conditions,
provided that Advances outstanding at any time shall not exceed the amount of
the Credit. The Credit will be evidenced by the Credit Note. Notwithstanding
anything in this Section to the contrary, at no time shall the Credit exceed
thirty-five percent (35%) of the net worth of Borrower as determined by Lender
from time to time, but not more frequently than quarterly, in accordance with
GAAP.
2.2 Term. This Agreement will be in effect until the Maturity Date when all
amounts outstanding hereunder and under the Credit Note shall be due and
payable.
2.3 Repayment of the Credit. Interest on the outstanding principal
balance of the Credit at the rate required in the Credit Note shall be payable
by the Borrower to Lender on the first day of each calendar month during Term
hereof, and on the date the Credit is paid in full. A late charge of five
percent (5%) of payments received more than fifteen (15) days past due will also
be payable in accordance with the terms of the Credit Note.
ARTICLE III. CONDITIONS TO ADVANCES
3.1 Initial Advance. Lender's obligation to make the initial
Advance, and the effectiveness of this
Agreement, are conditioned upon the fulfillment of the following conditions:
A. The Borrower shall have duly executed and delivered
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to Lender:
(1) This Agreement;
(2) The Credit Note;
(3) A copy, certified by the Secretary or an Assistant Secretary of the
Borrower,of the resolution of the Borrower's Board of Directors authorizing the
execution, delivery and performance of this Agreement, the Credit Note and all
related documents.
B. Lender shall have received:
(1) A copy of the Borrower's articles of incorporation and the Borrower's filed
certificate of incorporation;
(2) A copy of the most-current by-laws of the Borrower;
(3) A certificate of the Secretary of State of the state of the Borrower's
incorporation as to the existence and good standing of the Borrower;
(4) Evidence of the insurance coverages required by Section 6.4 hereof.
The documents referenced in (1) and (2) above may not be modified
without the prior written consent of Lender.
3.2 Conditions to Subsequent Advances. All future Advances shall be subject to
compliance with the requirements of Article II hereof and to such updating of
the certificates and opinions referred to in Section 3.1 as Lender may
reasonably require from time to time.
ARTICLE IV. SECURITY AGREEMENT
4.1 Grant of Security Interest. This Agreement constitutes a security agreement.
The following shall constitute collateral security for the repayment of all sums
which may become due under the Credit Note or this Agreement: (i) an assignment
of the Borrower's right to receive proceeds, collections, and repayments by,
through or relating to notes, participation agreements, and any instrument
evidencing an indebtedness of a third party as to which the Borrower is entitled
to payments: (ii) that certain note evidencing an indebtedness of ONE MILLION
FOUR HUNDRED SEVENTY THOUSAND DOLLARS ($1,470,000) from PS/XX Xxxxxxxxxx Farms,
LLC to the Borrower and (iii) that certain note evidencing an indebtedness of
ONE MILLION SIX HUNDRED THOUSAND DOLLARS ($1,600,000.00) from Xxxxx Creek
Investments to the Borrower (the aforementioned notes being hereinafter
collectively referred to as the "Collateral Notes ") together with all
modifications,amendments,renewals, and substitutions thereof (the
"Colllateral").
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Notwithstanding anything in this Section to the contrary, Lender hereby grants
to Borrower the right to sell participations in the Xxxxx Creek Note in an
amount not to exceed fifty percent (50%) of the Borrower's interest in the Xxxxx
Creek Note. The Lender shall, upon request from Borrower, prompty execute
documentation eveidencing Lender's consent to sell such participation interests,
notwithstanding the fract that the Lender intends its conseny to be
self-operative.
4.2 Rights of Lender.
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A. With respect to the Collateral Notes, Lender shall have the rights of a
secured party under the Uniform Commercial Code as enacted in the Commonwealth
of Virginia.
B. Except as expressly permitted in Section 4.1 above, the Borrower shall not
have the right to modify, delete, or waive any material term of the Collateral
Notes without Lender's prior consent.
C. From the Agreement Date up to and including the Maturity Date, no additional
financing by another lender shall be secured by the Collateral without the prior
written consent of the Lender.
4.3 Income from and Interest on Collateral.
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A. Until the occurrence of an Event of Default, the Borrower
reserves the right to receive all income from or interest on the Collateral Note
and all revenue from the End Loan Proceeds and if Lender receives any such
revenue, income or interest prior to such Event of Default, Lender shall pay the
same promptly to the Borrower.
B. Upon the occurrence of an Event of Default, the Borrower
will not demand or receive any income from or interest on such Collateral Note
or any revenue from the End Loan Proceeds, and if the Borrower receives any such
income, revenue or interest without any demand by it, same shall be held by the
Borrower in trust for Lender in the same medium in which received, shall not be
commingled with any assets of the Borrower and shall be delivered to Lender in
the form received, properly endorsed to permit collection, not later than the
next Business Day following the day of its receipt. Lender may apply the net
cash receipts from such income or interest to payment of any amounts due under
the Credit Note or this Agreement, provided that Lender shall account for and
pay over to the Borrower any such income or interest remaining after payment in
full of all such amounts.
4.4 Possession of Collateral. The Borrower agrees that possession of any of the
Collateral by closing attorneys, title companies, or any other Bailee acting on
the Borrower's behalf shall be deemed possession by Lender for purposes of
perfecting the Security Interest granted hereby.
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrower makes the following representations and warranties which
shall be deemed to be continuing representations so long as any portion of the
Credit remaining available or any indebtedness of the Borrower to Lender arising
pursuant to this Agreement remains unpaid:
5.1 Good Standing and Authority. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of its
incorporation; has powers to transact the business in which it is engaged; is
duly licensed or qualified and in good standing in each jurisdiction in which
the conduct of such business requires such licensing or such qualification; and
has all necessary power and authority to enter into this Agreement and to
execute, deliver and perform this Agreement, the Credit Note and any other
document executed in connection with this Agreement, all of which have been duly
authorized by all proper and necessary corporate action.
5.2 Valid and Binding Obligation. This Agreement and any other document executed
in connection herewith, and the Credit Note when executed and delivered, will
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms.
5.3 No Defaults or Pending Litigation. Except as have been or shall be disclosed
to Lender in writing, there are not action, suits, proceedings (whether or not
purportedly on behalf of the Borrower) or investigations pending or, to the
knowledge of the Borrower, threatened against the Borrower, or any basis
therefor, which, if adversely determined, would, in any case or in the
aggregate, materially and adversely affect the property, assets, financial
condition or business of the Borrower, or materially impair the right or ability
of the Borrower to carry on its operations substantially as now conducted or
anticipated to be conducted in the future, or which question the validity of
this Agreement, the Credit Note, or other documents required by this Agreement,
or any action to be taken pursuant to any of the foregoing.
5.4 No Consent or Filing. No consent, license, approval or authorization of, or
registration, declaration or filing with, any court, governmental body or
authority or other person or entity is required in connection with the valid
execution, delivery or performance of this Agreement, the Credit Note, or other
documents required by this Agreement or in connection with any of the
transactions contemplated thereby.
5.5 No Violations. The Borrower is not in violation of any material term of its
respective certificate of incorporation or bylaws, or of any mortgage, borrowing
agreement or other instrument or agreement pertaining to indebtedness for
borrowed money. The Borrower is not in violation of any term of any other
indenture, instrument or agreement to which it is a party or by which it may be
bound, resulting, or which might reasonably be expected to result in a material
and adverse effect upon its business or assets. The Borrower is not in violation
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of any order, writ, judgment, injunction or decree of any court of competent
jurisdiction or of any statute, rule or regulation of any competent governmental
authority. The execution and delivery of this Agreement, the Credit Note and
other documents required by this Agreement and the performance of all of the
same is and will be in compliance with the foregoing and will not result in any
violation or result in the creation of any mortgage, lien, security interest,
charge or encumbrance upon any properties or assets except in favor of Lender.
There exists no fact or circumstance not disclosed in this Agreement or in the
documents furnished in connection herewith which materially adversely affects,
or in the future (so far as the Borrower can now foresee), may materially
adversely affect the condition, business or operations of the Borrower.
5.6 Federal Regulations. The Borrower is not engaged principally, or as one of
its important activities, in the business of extending or arranging for the
extension of credit for the purpose of purchasing or carrying "margin security"
or "margin stock" (as defined in Regulations G and U issued by the Board of
Governors of the Federal Reserve System). Likewise, the Borrower does not own or
intend to carry or purchase any such "margin security" or "margin stock", and
the Borrower will not use the proceeds of any Advance to purchase or carry (or
refinance any borrowing, the proceeds of which were used to purchase or carry)
any such "margin security" or "margin stock".
5.7 Collateral. The Borrower represents, and so long as this Agreement is in
effect, shall be deemed continuously to represent and warrant that the Borrower
is the owner of the Collateral free of all security interests or other
encumbrances except the Security Interest granted herein.
5.8 Subsidiaries. The Borrower does not have a Subsidiary or other interest in
any other association, corporation, partnership, joint venture, or other
business entity not previously disclosed in writing to Lender.
5.9 Financial Condition. The financial statements which the Borrower has
furnished Lender have been prepared in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal year and present fairly the
financial condition of the Borrower as of such date and the result of its
operations for the period then ended and there has been no material adverse
change in said financial condition. The Borrower has no contingent obligations,
liabilities for taxes or other outstanding financial obligations which are
material in the aggregate, which are not otherwise disclosed in the financial
statements referred to above.
5.10 Corporate Takeovers. No portion of the Credit will be used to acquire any
security in any transaction which is subject to Section 13 or 14 of the
Securities and Exchange Act of 1934, including without limitation Sections 13(d)
and 14(d) thereof.
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5.11 Insider. The Borrower is not, and no person having "control" (as the term
is defined in 32 U.S.C. ss. 375(b)(5) or in regulations promulgated pursuant
thereto) of the Borrower is an "executive officer", "director", or "person who
directly or indirectly or in concert with one or more persons owns, controls, or
has the power to vote more than 10 of any class of voting securities" (as those
terms are defined in 12 U.S.C. ss. 375(b) or in regulations promulgated pursuant
thereto) of any bank, or of Lender, or any subsidiary thereof, or of a bank at
which Lender maintains a correspondent account, or of any bank which maintains a
correspondent account with Lender.
ARTICLE VI. COVENANTS
During the term of this Agreement, and so long as any portion of the
Credit shall remain available or any indebtedness of the Borrower to Lender
shall remain unpaid, the Borrower will:
6.1 Payments. Duly and punctually pay the principal of and interest on all
indebtedness incurred by it pursuant to this Agreement and the Credit Note in
the manner set forth herein and therein.
6.2 Notice. Promptly notify Lender in writing within 14 calendar days of
Borrower's notice of: (a) any pending or future audits of the Borrower's federal
income tax returns by the Internal Revenue Service, and the results of each such
audit after its completion; (b) any default by the Borrower in the performance
of, or any modifications of, any of the terms or conditions contained in any
agreement, mortgage, indenture or instrument to which the Borrower is a party or
which is binding upon the Borrower and of any default by the Borrower in the
payment of any of its indebtedness; provided, however, the Borrower shall not be
required to so notify Lender of modifications of any or all terms or provisions
of any document or agreement pertaining to its transaction in the ordinary
course of business, but which do not pertain to its indebtedness for borrowed
money, which do not materially and adversely affect the business or assets of
the Borrower; and (c) any payments on the Collateral which reduce the principal
of such Collateral by greater than twenty-five percent..
6.3 Taxes. Promptly pay and discharge all of its taxes, assessments and other
governmental charges (including any charged or assessed on the issuance of the
Credit Note) prior to the date on which penalties attach thereto, establish
adequate reserves for the payment of taxes and assessments and make all required
withholding and other tax deposits; provided, however, that nothing herein
contained shall be interpreted to require the payment of any tax, assessment or
charge so long as its validity is being contested in good faith and by
appropriate proceedings diligently conducted, if the Borrower, upon Lender's
request, deposits with Lender, to be held in escrow, such amount being
contested.
6.4 Insurance. Will furnish Lender with Certificates of insurance certifying
that there are in effect insurance coverages required by Lender (including but
not limited to hazard, liability and workmen's compensation) against such risks
and in such amounts as Lender shall request. Borrower shall provide thirty (30)
days prior written notice to Lender of cancellation or reduction of such
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insurance.
6.5 Litigation. Promptly notify Lender in writing within 10 days of the
Borrower having notice thereof, of the institution or filing of any litigation,
action, suit, claim, counterclaim or administrative proceeding against, or
investigation of, the Borrower: (a) to which the Borrower is a party by or
before any regulatory body or governmental agency; (b) the outcome of which may
materially and adversely affect the finances or operations of the Borrower or
the Borrower's ability to fulfill its obligations hereunder unless adequately
covered by insurance; or (c) which questions the validity of this Agreement, the
Credit Note or any action taken or to be taken pursuant to the foregoing; and
furnish or cause to be furnished to Lender such information regarding the same
as Lender may request.
6.6 Existence and Eligibility. Maintain its existence in good standing and
remain or become duly licensed or qualified and in good standing in each
jurisdiction in which the conduct of its business requires such qualification or
licensing.
6.7 Books and Records. Keep proper books and records in accordance with
generally accepted accounting principles consistently applied and notify Lender
promptly in writing of any proposed change in the location at which such books
and records are maintained.
6.8 Compliance with Law. Comply with all laws and governmental rules and
regulations respecting the transactions which are the subject of this Agreement.
6.9 Access to Records. Permit Lender's authorized representatives, during normal
business hours and as often as Lender may reasonably request, to have access to
the Borrower's premises and its financial records pertaining to the transactions
contemplated hereby; inspect and copy such records, and discuss the affairs and
finances of the Borrower with appropriate officers of the Borrower.
6.10 Financial Reports. Furnish to Lender the following financial information:
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A. Current financial statements of the Borrower
at least five (5) days prior to the closing date of this Agreement.
B. Financial statements as of the end of each of the
Borrower's fiscal quarters, to be furnished not later than forty-five (45)
calendar days after the end of such quarter. Such statements shall contain such
information as Lender may reasonably request.
C. Annual financial statements of the Borrower, audited by
independent certified public accountants acceptable to Lender, to be furnished
not later than one hundred twenty (120) days after the end of each fiscal year
of the Borrower.
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D. Copies of annual filed federal tax returns for the
Borrower to be delivered to Lender within ten (10) days of filing.
The Lender's approval of the financial data and other documents
referenced in this Section shall be for the sole benefit of Lender, and neither
Borrower nor any other party shall rely thereon; nor shall any such approval by
Lender by construed as a warranty that such documents or information are
adequate for the purposes intended.
6.11Collateral.
A. Defend the Collateral against the claims and demands of all
other parties; keep the Collateral free from all security interests or other
encumbrances except those which may be granted herein; not sell, transfer,
assign, deliver or otherwise dispose of any Collateral except pursuant to the
terms hereof or with the consent of Lender.
B. Execute and deliver to Lender such financing
statements, assignments and other documents and do such other customary
things relating to the Collateral as Lender may reasonably request.
6.12Liens. Not create or permit to exist any mortgage, pledge, title retention
lien, lease, purchase or other encumbrance or security interest with respect to
any of the Collateral, except:
A. the Security Interest;
B. construction liens, tax, and warehousemen's liens,
statutory liens of landlords and other like liens arising in the ordinary
course of business security obligations which are not yet due or which
are being contested in good faith by appropriate proceedings; and
C. liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security or to secure the performance of statutory
obligations, surety or appeal bonds, bids, leases, performance and return of
money bonds and similar obligations (exclusive of obligations for the payment of
borrowed money).
6.13 Distribution to Shareholder. Under no circumstances permit a
distribution of any kind to a shareholder, other than payments or distributions
to operating officers of salary, bonus and any other payments during the term
hereof and so long as any portion of the Credit remains unpaid, with the
exception of approximately FOUR HUNDRED FIFTY THOUSAND and 00/100 US DOLLARS
($450,000.00) plus interest for the repayment of a corporate obligation of
Borrower payable to a shareholder of Borrower.
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ARTICLE VII. EVENTS OF DEFAULT
The occurrence of any of the events listed in this Article shall
constitute an event of default under this Agreement ("Event of Default").
7.1 Nonpayment of Indebtedness. Failure of the Borrower to make any payment of
interest or principal or any other sum, which has become due whether by
acceleration or otherwise, under the terms of the Credit Note, this Agreement,
or any other document evidencing or securing indebtedness of the Borrower to
Lender.
7.2 Assignment or Encumbrance. Assignment or attempted assignment by the
Borrower of this Agreement, any rights hereunder, or any Advance to be make
hereunder, without first obtaining the specific written consent of Lender, or
the granting by the Borrower of any security interest, lien or other encumbrance
other than to Lender on any Collateral.
7.3 Insolvency Proceedings. The filing by or against the Borrower of a petition
for liquidation, reorganization, arrangement or adjudication as a bankrupt or
similar relief under the bankruptcy, insolvency or similar laws of the United
States or any state or territory thereof or of any foreign jurisdiction; the
failure of the Borrower to secure dismissal of any such petition filed against
it within thirty days of such filing; the making of any general assignment by
the Borrower for the benefit of creditors; the appointment of a receiver or
trustee for the Borrower for any part of the assets of the Borrower; the
institution by the Borrower of any other type of insolvency proceeding (under
the Bankruptcy Code or otherwise) or of any formal or informal proceeding,
including, without limitation, proceedings by the Federal Deposit Insurance
Corporation or other governmental authority, for the dissolution or liquidation
of, settlement of claims against, or winding up of the affairs of, the Borrower;
the institution of any such proceeding against the Borrower if the Borrower
shall fail to secure dismissal thereof within thirty days thereafter, the
consent by the Borrower to any type of insolvency proceeding against the
Borrower (under the Bankruptcy Code or otherwise); or the occurrence of any
event or existence of any condition which could be the ground, basis or cause
for any proceeding or petition described in this Section.
7.4 Misrepresentation. If any certificate, statement, representation, warranty
or audit heretofore or hereafter furnished by or on behalf of the Borrower
pursuant to or in connection with this Agreement or otherwise (including,
without limitation, representations and warranties contained herein) or as an
inducement to Lender to extend any credit to or to enter into this or any other
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agreement with the Borrower proves to have been false in any material respect at
the time as of which the facts therein set forth were stated or certified or to
have omitted any substantial contingent or unliquidated liability or claim
against the Borrower, or if on the Agreement Date there shall have been any
materially adverse changes in any of the facts previously disclosed by any such
certificate statement, representation, warranty or audit, which change shall not
have been disclosed to Lender at or prior to the time of such execution.
7.5 Materially Adverse Changes. Any materially adverse change in the financial
condition of the Borrower or the existence of any other condition which, in
Lender's sole determination, constitutes an impairment of the Borrower's ability
to perform its obligations under this Agreement or any other document evidencing
or securing the Credit, and which condition is not remedied within (10) ten days
after written notice to the Borrower thereof or, if the condition cannot be
fully remedied within said ten (10) days, substantial progress has not been made
within said ten (10) days toward remedy of the condition.
Such materially adverse change may include, but shall not be
limited to: (a) the sale, assignment, transfer or delivery of all or
substantially all of the assets of the Borrower; (b) the cessation by the
Borrower as a going business concern; (c) the entry of judgment against the
Borrower other than a judgment for which the Borrower is fully insured, if ten
(10) days thereafter such judgment is not satisfied, vacated, bonded or stayed
pending appeal; (d) if the Borrower is generally not paying its debts as such
debts become due; or (e) nonpayment by the Borrower when due of any indebtedness
for borrowed money owing to any third party, or the occurrence of any event
which could result in acceleration of payment of any such indebtedness.
7.6 Failure to Perform Obligation. Default by the Borrower in the performance of
any of the terms, conditions or covenants contained in this Agreement or any
agreement or document made in connection with this Agreement which is not
remedied within ten (10) days after notice thereof by Lender to the Borrower.
7.7 Change in Ownership. A change in the ownership or management
of the Borrower to which Lender has not given its written consent.
ARTICLE VIII. REMEDIES UPON DEFAULT
8.1 Events of Default. Upon the happening of one or more Events of Default,
Lender may: (a) immediately cancel or suspend its agreement to advance the
Credit; and (b) declare the principal of the Credit Note then outstanding to be
immediately due and payable, together with all interest thereon and fees and
expenses accruing under this Agreement. Upon such declaration, the balance then
outstanding on the Credit Note shall become immediately due and payable without
presentation, demand or further notice of any kind to the Borrower.
8.2 Enforcement of Agreements. Upon the happening of one or more Events of
Default, Lender shall have the right to obtain physical possession of all files
of the Borrower relating to the Collateral and all documents relating to the
Collateral which are then or may thereafter come into the possession of the
Borrower or any third party acting for the Borrower. Lender shall be entitled to
specific performance of all agreements of the Borrower contained in this
Agreement or other documents relating to the Credit.
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8.3 Realization on Collateral. Upon the happening of one or more Events of
Default, Lender shall have the right to collect all further payments made on the
Collateral Note and revenue from the End Loan Proceeds, and if any such payments
are received by the Borrower, the Borrower shall not commingle the amounts
received with other funds of the Borrower and shall promptly pay them over to
Lender. In addition, Lender shall have the right to dispose of the Collateral as
provided herein or as provided in the other documents executed in connection
herewith or as provided by law.
ARTICLE IX. INDEMNIFICATION AND EXPENSES
The Borrower agrees to hold Lender harmless from and indemnifies Lender
against all liabilities, losses, damages, judgments, costs, and expenses of any
kind which may be imposed on, incurred by, or asserted against Lender relating
to or arising out of this Agreement, the Credit Note, or any transaction
contemplated hereby which are held the direct result of Borrower's uncured
default or gross negligence. The Borrower also agrees to reimburse Lender for
all reasonable expenses in connection with this Agreement and the Credit Note,
including without limitation the reasonable fees and disbursements of counsel,
all delivery, and insurance charges incurred in connection with delivery of Loan
Documents, wire transfer fees and including expenses of enforcement. The
Borrower's agreements in this Section shall survive the payment in full of the
Credit Note and the expiration or termination of this Agreement.
ARTICLE X. MISCELLANEOUS
10.1 Amendments and Waivers. No modification, rescission, waiver, release or
amendment of any provision of this Agreement shall be made except by a written
agreement subscribed by duly authorized officers of the Borrower and Lender.
10.2 Delays and Omissions. No course of dealing and no delay or omission by
Lender in exercising any right or remedy hereunder or with respect to any
indebtedness of the Borrower to Lender shall operate as a waiver thereof or of
any other right or remedy, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. Lender may remedy any default by the Borrower hereunder or with
respect to any other person, firm or corporation in any reasonable manner
without waiving the default remedied and without waiving any other prior or
subsequent default by the Borrower and shall be reimbursed for its expenses in
so remedying such default. All rights and remedies of Lender hereunder are
cumulative.
10.3 Attorney-in-Fact. The Borrower hereby authorizes Lender, at the Borrower's
expense, to file such financing statement or statements relating to the
Collateral without the Borrower's signature thereon as Lender at is option may
deem appropriate, and appoints Lender as the Borrower's attorney-in-fact
(without requiring Lender) to complete any recording information that may be
required on any assignment, to execute any such financing statement or
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statements in the Borrower's name and to perform all other acts which Lender
deems appropriate to perfect and continue the Security Interest and to protect,
preserve and realize upon the Collateral, including, but not limited to, the
right to endorse notes, complete blanks in documents and sign assignments on
behalf of the Borrower as its attorney-in-fact. This Power of Attorney is
coupled with an interest and is irrevocable without Lender's consent.
10.4 Collection. In the event of an uncured default, hereunder, Lender may
demand, collect and xxx on any of the Collateral (in the Lender's name at the
latter's option); may enforce, compromise, settle or discharge such Collateral
without discharging the indebtedness or any part thereof; and may endorse the
Borrower's name on any and all checks, commercial paper, and any other
instruments pertaining to or constituting Collateral. In the event Lender
intends to exercise any rights set forth in this Section, Lender shall use its
best efforts to notify the Borrower thereof prior to taking any such action.
10.5 Further Security. As further security for payment of the indebtedness, the
Borrower hereby grants to Lender a Security Interest in and lien on any and all
of the Borrower property, with the exception of custodial accounts, which is or
may hereafter be in the possession or control of Lender in any capacity or of
any third party acting on its behalf, including, without limitation, all deposit
and other accounts and all moneys owed or to be owed by Lender to the Borrower;
and with respect to all of such property, Lender shall have the same rights
hereunder as its has with respect to the Collateral. Without limiting any other
right of Lender, wherever Lender has the right to declare any indebtedness to be
immediately due and payable (whether or not it has so declared), Lender at its
sole election may set off against the indebtedness any and all moneys then or
thereafter owed to the Borrower by Lender in any capacity, whether or not the
indebtedness or the obligation to pay such moneys owed by Lender is then due,
and Lender shall be deemed to have exercised such right of setoff immediately at
the time of such election even though any charge therefor is made or entered on
Lender's records subsequent thereto.
10.6 Return of Collateral Under Trust Receipt. Possession of any of the
Collateral may be temporarily relinquished by Lender to the Borrower under a
trust receipt for the sole purpose of sale, exchange, collection, or
presentation, renewal or registration of transfer. At all times the Collateral
is in the Borrower's possession, the Borrower will hold the Collateral in trust
so as to continue the perfection of Lender's Security Interest.
10.7 Loss of Loan Documents. Once Loan Documents have been delivered to a postal
or delivery service as described in Paragraph 10.9 Notices, below, neither party
shall incur liability of any kind in connection with loss or delay in connection
with the transmittal of Loan Documents to or from the other party, any Investor,
or any other party pursuant to this Agreement.
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10.8 Successors and Assigns. The Borrower and Lender as used herein shall
include the legal representatives or assigns of those parties in cases where the
assignment by the Borrower was made with the consent required hereunder.
10.9 Notices. Any notice or communication required or permitted hereunder shall
be given in writing, sent by: (a) personal delivery; or (b) expedited delivery
service with proof of delivery; or (c) United States mail, postage prepaid,
registered or certified mail; or (d) prepaid telecopy, telegram or telex
addressed as follows:
To Lender: Greater Atlantic Bank
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx XX 00000
Attention: Xxxxxxxx X. Xxxxx
Senior Vice President
To Borrower: Harbourton Financial Corp.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attention: J. Xxxxxxx XxXxxxxx
President
or to such other address or to the attention of such other person as hereafter
shall be designated in writing by the applicable party sent in accordance
herewith. Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of delivery service or
mail, as of the date of first attempted delivery at the address and in the
manner provided herein, or in the case of telecopy, telegram or facsimile, upon
receipt.
10.10 Governing Law and Consent to Jurisdiction. This Agreement shall be
construed in accordance with, and all disputes hereunder shall be controlled
by, the laws of the Commonwealth of Virginia.
10.11 WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER HEREBY WAIVE, TO
THE FULLEST EXTEND PERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON OR RELATED TO, THIS NOTE. THIS WAIVER IS
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE LENDER AND THE BORROWER AND
THE BORROWER ACKNOWLEDGES THAT NO PERSON OR PARTY ACTING ON BEHALF OF ANOTHER
PARTY TO THIS NOTE HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF
TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE LENDER AND THE
BORROWER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE
OPPORTUNITY TO BE REPRESENTED) IN CONNECTION WITH THIS NOTE AND IN THE MAKING OF
THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL AND
THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
15
10.12 Counterparts. This Agreement may be executed in several counterparts and
all counterparts so executed shall constitute one agreement binding on all the
parties hereto, notwithstanding that all the parties are not signatories to the
original or the same counterpart.
10.13 Titles: . Wherever the term "Borrower" is used herein, the term shall be
deemed to include all subsidiaries, of such entity. At Lender's sole discretion,
any reference to "Lender" herein shall be deemed to include and/or mean and
refer to any successor or assign of Lender and any subsidiary or affiliate of
Lender, including, without limitation, any subsidiary or affiliate of Lender
which may ultimately take title to the Collateral, as if the name of such
subsidiary or affiliate of Lender were set forth herein.
10.14 Additional Actions. Borrower agrees to take reasonable and customary
additional actions, including the execution and delivery of additional documents
necessary in the reasonable opinion of Lender, to effectuate the provisions and
spirit of this Agreement.
10.15 Participation. Lender reserves the right to transfer participating
interests in this Agreement and in the Credit Note to one or more other
institutions or entities.
10.16 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement with respect to the subject matter hereof and is
intended as a complete and exclusive statement of the terms and conditions
thereof, and this Agreement supersedes and replaces all prior negotiations and
agreements among the parties hereto, or any of them, whether written or oral.
Any provision of this Agreement may be changed, waived or terminated only by
written instrument signed by the party against whom the change, waiver, or
termination is sought to be enforced. Each of the parties hereto hereby
acknowledges that it has been represented by independent counsel of its own
choice throughout all negotiations that have preceded the execution of this
Agreement and that it has executed the same with the consent and upon the advice
of said independent counsel. Each of the parties hereto acknowledges that no
other party, or agent or attorney of any other party, has made any promise,
representation or warranty whatsoever, express or implied, not contained herein
concerning the subject matter hereof, to induce the other party to execute this
agreement or any of the other documents referred to herein, and each party
hereto acknowledges that it has not executed this Agreement or such other
documents in reliance upon any such promise, representation, or warranty not
16
contained herein.
10.17 Time is of the Essence. Time is of the essence of this Agreement. All
actions to be taken under this Agreement shall be undertaken immediately, except
as otherwise stated herein.
10.18 Headings. Section and subsection headings in this Agreement are for
convenience of reference only, and shall not govern or influence in any manner
whatsoever the interpretation of any provision hereof.
10.19 Severability. The invalidity, illegality or unenforceability of any
provision of this Agreement, pursuant to judicial decree or otherwise, shall not
affect the validity or enforceability of any other provision of this Agreement,
each of which shall remain in full force and effect.
10.20 Waiver. No failure of any party to exercise any power given under this
Agreement or to insist upon strict compliance with any of the terms or
conditions specified in this Agreement shall constitute a waiver of such party's
right to demand exact compliance with the terms of this Agreement.
10.21 Relationship of Parties. Nothing contained in this Agreement shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partners, joint venturers, or of any
association whatsoever among Lender and Borrower and Borrower will indemnify and
hold Lender harmless from and against any and all costs, losses, damages and
liability arising or resulting from any claim by any third party against Lender
based on the contention or allegation that Lender is a partner or joint venturer
with the Borrower or has any other relationship with the Borrower other than
that of Lender.
10.22 Reservation of Claims. Additionally, and in any event, Lender reserves the
rights, claims and causes of action it may have against any third party relating
to the Loan, the Collateral, or otherwise, and, unless Borrower pays Lender all
amounts due herein, Borrower hereby assigns to Lender any and all rights,
claims, and causes of action they may have, whether known or unknown, against
such third parties. The institution of any such cause of action or the exercise
of any rights with respect thereto by Lender shall in no way affect the validity
or enforceability of this Agreement or any other document executed and delivered
to Lender in connection herewith.
10.23 Borrower's Opinion. The Borrower shall submit to Lender a current written
opinion satisfactory to Lender that from counsel for the Borrower to the effect
that (i) the Borrower is legally organized, validly existing and in good
standing under the laws of the State of Delaware; (ii) all documents are valid
and binding upon the Borrower and are enforceable in accordance with their
terms; (iii) the transaction contemplated by this Agreement, the Credit Note and
related documents does not violate any restriction, term, condition, or
provision of any contract or agreement to which the Borrower is a party or by
which the Borrower is bound; and (iv) there are no proceedings pending against
the Borrower.
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10.24 Lender's Counsel. All documents required by Lender in connection with the
closing of the transaction contemplated herein shall be prepared or reviewed by
Lender's legal counsel. Regardless of whether the transaction closes, Borrower
shall pay to Lender's counsel all reasonable fees for services preformed by such
counsel in connection with the transaction and preparation and review of
documents, and shall reimburse said counsel for all disbursements for the
account of either the Lender or the Borrower in connection with the transaction.
10.25 Loan Costs. Borrower shall pay all recording fees, insurance premiums,
attorneys fees and any and all other expenses in connection with the negotiation
of, preparation for, closing and servicing of the transaction. Borrower shall
also pay all expenses incurred if the transaction fails to close through no
fault of the Lender.
10.26 No Broker. Borrower represents that no brokers were used in connection
with this transaction and Borrower agrees to indemnify and hold Lender harmless
from and against any and all claims, demands and liability for brokerage
commissions, assignment fees, finder's fees or other compensation whatsoever
arising from this transaction. The Lender hereby agrees to pay any and all fees
imposed or charged by all brokers hired solely by the Lender, if any.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and their corporate seals to be
hereunto affixed, all as of the Agreement Date.
WITNESS: BORROWER:
HARBOURTON FINANCIAL CORP.
_________________________ /s/ J. Xxxxxxx XxXxxxxx
-----------------------
By:
Name: J. Xxxxxxx XxXxxxxx
Title: President
WITNESS: LENDER:
GREATER ATLANTIC BANK
__________________________ /s/ Xxxxxxxx X. Xxxxx
By:
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President
18
STATE OF ____________________
COUNTY OF __________________
I, _____________________, a Notary Public in and for the State and
County aforesaid, do hereby certify that this day personally appeared before me,
_________________ as ______________________ of Harbourton Financial Corp., a
Delaware corporation, whose name is signed to the foregoing and hereto annexed
Instrument, dated the _________ day of ______________________, 2000, and
acknowledged the same.
Given under my hand and seal, this _____ day of _______________, 2000.
--------------------------------
Notary Public
My Commission Expires:
STATE OF ____________________
COUNTY OF __________________
I, _____________________, a Notary Public in and for the State and
County aforesaid, do hereby certify that this day personally appeared before me,
_________________ as ______________________ of Greater Atlantic Bank, a
federally chartered financial institution, whose name is signed to the foregoing
and hereto annexed Instrument, dated the _________ day of
______________________, 2000, and acknowledged the same.
Given under my hand and seal, this _____ day of _______________, 2000.
--------------------------------
Notary Public
My Commission Expires:
00
Xxxxxxxxxx xx Xxxxxxx Xxxxxxxx Bank
March 15, 2001
J. Xxxxxxx XxXxxxxx
President
Harbourton Financial Corp.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
RE: Proposed Second Modification to Loan 30-09-1672, a
$2,500,000.00Corporate RevolvingCredit Facility to Harbourton Financial Corp.
Dear Xx. XxXxxxxx:
Greater Atlantic Bank (the "Bank" or "Lender") is pleased to advise you that
it has approved your application to increase the maximum amount available to
Borrower under the Loan Agreement from $2,500,000.00 to $3,000,000.00 under
the Corporate Revolving Credit Facility (the "Loan") and to extend the
maturity date to December 31, 2002.
The Second Modification Agreement (the "Agreement") will be forwarded to you
under separate cover.
Please call me with any question you may have.
Sincerely,
/s/ XXXXXXXX X. XXXXX
----------------------
XXXXXXXX X. XXXXX
SENIOR VICE PRESIDENT
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