ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
COMPANY LOAN AGREEMENT
THIS COMPANY LOAN AGREEMENT is made as of June 20, 1996, between the
INDUSTRIAL DEVELOPMENT AUTHORITY OF MECKLENBURG COUNTY, VIRGINIA, a political
subdivision of the Commonwealth of Virginia, P. 0. Xxx 000, Xxxxxxx, Xxxxxxxx
00000 (the "Authority") and SHERWOOD FOODS, INC., a North Carolina corporation,
which has its principal place of business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxxxxxxx, Xxxxxxxx 00000, which is qualified to transact business in the
Commonwealth of Virginia (the "Company"), and SHERWOOD BRANDS, INC., a North
Carolina corporation, and XXXXX XXXXXXX, individually, jointly and severally,
the "Guarantors."
PREAMBLE:
A. The Authority, established by ordinance of the County of Mecklenburg,
Virginia under the Industrial Development and Revenue Bond Act, Chapter 33,
Title 15.1 of the Code of Virginia, 1950, as amended (the "Act"), is authorized
and empowered
"...to borrow money and to accept contributions, grants and other financial
assistance from ... the Commonwealth, of any political subdivision, agency,
or public instrumentality of the Commonwealth, for or in aid of the
construction, acquisition, ownership, maintenance or repair of the
authority facilities, for the payment of principal of any bond of the
authority, interest thereon, or other cost incident thereto, or in order to
make loans in furtherance of the purposes of this chapter of such money,
contributions, grants, and other financial assistance, and to this end the
authority shall have the power to comply with such conditions and to
execute such agreements, trust indentures, and other legal instruments as
may be necessary, convenient or desirable and to agree to such terms and
conditions as may be imposed."
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B. The Authority has received from The Virginia Small Business Financing
Authority (the "VSBFA") a loan in the principal sum of Four Hundred Thousand
Dollars ($400,000) from certain moneys allocated by the General Assembly of the
Commonwealth of Virginia. The Authority will loan the $400,000 to the Company so
that the Company may acquire certain machinery and equipment for its business.
C. The Company has acquired, now owns, and intends to renovate, improve,
and equip a manufacturing facility on approximately ten acres located at 000
Xxxxx Xxxx Xxxxxx, in the Town of Chase City, Mecklenburg County, Virginia,
shown on Exhibit A attached, to produce food products and confectionery (the
"Project") which qualifies the plant as a manufacturing facility as described in
the Act. The Company will create fifty (50) full-time jobs within a two-year
period from the date of this Company Loan Agreement.
D. The Authority will loan the $400,000 to the Company for a period of five
years, amortized over a ten year period at an annual percentage rate of seven
percent (7%) (the "Company Loan"). The Company Loan will be secured by a shared
second lien security interest of equal dignity for a $250,000 loan (the "Lake
Country Loan") previously made to the Company by Lake Country Development
Corporation ("Lake Country") in accordance with the provisions of a Revolving
Loan Fund Loan Agreement dated as of May 15, 1996, between the Company and Lake
Country on the Project and the machinery and equipment being purchased in whole
or in part with
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the proceeds of the Company Loan (the "Equipment"), as more fully described in
Exhibit B. The Company Loan will also be guaranteed, jointly and severally, by
Xxxxx Xxxxxxx (the "Individual Guarantor") and Sherwood Brands, Inc., a North
Carolina corporation (the "Corporate Guarantor").
The Authority is willing to fund the Company Loan upon the following terms
and conditions:
NOW, THEREFORE, in consideration of the benefits accruing to the public
generally, and to the citizens of Mecklenburg County, Virginia, the Authority
and the Company agree, each with the other, as follows:
ARTICLE I. THE COMPANY LOAN
Section 1. TRANSFER OF FUNDS AND CLOSING DATE
The Authority hereby agrees to transfer, set over, and loan to the Company
on the Company Loan closing date, the sum of Four Hundred Thousand Dollars
($400,000), to be used to promote the health, welfare, safety and economic
well-being and development of the citizens of the Commonwealth through the
creation of fifty (50) full-time jobs by the Company.
Section 2. CLOSING DATE TIMING
It is understood that the Company Loan closing date shall be set as soon as
possible and that VSBFA will be notified of such date one week prior to closing.
Section 3. COMPANY LOAN TERMS
The Company Loan, in the principal sum of $400,000 with interest at seven
percent (7%) per annum, shall be amortized over
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a term of ten years, payable in fifty-nine (59) consecutive, equal monthly
installments of principal and interest commencing thirty (30) days next after
the date of this Company Loan Agreement and one final sixtieth (60th) payment
on the fifth (5th) anniversary date of this Company Loan Agreement in the total
of the then outstanding unpaid principal balance, accrued unpaid interest, and
penalty, if any. The Authority shall apply all payments made by the Company
first to interest and then to principal. All payments shall be made to the
Authority at the following address:
Industrial Development Authority of
Mecklenburg County, Virginia
0000 Xxxxxxxxx Xxxxxx (P. 0. Box 307)
Xxxxxxx, Xxxxxxxx 00000
The repayment schedule for the Company Loan is shown on the attached Loan
Repayment Table (Exhibit C). The Company Loan shall be evidenced by a promissory
note in the principal amount of $400,000 duly executed by the Company and
substantially in the form attached hereto as Exhibit D (the "Promissory Note").
The Company Loan shall be secured by a shared second lien security interest of
equal dignity with Lake Country for the debt of the Company to Lake Country
evidenced by its Promissory Note of May 15, 1996, in the principal sum of
$250,000 with interest in the Project and Equipment. The Company Loan will also
be guaranteed, jointly and severally, by Xxxxx Xxxxxxx (the Individual
Guarantor) and Sherwood Brands, Inc. (the Corporate Guarantor). The Authority
will not make the Company Loan unless and until the Company provides the
Authority with evidence that said security has been delivered and recorded as
required by local law on or before the closing date.
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The Company shall have the right without premium or penalty to prepay the
Promissory Note, in whole or in part, at any time and from time to time,
provided that all accrued interest and penalty, if any, is paid at the time the
Promissory Note is paid in full.
Section 4. MACHINERY, EQUIPMENT AND REAL ESTATE DESCRIPTION/SECURITY INTEREST
The Company shall provide a description of the Equipment on Exhibit B.
The Company hereby grants to the Authority a security interest in the
Equipment, together with all additions thereto and all replacement parts and
substitutions therefor, and all proceeds of the Equipment. The security interest
in the Equipment and parts and substitutions therefor and proceeds therefrom is
to secure payment of the Promissory Note, the interest thereon, and any other
sums payable by the Company under this Company Loan Agreement.
Financing statements with respect to the Equipment and meeting the
requirements of the Uniform Commercial Code of Virginia shall be filed by the
Company in the Uniform Commercial Code Division of the State Corporation
Commission of Virginia and in the Clerk's Office of the Circuit Court of
Mecklenburg County, Virginia. The Company shall file updated financing
statements or continuation statements whenever deemed advisable by the Authority
or VSBFA.
Section 5. LOAN FEES/SERVICING FEES
The Company shall pay the fees of the Authority and its counsel in
connection with making the Company Loan or enforcing or interpreting this
Company Loan Agreement or the Promissory Note.
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Section 6. LOAN ASSUMPTION
The Company Loan may not be assumed or otherwise transferred by the Company
to another party without the written approval of the Authority and VSBFA.
Section 7. DISBURSEMENT OF FUNDS
The Authority shall disburse the Company Loan proceeds to the Company upon
delivery to the Authority of invoices, purchase orders or other evidence that
payment is due or has been made by the Company for the purchase of the
Equipment.
ARTICLE II. REPRESENTATION AND WARRANTIES
Section 1. DULY ORGANIZED
Prior to making the Company Loan, the Company shall provide to the
Authority evidence that the Company (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State, (B) is duly qualified
to transact business in the Commonwealth of Virginia and (C) has corporate power
to enter into this Company Loan Agreement and the Promissory Note.
Section 2. DULY AUTHORIZED
Prior to making the Company Loan, the Company shall provide to the
Authority an opinion of legal counsel to the Company that the execution and
delivery of the Financing Documents, as hereinafter defined, and all other
instruments by the Company have been duly authorized by all necessary corporate
action and if applicable, action of the governing body of the Company, and will
not violate any law, rule, regulation, order, writ, judgment, decree,
determination or award presently in effect having applicability to
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the Company or any provision of the Company's Certificate of Incorporation or By
Laws or, as applicable, other governing rules, or result in a breach of, or
constitute a default under, any loan agreement between the Company and Central
Fidelity National Bank pertaining to a $935,000 loan (the "CFB Loan").
Section 3. LEGALLY BINDING INSTRUMENTS
Prior to making the Company Loan, the Company shall provide to the
Authority an opinion of legal counsel to the Company that the Company Loan
Agreement and the Promissory Note each constitute the legal, valid and binding
obligation of the Company in accordance with its terms, subject to customary
exceptions. Further, the opinion shall provide that the security interest in the
Equipment constitutes a legal, valid, and binding lien free and clear of all
prior liens and encumbrances, with the exception of the lien securing the CFB
Loan and the Lake Country Loan.
Section 4. NO LEGAL SUITS
Prior to making the Company Loan, the Company shall provide to the
Authority an opinion of legal counsel to the Company (which opinion may rely on
information provided by a search firm) or other evidence satisfactory to the
Authority that there are no legal actions, suits, or proceedings pending in the
Circuit Court of Mecklenburg County or, to the knowledge of the Company or its
counsel, threatened against the Company before any court or administrative
agency, which, if determined adversely to the Company, would have a material
adverse effect on the financial condition or business of the Company.
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Section 5. ELIGIBLE TO RECEIVE FEDERAL FUNDING
Prior to making the Company Loan, the Company shall certify to the
Authority that it has not been disbarred, suspended, or otherwise excluded from
receiving federal financial assistance.
Section 6. PAYMENT OF TAXES
Prior to making the Company Loan, the Company will certify to the Authority
that it has paid all taxes due and payable to the Internal Revenue Service and
the Commonwealth of Virginia as of the closing date of the Company Loan.
Section 7. NOT LOCATED IN FLOODPLAIN
Prior to making the Company Loan, the Company shall certify to the
Authority that the real estate, either securing the Company Loan or containing
assets that secure the Company Loan, is not located in a floodplain.
Section 8. NO ADVERSE CHANGE
Prior to making the Company Loan, the Company shall certify to the
Authority that there has been no adverse change since the date of the Company
Loan application in the financial condition, organization, operation, business
prospects, fixed properties, or personnel of the Company or Sherwood Brands,
Inc.; and no adverse or material change in the financial condition of the
Individual or Corporate Guarantor.
Section 9. EQUIPMENT
Upon the distribution of the proceeds of the Company Loan to the Company,
the Company will own the Equipment. The Equipment
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will be located at the Company's plant at 000 Xxxxx Xxxx Xxxxxx in the Town of
Xxxxx Xxxx, Xxxxxxxxxxx Xxxxxx, Xxxxxxxx 00000.
ARTICLE III. CONDITIONS OF LENDING
In addition to the opinions and certifications required in Article II, the
Authority shall require the following documentation as conditions to making the
Company Loan:
Section 1. EXECUTION AND DELIVERY OF FINANCING DOCUMENTS
Prior to making the Company Loan, the Company shall have executed and
delivered to the Authority or shall have caused to be executed and delivered to
the Authority the following documents (together, the "Financing Documents") in
form satisfactory to the Authority, its legal counsel and VSBFA.
--this Company Loan Agreement;
--the Promissory Note, including the Unconditional Guaranties appended
thereto;
--The Subordinate, Second Deed of Trust and Security Agreement dated
as of June 20, 1996, from the Company as Grantor to E. Xxxxxx
Xxxxxxxx, Trustee, in which the Authority and Lake Country
Development Corporation are the beneficiaries to secure equally
and proportionately the Lake Country Note in the original
principal amount of $250,000 and the Authority Note in the
original principal amount of $400,000 dated May 15, 1996, and
June 20, 1996, respectively, together with evidence that said
deed of trust has been recorded in the Clerk's Office of the
Circuit Court of Mecklenburg County, Virginia; and
--the Financing Statements, together with evidence that they have been
recorded with the Uniform Commercial Code Division of the State
Corporation Commission of Virginia and the Clerk's Office of the
Circuit Court of the County of Mecklenburg, Virginia.
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Section 2. OTHER DOCUMENTATION
Prior to making the Company Loan, the Company shall provide the Authority
with:
(A) evidence that the Equipment is free and clear of all prior liens
and encumbrances, except as noted in Article II, Section 3;
(B) evidence verifying the purchase of the Equipment and machinery at
a cost of at least $950,000;
(C) a certificate of insurance coverage showing that the Company has
complied with the provisions set forth in Article IV, Section 3;
(D) a copy of a resolution adopted by its Board of Directors
authorizing the Company Loan and the execution of the Financing Documents
by the Company;
(E) written verification that the Company has made an equity
contribution to the cost of the Project in an amount of at least $300,000
and a written certification that the Company will make an additional equity
contribution in the amount of at least $300,000 to the cost of the Project
including improvements to real property of at least $200,000 on or before
August 30, 1996;
(F) written verification of a $250,000 loan from Lake Country to fund
a portion of the acquisition of real estate, fixtures, and equipment and
written verification of a commitment from Central Fidelity National Bank to
issue, on behalf of the Company, a "Letter of Credit" in an amount up to
$939,000 to provide credit enhancement and support to an issue of
tax-exempt
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bonds by the Authority to fund a portion of the cost of the Project; and
(G) a certification from the Company that the conditions precedent to
making the Company Loan have been duly satisfied as of the closing date.
ARTICLE IV. AFFIRMATIVE COVENANTS OF THE COMPANY
The Company makes the following covenants, which shall be in effect from
the closing date until the Promissory Note has been paid in full with interest,
unless VSBFA or its assigns shall otherwise consent in writing:
Section 1. LOAN PAYMENT
The Company hereby agrees and promises to pay punctually the principal and
interest on the Promissory Note according to the terms and conditions stated
therein and under any of the Financing Documents.
Section 2. PAYMENT OF OTHER INDEBTEDNESS
The Company hereby agrees to pay punctually the principal and interest due
on any other indebtedness now or hereafter at any time owed by the Company to
the Authority or any other lender.
Section 3. MAINTAIN AND INSURE PROPERTY
The Company hereby agrees at all times to maintain the Equipment in such
condition and repair that the Authority's security interest will be adequately
protected. The Company also hereby agrees to maintain during the term of the
Company Loan adequate liability and hazard insurance policies to protect the
Equipment with proper endorsements protecting the Authority as its
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interest may appear. Further, the Company hereby agrees to provide evidence of
such policies to the Authority on an annual basis. Any policies must be issued
by companies licensed in Virginia and shall contain acceptable mortgagee/loss
payee clauses in favor of the Authority.
Section 4. PAY ALL TAXES
The Company hereby agrees to pay promptly and discharge all taxes,
assessments, and governmental charges upon it or against its properties, except
that the Company shall not be required to pay any such tax, assessment or
governmental charge which is being contested by it in good faith and by
appropriate proceedings.
Section 5. RIGHT TO INSPECTION
The Company hereby agrees to grant the duly authorized representatives of
the Authority and VSBFA, until the Company Loan has been fully repaid with
interest, the right at all reasonable hours to inspect the Equipment, and the
Company further hereby agrees to provide the duly authorized representatives of
the Authority and VSBFA free access to the Company's premises for the purpose of
such inspection to determine the condition of the Equipment.
Section 6. PROVIDE FINANCIAL INFORMATION
During the first two years of the Company Loan, the Company hereby agrees
to deliver to the Authority and VSBFA a quarterly financial statement, certified
by an authorized officer of the Company, to be a true and accurate copy.
Quarterly statements
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shall be delivered to the Authority and VSBFA within sixty (60) days of the
close of each quarterly accounting period.
The Company further agrees that, during the entire term of the Company
Loan, it will deliver to the Authority and VSBFA, annual reviewed financial
statements, within ninety (90) days of the close of the annual financial period,
prepared by an independent public accountant and certified by an authorized
officer of the Company to be true and accurate copies. At the request of VSBFA,
such annual financial statements must be audited, rather than reviewed.
The Company further agrees to provide copies annually or when otherwise
requested of the corporate financial statements of Sherwood Brands, Inc. and the
personal and corporate financial statements of the Individual and Corporate
Guarantors.
Section 7. REPORTING OF JOBS CREATED AND RETAINED
The Company shall provide information on a quarterly basis concerning the
number of full-time jobs created for the first two years of the Company Loan.
Section 8. NOTIFICATION OF PUBLIC HEARING
The Company hereby agrees to provide written notice to the Authority of any
public hearing or meeting before any administrative or other public agency which
may, in any manner, affect the Equipment.
Section 9. NULL AND VOID COVENANTS
The Company hereby agrees that in the event that any provision of this
Company Loan Agreement or any other Financing Document or instrument executed at
closing or the application thereof to any
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person or circumstances shall be declared null and void, invalid, or held for
any reason to be unenforceable by a court of competent jurisdiction, the
remainder of this Company Loan Agreement or other Financing Document or
instrument shall nevertheless remain in full force and effect, and to this end,
the provisions of all covenants, conditions, and agreements described herein and
therein shall be deemed separate and independent.
Section 10. NOTICE OF DEFAULT
The Company hereby agrees to give written notice to the Authority and VSBFA
of any event, within ten (10) days of the event, which shall constitute an Event
or Default under this Company Loan Agreement as described in Article VI herein,
or that would, with notice or lapse of time or both, constitute an Event or
Default under this Company Loan Agreement.
Section 11. INDEMNIFICATION
The Company hereby agrees to indemnify and save the Authority, its
directors, officers, agents, employees, or their assigns harmless against any
and all liability and cost of whatever nature, including, but not limited to,
attorneys' fees, with respect to, or resulting from, any action, breach or
default under any of the Financing Documents. This is a covenant of first
payment and defense, not merely of surety or reimbursement.
Section 12. EXPENSES OF COLLECTION OR ENFORCEMENT
The Company hereby agrees, if at any time the Company shall default on any
provision of this Company Loan Agreement, to pay the Authority or its assigns,
in addition to any other amounts that may
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be due from the Company, an amount equal to the costs and expenses of
collection, enforcement or correction or waiver of default including but not
limited to attorneys' fees.
Section 13. ELIGIBLE LENDING AREA
The Company hereby agrees to maintain its operations within the Chase City,
Mecklenburg County area. In the event that operations are moved out of
Mecklenburg County, the outstanding balance of the Company Loan will be
immediately due and payable.
Section 14. COMPLIANCE WITH FEDERAL CIVIL RIGHTS REQUIREMENTS
The Company agrees to comply with all federal civil rights requirements
that hold that no person shall on the grounds of race, color, national origin,
sex, handicap, or age be excluded from participating in, be denied the benefits
of, or be otherwise subjected to discrimination under, any activity for which
this federal financial assistance has been extended. The Company further agrees
to provide any information requested by the VSBFA and/or the Authority to insure
the Company's compliance with civil rights laws.
Section 15. CERTIFICATION OF NONRELOCATION
The Company certifies that it will not transfer one or more jobs from one
commuting area to another either by closing an operation in one commuting area
and opening a new operation within a new commuting area or curtailing its
employment in one commuting area and increasing the number of jobs in another
commuting area as a result of this Loan.
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Section 16. ENVIRONMENTAL REQUIREMENTS
The Company agrees to indemnify and hold the Economic Development
Administration, the VSBFA, and the Authority harmless from and against all
liabilities that might be incurred as a result of providing an award to assist,
directly or indirectly, in the preparation of site construction, renovation, or
repair of any facility or site, if applicable, to the extent that such
liabilities are incurred because of ground water, surface, soil, or other
conditions caused by operations of the Company or any of its predecessors on the
property.
The Company further agrees to provide a Phase I environmental audit of the
real estate held as collateral acceptable to the VSBFA and agrees to comply with
applicable laws and statutes including, but not limited to, those listed in
Exhibit E.
Section 17. NOTICE OF DEBARMENT
The Company agrees to notify the Parties immediately upon notification that
it has been debarred, suspended, or otherwise excluded from receiving federal
financial assistance.
Section 18. APPOINTMENT OF PROCESS AGENT.
Sherwood Brands, Inc., a North Carolina corporation (the Corporate
Guarantor), whose address is 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxxxxxx 00000, is not registered for business in the Commonwealth of Virginia.
The Individual Guarantor, Urziel Frydman, whose address is 0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000, is a nonresident of the
Commonwealth of Virginia. Therefore, they and each of them
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irrevocably appoint Xxxx Xxxxxxxx as their agent to accept legal service of
process in their name and on their behalf. If the Authority is unable to obtain
prompt legal service upon a Guarantor at the address shown for such Guarantor
herein or through the designated agent, each Guarantor, jointly and severally,
irrevocably appoints the Secretary of the Commonwealth of Virginia as each
Guarantor's agent for the acceptance of substituted service of process upon each
Guarantor and it is understood and agreed that each Guarantor hereby submits to
the in personam jurisdiction of the Circuit Court of Mecklenburg County,
Virginia, (upon compliance with the procedural laws and rules of the
Commonwealth of Virginia) wherein any action may be brought by the Authority,
its successors or assigns, arising out of, resulting from, or incident to the
Promissory Note, Unconditional Guaranty, and the Company Loan Agreement.
This appointment shall survive satisfaction of the Company Loan Agreement
and payment of all indebtedness evidenced by the Promissory Note and all other
incidents of this transaction.
ARTICLE V. NEGATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that from the date hereof until
payment in full of the Promissory Note, the Company shall not (A) enter into any
agreement or other commitment the performance of which would constitute a
breach of any of the covenants contained in this Company Loan Agreement
including but not limited to, any agreement or commitment which would cause an
encumbrance of or create a lien against the Equipment; (B) sell,
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convey, lease, assign, pledge, transfer or otherwise dispose of the Equipment
without prior written consent of the Authority and VSBFA; (C) change 50% or more
of the ownership of the Company without the prior written consent of the
Authority and VSBFA; or (D) change its name or the location of the Equipment
without prior written notice to the Authority and VSBFA. The Company further
covenants and agrees that it will notify the Authority and VSBFA of any change
in ownership of the Company.
ARTICLE VI. EVENTS OF DEFAULT
Section 1. EVENTS OF DEFAULT
Each of the following is an "Event of Default" under this Company Loan
Agreement:
A. NONPAYMENT OF COMPANY LOAN
Failure by the Company to make payment of any installment of principal on
the Promissory Note, or interest accrued thereon within ten (10) days after the
date such payment is due.
B. NONPAYMENT ON OTHER INDEBTEDNESS
Failure by the Company to make payment of any installment of principal or
interest on any other indebtedness of the Company within thirty (30) days of the
date of such payment is due.
C. INCORRECT REPRESENTATION OR WARRANTY
Any material inaccuracy in any representation or warranty contained in, or
made in connection with the execution and delivery of the Financing Documents or
in any certificate or instrument furnished pursuant thereto.
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D. DEFAULT IN COVENANTS
Any material default by the Company in the performance of any other term,
covenant, or agreement contained in the Financing Documents which continues
without remedy for thirty (30) days after either (i) it becomes known to an
executive officer of the Company or (ii) written notice thereof has been given
to the Company by the Authority or VSBFA.
Any material default by Sherwood Brands, Inc., or the Individual Guarantor
in the performance of any other term, covenant, or agreement contained in the
Financing Documents which continues without remedy for thirty (30) days after
either (i) it becomes known to such person or an executive officer of Sherwood
Brands, Inc., or (ii) written notice thereof has been given to such person or
Sherwood Brands, Inc. by the Authority or VSBFA.
E. DEFAULT IN JOB CREATION
Failure by the Company to create fifty (50) full-time jobs within a
two-year period from the closing date of the Company Loan, except to the extent
that such failure is attributed to adverse economic conditions.
F. OTHER DEFAULTS
(1) There is instituted by or against the Company any proceedings for an
order for relief, or if the Company consents to an order for relief against it,
or if the Company files a petition or answer or consent seeking
reorganization, arrangement, adjustment, composition or relief, under the
federal bankruptcy laws or any other similar applicable federal or state law, or
if
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the Company consents to the appointment of a receiver, liquidator, custodian,
assignee, trustee or sequestrator (or other similar official) of the Company or
of any substantial part of its property, or if the Company makes an assignment
for the `benefit of creditors or admits in writing its inability to pay its
debts generally as they become due; (2) unpaid final judgments have been entered
against the Company exceeding $10,000 that are not fully covered by liability
insurance; and (3) any lawsuit has been instituted affecting the Company or its
corporate principals which may affect the Company's ability to make payments on
the Promissory Note as and when due or affect a substantial portion of the
Equipment.
Section 2. EFFECT OF EVENT OF DEFAULT
Upon the occurrence of an Event of Default, whether voluntarily or
involuntarily, or, without limitation, brought about by operation of law or
pursuant to or in compliance with any judgment, decree or order or any court
order or any order, rule, or regulation of any administrative or governmental
body, the entire unpaid principal of the Promissory Note, and the interest then
accrued thereon, shall become immediately due and payable upon the written
demand of the Authority or its assigns. The Authority may take any other action
or pursue any other remedy permitted by law, including taking possession of the
Equipment and exercising any other remedies authorized by the Uniform Commercial
Code of Virginia. If requested by the Authority, the Company shall assemble the
Equipment and make it available to the Authority at a
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place designated by the Authority which is reasonably convenient to the
Authority and the Company.
If a default in payment under the Promissory Note remains without remedy
for more than thirty (30) days, the Authority shall notify VSBFA of the default
and shall take whatever reasonable actions are necessary, including legal
action, to secure payment of the Promissory Note. The Authority shall document
all actions taken in regard to correcting the default and shall provide
documentation to VSBFA. The VSBFA will pay the reasonable fees and expenses of
any actions or remedies pursued by the Authority or its directors, officers,
employees or agents upon a default by the Company. The moneys received from any
action taken upon an Event of Default shall first be applied to the payment of
the reasonable fees and expenses incurred by the Authority and VSBFA or their
directors, officers, employees or agents in the collection of such moneys, then
shall be applied to the payment of the Promissory Note.
ARTICLE VII. MISCELLANEOUS
Section 1. NO INDIVIDUAL LIABILITY OF OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS
OF THE AUTHORITY
No covenant, agreement or obligation in this Company Loan Agreement or in
the other Financing Documents or instruments in connection with this Company
Loan Agreement shall be deemed to be a covenant, agreement or obligation of any
present or future director, officer, employee or agent of the Authority in his
or her individual capacity, and neither the directors of the Authority nor any
officer thereof executing this Company Loan Agreement or any
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Financing Documents or any other instruments pertaining to it shall be liable
personally or be subject to any personal liability or accountability by reason
of the issuance thereof. No director, officer, employee or agent or advisor of
the Authority including any successor or assignee of any of the foregoing shall
incur any personal liability with respect to any other action taken by him or
her pursuant to this Company Loan Agreement or the Act provided he or she does
not act in good faith.
Upon request, VSBFA will submit to the Authority written instructions
regarding any actions to be taken or not to be taken under its Loan Agreement or
this Company Loan Agreement. Notwithstanding anything in this Company Loan
Agreement to the contrary, neither the Authority nor any present or future
director, officer, employee, agent, or advisor of the Authority shall incur any
liability or be personally responsible for any action taken or not taken under
its Loan Agreement or this Company Loan Agreement in the furtherance of remedies
or other activities previously discussed with VSBFA or contained in written
instructions from VSBFA, whether or not the specific action taken or not taken
was specifically discussed with VSBFA or contained in written instructions from
VSBFA and whether or not such action is deemed to have been taken or not taken
in bad faith.
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WITNESS the execution of these presents as of the date and year first above
written and duly authorized as required by applicable law.
INDUSTRIAL DEVELOPMENT AUTHORITY
OF MECKLENBURG COUNTY, VIRGINIA
BY /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, Vice Chairman
ATTEST:
BY /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx, Secretary
(SEAL)
IN WITNESS WHEREOF Sherwood Foods, Inc., a North Carolina corporation,
causes this Economic Development Revolving Loan Fund Company Loan Agreement
dated as of June 20, 1996, to be executed in its behalf by Xxxx Xxxxxxxx, Vice
President, attested by Xxxx Xxxxxxxx, Secretary, pursuant to authority of its
Board of Directors by resolution duly adopted as its corporate act and deed as
of the date and year first above written.
SHERWOOD FOODS, INC., a North
Carolina corporation
By /s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx, Vice President
ATTEST:
/s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx, Secretary
(SEAL)
Page 23 of 26
THE GUARANTORS:
SHERWOOD FOODS, INC., a North
Carolina corporation
By /s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx, Vice President
ATTEST:
/s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx, Secretary
(SEAL)
/s/ Xxxxx Xxxxxxx
--------------------------- (SEAL)
Xxxxx Xxxxxxx
Exhibit A -- Description of Property
Exhibit B -- Description of Equipment
Exhibit C -- Loan Repayment Table
Exhibit D -- Form of Promissory Note
Exhibit E -- Environmental Laws and Statutes
COMMONWEALTH OF VIRGINIA
COUNTY OF MECKLENBURG
I, Xxxxx X. Xxxxxx, a Notary Public in and for the County and State
aforesaid, do hereby certify that Xxxxxx X. Xxxxxxx, Vice Chairman, and Xxxxx X.
Xxxxxxx, Secretary, of the Industrial Development Authority of Mecklenburg
County, Virginia, whose names are signed to the foregoing Company Loan Agreement
made as of June 20, 1996, have this day personally appeared before me and
acknowledge the execution thereof in my County and State aforesaid.
Given under my hand this 20th day of June, 1996.
My commission expires: April 30, 1998
Xxxxx X. Xxxxxx
-------------------------
Notary Public
Page 24 of 26
COMMONWEALTH OF VIRGINIA
COUNTY OF MECKLENBURG
I, Xxxxx X. Xxxxxx, a Notary Public in and for the County and State
aforesaid certify that Xxxx Xxxxxxxx personally came before me this day and
acknowledged that she is Secretary of Sherwood Foods, Inc., a North Carolina
corporation, and that by authority duly given and as the act of the corporation,
the foregoing instrument was signed in its name by Xxxx Xxxxxxxx as Vice
President, sealed with its corporate seal and attested by Xxxx Xxxxxxxx, as its
Secretary.
Witness my hand and official seal this 20th day of June, 1996
My commission expires: April 30, 1998
Xxxxx X. Xxxxxx
-------------------------
Notary Public
COMMONWEALTH OF VIRGINIA
COUNTY OF MECKLENBURG
I, Xxxxx X. Xxxxxx, a Notary Public in and for the County and State
aforesaid certify that Xxxx Xxxxxxxx personally came before me this day and
acknowledged that she is Secretary of Sherwood Brands, Inc., a North Carolina
corporation, and that by authority duly given and as the act of the corporation,
the foregoing instrument was signed in its name by Xxxx Xxxxxxxx as Vice
President, sealed with its corporate seal and attested by Xxxx Xxxxxxxx, as its
Secretary.
Witness my hand and official seal this 20th day of June, 1996
My commission expires: April 30, 1998
Xxxxx X. Xxxxxx
-------------------------
Notary Public
Page 25 of 26
COMMONWEALTH OF VIRGINIA
COUNTY OF MECKLENBURG
I, Xxxxx X. Xxxxxx, a Notary Public in and for the County and State
aforesaid, do hereby certify that Xxxxx Xxxxxxx whose name is signed to the
foregoing Company Loan Agreement made as of June 20, 1996, has this day
personally appeared before me and acknowledge the execution thereof in my County
and State aforesaid.
Given under my hand this 20th day of June, 1996.
My commission expires: April 30, 1998
Xxxxx X. Xxxxxx
-------------------------
Notary Public
Page 26 of 26
THIS DEED, made this 17th day of April, 1996 by and between HAMPCO
APPAREL, INC. a Maryland Corporation, formerly known as Standard Garments, Inc.,
party of the first part (Grantor), and SHERWOOD FOODS, INC. a North Carolina
Corporation, of 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000,
party of the second part (Grantee),
W I T N E S S E T H
That for and in consideration of the sum of TEN ($10.00) DOLLARS and other
legal and valuable considerations in hand paid the Grantor by the Grantee, at
and before the signing, sealing and delivery of this deed, the receipt of which
is hereby acknowledged, the Grantor does, by these presents, bargain, sell,
grant and convey unto SHERWOOD FOODS, INC., a North Carolina Corporation with
GENERAL WARRANTY and ENGLISH COVENANTS OF TITLE, all of the following described
real estate, to wit;
All that certain tract or parcel of land located in the Town of Chase City,
Mecklenburg County, Virginia, containing TEN AND 00/100 (10.00) ACRES, more
or less, as shown on a survey prepared by Xxxxxxxxxxx & Associates, Inc.,
dated April 11, 1996. Said survey is recorded in New Plat Book 8, page 277
and reference is made thereto for a more complete description of the said
10.00 acres and the metes and bounds description thereon is by reference
incorporated herein. Said property is bounded on the North by lands of
Xxxxxx Oil Company; on the East by lands of Xxxx X. and Xxxx X. Xxxxxx; on
the South by lands of Okla X. Xxxxxxx; and, on the West by Virginia State
Route 92.
