R#261058.5
[Execution Copy]
OMNIBUS AGREEMENT
dated September 2, 1998
by and among
FOUNTAIN POWERBOATS, INC.
FOUNTAIN POWERBOAT INDUSTRIES, INC.
FOUNTAIN POWER,INC.
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
GENERAL ELECTRIC CAPITAL CORPORATION, AS AGENT
TABLE OF CONTENTS
(Not a part of the Agreement)
ARTICLE 1. DEFINITIONS AND USAGE 2
1.01. Definitions 2
1.02. Use of Defined Terms 8
1.03. Terminology 8
1.04. Accounting Terms 8
1.05. Headings 8
1.06. References 8
ARTICLE 2. THE LOANS 9
2.01. The GECC Loan 9
2.02. The Aircraft Loan 9
2.03. The Transamerica Loan 9
2.04. Prepayments 9
ARTICLE 3. CONDITIONS 10
3.01. Transamerica Loan; Amendment of GECC Loan and
Aircraft Loan 10
3.02. General Conditions 13
ARTICLE 4. REPRESENTATIONS AND WARRANTIES 14
4.01. Financial Statements 14
4.02. Capacity and Standing 14
4.03. No Violation of Other Agreements 14
4.04. Authority 14
4.05. Asset Ownership 14
4.06. Discharge of Liens and Taxes 15
4.07. Regulation U 15
4.08. ERISA 15
4.09. Litigation 15
4.10. Binding and Enforceable 15
4.11. Insolvency 15
4.12. Boat Titles, Etc 15
ARTICLE 5. COVENANTS 16
5.01. Affirmative Covenants. 16
(a) Maintain Existence 16
(b) Maintain Records 16
(c) Maintain Properties 16
(d) Conduct of Business 16
(e) Maintain Insurance 16
(f) Comply with Laws 16
(g) Governmental Notices 16
(h) Right of Inspection 16
(i) Financial Reports and Other Data 17
(j) Knowledge of Certain Events 18
(k) Other Notices 18
(l) Further Assurances 19
(m) ERISA 19
(n) Payment of Obligations 19
(o) Subsidiaries 19
(p) Assets 19
(q) Encumbrance of Assets 19
5.02. Financial Covenants. 20
(a) Current Ratio 20
(b) Tangible Net Worth 20
(c) Debt to Worth 20
(d) Cash Flow Margin 20
(e) Capital Expenditures Limitation 20
5.03. Negative Covenants. 20
(a) Liens 20
(b) Debt 20
(c) Mergers 21
(d) Leases 21
(e) Dividends 21
(f) Guaranties 21
(g) Sale of Assets 22
(h) Transfer of Ownership 22
(i) Related Party Contracts 22
(j) Boat Titles, Etc 22
ARTICLE 6. HAZARDOUS MATERIALS AND ENVIRONMENTAL COMPLIANCE
22
6.01. Investigation 22
6.02. Compliance 23
6.03. Remedial Action 23
ARTICLE 7. COLLATERAL; INTERCREDITOR PROVISIONS 23
7.01. Collateral. 23
7.02. Transfer of Secured Party's Interest 23
7.03. Sharing of Collateral. 23
7.04. Collateral Held for Benefit of Lenders. 24
7.05. Sharing of Recoveries. 24
7.06. Consents 24
7.07. Modifications to Existing Security Agreements
25
ARTICLE 8. DEFAULT 26
8.01. Events of Default 26
8.02. Remedies 28
8.03. Notice of Default 29
8.04. Realization on Collateral 29
ARTICLE 9. THE AGENT 29
9.01. Appointment, Powers and Immunities 29
9.02. Reliance by Agent 30
9.03. Defaults 30
9.04. Rights of Agent as a Lender 30
9.05. Indemnification 31
9.06. CONSEQUENTIAL DAMAGES 31
9.07. Payee of Note Treated as Owner 31
9.08. Non-Reliance on Agent and Other Lenders 32
9.09. Failure to Act 32
9.10. Resignation or Removal of Agent 32
ARTICLE 10. MISCELLANEOUS 33
10.01. Notices 33
10.02. No Waivers 33
10.03. Expenses; Documentary Taxes; Indemnification 33
10.04. Amendments and Waivers 34
10.05. Successors and Assigns 35
10.06. Obligations Several 36
10.07. Making Required Payments 37
10.08. Existing Guaranty 37
10.09. Omnibus Agreement Controls 37
10.10. No Novation 37
10.11. North Carolina Law 38
10.12. Severability 38
10.13. Interpretation 38
10.14. Consent to Jurisdiction 38
10.15. Arbitration 39
10.16. Proceedings Against Collateral 39
10.17. No Setoff 39
10.18. Reproduction of Documents 40
10.19. Inconsistency of Covenants 40
10.20. Counterparts 40
SCHEDULES AND EXHIBITS
SCHEDULE 4.05 Assets of Present Subsidiary
SCHEDULE 4.09 Litigation
SCHEDULE 6.01 Hazardous Materials
SCHEDULE 7.07 Existing Security Agreement Terms
EXHIBIT A Amended GECC Note
EXHIBIT B Amended Aircraft Note
EXHIBIT C Transamerica Note
EXHIBIT D Deed of Trust Amendment
EXHIBIT E Assignment of Rents Amendment
EXHIBIT F Aircraft Mortgage Amendment
EXHIBIT G Assignment of Existing Collateral Assignment
EXHIBIT H New Collateral Assignment
EXHIBIT I Corporate Guaranty
EXHIBIT J Parent Security Agreement
EXHIBIT K Life Insurance Assignment
EXHIBIT L Subordination Agreement
EXHIBIT M Parent Collateral Assignment
EXHIBIT N Power Collateral Assignment
EXHIBIT O Form of Legal Opinion
OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT (this "Agreement") is made as of
September 2, 1998,
by and among:
FOUNTAIN POWERBOATS, INC., a corporation duly organized and
existing under
the laws of the State of North Carolina (hereinafter
referred to as
"Borrower"), FOUNTAIN POWERBOAT INDUSTRIES, INC., a Nevada
corporation
(the "Parent Corporation"), and FOUNTAIN POWER, INC., a
North Carolina
corporation ("Power" or the "Present Subsidiary"; the Parent
Corporation,
the Present Subsidiary, any other present or future
"Consolidated
Subsidiaries" {as such term is hereinafter defined} of the
Parent
Corporation, and the Borrower are sometimes hereinafter
referred to
collectively as the "Fountain Corporations" and each as a
"Fountain
Corporation");
GENERAL ELECTRIC CAPITAL CORPORATION, a corporation
organized and existing
under the laws of New York (hereinafter referred to as
"GECC");
TRANSAMERICA BUSINESS CREDIT CORPORATION, a corporation
organized and
existing under the laws of Delaware (hereinafter referred to
as
"Transamerica"; Transamerica and GECC are referred to herein
collectively
as the "Lenders" and individually as a "Lender"); and
GENERAL ELECTRIC CAPITAL CORPORATION, a corporation
organized and existing
under the laws of New York, not individually but in its
capacity as agent
(in such capacity, the "Agent") for itself and the other
Lenders.
BACKGROUND:
A. The Borrower, the Parent Corporation, Power, certain
formerly
existing subsidiaries of the Borrower and GECC have heretofore
entered into a
Loan Agreement, dated December 31, 1996, pursuant to which GECC
loaned to the
Borrower the principal sum of $10,000,000 (the "GECC Loan") as
evidenced by the
Borrower's promissory note in said principal amount payable to
the order of
GECC and dated December 31, 1996 (the "Existing GECC Note").
B. The Borrower, the Parent Corporation and Power have
requested that
GECC make an additional $4,000,000 loan to the Borrower. GECC
has declined to
do so. However, Transamerica has agreed to make a loan in such
amount to the
Borrower (the "Transamerica Loan"), subject to the terms and
conditions of this
Agreement.
C. The parties desire to provide that the collateral
currently securing
the GECC Loan and the Aircraft Loan (as hereinafter defined)
shall ratably
secure the GECC Loan, the Aircraft Loan and the Transamerica Loan
(collectively, the "Loans") and that GECC shall hold all such
collateral not
solely for its own account but, acting as Agent, for the account
of the
Lenders. The parties also wish to provide that the Loans shall
be subject to
and governed by the terms of this Agreement. Finally, the
parties wish to (1)
make certain amendments to the certain instruments and agreements
heretofore
executed in connection with the Aircraft Loan and the GECC Loan
and (2), make
certain amendments to the various instruments and agreements now
securing the
GECC Loan and the Aircraft Loan, in order to provide for the
sharing of
collateral by the Lenders through the Agent and to provide for
certain
additional collateral to secure the Loans.
D. In addition to the foregoing, the Borrower and GECC
wish to provide
for certain changes to the Existing GECC Note and the Existing
Aircraft Note
(as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and for
other valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, and
intending to be legally bound hereby, the parties agree as
follows:
1. ARTICLE DEFINITIONS AND USAGE
1.1. Definitions . In addition to the terms heretofore
defined, the terms
as defined in this Section 1.01 shall, for all purposes of this
Agreement and
any amendment hereto (except as herein otherwise expressly
provided or unless
the context otherwise requires), have the meanings set forth
herein (terms used
in the singular to have the corresponding meanings when used in
the plural, and
vice versa):
"Affiliate" means any entity which directly or indirectly
controls, is
controlled by, or is under common control with, the Parent
Corporation or any
of its subsidiaries. For purposes of this definition, "control"
shall mean the
possession, directly or indirectly, of the power to (i) vote ten
percent (10%)
or more of the securities having ordinary voting power for the
election of
directors of such Person, or (ii) direct or cause the direction
of management
and policies of a business, whether through the ownership of
voting securities,
by contract or otherwise and either alone or in conjunction with
others or any
group.
"Aircraft Loan Assumption Agreement" means that Transfer and
Assumption
Agreement, dated October 1, 1997, by and among RMF, the Borrower
and GECC.
"Aircraft Loan" means the loan in the principal amount of
$1,067,810.66
made by GECC to RMF on July 11, 1996, as evidenced by the
Existing Aircraft
Note, the liability for which loan the Borrower assumed (and from
which
liability RMF was released) pursuant to the Aircraft Loan
Assumption Agreement.
"Aircraft Mortgage" means that Aircraft Chattel Mortgage,
dated as of July
11, 1996, by and between GECC as mortgagee and RMF, as mortgagor,
as the same
has been amended on the date hereof by the Aircraft Mortgage
Amendment and as
the same may be further amended, supplemented, restated,
extended, renewed,
replaced or otherwise modified and in effect from time to time.
Said Aircraft
Chattel Mortgage, the aircraft and other property encumbered
thereby and the
indebtedness secured thereby were transferred by said RMF to the
Borrower
pursuant to the Aircraft Loan Assumption Agreement.
"Aircraft Mortgage Amendment" has the meaning assigned to
such term in
Section 3.01.(g).
"Amended Aircraft Note" means the promissory note of the
Borrower provided
for by Section 2.02 to evidence the Aircraft Loan, and all
promissory notes
delivered in substitution or exchange therefor, in each case as
the same may be
modified, amended, supplemented, restated, extended,
consolidated, renewed or
replaced and in effect from time to time.
"Amended GECC Note" means the promissory note of the
Borrower provided for
by Section 2.01 to evidence the GECC Loan, and all promissory
notes delivered
in substitution or exchange therefor, in each case as the same
may be modified,
amended, supplemented, restated, extended, consolidated, renewed
or replaced
and in effect from time to time.
"Assignment of Existing Collateral Assignment" has the
meaning assigned to
such term in Section 3.01(h).
"Assignment of Rents" means the Assignment of Rents and
Leases, dated
December 31, 1996, between the Borrower and GECC, recorded in the
Registry in
Book 1063, Page 372, as amended on the date hereof pursuant to
the Assignment
of Rents Amendment and as the same may be further amended,
supplemented,
restated, extended, renewed, replaced or otherwise modified and
in effect from
time to time.
"Assignment of Rents Amendment" has the meaning assigned to
such term in
Section 3.01(f).
"Borrower Security Agreement" means that Master Security
Agreement, dated
December 31, 1996, between the Borrower and GECC, as modified by
this Agreement
and as the same may be further amended, supplemented, restated,
extended,
renewed, replaced or otherwise modified and in effect from time
to time.
"Business Day" means and includes any calendar day other
than a Saturday,
a Sunday or a day on which all commercial banks in the City of
New York, New
York, are required or authorized to be closed.
"Collateral" means any and all assets of the respective
Fountain
Corporations now or at any time hereafter encumbered by the lien
of any
Security Document.
"Consolidated Current Assets" and "Consolidated Current
Liabilities" mean,
at any time, all assets or liabilities, respectively, of the
Parent Corporation
and its Consolidated Subsidiaries that, in accordance with GAAP,
should be
classified as current assets or current liabilities,
respectively, on a
consolidated balance sheet of the Parent Corporation.
"Consolidated Liabilities" means the sum of (i) all
liabilities that, in
accordance with GAAP, should be classified as liabilities on a
consolidated
balance sheet of Parent Corporation, and (ii) to the extent not
included in
clause (i) of this definition, all redeemable preferred stock.
"Consolidated Subsidiary" means at any date any Subsidiary
or any other
entity the accounts of which, in accordance with GAAP, would be
consolidated
with those of the Parent Corporation in its consolidated
financial statements
as of such date.
"Consolidated Tangible Net Worth" means, at any time,
stockholders'
equity, less the sum of the value, as set forth or reflected on
the most recent
consolidated balance sheet of the Parent Corporation, prepared in
accordance
with GAAP, of
(A) any surplus resulting from any write-up of
assets
subsequent to June 30, 1996;
(B) all assets which would be treated as
intangible assets for
balance sheet presentation purposes under GAAP, including
without
limitation goodwill (whether representing the excess of cost
over book
value of assets acquired, or otherwise), trademarks,
tradenames,
copyrights, patents and technologies, and unamortized debt
discount and
expense.
(C) to the extent not included in (B) of this
definition, any,
amount at which shares of capital stock of the Parent
Corporation appear
as an asset on the consolidated balance sheet of the Parent
Corporation;
(D) loans or advances to stockholders, directors,
officers or
employees; and
(E) to the extent not included in (B) of this
definition,
deferred expenses.
"Corporate Guaranty" means the guaranty agreement provided
for by Section
3.01(j), executed by the Parent Corporation and the Present
Subsidiary to and
in favor of the Agent and the Lenders, as the same may be
amended,
supplemented, restated, extended, renewed, replaced or otherwise
modified and
in effect from time to time.
"Debt" of any Person means at any date, without duplication,
(i) all
obligations of such Person for borrowed money, (ii) all
obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments,
(iii) all obligations of such Person to pay the deferred purchase
price of
property or services, except trade accounts payable arising in
the ordinary
course of business, (iv) all obligations of such Person as lessee
under capital
leases, (v) all obligations of such Person to reimburse any bank
or other
Person in respect of amounts payable under a banker's acceptance,
(vi) all
redeemable preferred stock of such Person (in the event such
Person is a
corporation), (vii) all obligations (absolute or contingent) of
such Person to
reimburse any bank or other Person in respect of amounts paid
under a letter of
credit or similar instrument, (viii) all Debt of others secured
by a Lien on
any asset of such Person, whether or not such Debt is assumed by
such Person,
and (ix) all Debt of others Guaranteed by such Person.
"Deed of Trust" means that Deed of Trust, Assignment of
Rents and Security
Agreement, dated December 31, 1996, by and among the Borrower,
Xxxxxxx X.
Xxxxxxxx as trustee and GECC as Beneficiary, recorded in the
Registry at Book
1063, Page 337, as amended on the date hereof pursuant to the
Deed of Trust
Amendment and as the same may be further amended, supplemented,
restated,
extended, renewed, replaced or otherwise modified and in effect
from time to
time.
"Deed of Trust Amendment" has the meaning assigned to such
term in Section
3.01(e).
"Default" means any act, event, condition, occurrence or
circumstance that
constitutes an Event of Default or that, with the giving of
notice or lapse of
time or both, would become an Event of Default unless cured or
waived in
writing.
"Default Rate" means, at any time, the lesser of 18% per
annum or the
highest rate not prohibited by applicable law.
"Dividends" means for any period the sum of all dividends
paid or declared
during such period in respect to any capital stock and redeemable
preferred
stock (other than dividends paid or payable in the form of
additional capital
stock).
"Environmental Laws" means all federal and state laws, rules
and
regulations which affect or may affect any real property,
including without
limitation the Comprehensive Environmental Response Compensation
and Liability
Act (42 U.S.C. Section 9601 et seq.), the Resource Conservation
and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Federal Water
Pollution Control Act
(33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the
North Carolina Sedimentation Pollution Control Act (N.C.G.S.
Section 113A-5 et
seq.), the North Carolina Hazardous Chemicals Right to Know Act
(N.C.G.S.
Section 95-173 et seq.), the North Carolina Oil Pollution and
Hazardous
Substances Control Act (N.C.G.S. Section 143-215.75 et seq.), the
North
Carolina Solid Waste Management Act (N.C.G.S. Section 130A-290 et
seq.), and
the North Carolina Coastal Area Management Act (N.C.G.S. Section
113A-100 et
seq.), as such laws, rules or regulations have been amended or
may be amended.
"ERISA" has the meaning set forth in Section 4.08.
"Event of Default" has the meaning set forth in Section
8.01.
"Existing Aircraft Note" means the promissory note, dated
July 11, 1996,
executed by RMF and made payable to the order of GECC in the
original principal
amount of $1,067,810.66 (the liability for and indebtedness under
which were
assumed by the Borrower, and from which liability and
indebtedness said RMF was
released, pursuant to the Aircraft Loan Assumption Agreement).
"Existing Collateral Assignment" means the Collateral
Assignment of
Security Interest in Patents, Trademarks and Related
Applications, dated
December 31, 1996, between the Borrower and GECC, as assigned and
amended on
the date hereof pursuant to Assignment of Existing Collateral
Assignment and as
the same may be further amended, supplemented, restated,
extended, renewed,
replaced or otherwise modified and in effect from time to time.
"Existing Guaranty" means that Corporate Guaranty, dated
December 31,
1996, by and from the Parent Corporation, the Present Subsidiary,
Fountain
Aviation, Inc., Fountain Sportswear, Inc., Fountain Trucking,
Inc., and
Fountain Unlimited, Inc. to and in favor of GECC.
"Existing Security Agreements" means the Borrower
Security Agreement
and the Power Security Agreement.
"GAAP" means generally accepted accounting principles,
applied on a
consistent basis.
"Guarantee" by any Person means any obligation,
contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Debt or other
obligation of any other Person and, without limiting the
generality of the
foregoing, any obligation, direct or indirect, contingent or
otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds
for the
purchase or payment of) such Debt or other obligation (whether
arising by
virtue of partnership arrangements, by agreement to keep-well, to
purchase
assets, goods, securities or services, to provide collateral
security, to take-
or-pay, or to maintain financial statement conditions or
otherwise) or
(ii) entered into for the purpose of assuring in any other manner
the obligee
of such Debt or other obligation of the payment thereof or to
protect such
obligee against loss in respect thereof (in whole or in part),
provided that
the term Guarantee shall not include endorsements for collection
or deposit in
the ordinary course of business. The term "Guarantee" used as a
verb has a
corresponding meaning.
"Hazardous Materials" means and includes any hazardous,
toxic or
dangerous waste, substance or material (including without
limitation any
materials containing asbestos) defined as such in (or for
purposes of) any
Environmental Laws.
"Lien" means, with respect to any asset, any mortgage,
deed to secure
debt, deed of trust, lien, pledge, charge, security interest,
security title,
preferential arrangement which has the practical effect of
constituting a
security interest or encumbrance, servitude or encumbrance of any
kind in
respect of such asset to secure or assure payment of a Debt or a
Guarantee,
whether by consensual agreement or by operation of statute or
other law, or by
any agreement, contingent or otherwise, to provide any of the
foregoing. For
the purposes of this Agreement, the Parent Corporation or any
Subsidiary shall
be deemed to own subject to a Lien any asset which it has
acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale
agreement, capital lease or other title retention agreement
relating to such
asset.
"Life Insurance Assignment" has the meaning set forth
in Section
3.01(l).
"Loan Documents" means this Agreement, the Notes, the
Corporate
Guaranty, the Existing Guaranty, the Subordination Agreement, the
Security
Documents and any and all other instruments at any time
evidencing, securing,
guarantying or governing the terms of the Loans, or any of them,
all as the
same may be amended, supplemented, restated, extended, renewed,
replaced or
otherwise modified and in effect from time to time.
"Monthly Assets Report" has the meaning set forth in
Section
5.01(i)(vi).
"Net Income" means, as applied to any Person for any
period, the
aggregate amount of net income of such Person, after taxes, for
such period, as
determined in accordance with GAAP.
"New Collateral Assignment" has the meaning assigned to
such term in
Section 3.01(i).
"Notes" means the Amended GECC Note, the Amended
Aircraft Note and
the Transamerica Note.
"Obligations" means all indebtedness, obligations and
liabilities of
the Borrower or any other Fountain Corporation to any or all of
the Lenders
and/or the Agent evidenced by the Notes or otherwise arising
under this
Agreement or any other Loan Document, whether any such
indebtedness,
obligations and liabilities (a) exist on the date of this
Agreement or arise
thereafter, (b) is direct or indirect, joint or several, absolute
or
contingent, matured or unmatured, liquidated or unliquidated,
secured or
unsecured (and including, without limitation, including interest
accruing after
the filing of any bankruptcy or similar petition), or (c) arise
by contract,
operation of law or otherwise.
"Parent Security Agreement" has the meaning assigned to
such term in
Section 3.01(k).
"Parent Collateral Assignment" has the meaning assigned
to such term
in Section 3.01(n).
"Person" means an individual, a corporation, a
partnership (including
without limitation, a joint venture), a limited liability
company, an
unincorporated association, a trust or any other entity or
organization,
including, but not limited to, a government or political
subdivision or an
agency or instrumentality thereof.
"Power Collateral Assignment" has the meaning assigned
to such term
in Section 3.01(o).
"Power Security Agreement" means that Master Security
Agreement,
dated January 31, 1997, between Power and GECC, as modified by
this Agreement
and as the same may be further amended, supplemented, restated,
extended,
renewed, replaced or otherwise modified and in effect from time
to time.
"Registry" means the Office of the Register of Deeds of
Beaufort
County, North Carolina.
"Related Party" has the meaning given to such term in
the Internal
Revenue Code of 1986, as amended.
"Required Lenders" means at any time Lenders holding at
least 66 2/3%
of the aggregate outstanding principal amount of the Notes.
"RMF" means Xxxxxxxx X. Xxxxxxxx, Xx., a resident of
Beaufort County,
North Carolina.
"Security Documents" means this Agreement, the Existing
Security
Agreements, the Parent Security Agreement, the Aircraft Mortgage,
the Deed of
Trust, the Assignment of Rents, the Life Insurance Assignment,
the Existing
Collateral Assignment, the New Collateral Assignment, the Parent
Collateral
Assignment, the Power Collateral Assignment, and any and all
other instruments
and agreements now or at any time hereafter securing any or all
of the Loans,
all as the same may be amended, supplemented, restated, extended,
renewed,
replaced or otherwise modified and in effect from time to time.
"Subordination Agreement" means the subordination
agreement provided
for by Section 3.01(m), executed by RMF, the Borrower, the Parent
Corporation
and the Present Subsidiary to and in favor of the Lenders, as the
same may be
amended, supplemented, restated, extended, renewed, replaced or
otherwise
modified and in effect from time to time.
"Subsidiary" means any corporation or other entity of
which
securities or other ownership interests having ordinary voting
power to elect a
majority of the board of directors or other persons performing
similar
functions are at the time directly or indirectly owned by the
Parent
Corporation.
"Transamerica Note" means the promissory note of the
Borrower
provided for by Section 2.03 and all promissory notes delivered
in substitution
or exchange therefor, in each case as the same may be modified,
amended,
supplemented, restated, extended, consolidated, renewed or
replaced and in
effect from time to time.
1.2. Use of Defined Terms . All terms defined in this
Agreement shall
have the same meanings when used in any of the other Loan
Documents, unless
otherwise defined therein or unless the context shall otherwise
require.
1.3.
1.4. Terminology . Except as otherwise expressly provided
in this
Agreement: all personal pronouns used in this Agreement, whether
used in the
masculine, feminine or neuter gender, shall include all other
genders; the
singular shall include the plural and the plural shall include
the singular;
the words "herein," "hereof," "hereunder" and other words of
similar import
refer to this Agreement as a whole, including the Schedules
hereto, if any,
that are a part hereof, and not to any particular Section,
Article, paragraph
or other subdivision; "or" is not exclusive; and the words
"include,"
"includes" and "including" are not limiting.
1.5.
1.6. Accounting Terms . Unless otherwise specified herein,
all terms of
an accounting character used herein shall be interpreted, all
accounting
determinations hereunder shall be made, and all financial
statements required
to be delivered hereunder shall be prepared in accordance with
GAAP, applied on
a basis consistent (except for changes concurred in by the Parent
Corporation's
independent public accountants or otherwise required by a change
in GAAP) with
the most recent audited consolidated financial statements of the
Parent
Corporation delivered to the Lender, unless with respect to any
such change
concurred in by the Parent Corporation's independent public
accountants or
required by GAAP, in determining compliance with any of the
provisions of this
Agreement or any of the other Loan Documents: (i) the Borrower
shall have
objected to determining such compliance on such basis at the time
of delivery
of such financial statements, or (ii) the Required Lenders shall
so object in
writing within 30 days after the delivery of such financial
statements, in
either of which events such calculations shall be made on a basis
consistent
with those used in the preparation of the latest financial
statements as to
which such objection shall not have been made.
1.7.
1.8. Headings . Article, Section and other headings in this
Agreement are
included for convenience of reference only and shall not
constitute a part of
this Agreement for any other purpose or be given any substantive
effect.
1.9.
1.10. References . Except as otherwise expressly
provided in this
Agreement:
1.11.
(a) a reference to an Article, Section, paragraph or
other subdivision,
or to a Schedule or an Exhibit, is a reference to an
Article, Section,
paragraph or other subdivision of, or to a Schedule or an
Exhibit to, this
Agreement;
(a) a reference to any agreement or other contract
includes past and
future permitted supplements, amendments, modifications and
restatements
thereto or thereof;
(a) a reference to any law includes any amendment or
modification to such
law, any replacement or successor law or laws and any rules
and regulations
promulgated under such law or any replacement or successor
law or laws;
(a) a reference to a particular provision of any law,
rule or regulation
includes any successor provision or provisions;
(a) a reference to the time of day is to the time of
day in the city in
which the Agent's office is located;
(b) a reference to a Person includes its permitted
successors and
assigns;
(a) any right may be exercised at any time and from
time to time; and
(a) except as otherwise expressly provided therein,
all obligations under
any agreement or other contract are continuing obligations
throughout the term
of such agreement or contract.
1. ARTICLE THE LOANS
1.1. The GECC Loan . Subject to the terms and conditions
set forth
herein, henceforth the GECC Loan shall be evidenced by a single
separate
promissory note of the Borrower, payable to the order of GECC in
a principal
amount equal to the current outstanding principal balance of the
GECC Loan.
Such note shall be dated the date hereof and shall be
substantially in the form
attached as Exhibit A and otherwise duly completed. Such note
shall evidence
the same indebtedness as heretofore evidenced by the Existing
GECC Note and
shall be secured, ratably with the Amended Aircraft Note and the
Transamerica
Note, by all of the Collateral (including, without limitation,
the collateral
securing the Existing GECC Note and the Existing Aircraft Note).
The GECC Loan
shall be repaid as set forth in such note and shall bear interest
as set forth
therein, payable as set forth therein.
1.1. The Aircraft Loan . Subject to the terms and
conditions set forth
herein, henceforth the Aircraft Loan shall be evidenced by a
single separate
promissory note of the Borrower, payable to the order of GECC in
a principal
amount equal to the current outstanding principal balance of the
Aircraft Loan.
Such note shall be dated the date hereof and shall be
substantially in the form
attached as Exhibit B and otherwise duly completed. Such note
shall evidence
the same indebtedness as heretofore evidenced by the Existing
Aircraft Note and
shall be secured, ratably with the Amended GECC Note and the
Transamerica Note,
by all of the Collateral (including, without limitation, the
collateral
securing the Existing GECC Note and the Existing Aircraft Note).
The Aircraft
Loan shall be repaid as set forth in such note and shall bear
interest as set
forth therein, payable as set forth therein.
1.2.
1.3. The Transamerica Loan . Transamerica agrees, on the
terms and
conditions set forth herein, to make the Transamerica Loan to the
Borrower in
the principal amount of $4,000,000. The Transamerica Loan shall
be evidenced
by a single separate promissory note of the Borrower, payable to
the order of
Transamerica in the principal amount of $4,000,000. Such note
shall be dated
the date hereof and shall be substantially in the form attached
as Exhibit C
and otherwise duly completed. Such note shall be secured,
ratably with the
Amended GECC Note and the Amended Aircraft Note, by all of the
Collateral
(including, without limitation, the collateral securing the
Existing GECC Note
and the Existing Aircraft Note). The Transamerica Loan shall be
repaid as set
forth in such note and shall bear interest as set forth therein,
payable as set
forth therein.
1.4.
1.5. Prepayments .
1.6.
1.7. (a) Partial prepayment of the Notes, or any of them is
hereby
expressly prohibited. No prepayment in full of any Note may be
made except as
hereinafter provided in this Section and further provided in the
Notes.
1.8.
1.9. (b) Subject to paragraph (c) of this Section, the
Borrower shall
have the right, on the first Business Day of any month, to prepay
the
outstanding principal of all (but not less than all) of the Notes
in full by
paying with such prepayment to each Lender with respect to each
of its Notes a
lump sum prepayment charge or premium, if any, expressly required
by the terms
of such Note.
1.10.
1.11. (c) Notwithstanding anything to the contrary in
this
Section 2.04, no prepayment may be made except after not more
than sixty (60),
nor less than thirty (30), days' prior written notice, delivered
to the Agent
and each of the Lenders, specifying the prepayment date and that
such
prepayment is being made pursuant to Section 2.04(b) of this
Agreement. Any
such notice shall be irrevocable. The Borrower shall pay with
such prepayment
all accrued and unpaid interest on the principal of the Notes to
the date of
such prepayment and any and all other Obligations, including,
without
limitation, if and to the extent expressly required by the terms
of any Note,
the applicable prepayment premium due in connection with such
prepayment.
Notwithstanding anything to the contrary set forth in any Note or
any other
Loan Document, on the date for prepayment specified in such
notice of
prepayment, the entire principal of, premium, if any, and
interest on each of
the Notes, and any and all other Obligations then outstanding,
shall be and
become due and payable in full.
1.12.
1.13.
2. ARTICLE CONDITIONS
1.1. Transamerica Loan; Amendment of GECC Loan and Aircraft
Loan . The
obligation of Transamerica to make and fund the Transamerica Loan
and of GECC
to amend the terms of the GECC Loan and the Aircraft Loan is
subject to the
satisfaction of the conditions set forth in Section 3.02 and the
condition that
the Agent shall have received each of the following items in form
and substance
satisfactory to the Lenders and their counsel:
(a) a duly executed counterpart of this Agreement
signed by the Borrower;
(a) the Amended GECC Note duly executed by the
Borrower, dated the date
hereof and complying with the provisions of Section 2.01;
(a) the Amended Aircraft Note, duly executed by the
Borrower, dated the
date hereof and complying with the provisions of Section
2.02;
(a) the Transamerica Note, duly executed by the
Borrower, dated the date
hereof and complying with the provisions of Section 2.03;
(a) a First Amendment to Deed of Trust in the form
attached hereto as
Exhibit D, dated the date hereof and duly executed and
acknowledged by the
Borrower and duly recorded in the Registry (the"Deed of
Trust Amendment");
(a) a First Amendment to Assignment of Rents and
Leases in the form
attached hereto as Exhibit E, dated the date hereof and duly
executed and
acknowledged by the Borrower and duly recorded in the
Registry (the "Assignment
of Rents Amendment");
(a) a First Amendment to Aircraft Chattel Mortgage in
the form attached
hereto as Exhibit F, duly executed by the Borrower and the
Agent and duly filed
with the Federal Aviation Administration (the "Aircraft
Mortgage Amendment");
(a) an Assignment of Collateral Assignment of Security
Interest in
Patents, Trademarks and Related Applications in the form
attached hereto as
Exhibit G, duly executed by the Borrower and the Agent and
duly filed in the
United States Patent and Trademark Office (the "Assignment
of Existing
Collateral Assignment");
(a) a Collateral Assignment of Security Interest in
Patents, Trademarks
and Related Applications in the form attached hereto as
Exhibit H, duly
executed by the Borrower and duly filed in the United States
Patent and
Trademark Office (the "New Collateral Assignment");
(a) a guaranty agreement in the form attached hereto
as Exhibit I, duly
executed by the Parent and the Present Subsidiary (the
"Corporate Guaranty");
(a) a security agreement in the form attached hereto
as Exhibit J, duly
executed by the Parent Corporation (the "Parent Security
Agreement");
(a) an Assignment of Life Insurance Policy on the life
of RMF in the
amount of $1,000,000.00, which instrument shall be
substantially in the form
attached hereto as Exhibit K (the "Life Insurance
Assignment");
(a) a subordination agreement substantially in the
form attached hereto
as Exhibit L, duly executed by RMF, the Borrower, the Parent
Corporation and
the Present Subsidiary (the "Subordination Agreement");
(a) a Collateral Assignment of Security Interest in
Patents, Trademarks
and Related Applications in the form attached hereto as
Exhibit M, duly
executed by the Parent Corporation and duly filed in the
United States Patent
and Trademark Office (the "Parent Collateral Assignment");
(a) a Collateral Assignment of Security Interest in
Patents, Trademarks
and Related Applications in the form attached hereto as
Exhibit N, duly
executed by the Present Subsidiary and duly filed in the
United States Patent
and Trademark Office (the "Power Collateral Assignment");
(a) the legal opinion of Xxxx and Xxxxx, P.A., counsel
for the Borrower,
dated the date hereof, substantially in the form of Exhibit
O hereto and
covering such additional matters relating to the
transactions contemplated
hereby as the Lenders may reasonably request;
(a) an endorsement to the mortgagee title insurance
policy no.
96J31510-M, issued by Fidelity National Title Insurance
Company of Pennsylvania
to GECC in connection with the initial recordation of the
Deed of Trust (the
"Title Policy"), which shall:
(i) increase the amount of coverage thereunder to
$14,153,525.52,
(ii) insure the lien of the Deed of Trust, as
amended by the
Deed of Trust Amendment, as a first priority lien with
respect to all
of the real property (including fixtures) covered
thereby, including,
without limitation, the additional real property made
subject to the
lien of the Deed of Trust by the Deed of Trust
Amendment (the "New
Real Property"),
(iii) insure that the lien of the Deed of
Trust, as so
amended, is in favor of the Agent for the ratable
benefit of the
Lenders, to secure up to $14,153,525.52 in respect of
the aggregate
principal amount of, and the maximum aggregate
prepayment premium on,
all of the Notes, and
(iv) bring the effective date of coverage of the
Title Policy
forward to the date the Deed of Trust Amendment is
recorded and
contain no exceptions to coverage except those
satisfactory to the
Lenders;
(a) either (i) evidence satisfactory to the Lenders
and their counsel
that the New Real Property is not located within a 100-year
flood zone or (ii)
flood insurance satisfactory to the Agent;
(a) UCC Financing Statements (UCC-1) duly filed in all
jurisdictions
necessary, or in the opinion of the Agent desirable, to
perfect the security
interests granted in the Security Documents, results of
searches for all
previously filed financing statements, currently effective
and on record as of
the date for which filing information is most recently
available, for the
Borrower and Power and any predecessors in title for the
five-year period
predating the date of this Agreement from all relevant
jurisdictions indicating
that no security interest has previously been granted in any
of the Collateral
described in the Security Documents unless prior approval
has been given by the
Required Lenders;
(a) to the extent required by the Lenders, statements
of termination with
respect to UCC Financing Statements of record filed in favor
Persons other than
GECC or the Agent;
(a) evidence satisfactory to the Lenders that all
insurance coverage
required by any Security Document is in full force and
satisfies all of the
requirements of such Security Document;
(a) a copy of the Articles of Incorporation of the
Borrower, the Parent
Corporation and Power, each certified by the Secretary of
State of the state of
such Fountain Corporation's incorporation each dated not
more than sixty (60)
days prior to the date hereof;
(a) a certificate as to the existence in good standing
of the Borrower,
the Parent Corporation and Power, each dated not more than
sixty (60) days
prior to the date hereof and issued by the Secretary of
State of the state of
each such Fountain Corporation's incorporation;
(a) the following items with respect to each of the
Borrower, the Parent
Corporation and Power, each certified by the Secretary or an
Assistant
Secretary of such Fountain Corporation on the date hereof:
(i) a copy of its Bylaws,
(ii) a copy of the action taken by its Board of
Directors
authorizing its execution, delivery and performance of
this Agreement
and the other Loan Documents to which it is a party,
and the
consummation of the other transactions contemplated
hereby and
thereby, and
(iii) true signatures of its officer or
officers authorized
to execute and deliver this Agreement and the other
Loan Documents to
which it is a party;
(a) the unpaid balance, if any, of those fees due to
GECC under the terms
of that letter agreement between GECC and the Borrower dated
April 24, 1998;
and
(a) such other requirements, agreements, certificates,
instruments,
opinions and other documents and materials as the Lenders
may reasonably
request.
1.1. General Conditions . The obligation of GECC to modify
the terms of
the GECC Loan and the Aircraft Loan and of Transamerica to make
the
Transamerica Loan is subject to the satisfaction of the
additional following
conditions:
1.2.
(a) the fact that no Default shall have occurred and
be continuing
or, after giving effect to any such transaction, will result
therefrom;
(b) the fact that the representations and warranties
of the
Borrower, the Parent Corporation and the Present Subsidiary
contained in
Article 4 shall be true and correct on the date hereof; and
(c) that on the date hereof, the Lenders shall have
received a
certificate of a principal financial officer of each
Fountain Corporation,
dated on each such date, to the effect that (i) the
representations and
warranties made by the Borrower, the Parent Corporation and
the Present
Subsidiary in Article 4 are true and complete on and as of
each such date,
(ii) no Default or Event of Default exists such date, and no
act, event,
condition or circumstance has occurred or exists which would
result in the
occurrence or existence of a Default or an Event of Default,
(iii) except
to the extent such performance or compliance has been
expressly waived by
the Lenders in writing, the Borrower, the Parent Corporation
and the
Present Subsidiary have performed and complied with all the
terms and
conditions of this Agreement required to be performed or
complied with by
them prior to such date as a condition to the funding of the
Loan to be
made on such date, and (iv) there has not occurred any
material adverse
change in the consolidated financial condition of the Parent
Corporation
and its Consolidated Subsidiaries from the consolidated
financial
condition of the Parent Corporation and its Consolidated
Subsidiaries as
shown by the financial statements most recently delivered to
the Lenders,
nor has there occurred, since the date of any Lender's
written commitment
on the basis of which the parties have entered into or
become a party to
this Agreement, (A) any material adverse change in the
business, results
of operations or prospects of the Parent Corporation and its
Consolidated
Subsidiaries, considered as a whole, or in the condition of
the principal
industry in which the Parent Corporation and its
Consolidated Subsidiaries
are engaged, or (B) a material change in the Borrower's
management
personnel.
1. ARTICLE REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make or
( in the case of GECC) modify the terms of its Loans, each of the
Fountain
Corporations represents and warrants to the Lenders (which
representations and
warranties shall survive the delivery of this Agreement and the
other Loan
Documents and the funding of the Loans) as follows:
1.1. Financial Statements . The balance sheet of the Parent
Corporation
and its Consolidated Subsidiaries and the related Statements of
Income and
Retained Earnings of the Parent Corporation and its Consolidated
Subsidiaries,
the accompanying footnotes together with the accountant's opinion
thereon, and
all other financial information previously furnished to the
Lenders, are true
and correct and fairly reflect the financial condition of the
Parent
Corporation and its Consolidated Subsidiaries as of the dates
thereof,
including all contingent liability of every type, and the
financial condition
of the Parent Corporation and its Consolidated Subsidiaries as
stated therein
has not changed materially and adversely since the dates thereof.
1.2.
1.3. Capacity and Standing . Each Fountain Corporation is
duly organized
and validly existing under the laws of the state in which it is
incorporated,
is duly qualified and in good standing in every other state in
which the nature
of its business shall require such qualification and where the
failure to
qualify would have a material adverse effect, and it is duly
authorized by its
board of directors to make and perform its respective obligations
under this
Agreement and each of the other Loan Documents to which it is a
party.
1.4.
1.5. No Violation of Other Agreements . The execution by
each Fountain
Corporation of any of the Loan Documents, and other performance
by each
Fountain Corporation thereunder will not violate any provision of
its
certificate of incorporation or bylaws (as amended), or of any
law, other
agreement, indenture, note, or other instrument binding upon such
Fountain
Corporation, or create any lien, charge or encumbrances on any of
the
Collateral (except for the liens arising under the Security
Documents), or give
cause for the acceleration of any of the obligations of any
Fountain
Corporation.
1.6.
1.7. Authority . All authority from and approval by any
governmental
body, commission, or agency, whether federal, state, or local
necessary to the
making, validity, or enforceability of this Agreement and each of
the other
Loan Documents has been obtained.
1.8.
1.9. Asset Ownership . The Fountain Corporations have good
and marketable
title to all of the properties and assets reflected on the
balance sheets and
financial statements of the Parent Corporation and its
Consolidated
Subsidiaries supplied to the Lenders, and all such properties and
assets are
free and clear of mortgages, deeds of trust, pledges, liens, and
all other
encumbrances except as otherwise disclosed by such financial
statements. The
only asset held by the Parent Corporation is the stock of the
Borrower. The
only Subsidiaries of the Parent Corporation are the Borrower and
the Present
Subsidiary. The Present Subsidiary owns no Receivables (as
defined in the
Existing Security Agreements), Inventory (as defined in the
Existing Security
Agreements) or Tangible Personal Property (as defined in the
Existing Security
Agreements) in its own name except as disclosed in Schedule 4.05
attached
hereto. All of the Receivables and Inventory disclosed in the
Parent
Corporation's financial statements are owned by the Borrower
except for those
described in Schedule 4.05.
1.10.
1.11. Discharge of Liens and Taxes . Each Fountain
Corporation has
filed, paid, and or discharged all taxes or other claims which
may become a
lien on its properties or assets, excepting to the extent that
such items are
being appropriately contested in good faith and for which an
adequate reserve
for the payment thereof is being maintained.
1.12.
1.13. Regulation U . None of the proceeds of any of the
Loans has
been or shall be used directly or indirectly for the purpose of
purchasing or
carrying any stock in violation of any of the provisions of
Regulation U of the
Board of Governors of the Federal Reserve System.
1.14.
1.15. ERISA . Each employee benefit plan, as defined by
the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained by any
Fountain Corporation meets, as of the date hereof, the minimum
funding
standards of ERISA, all applicable requirements of ERISA and of
the Internal
Revenue Code of 1986, as amended, and no "Reportable Event" nor
"Prohibited
Transaction" (as defined by ERISA) has occurred with respect to
any such plan.
1.16.
1.17. Litigation . Except as disclosed in Schedule 4.09
attached
hereto, there is no pending or threatened action or proceeding
against or
affecting the Fountain Corporations before any court, commission,
governmental
agency, whether state or federal, or arbitration which may
materially adversely
affect such party's financial condition, operations, properties,
or business or
the ability of such party to perform its obligations under the
Loan Documents.
1.18.
1.19. Binding and Enforceable . Each of the Loan
Documents, when
executed, shall constitute a valid, legal and binding obligation
of each
Fountain Corporation party thereto, enforceable against each such
Fountain
Corporation in accordance with its terms, except as may be
limited by
bankruptcy, insolvency, moratorium, or similar laws affecting
creditors' rights
generally.
1.20.
1.21. Insolvency . After giving effect to the execution
and delivery
of the Loan Documents and the making of the Loans under this
Agreement, none of
the Fountain Corporations will be "insolvent," as defined in
101 of Title 11
of the United States Code or Section 2 of the Uniform Fraudulent
Transfer Act,
or any other applicable state law pertaining to fraudulent
transfers, as each
may be amended from time to time, or be unable to pay its debts
generally as
such debts become due, or have an unreasonably small capital to
engage in any
business or transaction, whether current or contemplated.
1.22.
1.23. Boat Titles, Etc . No boat or vessel owned by any
Fountain
Corporation, including without limitation any boat used for
racing,
demonstration, advertising or promotional purposes, has been
documented as a
flag vessel of the United States or any other jurisdiction, nor
has any
application been filed to so document any such boat or vessel.
No title or
certificate of title has been issued, nor has application been
made for the
issuance of any title or certificate of title, for any such boat
or vessel
pursuant to the North Carolina Watercraft Titling Act, N.C.G.S.
75A-32 et
seq., or any similar law of any jurisdiction.
1.24.
2. ARTICLE COVENANTS
1.1. Affirmative Covenants. Each of the Fountain
Corporations covenants
and agrees that from the date hereof until payment in full and
performance of
all of the Obligations, it will:
1.2.
(a) Maintain Existence . Preserve and maintain its
existence and
good standing in its state of organization, and qualify and
remain
qualified as a foreign corporation, in each jurisdiction in
which such
qualification is required and where the failure to qualify
would have a
material adverse effect on such Fountain Corporation. The
foregoing
covenant shall not preclude mergers permitted under Section
5.03(c) and
shall not preclude the dissolution of a corporation owning
no assets or
whose assets would vest, as a result of such dissolution, in
the Borrower.
(b) Maintain Records . Keep adequate records and
books of account,
in which complete entries will be made in accordance with
GAAP,
consistently applied, reflecting all financial transactions
of Fountain
Corporations.
(c) Maintain Properties . Maintain, keep and preserve
all of its
properties (tangible and intangible) necessary or useful in
the conduct of
its business in good working order and condition, ordinary
wear and tear
excepted.
(d) Conduct of Business . Continue to engage in an
efficient,
prudent, and economical manner in a business of the same
general type as
now conducted.
(e) Maintain Insurance . Maintain insurance with
financially sound
and reputable insurance companies or associations in such
amounts and
covering such risks as are usually carried by companies
engaged in the
same or a similar business, which insurance may provide for
a reasonable
deductible. The Agent shall be named as loss payee on all
policies which
apply to the Collateral and additional insured on all such
insurance, and
the Borrower shall deliver certificates of insurance at
closing evidencing
such insurance. All such insurance policies shall provide,
and the
certificate shall state, that no policy will be terminated
without 30 days
prior written notice to Agent and, provided that the issuers
of such
policies will agree to provide the such notice, to each
Lender that is not
the Agent.
(f) Comply with Laws . Comply in all material
respects with all
applicable laws, rules, regulations, and orders including,
without
limitation, all Environmental Laws and pay before any
delinquency all
taxes, assessments, and governmental charges imposed upon
the Borrower or
upon its property.
(g) Governmental Notices . Promptly upon receipt
thereof, provide
to the Lenders a copy of any written notice of any
governmental authority
received by such Fountain Corporation which indicates that
such Fountain
Corporation has violated a law, rule, regulation and order,
including
without limitation any Environmental Law.
(h) Right of Inspection . Permit the officers and
authorized agents
of the Agent and the Lenders, at any reasonable time, to
examine and make
copies of the records and books of account of such Fountain
Corporation,
and visit the properties of such Fountain Corporation, and
to discuss such
matters with any officers, directors, and independent
accountants of such
Fountain Corporation as the Agent or any such Lender deems
necessary.
(i) Financial Reports and Other Data . Deliver or
cause to be
delivered to the Agent and the Lenders:
(i) As soon as practicable and in any event
within ninety (90)
days after the end of each fiscal year, an audited
consolidated
balance sheet of the Parent Corporation and its
Consolidated
Subsidiaries and related statements of income and
retained earnings
and cash flow for such fiscal year, setting forth in
each case in
comparative form corresponding figures for the
preceding annual
period, all satisfactory to the Lenders. All annual
financial
statements will be consolidated, will be prepared in
conformity with
GAAP consistently applied and will be in a form
satisfactory to the
Lenders. In connection with the examination, the
independent
certified public accountant will issue a letter stating
any and all
of the terms of this Agreement that are being violated
or that there
are no violations.
(ii) As soon as practicable and in any event
within forty-five
(45) days following the end of each fiscal quarter
(except for the
last fiscal quarter of the Parent Corporation's fiscal
year), an
unaudited consolidated balance sheet for the Parent
Corporation and
its Consolidated Subsidiaries and related statements of
income and
retained earnings and cash flow, in each case for the
period from the
beginning of the then current fiscal year to the end of
such quarter,
all in reasonable detail and certified by the chief
financial officer
of the Parent Corporation to provide a fair
presentation of the
financial condition of the Parent Corporation and its
Consolidated
Subsidiaries, subject to normal year end audit
adjustments.
(iii) As soon as available for each year,
copies of all
state and federal tax returns filed by each of the
Fountain
Corporations.
(iv) With reasonable promptness, such additional
financial or
other data as any Lender may reasonably request
regarding each
Fountain Corporation's operations, business affairs and
financial
condition. Each Lender and the Agent is hereby
authorized by each
Fountain Corporation to deliver a copy of such
information made
available by such corporation to any regulatory
authority having
jurisdiction over such Lender or the Agent.
(v) On a quarterly basis, at the time quarterly
financial
statements are tendered, a Certificate of Compliance
prepared by the
Parent Corporation's Chief Financial Officer and
certified as to
accuracy by such officer of the Parent Corporation and
the Borrower
(the "Certificate of Compliance"). The Certificate of
Compliance
shall set forth the Fountain Corporations' status with
respect to
their compliance with the covenants and other default
provisions
contained herein or in any other Loan Document. Any
default shall be
identified with particularity, and the Parent
Corporation shall also
identify proposed action to be taken by it, the
Borrower or such
other Fountain Corporation with respect thereto.
(vi) If requested by the Required Lenders in
writing, an
itemized list, to be delivered no more often than once
a month, of
the Borrower's "Inventory" (as defined in the Borrower
Security
Agreement), including without limitation work-in-
process Inventory,
and "Receivables" (as defined in the Borrower Security
Agreement)
(the "Monthly Assets Report"). The Monthly Assets
Report shall
describe with particularity additional equipment,
molds, and other
Tangible Personal Property (as defined in the Borrower
Security
Agreement) acquired by the Borrower within the prior
calendar month
and identify any Tangible Personal Property disposed of
within the
prior calendar month and shall identify and federal
trademark
registration applications and patent applications filed
during the
preceding calendar month. The Borrower shall at all
times maintain
an aggregate value of Inventory (as defined in the
Borrower Security
Agreement) and Receivables (as defined in the Borrower
Security
Agreement) of at least Five Million Five Hundred
Thousand Dollars
($5,500,000). Compliance with this covenant shall be
established
once each month through the Monthly Assets Report and
more
frequently, upon request of the Required Lenders.
(vii) At least once each calendar month,
provide the Lenders
with a schedule of its Receivables (as defined in the
Borrower
Security Agreement) and a schedule of its Inventory (as
so defined)
consisting of boats the manufacture of which has been
completed for
more than 30 days.
(j) Knowledge of Certain Events . Upon an officer of
any of the
Fountain Corporations obtaining knowledge of the occurrence
of any Default
or Event of Default hereunder, cause to be delivered to the
Lender, within
ten (10) Business Days of such officer obtaining such
knowledge, an
officer's certificate specifying the nature thereof, the
period of
existence thereof and what action is proposed to be taken
with respect
thereto.
(k) Other Notices . Notify the Lenders in writing
within ten (10)
Business Days of the occurrence of any of the following with
respect to
such Fountain Corporation:
(i) the service upon such Fountain Corporation of
any action,
suit or proceeding at law or in equity making a claim
in excess of
$100,000;
(ii) the occurrence or existence of any event or
condition which
shall constitute an event of default under any other
agreement for
borrowed money or any known or potential material
change in this or
any other contractual agreement;
(iii) the loss of any patents, licenses,
franchises,
trademarks, trademark rights, trade names, trade name
rights and
copyrights material to its business;
(iv) the occurrence or existence of any event or
condition which
shall cause any Loan Document or any agreements,
reports, schedules,
certificates or instruments in connection with or
pursuant to this
Agreement or any other Loan Document to become false or
misleading in
any material respect; and
(v) a Fountain Corporation or any other Person
causes or
permits Hazardous Materials to be placed, held, located
or disposed
of on, under or at real property owned, leased or
otherwise used by a
Fountain Corporation or any part thereof in violation
of
Environmental Laws (whether or not any of such real
property is
encumbered by the Deed of Trust).
(l) Further Assurances . Upon request of the Agent or
the Required
Lenders, duly execute and deliver or cause to be duly
executed and
delivered to the Lenders such further instruments and do and
cause to be
done such further acts that may be reasonably necessary or
proper in the
opinion of the Agent or the Required Lenders (as the case
may be) to carry
out more effectively the provisions and purposes of the Loan
Documents.
(m) ERISA . Comply with all requirements of ERISA
applicable to it
(including the payment of all obligations and liabilities
arising under
ERISA) and furnish to the Lenders as soon as possible and in
any event
within 30 days after it or any duly appointed administrator
of any
employee pension benefit plan (as defined in ERISA) knows or
has reason to
know that a Reportable Event (as defined in ERISA) with
respect to any
such plan has occurred which is likely to result in a
penalty being
imposed on the plan, a statement of the chief financial
officer of the
Parent Corporation describing in reasonable detail such
Reportable Event
and any action proposed to be taken with respect thereto,
together with a
copy of the notice of such Reportable Event given to the
Pension Benefit
Guaranty Corporation or a statement that such notice will be
filed with
the annual report to the United States Department of Labor
with respect to
such plan if such filing has been authorized.
(n) Payment of Obligations . Pay when due (including
any applicable
grace period) all its obligations for indebtedness for money
borrowed,
except where the same (other than indebtedness evidenced by
the Notes or
in respect of any other Obligations) may be contested in
good faith and
appropriate reserves for the accrual of the same are
maintained in amounts
in accordance with GAAP.
(o) Subsidiaries . In the event that any corporation
or other
entity becomes a Subsidiary (directly or indirectly) of the
Parent
Corporation, the Parent Corporation shall cause such
Subsidiary to
guarantee repayment of the Obligations pursuant to a
guaranty in form and
substance identical to the Corporate Guaranty and to sign
documentation,
in form and substance satisfactory to the Required Lenders,
agreeing to
abide by the covenants and terms of this Agreement.
(p) Assets . Each Monthly Assets Report shall
disclose all assets
held in the name of the Parent Corporation and its
Consolidated
Subsidiaries other than the Borrower. The value of Tangible
Personal
Property, Inventory, or Receivables for any Fountain
Corporation other
than the Borrower shall not exceed at any one time
$1,000,000.
(q) Encumbrance of Assets . If requested by any
Lender, each of the
Fountain Corporations shall execute such documentation as
the Required
Lenders deem necessary so as to grant a first-priority
security interest
in any asset held by such Fountain Corporation to the Agent
for the
benefit of the Lenders.
1.1. Financial Covenants. Each of the Fountain
Corporations covenants
and agrees that from the date hereof until payment in full and
performance of
all of the Obligations, the Parent Corporation and its
Consolidated
Subsidiaries shall at all times maintain the following financial
position and
ratios:
1.2.
(a) Current Ratio . A ratio of Consolidated Current
Assets to
Consolidated Current Liabilities of not less than 1.0 to
1.0.
(b) Tangible Net Worth . A minimum Consolidated
Tangible Net Worth
of not less than $10,500,000.00 at all times.
(c) Debt to Worth . A ratio of Consolidated
Liabilities to
Consolidated Tangible Net Worth of not greater than 1.8 to
1.
(d) Cash Flow Margin . The ratio of (i) Net Income
after taxes plus
depreciation plus amortization less extraordinary items to
(ii) all long-
term debt payments (excluding interest) due during the
previous twelve
(12) months must exceed 2.0 to 1.0 annually. Compliance
with this ratio
will be calculated on a rolling four quarter basis,
determined at the end
of each fiscal quarter of the Parent Corporation.
(e) Capital Expenditures Limitation . Expenditures
for fixed assets
in any fiscal year shall not exceed in the aggregate for all
Fountain
Corporations the sum of $500,000 without the prior written
consent of the
Required Lenders.
1.1. Negative Covenants. Each of the Fountain Corporations
covenants and
agrees that from the date hereof and until payment in full of the
Loan and
performance of all obligations under the Loan Documents, it shall
not, without
the prior written consent of the Required Lenders:
1.2.
(a) Liens . Create, incur, assume, or suffer to exist
any Lien upon
or with respect to any of its properties, except:
(i) Liens in favor of the Agent securing the
Obligations;
(ii) Liens for taxes not yet due and payable or
otherwise being
contested in good faith and for which appropriate
reserves are
maintained;
(iii) Other Liens imposed by law not yet due
and payable, or
otherwise being contested in good faith and for which
appropriate
reserves are maintained; and
(iv) Purchase money Liens on any property
hereafter acquired
(expressly excluding, however, Liens with respect to
any property
acquired in replacement of or substitution for property
on which the
Lender has a security interest), provided that such
purchase-money
Lien shall attach only to the property so acquired.
(b) Debt . Create, incur, assume, or suffer to exist
any Debt
except:
(i) Debt consisting of the Obligations;
(ii) Debt presently outstanding and shown on the
most recent
financial statements of the Borrower submitted to the
Lenders;
(iii) accounts payable to trade creditors
incurred in the
ordinary course of business;
(iv) Debt secured by purchase money Liens as
outlined above in
Section 5.03(a)(iv), provided that the aggregate cost
of all assets
acquired in any year that have been financed by or with
the proceeds
of such Debt shall not result in a violation of the
capital
expenditure limitation set forth in Section 5.02(e);
(v) additional Debt (including, but not limited
to, Debt owed
to any Related Party) not to exceed $500,000.00 in the
aggregate.
(c) Mergers . Enter into a merger or consolidate with
or sell,
assign, lease, or otherwise dispose of all or substantially
all of its
assets to any Person except for the merger of a Consolidated
Subsidiary
into the Borrower where the Borrower is the surviving
corporation or a
dissolution of a corporation owning no assets or whose
assets would vest,
as a result of such dissolution, in the Borrower.
(d) Leases . Create, incur, assume, or suffer to
exist any leases,
except:
(i) Leases presently outstanding and showing on
the most recent
financial statement submitted to the Lender; and
(i) operating leases for machinery and equipment
which do not
in the aggregate require payments in excess of $100,000
in any fiscal
year of the Parent Corporation.
(e) Dividends . Declare or pay any Dividends in
excess of Net
Income plus depreciation less current maturities of
indebtedness and less
extraordinary items in any fiscal year of the Parent
Corporation.
(f) Guaranties . Execute any Guarantee or assume,
Guarantee
endorse, or otherwise be or become directly or contingently
liable for
obligations of any person, or agree to repurchase any
Inventory sold to a
third party except (i) Guarantees by endorsement of
negotiable instruments
for deposit or collection or similar transactions in the
ordinary course
of business, (ii) Guarantees of repayment of interest
accruing under floor-
plan-financed boats constituting Inventory (as such term is
defined in the
Borrower Security Agreement); (iii) repurchase obligations
arising under
direct repurchase agreements pursuant to which the Borrower
agrees to
repurchase boats constituting Inventory (as so defined) from
floor plan
lenders; (iv) the Existing Guaranty; and (v) any Guarantee
required by the
terms of this Agreement, including without limitation the
Corporate
Guaranty. The aggregate amount of all such Guarantees
specified under
(i), (ii) and (iii), however, shall not exceed 200% of the
net sales of
the Parent Corporation and its Consolidated Subsidiaries for
the preceding
fiscal quarter.
(g) Sale of Assets . Sell, lease, or otherwise
dispose of any of
its assets or properties (exclusive of Inventory permitted
to be sold
pursuant to the terms of the Borrower Security Agreement) in
excess of
$200,000 in the aggregate for all Fountain Corporations in
any fiscal year
of the Parent Corporation without the prior written consent
of the
Required Lenders.
(h) Transfer of Ownership . Transfer or sell more
than 10% of the
total number of shares of stock in any Fountain Corporation
(other than
the Parent Corporation) prior to the repayment in full of
the Obligations.
(i) Related Party Contracts . No Fountain Corporation
shall enter
into any contract (specifically including any lease or
contract for
services) with any Related Party without the Required
Lenders' prior
review and approval of such contract, not to be unreasonably
withheld or
delayed; provided that, notwithstanding the foregoing, (i)
the Fountain
Corporations continue to pay annual compensation to RMF
under an
employment contract of up to $600,000 in any year, (ii) the
Fountain
Corporations may enter into other contracts with RMF, so
long as the
aggregate amount of all payments to him under all such other
contracts
shall not exceed $50,000 in any year, and (ii) the Borrower
may contract
for advertising services with Xxxxxxx Advertising so long as
the aggregate
amount of all payments to Xxxxxxx Advertising under all such
contracts
shall not exceed in any year the sum of (x) $300,000 in
respect of
advertising consulting fees and (y) out-of-pocket costs
actually incurred
and independent third party pass-through costs.
(j) Boat Titles, Etc . No Fountain Corporation shall
(i) suffer or
permit any boat or vessel owned by it, including without
limitation any
boat or vessel used for racing, demonstration, advertising
or promotional
purposes, to be documented as a flag vessel of the United
States or any
other jurisdiction, (ii) make application for such
documentation, (iii)
suffer or permit any title or certificate of title to be
issued for any
such boat or vessel pursuant to the North Carolina
Watercraft Titling Act,
N.C.G.S. 75A-32 et seq., or any similar law of any
jurisdiction, or (iv)
suffer or permit application to be made for any such title
or certificate
of title.
1. ARTICLE HAZARDOUS MATERIALS AND ENVIRONMENTAL
COMPLIANCE
1.1. Investigation . Each Fountain Corporation hereby
certifies that it
has exercised due diligence to ascertain whether any real
property owned,
leased, occupied or operated by it (the "Property") is or has
been affected by
the presence of asbestos, oil or oil products, urea formaldehyde,
PCBs,
hazardous or nuclear waste, toxic chemicals and substances, or
other Hazardous
Materials. Each Fountain Corporation represents and warrants
that except as
disclosed in the audited financial statements for the period
ending June 30,
1997, or as disclosed in Schedule 6.01 attached hereto, there are
no such
materials contaminating any Property, nor have any such materials
been
improperly stored or improperly disposed of on any Property.
Each Fountain
Corporation hereby agrees that it shall not permit any such
contamination as
long as any Obligations remain unpaid or unfulfilled. In
addition, no Fountain
Corporation has or uses any underground storage tanks on any
Property which are
not registered with the appropriate federal and/or state agencies
and which are
not properly equipped and maintained in accordance with all
Environmental Laws.
If requested by any Lender, each Fountain Corporation shall
provide the Lenders
with all necessary and reasonable assistance required for
purposes of
determining the existence of Hazardous Materials on any Property
(including
without limitation the Property encumbered by the Deed of Trust),
including
allowing the Lenders access to such Property, and access to such
corporation's
employees having knowledge of, and to files and records within
such
corporation's control relating to the existence, storage or
discharge of
Hazardous Materials on such Property.
1.2.
1.3. Compliance . Each Fountain Corporation agrees to
comply with all
applicable Environmental Laws, including, without limitation, all
those
relating to Hazardous Materials. Each Fountain Corporation
further agrees to
provide the Lenders, and all appropriate federal and state
authorities, with
immediate notice in writing of any Hazardous Materials released
on any Property
and to pursue diligently to completion all appropriate and/or
required remedial
action in the event of such release.
1.4.
1.5. Remedial Action . The Lenders shall have the right,
but not the
obligation, to undertake all or any part of such remedial action
in the event
of a release of Hazardous Materials on any Property and to add
any expenditures
so made to the principal indebtedness secured by the Deed of
Trust. Each
Fountain Corporation jointly and severally agrees to indemnify
and hold the
Agent and the Lenders harmless from any and all loss or liability
arising out
of any violation of the representations, covenants and
obligations contained in
this Article 6, or resulting from the recording of the Deed of
Trust.
1.6.
1.7.
2. ARTICLE COLLATERAL; INTERCREDITOR PROVISIONS
1.1. Collateral. The Notes and all other Obligations owing
from time to
time to the Agent or any Lender shall be secured by the
Collateral (including,
without limitation, all Collateral encumbered by any Security
Document executed
prior to the date hereof in favor of GECC as secured party,
beneficiary,
mortgagee, assignee or otherwise) and, to the extent they have
not heretofore
done so, each Fountain Corporation which now or at anytime
hereafter has any
rights in or to any and all of the Collateral (whether now or
hereafter owned
or existing) hereby grants to the Agent, and hereby transfers,
conveys and
assigns to the Agent, for the ratable benefit of the Lenders, all
of such
Collateral as security for the payment when due and performance
of the
Obligations.
1.1. Transfer of Secured Party's Interest . GECC, as
beneficiary first
named under the Deed of Trust, as assignee first named under the
Assignment of
Rents and the Existing Collateral Assignment, as mortgagee first
named under
the Aircraft Mortgage, and as secured party first named under the
Borrower
Security Agreement and the Power Security Agreement, hereby
transfers, conveys
and assigns to the Agent all of its rights in, to and under each
such Security
Document, all of the Liens arising or created thereunder, and all
of the
property conveyed, transferred, assigned, mortgaged or otherwise
encumbered
thereby or thereunder, to be held by the Agent for the ratable
benefit of the
Lenders to secure the repayment of the principal of, premium, if
any, and
interest on the Loans and the Notes and any and all other
Obligations. The
Agent hereby accepts the aforesaid transfer, conveyance and
assignment.
1.2.
1.3. Sharing of Collateral. The Agent and the Lenders
agree that the net
proceeds of any and all Collateral received by the Agent or any
Lender (after
payment of the Agent's or such Lender's costs and expenses
incurred in
realizing upon any Collateral, including without limitation
attorneys fees
incurred by the Agent or such Lender) shall be applied first to
all sums then
due and owing to the Agent (in its capacity as Agent, and not in
its individual
capacity as a Lender) hereunder or under any other Loan Document
and the
balance shall be shared ratably among the Lenders based on the
outstanding
amount of Obligations owing to the respective Lenders.
1.4.
1.5. Collateral Held for Benefit of Lenders. The Agent
shall hold all
Collateral and the proceeds thereof for the account of itself and
the Lenders
in accordance with the provisions hereof. The Borrower, the
Lenders and the
Agent agree that, to the extent that GECC now or hereafter holds
any Collateral
for its individual account in respect of the Existing GECC Note
or the Existing
Aircraft Note, all such Collateral shall henceforth be held by
GECC in its
capacity as Agent for the ratable benefit of all of the Lenders
to secure the
payment when due of all of the principal, premium, if any, and
interest on the
Notes and the payment when due and performance of any and all
other
Obligations.
1.6.
1.7. Sharing of Recoveries. Each Lender agrees that if it
shall, by
exercising any right1.8. of set-off or counterclaim, by recovery
under the
Existing Guaranty or the Corporate Guaranty, or otherwise,
receive payment of
principal, premium and/or interest or other amounts in excess of
the ratable
portion due to such Lender in accordance with this Agreement
("Excess
Payment"), then such Lender ("Distributing Lender") shall
distribute to the
other Lenders ("Receiving Lender(s)") the applicable amounts
necessary to give
each Lender its proportionate share (for purposes of this
paragraph, "Pro Rata
Share") of such Excess Payment. To the extent necessary under
applicable law
so as not to extinguish any unpaid Obligations, to maintain
perfection in the
Collateral, or otherwise protect any rights of the Lenders
herein, the
Distributing Lender shall be subrogated to any and all rights and
interests of
the Receiving Lender receiving the Excess Payment but only to the
extent of the
applicable Pro Rata Share of the Excess Payment. Should the
Receiving Lender
ever receive monies or funds for which the Distributing Lender
would be
entitled due to the Excess Payment distributed by the
Distributing Lender to
the Receiving Lender ("Recoupment Payments"), such funds shall be
paid to the
Distributing Lender to the extent necessary so as to maintain the
appropriate
Pro Rata Share among the Lenders. To the extent any interest,
premiums, or
other amounts are received by any of the Lenders in connection
with either
Excess Payments or Recoupment Payments, the same shall be
distributed on an
equitable basis based on each Lender's Pro Rata Share as
evaluated over the
applicable time period. Should any Lender be required to return
funds, in an
amount disporportionate to that required to be returned by the
other Lenders,
to a bankruptcy trustee, the Borrower or otherwise due to a
bankruptcy filing
or other legal process, then such other Lenders shall make
appropriate payment
adjustments with such Lender so that each Lender has received it
Pro Rata
Share. To the extent any Lender has the right of set-off or
counterclaim
arising from indebtedness other than the Obligations and which is
either
unsecured or secured by collateral other than the Collateral, it
may exercise
the right of set-off or counterclaim against any monies it may
hold which were
not paid in connection with the Obligations or otherwise received
in connection
with the Collateral.
1.9.
1.10. Consents . At any time during which an Event of
Default has
occurred and is continuing, if GECC shall make a written request,
delivered to
Transamerica in accordance with the notice provisions of Section
10.01 (a
"Request"), for Transamerica's consent to or approval of any
action to be taken
or not taken by the Agent hereunder or under any other Loan
Document or
Transamerica's consent to any other matter as to which such
consent is required
hereunder or under any Loan Document, and GECC shall not receive
a written
denial thereof from Transamerica within thirty (30) days after
Transamerica's
receipt of such Request, then Transamerica shall be deemed to
have denied such
consent or approval upon the expiration of such period. In the
event
Transamerica shall deny or shall be so deemed to have denied any
such Request
and in the event that an Event of Default has occurred and is
continuing, then
GECC may, but shall be under no obligation to, purchase from
Transamerica the
Transamerica Note and all of Transamerica's right, title and
interest in, to
and under this Agreement and each of the other Loan Documents for
a purchase
price, payable by wire transfer within thirty (30) days after
GECC's receipt of
such denial (or, if applicable, within thirty (30) days after the
date of such
deemed denial), equal to the entire outstanding principal of and
all accrued
and unpaid interest on the Transamerica Loan. Upon payment of
such purchase
price, Transamerica shall endorse the Transamerica Note to the
order of GECC
and deliver it, together with an instrument of assignment,
reasonably
satisfactory to GECC and Transamerica and executed by
Transamerica, assigning
to GECC all of Transamerica's right, title and interest in, to
and under this
Agreement and the other Loan Documents.
1.11.
1.12. Modifications to Existing Security Agreements .
In order to
implement the provisions of this Agreement, the Existing Security
Agreements
are hereby amended as follows:
1.13.
1.14. (a) Notwithstanding anything to the contrary in
any Existing
Security Agreement, the Collateral described in each of the
respective Existing
Security Agreements shall henceforth secure the payment when due
and
performance of the Obligations, and the Borrower and Power each
hereby grant to
the Agent, for the ratable benefit of the Lenders, a security
interest in such
Collateral to which it has rights in order to secure the payment
when due and
performance of the Obligations.
1.15.
1.16. (b) The last sentence of Section 1 of the
Existing Security
Agreements (which begins with the phrase "Notwithstanding the
foregoing") is
hereby deleted.
1.17.
1.18. (c) Except as otherwise provided in this Section,
the terms set
forth in the table appearing in Schedule 7.07 attached hereto, as
used in the
respective Existing Security Agreements, shall be deemed to refer
to the terms
defined in this Agreement as set forth opposite such terms.
1.19.
1.20. (d) Notwithstanding the provisions of paragraph
(c) of this
Section with respect to the term "Secured Party" as used in the
Existing
Security Agreements, the following specific references to the
"Secured Party"
as used therein shall be construed as follows:
1.21.
(i) The following such references shall be construed
to refer to the
Lenders:
(A) those contained in the final paragraph of
Section 1 of the
Existing Security Agreements;
(B) that contained in Section 2(g) of the
Existing Security
Agreements;
(C) that contained in the second sentence of
Section 3(a) of
the Existing Security Agreements;
(D) all those contained in Section 3(d) of the
Existing
Security Agreements;
(E) that contained in Section 3(f) of the
Existing Security
Agreements;
(F) all those contained in Section 5(b) of the
Existing
Security Agreements;
(G) that contained in the first sentence of the
second
paragraph of Section 6(a) of the Existing Security
Agreements;
(H) that contained in Section 8(c) of the
Existing Security
Agreements;
(I) those contained in Section 10(a) of the
Existing Security
Agreements; and
(J) those contained in Section 10(f) of the
Existing Security
Agreements.
(ii) The following such references shall be construed
to refer to the
Required Lenders:
(A) that contained in the last sentence of
Section 4 of the
Existing Security Agreements;
(B) that contained in Section 7(b) of the
Existing Security
Agreements;
(C) that contained in Section 8(a) of the
Existing Security
Agreements;
(D) the second such reference contained in the
third sentence
of Section 8(e) of the Existing Security Agreements;
(E) those contained in the first sentence of
Section 9(c) of
the Existing Security Agreements; and
(F) the first such reference contained in Section
9(g) of the
Existing Security Agreements.
(iii) Such reference set forth in Section 6(c) of
the Existing
Security Agreements shall be construed to refer to the Agent
and the
Lenders.
(iv) Such references set forth in Section 7(g), and in
the first
sentence of Section 8(d), of the Existing Security
Agreements shall be
construed to refer to the Agent or any Lender.
1. ARTICLE DEFAULT
1.1. Events of Default . The occurrence of any one or more
of the
following events shall constitute an "Event of Default" under
this Agreement,
whatever the reason for such event and whether it shall be
voluntary or
involuntary, within or without the control of the Borrower or any
other
Fountain Corporation, or be effected by operation of law or
pursuant to any
judgment or order of any court or any order, rule or regulation
of any
governmental authority or non-governmental body:
(a) Either (i) the failure to make payment of any
installment of
principal or interest (or of principal and interest) on any
Note within
ten (10) days after the same becomes due and payable or (ii)
the failure
to pay the entire outstanding principal of, premium, if any,
and interest
on any Note when the same shall become due (at maturity, by
acceleration,
by notice of prepayment or otherwise);
(b) Any representation or warranty made in the Loan
Documents shall
prove to be false or misleading in any material respect when
made or
repeated or deemed made or repeated.
(c) Any report, certificate, financial statement or
other document
furnished prior to the execution of or pursuant to the terms
of this
Agreement (or pursuant to any terms of any other agreement
incorporated
herein by reference) shall prove to be false or misleading
in any material
respect.
(d) Any Fountain Corporation shall default in the
payment of any
other obligation for money borrowed when due or in the
performance of any
obligation incurred in connection with such money borrowed.
Notwithstanding the foregoing, it shall not constitute an
Event of Default
hereunder if such default is with respect to indebtedness of
less than
$25,000 individually and $50,000 in the aggregate for all
indebtedness of
all Fountain Corporations.
(e) The breach of any covenant, condition, or
agreement made by any
Fountain Corporation in (i) paragraph (a), (e), (h) or (j)
of Section
5.01, (ii) Section 5.02, (iii) Section 5.03, or (iv) Article
6.
(f) The breach of any other covenant, condition, or
agreement made
by any Fountain Corporation, or incorporated by reference,
in or pursuant
to this Agreement (other than those identified in paragraphs
(a) or (e)
above), which breach is not fully cured within thirty (30)
days after the
earlier of (i) the first day on which an officer of any
Fountain
Corporation has knowledge of such failure or (ii) written
notice thereof
has been given to the Borrower by the Agent at the request
of any Lender.
(g) The occurrence of an "Event of Default" under (and
as defined
in) any other Loan Document, or the breach of any covenant,
condition, or
agreement made by any Fountain Corporation under any Loan
Document after
the passage of any applicable cure period set out in such
Loan Document.
(h) Liquidation or dissolution of any Fountain
Corporation, or
suspension of the business of any Fountain Corporation or
filing by any
Fountain Corporation of a voluntary petition in bankruptcy
or a voluntary
petition or an answer seeking reorganization, arrangement,
readjustment of
its debts or for any other relief under the United States
Bankruptcy Code,
as amended, or under any other insolvency act or law, state
or federal,
now or hereafter existing, or any other action of any
Fountain Corporation
indicating its consent to, approval of, or acquiescence in
any petition or
proceedings; the application by any Fountain Corporation
for, or the
appointment by consent or acquiescence of, a receiver, a
trustee or a
custodian of such Fountain Corporation, or an assignment for
the benefit
of creditors, the inability of such Fountain Corporation or
the admission
by such Fountain Corporation in writing of its inability to
pay its debts
as they mature.
(i) Filing of an involuntary petition against any
Fountain
Corporation in bankruptcy or seeking reorganization,
arrangement,
readjustment of its debts or for any other relief under the
United States
Bankruptcy Code, as amended, or under any other insolvency
act or law,
state or federal, now or hereafter existing; or the
involuntary
appointment of a receiver, a trustee or a custodian of any
Fountain
Corporation or for all or a substantial part of its
property; the issuance
of a warrant of attachment, execution or similar process
against any
substantial part of the property of any Fountain Corporation
and the
continuance of any of the events referred to in this
paragraph for thirty
(30) days undismissed or undischarged.
(j) Final judgment, settlement or arbitration award
for the payment
of money shall be rendered against the Borrower or any
Fountain
Corporation which is in excess of $10,000 individually and
which judgment
shall remain undischarged for a period of 30 days unless
such judgment or
execution thereon be effectively stayed under the laws of
the jurisdiction
in which such judgment was rendered.
(k) The occurrence of any default under the Existing
Guaranty,
Corporate Guaranty, or any other guaranty of all or any of
the Obligations
hereafter delivered.
(l) Should any lien or security interest granted to
the Agent or any
Lender to secure payment and/or performance of the
Obligations terminate,
fail for any reason to have the priority believed by the
Lenders on the
date granted, or become unperfected for any reason.
1.1. Remedies . If an Event of Default shall have occurred,
then (a) any
obligation of the Lenders, or any of them, to advance funds under
any Note and
all other obligations (if any) of the Agent or Lenders to the
Borrower or any
other Fountain Corporation hereunder or under any other Loan
Document shall
immediately cease and terminate unless and until the Lenders
shall reinstate
such obligation in writing, and (b) at any time thereafter the
Agent shall, if
requested by the Required Lenders, by notice to the Borrower
declare the Notes
(together with accrued interest and premium, if any, thereon) and
all other
amounts payable hereunder and under the other Loan Documents to
be, and the
Notes (together will all accrued interest and premium, if any,
thereon) and all
other amounts payable hereunder and under the other Loan
Documents shall
thereupon become, immediately due and payable without
presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the
Borrower and the other Fountain Corporations; provided that, if
any Event of
Default specified in clause (h) or (i) of Section 8.01 shall
occur, then
without any notice to the Borrower or any other act by the Agent
or the
Lenders, the Notes (together with accrued interest and premium,
if any,
thereon) and all other amounts payable hereunder and under the
other Loan
Documents shall automatically become immediately due and payable
without
presentment, demand, protest or other notice of any kind, all of
which are
hereby waived by the Borrower and each of the other Fountain
Corporations.
Notwithstanding the foregoing, the Agent and the Lenders shall
have all other
remedies available to it or them under the other Loan Documents
or otherwise
available to it or them at law or in equity, and the Agent shall
exercise any
one or all of such remedies available to it at the request of the
Required
Lenders. Without limiting the foregoing, the Lenders or the
Agent may, and the
Agent at the request of the Required Lenders shall,
1.2.
(a) take immediate possession of and foreclose upon
any or all
Collateral including real and personal property which may be
granted to
the Agent or any Lender as security for the Obligations;
(b) exercise such other rights and remedies as the
Agent or any
Lender may be provided in the Loan Documents, as a secured
party under the
North Carolina Uniform Commercial Code, or as otherwise
provided by law;
(c) institute any action against the Borrower to
collect on sums due
under the Notes, and institute any action against any one or
more of the
Fountain Corporations that have executed the Existing
Guaranty, the
Corporate Guaranty, any subsequent guaranty of all or any of
the
Obligations or any other Loan Document; and/or
(d) take any other action permitted to be taken as
specified in the
Loan Documents upon the occurrence of an Event of Default
and take any
other action permitted to be taken and available at law or
in equity.
1.1. Notice of Default . The Agent shall give notice to the
Borrower of
any Default under Section 8.01(f) promptly upon being requested
to do so by any
Lender and shall thereupon notify all the Lenders thereof.
1.2.
1.3. Realization on Collateral . Notwithstanding anything
to the contrary
contained in this Agreement or any other Loan Document, no Person
other than
the Agent shall exercise any right or remedy against, or
liquidate, foreclose
or otherwise realize upon, any of the Collateral except for the
exercise by any
Lender of rights of set-off (it being understood that the
exercise of any such
rights shall be subject to the provisions of Section 7.05).
1.4.
1.5.
2. ARTICLE THE AGENT
1.1. Appointment, Powers and Immunities . Each Lender
hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder
and under the
other Loan Documents with such powers as are specifically
delegated to the
Agent by the terms hereof and thereof, together with such other
powers as are
reasonably incidental thereto. The Agent: (a) shall have no
duties or
responsibilities except as expressly set forth in this Agreement
and the other
Loan Documents, and shall not by reason of this Agreement or any
other Loan
Document be a trustee for any Lender; (b) shall not be
responsible to the
Lenders for any recitals, statements, representations or
warranties made by any
Fountain Corporation contained in this Agreement or any other
Loan Document, or
in any certificate or other document referred to or provided for
in, or
received by any Lender under, this Agreement or any other Loan
Document, or for
the validity, effectiveness, genuineness, enforceability or
sufficiency of this
Agreement or any other Loan Document or any other document
referred to or
provided for herein or therein by any Fountain Corporation or for
any failure
by any Fountain Corporation to perform any of its obligations
hereunder or
thereunder; (c) subject to Section 9.03, shall not be required to
initiate or
conduct any litigation or collection proceedings under any Loan
Document except
to the extent requested by the Required Lenders, and then only on
terms and
conditions reasonably satisfactory to the Agent after consulting
with the
Lenders, and (d) shall not be responsible for any action taken or
omitted to be
taken by it hereunder or under any other Loan Document or any
other document or
instrument referred to or provided for herein or therein or in
connection
herewith or therewith, except for its own negligence or willful
misconduct.
The Agent may employ agents and attorneys-in-fact and shall not
be responsible
for the negligence or misconduct of any such agents or attorneys-
in-fact
selected by it with reasonable care. The provisions of this
Article 9 are
solely for the benefit of the Agent and the Lenders, and neither
the Borrower
nor any other Fountain Corporation shall have any rights as a
third party
beneficiary of any of the provisions hereof. In performing its
functions and
duties under this Agreement and under the other Loan Documents,
the Agent shall
act solely as agent of the Lenders and does not assume and shall
not be deemed
to have assumed any obligation towards or relationship of agency
or trust with
or for the Borrower or any other Fountain Corporation. The
duties of the Agent
shall be ministerial and administrative in nature, and the Agent
shall not have
by reason of this Agreement or any other Loan Document a
fiduciary relationship
in respect of any Lender.
1.1. Reliance by Agent . The Agent shall be entitled to
rely upon any
certification, notice or other communication (including any
thereof by
telephone, telefax, telegram or cable) believed by it to be
genuine and correct
and to have been signed or sent by or on behalf of the proper
Person or
Persons, and upon advice and statements of legal counsel,
independent
accountants or other experts selected by the Agent. As to any
matters not
expressly provided for by this Agreement or any other Loan
Document, the Agent,
subject to the provisions of Section 9.03, shall in all cases be
fully
protected in acting, or in refraining from acting, hereunder and
thereunder in
accordance with instructions signed by the Required Lenders
(given after
compliance with the requirements of Section 9.03 hereof), and
such instructions
of the Required Lenders in any action taken or failure to act
pursuant thereto
shall be binding on all of the Lenders. Notwithstanding the
foregoing or
otherwise, the Agent shall carry out and act in good faith to
satisfy the
directions of the Required Lenders.
1.2.
1.3. Defaults . If the Agent or any Lender shall have
actual knowledge of
a Default or an Event of Default, then the Agent shall promptly
notify the
Lenders, or such Lender shall promptly notify the Agent and the
other Lenders,
of such Default or Event of Default. As used in this Section,
"actual
knowledge" means the actual knowledge of the President, any
Senior Vice
President or any Vice President of a party. Thereupon, the
Lenders and the
Agent shall consult in good faith as to the action to be taken as
a consequence
of such Default or Event of Default. Subject to the foregoing,
the Required
Lenders shall determine in good faith the action or actions to be
taken as it
shall reasonably determine to be advisable and in the best
interest of the
Lenders and the Agent shall take such actions with respect
thereto as the
Required Lenders shall direct in writing. However, if the Agent
shall have
actual knowledge of a Default or an Event of Default, and unless
and until the
Agent shall have received directions from the Required Lenders
(or, in the case
a Default described in Section 8.01(f), any Lender), the Agent
may (but shall
not be obligated to) take such action, or refrain from taking
such action, with
respect to such Default or Event of Default as it shall deem
advisable in the
best interests of the Lenders. The selection by the Agent of
counsel to
represent it and the Lenders in connection with proceedings to
collect the
Obligations and enforce the Loan Documents shall be subject to
the approval of
each Lender, provided that such approval shall not be
unreasonably withheld or
delayed.
1.4.
1.5. Rights of Agent as a Lender . With respect to the
Loans made by GECC
or any Person succeeding it as Agent hereunder, GECC or such
Person in its
capacity as a Lender hereunder shall have the same rights and
powers hereunder
as any other Lender and may exercise the same as though it were
not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the
context
otherwise indicates, include GECC or such Person succeeding it as
Agent
hereunder, as the case may be, in its individual capacity. The
Agent may
(without having to account therefor to any Lender) lend money to
and generally
engage in any kind of business with the Borrower (and any of its
Affiliates) as
if it were not acting as the Agent; provided that such lending of
money to or
engaging in business with the Borrower (or any of its Affiliates)
does not
adversely affect any other Lender's ratable interest in and to
the Collateral
nor is secured by any Lien on any of the Collateral.
Notwithstanding anything
herein to the contrary, however, the Agent may retain for its own
account the
fee referenced in Section 3.01(y).
1.6.
1.7. Indemnification . Each Lender severally agrees to
indemnify the
Agent, to the extent the Agent shall not have been reimbursed by
the Borrower,
ratably in accordance with the outstanding principal amount of
its Note, for
any and all liabilities, obligations, losses, damages, penalties,
actions,
judgments, suits, costs, expenses (including, without limitation,
counsel fees
and disbursements) or disbursements (but not including any fees
or other
considerations paid to the Agent by the Borrower or its
Affiliates pursuant to
or described in Section 9.04) of any kind and nature whatsoever
that may be
imposed on, incurred by or asserted against the Agent in any way
relating to or
arising out of this Agreement or any other Loan Document or any
other documents
contemplated hereby or thereby or referred to herein or therein
or the
transactions contemplated hereby or thereby (excluding, unless an
Event of
Default has occurred and is continuing, the normal administrative
costs and
expenses incident to the performance of its agency duties
hereunder) or the
enforcement of any of the terms hereof or thereof or any such
other documents;
provided that no Lender shall be liable for any of the foregoing
to the extent
they arise from the gross negligence or willful misconduct of the
Agent. If
following receipt of an indemnity payment from the Lenders the
Agent shall
recover from any Fountain Corporation or any other party (other
than a Lender)
any sum in respect of which such indemnity payment was required
to be made,
then the Agent shall pay such sum over to each Lender to the
extent of the
indemnity payment made by such Lender (except if such sum is
insufficient to
cover all such indemnity payments, such sum shall be allocated
among the
Lenders ratably in accordance with their respective indemnity
payments).
Except to the extent that the Agent shall recover from any
Fountain Corporation
or any other party (other than a Lender) and distribute to the
indemnifying
Lenders any sum in respect of which an indemnity payment was made
hereunder,
any indemnity payment made by the Lenders shall be a debt of the
Borrower to
the respective Lenders and shall be added to and form a part of
the
Obligations.
1.8.
1.9. CONSEQUENTIAL DAMAGES . THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE
TO ANY LENDER, THE BORROWER, ANY OTHER FOUNTAIN CORPORATION OR
ANY OTHER PERSON
OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE
ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
1.10.
1.11. Payee of Note Treated as Owner . The Agent may
deem and treat
the named payee of any Note as the owner thereof for all purposes
hereof unless
and until a written notice of the assignment or transfer thereof
shall have
been filed with the Agent and the provisions of Section 10.05(c)
have been
satisfied. Any requests, authority or consent of any Person who
at the time of
making such request or giving such authority or consent is the
holder of any
Note shall be conclusive and binding on any subsequent holder,
transferee or
assignee of that Note or of any Note or Notes issued in exchange
therefor or
replacement thereof.
1.12.
1.13. Non-Reliance on Agent and Other Lenders . Each
Lender agrees
that it has, independently and without reliance on the Agent or
any other
Lender, and based on such documents and information as it has
deemed
appropriate, made its own credit analysis of the Borrower and the
other
Fountain Corporations and its own decision to enter into this
Agreement and
that it will, independently and without reliance upon the Agent
or any other
Lender, and based on such documents and information as it shall
deem
appropriate at the time, continue to make its own analysis and
decisions in
taking or not taking action under this Agreement or any of the
other Loan
Documents. The Agent shall not be required to keep itself (or
any Lender)
informed as to the performance or observance by the Borrower or
any other
Person of this Agreement or any of the other Loan Documents or
any other
document referred to or provided for herein or therein or to
inspect the
properties or books of the Borrower or any other Person. Except
for notices,
reports and other documents and information expressly required to
be furnished
to the Lenders by the Agent hereunder or under the other Loan
Documents, the
Agent shall not have any duty or responsibility to provide any
Lender with any
credit or other information concerning the affairs, financial
condition or
business of the Borrower or any other Person (or any of their
Affiliates) that
may come into the possession of the Agent.
1.14.
1.15. Failure to Act . Except for action expressly
required of the
Agent hereunder or under the other Loan Documents, the Agent
shall in all cases
be fully justified in failing or refusing to act hereunder and
thereunder
unless it shall receive further reasonable assurances to its
reasonable
satisfaction by the Lenders of their indemnification obligations
under Section
9.05 against any and all liability and expense that may be
incurred by the
Agent by reason of taking, continuing to take, or failing to take
any such
action.
1.16.
1.17. Resignation or Removal of Agent . Subject to the
appointment
and acceptance of a successor Agent as provided below, the Agent
may resign at
any time by giving notice thereof to the Lenders and the Borrower
and the Agent
may be removed at any time with or without cause by the Required
Lenders. Upon
any such resignation or removal, the Required Lenders shall have
the right to
appoint a successor Agent. If no successor Agent shall have been
so appointed
by the Required Lenders and shall have accepted such appointment
within 60 days
after the retiring Agent's notice of resignation or the Required
Lenders'
removal of the retiring Agent, then the retiring Agent may, on
behalf of the
Lenders, appoint a successor Agent. Any successor Agent shall be
either a
Lender or a financial institution that has a total capitalization
of not less
than $500,000,000 (or, in the case of a bank, that has a combined
capital and
surplus of at least $500,000,000). Upon the acceptance of any
appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon
succeed to and become vested with all the rights, powers,
privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged
from its
duties and obligations hereunder. After any retiring Agent's
resignation or
removal hereunder as Agent, the provisions of this Article 9
shall continue in
effect for its benefit in respect of any actions taken or omitted
to be taken
by it while it was acting as the Agent hereunder. The resigning
or removed
Agent shall execute and deliver to the successor Agent all such
instruments as
the successor Agent may reasonably require in order to publish
record notice
that the successor Agent has succeeded to all of the right, title
and interest
of the removed or resigning Agent in, to and under the Security
Documents and
the Collateral.
1.18.
2. ARTICLE MISCELLANEOUS
1.1. Notices . All notices, requests and other
communications to any
party hereunder shall be in writing (including facsimile
transmission or
similar writing) and shall be given to such party at its address
or telecopy
number set forth on the signature pages hereof or such other
address or
telecopy number as such party may hereafter specify for the
purpose by notice
to each other party. Each such notice, request or other
communication shall be
effective (i) if given by telecopier, when such telecopy is
transmitted to the
telecopy number referred to in or specified pursuant to this
Section and the
telecopy machine used by the sender provides a written
confirmation that such
telecopy has been so transmitted or receipt of such telecopy
transmission is
otherwise confirmed, (ii) if given by mail, 72 hours after such
communication
is deposited in the mails with first class postage prepaid,
addressed as
aforesaid, or (iii) if given by any other means, when delivered
at the address
referred to in or specified pursuant to this Section; provided
that notices to
the Agent under Article 9 shall not be effective until received.
1.1. No Waivers . No failure or delay by the Agent or any
Lender in
exercising any right, power or privilege hereunder or under any
Note or other
Loan Document shall operate as a waiver thereof nor shall any
single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise
of any other right, power or privilege. The rights and remedies
herein
provided shall be cumulative and not exclusive of any rights or
remedies
provided by law.
1.2.
(a) Expenses; Documentary Taxes; Indemnification . The
Borrower shall
pay (i) all out-of-pocket expenses of the Lenders and the Agent,
including fees
and disbursements of the Agent's and each Lender's counsel, in
connection with
the preparation of this Agreement and the other Loan Documents,
any waiver or
consent hereunder or thereunder or any amendment hereof or
thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a
Default
occurs, all out-of-pocket expenses incurred by the Agent or any
Lender,
including fees and disbursements of counsel, in connection with
such Default
and collection and other enforcement proceedings resulting
therefrom, including
out-of-pocket expenses incurred in enforcing this Agreement and
the other Loan
Documents.
(b)
(c) The Borrower shall indemnify the Agent and each Lender
against any
and all documentary stamp taxes, transfer taxes or interest
equalization taxes
or similar excise taxes, assessments or charges which may at any
time be
determined to be payable by the Agent or such Lender by reason of
the execution
and delivery of this Agreement or any other Loan Document or the
issuance by
the Borrower of any of the Notes.
(d)
(e) The Borrower agrees to indemnify each of the Agent, the
Lenders, each
affiliate of the Agent or any Lender and all of their respective
directors,
officers, employees and agents (each an "Indemnified Party")
from, and hold
each Indemnified Party harmless from and against, any and all
losses, costs,
charges, expenses (including, without limitation, reasonable
attorney's fees
and expenses of preparing for litigation or preparation therefor,
whether or
not such Indemnified Party is a party thereto), claims, demands,
suits,
damages, penalties, taxes (other than taxes on the income),
fines, levies and
assessments that may be asserted or imposed against, or suffered
or incurred
by, such Indemnified Party as a direct or indirect result of:
(f)
(i) this Agreement, the Notes, the other Loan
Documents, the Obligations,
the transactions contemplated by the Loan Documents, the
making of any Loans or
the direct or indirect use or application, or proposed use
or application, of
the proceeds of any Loans,
(i) any violation of any Environmental Laws, the past,
present or future
operations of any Fountain Corporation or its predecessors
in interest, or the
past, present or future environmental, health or safety
condition of any
property or any actual or threatened release of any
Hazardous Material.
(i) any representation or warranty of any Fountain
Corporation in this
Agreement or any other Loan Document being untrue or
inaccurate in any respect,
and/or
(i) the failure by any Fountain Corporation to
observe, perform or comply
with any of its covenants, undertakings or obligations set
forth in this
Agreement or any other Loan Document;
provided that the Borrower shall have no obligation to indemnify
an Indemnified
Party hereunder in respect of the foregoing to the extent the
same shall arise
directly from the gross negligence or willful misconduct of such
Indemnified
Party. The obligations of the Borrower under this Section shall
survive the
repayment of the Loans and other Obligations.
1.1. Amendments and Waivers . (a) Any provision of this
Agreement, the
Notes or any other Loan Documents may be amended or waived if,
but only if,
such amendment or waiver is in writing and is signed by each such
Fountain
Corporation party hereto and the Required Lenders (and, if the
rights or duties
of the Agent are affected thereby, by the Agent); provided that
no such
amendment or waiver shall, unless signed by all the Lenders, (i)
increase the
amount any Lender has agreed to lend to the Borrower or subject
any Lender to
any additional obligation, (ii) change the principal of or rate
of interest on
any Loan or any fees hereunder, (iii) change the date fixed for
any payment of
principal of or interest on any Loan or any fees hereunder, (iv)
change the
amount of principal, interest or fees due on any date fixed for
the payment
thereof, (v) change the percentage of the aggregate unpaid
principal amount of
the Notes, or the percentage of Lenders, that shall be required
for the Lenders
or any of them to take any action under this Section or any other
provision of
this Agreement, (vi) change the manner of application of any
payments made
under this Agreement or the Notes, (vii) release, subordinate or
substitute any
of the Collateral (except in accordance with the limitations set
forth in the
Loan Documents, (viii) release any guaranty given to support
payment of the
Loans, (ix) change or waive insurance requirements, or (vii)
modify or waive in
any respect any provision of Article 2, Section 5.02, Section
5.03, Article 7
(excluding, however, Section 7.07), Article 8, Article 9 or this
Section 10.04.
To the extent any Event of Default described in paragraph (a),
(d), (e), (l) of
Section 8.01 or (as it relates to a payment default under the
Parent Guaranty)
in paragraph (k) of Section 8.01 shall occur and GECC, in its
capacity as
Agent, shall have failed to initiate remedial action with respect
to such Event
of Default within forty-five (45) days after its receipt from
Transamerica of a
written request that it take remedial action with respect to such
Event of
Default, then if such Event of Default is continuing such
situation shall be
deemed an "Implied Waiver" unless the commencement of remedial
action in the
then-present circumstance would not be consistent with the
practice of a
reasonably prudent lender. Upon the occurrence of an Implied
Waiver, the Agent
must receive the consent of Transamerica to the continuance of
the Implied
Waiver, which consent shall not be unreasonably withheld. To the
extent the
Agent fails to obtain consent to an Implied Waiver and
Transamerica gives
written notice of such failure to the Agent, the Agent shall
within thirty (30)
days after it's receipt of such notice discuss with and obtain
Transamerica's
consent to the Implied Waiver, which consent shall not be
unreasonably
withheld. If the Agent fails to obtain such consent as
contemplated by the
foregoing sentence, then so long as such Event of Default is
continuing, GECC
shall, at Transamerica's written request, purchase from
Transamerica the
Transamerica Note and all of Transamerica's right, title and
interest in, to
and under this Agreement and each of the other Loan Documents for
a purchase
price, payable by wire transfer within thirty (30) days after
GECC's receipt of
such request for purchase, equal to the entire outstanding
principal of and all
accrued and unpaid interest on the Transamerica Loan. Upon
payment of such
purchase price, Transamerica shall endorse the Transamerica Note
to the order
of GECC and deliver it, together with an instrument of
assignment, reasonably
satisfactory to GECC and Transamerica and executed by
Transamerica, assigning
to GECC all of Transamerica's right, title and interest in, to
and under this
Agreement and the other Loan Documents. The definition of
Implied Waiver, as
used herein, only relates to the rights as between the Lenders
and in no way
shall the definition or procedures set forth in this Section
10.04(a)
constitute a waiver as to, or for the benefit of, Borrower or any
Fountain
Corporation, or give any rights or defenses to any such party.
1.2.
1.3. (b) No Fountain Corporation will solicit, request or
negotiate for
or with respect to any proposed waiver or amendment of any of the
provisions of
this Agreement or any other Loan Document unless each Lender
shall be informed
thereof by such Fountain Corporation and shall be afforded an
opportunity of
considering the same and shall be supplied by such Fountain
Corporation with
sufficient information to enable it to make an informed decision
with respect
thereto. Executed or true and correct copies of any waiver or
consent effected
pursuant to the provisions of this Agreement shall be delivered
by the Borrower
to each Lender forthwith following the date on which the same
shall have been
executed and delivered by the Lenders. No such Fountain
Corporation will,
directly or indirectly, pay or cause to be paid any remuneration,
whether by
way of supplemental or additional interest, fee or otherwise, to
any Lender (in
its capacity as such) as consideration for or as an inducement to
the entering
into by such Lender of any waiver or amendment of any of the
terms and
provisions of this Agreement unless such remuneration is
concurrently paid, on
the same terms, ratably to all the Lenders; provided that no
Lender other than
GECC shall be entitled to receive any fee or other compensation
in connection
with (i) the Borrower's exercise of its options, under the
Amended GECC Note
and/or the Amended Aircraft Note, to convert the interest rate
thereunder from
a floating rate to a fixed rate or (ii) any fee paid pursuant to
Section
3.01(y).
1.4.
1.5. (c) The Lenders reserve the right to charge a fee in
connection with
any amendment, extension, renewal or other modification of this
Agreement or
any other Loan Document; provided that except for fees that are
to be
apportioned ratably among the Lenders based on the outstanding
principal
balance of the Obligations owed to the respective Lenders, the
fees paid to
each Lender on the occasion of each such amendment, extension,
renewal or
modification shall be equal to those paid to all other Lenders.
1.6.
1.7. Successors and Assigns . (a) The provisions of this
Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their
respective successors and assigns; provided that no Fountain
Corporation may
assign or otherwise transfer any of its rights under this
Agreement.
1.8.
1.9. (b) Any Lender may at any time sell to one or more
Persons (each a
"Participant") participating interests in any Loan owing to such
Lender, any
Note held by such Lender or any other interest of such Lender
hereunder. In
the event of any such sale by a Lender of a participating
interest to a
Participant, such Lender's obligations under this Agreement shall
remain
unchanged, such Lender shall remain solely responsible for the
performance
thereof, such Lender shall remain the holder of any such Note for
all purposes
under this Agreement, and Fountain Corporations and the Agent
shall continue to
deal solely and directly with such Lender in connection with such
Lender's
rights and obligations under this Agreement. In no event shall a
Lender that
sells a participation be obligated to the Participant to take or
refrain from
taking any action hereunder except that such Lender may agree
that it will not
(except as provided below), without the consent of the
Participant, agree to
(i) the change of any date fixed for the payment of principal of
or interest on
the related Loan or Loans, (ii) the change of the amount of any
principal,
interest or fees due on any date fixed for the payment thereof
with respect to
the related Loan or Loans (except for those changes required by
the terms of
any Note, including those options set forth in the Amended
Aircraft Note and
the Amended GECC Note to change the interest rate to a fixed rate
of interest),
(iii) the change of the principal of the related Loan or Loans,
(iv) any change
in the rate at which either interest is payable thereon or (if
the Participant
is entitled to any part thereof) commitment fee is payable
hereunder from the
rate at which the Participant is entitled to receive interest or
commitment fee
(as the case may be) in respect of such participation, (v) the
release or
substitution of all or any substantial part of the Collateral, or
(vi) the
release of any guaranty given to support payment of the Loans.
Each Lender
selling a participating interest in any Loan, Note or other
interest under this
Agreement shall, within 10 Business Days of such sale, provide
the Borrower and
the Agent with written notification stating that such sale has
occurred and
identifying the Participant and the interest purchased by such
Participant.
1.10.
1.11. (c) Any Lender may at any time assign to one or
more banks or
financial institutions (each an "Assignee") all, or a
proportionate part of
all, of its rights and obligations under this Agreement, the
Notes and the
other Loan Documents, and such Assignee shall assume all such
rights and
obligations, pursuant to an instrument of assignment and
assumption (an
"Assignment") reasonably satisfactory to the Agent and the other
Lenders,
executed by such Assignee, such transferring Lender and the
Agent. All costs
relating to any such assignment, including without limitation
reasonable
outside, third party costs incurred by and administrative charges
of the Agent,
shall be paid by the Lender making such assignment. Upon the
consummation of
any transfer to an Assignee pursuant to this paragraph (c), the
transferor
Lender, the Agent and the Borrower shall make appropriate
arrangements so that,
if required, a new Note is issued to each of such Assignee and
such transferor
Lender.
1.12.
1.13. (d) Each such Fountain Corporation authorizes
each Lender to
disclose to any Participant, Assignee or other transferee (each a
"Transferee")
and any prospective Transferee any and all financial and other
information in
such Lender's possession concerning the Fountain Corporations
that has been
delivered to such Lender pursuant to this Agreement or that has
been delivered
to such Lender in connection with such Lender's credit evaluation
prior to
entering into this Agreement.
1.14.
1.15. Obligations Several . The obligations of each
Lender hereunder
are several, and no Lender shall be responsible for the
obligations or
commitment of any other Lender hereunder. Nothing contained in
this Agreement
nor any action taken by the Lenders pursuant hereto shall be
deemed to
constitute the Lenders to be a partnership, an association, a
joint venture or
any other kind of entity. The amounts payable at any time
hereunder to each
Lender shall be a separate and independent debt, and each Lender
shall be
entitled to protect and enforce its rights arising out of this
Agreement or any
other Loan Document and it shall not be necessary for any other
Lender to be
joined as an additional party in any proceeding for such purpose.
1.16.
1.17. Making Required Payments . In the event any
Fountain
Corporation shall fail to maintain insurance, pay taxes or
assessments, costs
and expenses which such Fountain Corporation is, under any of the
terms hereof
or of any Loan Document, required to pay, or shall fail to keep
any of the
properties and assets constituting collateral free from new
security interests,
liens, or encumbrances, except as permitted herein, the Lenders
may, at the
election of the Required Lenders, make expenditures for any or
all such
purposes and the amounts expended together with interest thereon
at the Default
Rate, shall become immediately due and payable to the Lenders,
shall constitute
part of the Obligations and shall have the benefit of and be
secured by the
Collateral to the extent permitted by law. The Lenders shall be
under no duty
or obligation whatever with respect to any of the foregoing
expenditures.
1.18.
1.19. Existing Guaranty . Each Fountain Corporation
that is a party
to the Existing Guaranty hereby acknowledges and consents to the
amendments to
the Existing GECC Note, the Existing Aircraft Note and all of the
Security
Documents executed and delivered in connection with the loans
evidenced by the
Existing GECC Note and the Existing Aircraft Note, whether
effected hereby or
by any instrument, agreement or amendment to be delivered
pursuant to Article 3
and agrees that (a) each reference in the Existing Guaranty to
the Loan
Agreement shall be deemed to refer to this Agreement as amended
from time to
time, (b) each reference, if any, in the Existing Guaranty to the
Existing
Aircraft Note or the Existing GECC Note shall be deemed to refer
to the Amended
Aircraft Note and the Amended GECC Note, respectively, (c) the
liabilities,
indebtedness and obligations the payment and performance of which
has been
guaranteed pursuant to the Existing Guaranty shall be and hereby
is expanded to
include any and all of the Obligations, whether the same shall be
due or owing
to GECC, Transamerica, any other Lender or the Agent, (d) the
Existing Guaranty
and each such Fountain Corporation's liabilities and obligations
thereunder are
and shall remain in full force and effect in accordance with the
terms and
provisions of the Existing Guaranty as modified, supplemented
and/or amended by
the provisions of this Section, and (e) nothing in this Agreement
or in any
instrument, agreement or amendment delivered pursuant to Article
3 shall alter,
limit, diminish or impair such Fountain Corporation's obligations
under the
Existing Guaranty except to the extent that the indebtedness and
obligations of
the Borrower, the payment of which such Fountain Corporation has
guaranteed
pursuant to the Existing Guaranty, have been altered by the
provisions of this
Agreement or any instrument, agreement or amendment delivered
pursuant to
Article 3.
1.20.
1.21. Omnibus Agreement Controls . In the event of any
inconsistency
between the terms of the Loan Documents (other than this
Agreement) and this
Agreement, the terms of this Agreement shall control, except in
the case of the
Notes (which shall be controlling in the event of a conflict with
this
Agreement).
1.22.
1.23. No Novation . Except as expressly modified and
amended by or
pursuant to this Agreement, the Amended Aircraft Note, the
Amended GECC Note or
any other amendment of any existing Loan Document made pursuant
to the
provisions of this Agreement, all of the agreements and
instruments so modified
and amended by or pursuant thereto shall be and continue in full
force and
effect. None of the parties hereto intends that anything in this
Agreement,
the Amended Aircraft Note, the Amended GECC Note or any such
other amendment
shall be construed as a novation, and none of such instruments
and agreements
shall effect a novation. The Borrower hereby ratifies and
confirms its
indebtedness under the Existing Aircraft Note and the Existing
GECC Note, as
modified, amended and restated by the Amended Aircraft Note and
the Amended
GECC Note, respectively. Each of the Fountain Corporations that
is a party to
any existing Loan Document hereby further ratifies and confirms
the conveyances
and assignments provided in, the security provided by, and its
duties,
obligations and responsibilities under, each such existing Loan
Document, as
the same heretofore may have been and, pursuant to this Agreement
or any such
amendment, hereby is modified and amended, and acknowledges that
each such Loan
Document, as so modified, supplemented and amended, is fully
enforceable
against such Fountain Corporation and its assets, if any,
encumbered thereby.
The Existing Aircraft Note, all prior amendments and supplements
thereto and
modifications thereof, if any, and the Amended Aircraft Note
shall be construed
together as a single instrument. The Existing GECC Note, all
prior amendments
and supplements thereto and modifications thereof, if any, and
the Amended GECC
Note shall be construed together as a single instrument. Each of
the other
existing Loan Documents that has been amended as aforesaid, all
prior
amendments and supplements thereto and modifications thereof, if
any, and the
instrument or agreement amending the same (or, in the case of the
Existing
Security Agreements, the provisions of Article 7 hereof, to the
extent that the
Existing Security Agreements have been amended pursuant thereto)
shall be
construed together as a single instrument.
1.24.
1.25. North Carolina Law . This Agreement and each Note
shall be
construed in accordance with and governed by, and any dispute
arising out of or
related to the relationship established among the parties from
time to time
party hereto in connection with this Agreement and the other Loan
Documents
(and whether arising in contract, tort, equity, or otherwise)
shall be resolved
in accordance with, the internal laws and not the conflicts of
law provisions
of the State of North Carolina. This Agreement and the Notes are
intended to
be effective as instruments executed under seal.
1.26.
1.27. Severability . This Agreement, the Notes and the
other Loan
Documents are intended to be performed in accordance with, and
only to the
extent permitted by, all applicable requirements of law. If any
provision of
this Agreement, any Note or any other Loan Document or the
application thereof
to any Person or circumstances shall, for any reason and to any
extent, be
invalid or unenforceable, neither the remainder of this
Agreement, such Note or
such other Loan Document in which such provision is contained nor
the
application of such provision to other Persons or circumstances
or other Loan
Documents or other instruments referred to hereinabove shall be
affected
thereby, but rather, the same shall be enforced to the greatest
extent
permitted by law.
1.28.
1.29. Interpretation . No provision of this Agreement
or any of the
other Loan Documents shall be construed against or interpreted to
the
disadvantage of any party hereto by any court or other
governmental authority
by reason of such party having or being deemed to have structured
or dictated
such provision.
1.30.
1.31. Consent to Jurisdiction . EACH FOUNTAIN
CORPORATION HEREBY
IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING
OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY BE
INSTITUTED IN THE
SUPERIOR COURT IN MECKLENBURG COUNTY, NORTH CAROLINA, OR THE
UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA OR IN
SUCH OTHER
APPROPRIATE COURT AND VENUE AS THE AGENT OR ANY LENDER MAY CHOOSE
AT ITS SOLE
DISCRETION. EACH FOUNTAIN CORPORATION CONSENTS TO THE
JURISDICTION OF SUCH
COURTS AND WAIVES ANY OBJECTION RELATING TO THE BASIS FOR
PERSONAL OR IN REM
JURISDICTION OR TO VENUE WHICH SUCH FOUNTAIN CORPORATION MAY NOW
OR HEREAFTER
HAVE IN ANY SUCH LEGAL ACTION OR PROCEEDINGS. EACH FOUNTAIN
CORPORATION AGREES
THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN THE MANNER
PRESCRIBED IN SECTION
9.01 FOR THE GIVING OF NOTICE TO IT. NOTHING HEREIN CONTAINED,
HOWEVER, SHALL
PREVENT THE AGENT OR ANY LENDER FROM BRINGING ANY ACTION OR
EXERCISING ANY
RIGHTS AGAINST ANY SECURITY AND AGAINST ANY FOUNTAIN CORPORATION
PERSONALLY,
AND AGAINST ANY ASSETS OF ANY FOUNTAIN CORPORATION, WITHIN ANY
OTHER STATE OR
JURISDICTION.
1.32.
1.33. Arbitration . SUBJECT TO SECTION 10.16, ANY
CONTROVERSY OR
CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT
SHALL BE DETERMINED BY ARBITRATION IN ACCORDANCE WITH THE
COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE
NUMBER OF
ARBITRATORS SHALL BE THREE. ONE ARBITRATOR SHALL BE APPOINTED BY
THE LENDERS,
ONE ARBITRATOR SHALL BE APPOINTED BY THE BORROWER, AND THE THIRD
ARBITRATOR,
WHO SHALL SERVE AS CHAIRMAN OF THE TRIBUNAL, SHALL BE APPOINTED
BY THE AMERICAN
ARBITRATION ASSOCIATION. THE PLACE OF ARBITRATION SHALL BE
CHARLOTTE, NORTH
CAROLINA. ANY ARBITRAL AWARD ARISING FORM ANY ARBITRATION
PURSUANT TO THIS
PARAGRAPH SHALL BE FINAL AND BINDING UPON ALL PARTIES HERETO.
1.34.
1.35. Proceedings Against Collateral . Notwithstanding
the provisions
of Section 10.15 or any similar provision contained in any other
Loan Document,
neither the commencement or pendency of, or demand by any party
for, any
arbitration proceedings to determine any controversy or claim
arising out of or
relating to this Agreement or any other Loan Document shall
preclude the
Lenders or the Agent, if an Event of Default shall have occurred,
from causing
the maturity of the Obligations or the Notes to be accelerated or
enforcing any
rights or remedies (including, without limitation, foreclosure,
sale,
liquidation or other rights or remedies) with respect to any
Collateral, all of
which rights and remedies (including, without limitation, the
right to cause
the maturity of the Obligations or the Notes to be accelerated)
may be
exercised if an Event of Default shall have occurred,
notwithstanding the
commencement or pendency of or demand for any such proceedings.
1.36.
1.37. No Setoff . Except as otherwise expressly
provided in this
Agreement, no act of commission or omission of any kind or at any
time upon the
part of the Agent or any Lender in respect of any matter
whatsoever shall in
any way affect or impair the rights of the Agent, such Lender or
any other
Lender to enforce any right, power or benefit of the Agent, such
Lender or any
other Lender under this Agreement or any other Loan Document, and
no set-off,
claim, reduction or diminution of any obligation or any defense
of any kind or
nature that either any Fountain Corporation has or may have
against the Agent
or any Lender shall be available to any such Fountain Corporation
or asserted
against the Agent, such Lender or any other Lender in any suit or
action
brought by Agent or any Lender to enforce or collect any
Obligation or to
exercise any right, power or benefit under this Agreement or any
other Loan
Document. Nothing in this Agreement shall be construed as a
waiver by any
Fountain Corporation of any rights or claims it may have against
the Agent or
any Lender under this Agreement or otherwise, but any recovery
upon such rights
and claims shall be had from the Agent or such Lender separately,
the intent of
this Agreement being that each Fountain Corporation party to any
Loan Document
shall be unconditionally and absolutely obligated to perform
fully all of its
obligations, agreements and covenants thereunder for the benefit
of the Agent
and the Lenders.
1.38.
1.39. Reproduction of Documents . This Agreement, the
other Loan
Documents and all documents relating hereto and thereto,
including without
limitation (a) consents, waivers and modifications that may
hereafter be
executed, (b) documents received by the Agent or any Lender at
the closing
(except the Notes), and (c) financial statements, certificates
and other
information previously or hereafter furnished to the Agent or any
Lender may be
reproduced by the Agent or such Lender by a photographic,
photostatic,
microfilm, micro-card, miniature photographic or other similar
process and the
Agent and such Lender may destroy any original document so
reproduced. Each
Fountain Corporation from time to time party to any Loan Document
agrees and
stipulates that, to the extent permitted by applicable law, any
such
reproduction shall be admissible in evidence as the original
itself in any
judicial or administrative proceeding (whether or not the
original is in
existence) and that any enlargement, facsimile or further
reproduction of such
reproduction shall likewise be admissible in evidence. The
purpose of this
Section is to constitute a waiver of the "best evidence" rule
with respect to
this Agreement, the Loan Documents and the other documents
referred to herein
and therein and this Section shall not constitute a waiver of any
other
objection to the admissibility of such document in any judicial
or
administrative proceeding.
1.40.
1.41. Inconsistency of Covenants . All of covenants
hereunder of the
Borrower, the Parent Corporation or any Consolidated Subsidiary
from time to
time party hereto shall be given independent effect, so that if a
particular
action or condition is not permitted by any such covenant, the
fact that it
would be permitted by, or be otherwise within the limitations of,
another
covenant shall not avoid the occurrence of a Default if such
action is taken or
such condition occurs.
1.42.
1.43. Counterparts . This Agreement may be signed in
any number of
counterparts, each of which shall be an original, with the same
effect as if
the signatures thereto and hereto were upon the same instrument.
1.44.
1.45.
1.46.
1.47.
1.48.
1.49.
1.50.
1.51.
1.52.
1.53.
[Signatures follow on separate pages]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be
executed by their respective officers duly authorized to do so,
as of the day
and year first above written.
THE BORROWER:
ATTEST: FOUNTAIN
POWERBOATS, INC.
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
THE PARENT CORPORATION:
ATTEST: FOUNTAIN
POWERBOAT
INDUSTRIES,
INC.
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
THE PRESENT SUBSIDIARY:
ATTEST: FOUNTAIN POWER,
INC.
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
Notice Address (for all Fountain
Corporations):
Fountain Powerboats, Inc.
0000 Xxxxxxxx'x Xxxxx Xxxx
X.X. Xxxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000
Attention: Xxxxxxxx X.
Xxxxxxxx, Xx.
Telecopy number: 252-975-
4565
Telephone number: 252-975-
2000
[This is a signature page to the Omnibus Agreement,
signed by the parties named above]
[This page intentionally left blank]
[Signatures continued from preceding page]
GECC AND THE AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION, individually and as
Agent
By:
Name:
Title:
Notice Address:
General Electric Capital
Corporation
Xxxxx 000
0 Xxxxx Xxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Operations Manager
Telecopy number: 410-527-
9393
Telephone number: 410-527-
9300
[This is a signature page to the Omnibus Agreement,
signed by the party named above]
[Signatures continued from preceding page]
TRANSAMERICA:
TRANSAMERICA BUSINESS
CREDIT CORPORATION
By:
Name:
Title:
Notice Address:
Transamerica Business Credit
Corporation
Equipment and Lease Division
Intermediary Funding Group
0000 Xxxxxxxx Xxxxx,
Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000
Telecopy number: 000-000-0000
Telephone number: 000-000-0000
[This is a signature page to the Omnibus Agreement,
signed by the party named above]
SCHEDULE 4.05
Assets of Present Subsidiary
SCHEDULE 4.09
Litigation
SCHEDULE 6.01
Hazardous Materials
SCHEDULE 7.07
Existing Security Agreement Terms
Except as otherwise provided in Section 7.06, the terms set
forth in the
following table, as used in the respective Existing Security
Agreements, shall
be deemed to refer to the terms defined in this Agreement as set
forth opposite
such terms:
The following term used
in the Existing Security AgreementsShall be deemed to refer to
"Debt Documents" the Loan Documents
"Deed of Trust" the Deed of Trust, as amended by the
Deed of Trust Amendment
"Indebtedness" the Obligations
"Loan Agreement" this Omnibus Agreement
"loan documents" the Loan Documents
"Note" the Notes
"Real Property" the property encumbered by the Deed of
Trust, as
amended
"Secured Party" the Agent, acting in its capacity as
such for the
ratable benefit of the Lenders from time
to time
party to this Omnibus Agreement
EXHIBIT A
AMENDED GECC NOTE
[Intentionally Omitted]
EXHIBIT B
AMENDED AIRCRAFT NOTE
[Intentionally Omitted]
EXHIBIT C
TRANSAMERICA NOTE
[Intentionally Omitted]
EXHIBIT D
DEED OF TRUST AMENDMENT
[Intentionally Omitted]
EXHIBIT E
ASSIGNMENT OF RENTS AMENDMENT
[Intentionally Omitted]
EXHIBIT F
AIRCRAFT MORTGAGE AMENDMENT
[Intentionally Omitted]
EXHIBIT G
ASSIGNMENT OF COLLATERAL ASSIGNMENT
[Intentionally Omitted]
EXHIBIT H
NEW COLLATERAL ASSIGNMENT
[Intentionally Omitted]
EXHIBIT I
CORPORATE GUARANTY
[Intentionally Omitted]
EXHIBIT J
PARENT SECURITY AGREEMENT
[Intentionally Omitted]
EXHIBIT K
LIFE INSURANCE ASSIGNMENT
[Intentionally Omitted]
EXHIBIT L
SUBORDINATION AGREEMENT
[Intentionally Omitted]
EXHIBIT M
PARENT COLLATERAL ASSIGNMENT
[Intentionally Omitted]
EXHIBIT N
POWER COLLATERAL ASSIGNMENT
[Intentionally Omitted]
EXHIBIT O
FORM OF LEGAL OPINION
[Intentionally Omitted]
5
R#260921.4
[Execution Copy]
PROMISSORY NOTE
September 2, 0000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx
FOR VALUE RECEIVED, FOUNTAIN POWERBOATS, INC., a North
Carolina
corporation ("Maker"), promises, jointly and severally if more
than one, to pay
to the order of TRANSAMERICA BUSINESS CREDIT CORPORATION, a
Delaware
corporation, or any subsequent holder hereof (each, a "Payee") at
its office
located at 0000 Xxxxxxxx Xxxxx, Xxxxx 0000 Xxxx Xxxxxx, Xxxxx
00000
(Attention: Equipment and Lease Division, Intermediary Funding
Group), or at
such other place as Payee or the holder hereof may designate, the
principal sum
of FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00), or so much
thereof as shall
have been disbursed from time to time and remains unpaid, with
interest thereon
in arrears, from the date hereof through and including dates of
payment, at a
floating per annum simple interest rate ("Contract Rate") as
hereinafter
calculated. The principal of and interest on this Note shall be
payable as
hereinafter provided.
As used in this Note, unless otherwise defined herein terms
defined in the
Omnibus Agreement (as hereinafter defined) are used herein as
therein defined
and, in addition, the following terms shall have the following
meanings (terms
defined in the singular to have the corresponding meaning when
used in the
plural, and vice versa):
"Default Rate" means, at any time, the lesser of 18% per
annum or the
highest rate not prohibited by applicable law.
"LIBOR Rate" means, with respect to any Effective Period (as
herein
defined) occurring during the term of this Note, an interest rate
per annum
equal the rate published under the heading "London Interbank
Offered Rates
(LIBOR)" for dollar deposits in the London market for a one month
maturity, as
published in the "Money Rates" column of the Eastern Edition of
the Wall Street
Journal on the first Business Day of the calendar month in which
such Effective
Period commences.
"Maturity Date" means January 2, 2002.
"Omnibus Agreement" means that Omnibus Agreement, dated as
of September 2,
1998, by and among the Maker, Fountain Powerboat Industries,
Inc., Fountain
Power, Inc., Transamerica Business Credit Corporation, and
General Electric
Capital Corporation, in its individual capacity and in its
capacity as agent
for itself and the other Lenders (as such term is defined in the
Omnibus
Agreement), as the same may be amended, supplemented, restated,
extended,
renewed, replaced or otherwise modified and in effect from time
to time.
"Payment Date" means the first day of each month, commencing
October 1,
1998 and continuing thereafter until and including the Maturity
Date.
The Contract Rate for a given period (the "Effective
Period") shall be
equal to the sum of (i) two and 70/100 percent (2.70%) per annum
plus (ii) the
LIBOR Rate for such Effective Period. The first Effective Period
shall begin
on the date hereof, and shall continue to (but shall not include)
the first
Payment Date. Each subsequent Effective Period shall begin on
the day
immediately after the last day of the previous Effective Period
and shall
continue to (but shall not include) the next Payment Date.
Interest shall be payable in arrears on each Payment Date,
commencing
October 1, 1998.
Subject to the other provisions hereof, the principal of and
interest on
this Note shall be paid in monthly installments (each a "Periodic
Installment")
commencing on October 1, 1998 and on each Payment Date thereafter
until and
including January 2, 2002, as follows: (i) thirty-nine (39)
consecutive monthly
installments of principal each in the amount of One Hundred
Thousand and 00/100
Dollars ($100,000.00), (ii) the interest accrued on the
outstanding principal
of this Note shall be paid with, and in addition to, each of the
foregoing
principal installments, and (iii) on the fortieth (40th) and
final Payment Date
(i.e., January 2, 2002, the Maturity Date) the entire outstanding
principal
balance of this Note, together with all accrued and unpaid
interest thereon,
shall be due and payable. All Periodic Installments hereunder
shall be applied
first to interest and then to principal. The acceptance by Payee
of any
payment which is less than payment in full of all amounts due and
owing at such
time shall not constitute a waiver of Payee's right to receive
payment in full
at such time or at any prior or subsequent time. All interest
due and payable
hereunder shall be calculated on the basis of a 360 day year for
the number of
days actually elapsed and will be charged at the Contract Rate
(or if an Event
of Default or from and after the Maturity Date, at the Default
Rate) on the
outstanding principal balance of this Note for each calendar day
on which any
principal is outstanding.
Except as expressly set forth in Section 2.05 of the Omnibus
Agreement,
prepayment of this Note is prohibited. If and to the extent that
the Maker
shall give notice of its intention to prepay this Note pursuant
to Section 2.05
of the Omnibus Agreement, then on the date for prepayment
specified in such
notice there shall be due and payable in full the entire
outstanding principal
of and interest on this Note and, in addition thereto, a
prepayment premium
equal to the amount determined in accordance with the following
table:
If Prepayment is Made The Prepayment Premium is
Prior to September 1, 2000 $ 80,000.00
Thereafter and prior to
September 1, 2001 $ 40,000.00
September 1, 2001 and
thereafter $ 0.00
The acceptance by Payee of any payment of principal or
interest which is
less than payment in full of all amounts due and owing at such
time shall not
constitute a waiver of Payee's right to receive payment in full
at such time or
at any prior or subsequent time.
This Note is one of the Notes issued pursuant to, and is one
of the Notes
identified in, the Omnibus Agreement. This Note and the Payee
are entitled to
all of the rights, benefits and security of the Omnibus Agreement
and of the
other Loan Documents. This Note is secured by the Security
Documents
identified in the Omnibus Agreement, including without limitation
the Deed of
Trust.
Time is of the essence hereof. If the full amount of any
payment (whether
of principal, interest or any other amount) due hereunder or any
other Loan
Document is not received within fifteen (15) days after its due
date, the Maker
agrees to pay, in addition to the amount of each payment, a late
payment charge
of four percent (4%) of the amount not so paid when due in order
to compensate
the Payee for extra costs and expenses caused by such late
payment.
If an Event of Default shall occur, then (subject to the
provisions of the
Omnibus Agreement) at any time thereafter the entire principal
sum remaining
unpaid, together with all interest thereon and any other sum
payable under this
Note or any Loan Document at the election of Payee, shall
immediately become
due and payable, with interest thereon at the Default Rate from
the date of
such accelerated maturity until paid (both before and after any
judgment).
It is the intention of the parties hereto to comply with the
applicable
usury laws; accordingly, it is agreed that, notwithstanding any
provision to
the contrary in this Note or any other Loan Document, in no event
shall this
Note or any other Loan Document require the payment or permit the
collection of
interest in excess of the maximum amount permitted by applicable
law. If any
such excess interest is contracted for, charged or received under
this Note or
any other Loan Document, or if all of the principal balance shall
be prepaid,
so that under any of such circumstances the amount of interest
contracted for,
charged or received under this Note or any other Loan Document on
the principal
balance shall exceed the maximum amount of interest permitted by
applicable
law, then in such event (a) the provisions of this paragraph
shall govern and
control, (b) neither Maker nor any other person or entity now or
hereafter
liable for the payment hereof shall be obligated to pay the
amount of such
interest to the extent that it is in excess of the maximum amount
of interest
permitted by applicable law, (c) any such excess which may have
been collected
shall be either applied as a credit against the then unpaid
principal balance
or refunded to Maker, at the option of the Payee, and (d) the
effective rate of
interest shall be automatically reduced to the maximum lawful
contract rate
allowed under applicable law as now or hereafter construed by the
courts having
jurisdiction thereof. It is further agreed that without
limitation of the
foregoing, all calculations of the rate of interest contracted
for, charged or
received under this Note or any Loan Document which are made for
the purpose of
determining whether such rate exceeds the maximum lawful contract
rate, shall
be made, to the extent permitted by applicable law, by
amortizing, prorating,
allocating and spreading in equal parts during the period of the
full stated
term of the indebtedness evidenced hereby, all interest at any
time contracted
for, charged or received from Maker or otherwise by Payee in
connection with
such indebtedness; provided, however, that if any applicable
state law is
amended or the law of the United States of America preempts any
applicable
state law, so that it becomes lawful for the Payee to receive a
greater
interest per annum rate than is presently allowed, the Maker
agrees that, on
the effective date of such amendment or preemption, as the case
may be, the
lawful maximum hereunder shall be increased to the maximum
interest per annum
rate allowed by the amended state law or the law of the United
States of
America.
The Maker and all sureties, endorsers, guarantors or any
others (each such
person, other than the Maker, an "Obligor") who may at any time
become liable
for the payment hereof jointly and severally consent hereby to
any and all
extensions of time, renewals, waivers or modifications of, and
all
substitutions or release of, security or of any party primarily
or secondarily
liable on this Note or any Loan Document or any term and
provision of either,
which may be made, granted or consented to by Payee, and agree
that suit may be
brought and maintained against any one or more of them, at the
election of
Payee without joinder of any other as a party thereto, and that
Payee shall not
be required first to foreclose, proceed against, or exhaust any
security hereof
in order to enforce payment of this Note. The Maker and each
Obligor hereby
waive presentment, demand for payment, notice of nonpayment,
protest, notice of
protest, notice of dishonor, and all other notices in connection
herewith, as
well as filing of suit (if permitted by law) and diligence in
collecting this
Note or enforcing any of the security hereof, and agree to pay
(if permitted by
law) all expenses incurred in collection, including Payee's
actual attorneys'
fees for time in fact incurred at such attorneys' standard hourly
billing
rates, without regard to any statutory presumption.
This Note and the other Loan Documents constitute the entire
agreement of
the Maker and Payee with respect to the subject matter hereof and
supersedes
all prior understandings, agreements and representations, express
or implied.
THIS NOTE SHALL BE GOVERNED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF
NORTH CAROLINA.
No variation or modification of this Note, or any waiver of
any of its
provisions or conditions, shall be valid unless in writing and
signed by an
authorized representative of Maker and Payee. Any such waiver,
consent,
modification or change shall be effective only in the specific
instance and for
the specific purpose given.
Any provision in this Note or any Loan Document which is in
conflict with
any statute, law or applicable rule shall be deemed omitted,
modified or
altered to conform thereto.
IN WITNESS WHEREOF, this Note has been executed, UNDER SEAL,
the day and
year first above written.
ATTEST: FOUNTAIN POWERBOATS, INC.
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx
Title: President
[CORPORATE SEAL]
7
R#261221.4
[Execution Copy]
AMENDED AND RESTATED PROMISSORY NOTE
September 2, 0000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx
FOR VALUE RECEIVED, FOUNTAIN POWERBOATS, INC., a North
Carolina
corporation ("Maker"), promises, jointly and severally if more
than one, to pay
to the order of GENERAL ELECTRIC CAPITAL CORPORATION or any
subsequent holder
hereof (each, a "Payee") at its office located at 0000 Xxxxxxxx
Xxxx, Xxxxx
0000, Xxxxxxxxx, XX 00000 or at such other place as Payee or the
holder hereof
may designate, the principal sum of NINE MILLION SEVEN THOUSAND
SEVEN HUNDRED
NINETY-SEVEN AND 00/100 DOLLARS ($9,007,797.00), with interest
thereon in
arrears, from the date hereof through and including dates of
payment, at a
floating per annum simple interest rate ("Contract Rate") as
hereinafter
calculated.
This Note amends and restates, and evidences the current
principal balance
outstanding under, that promissory note, dated December 31, 1996,
issued by the
Borrower in the principal amount of $10,000,000 and made payable
to the order
of the Payee first named above (the "Original Note"). This Note
does not
extinguish the indebtedness in respect of accrued and unpaid
interest on the
Original Note, which shall be repaid as hereinafter provided.
Unless otherwise defined herein, terms defined in the
Omnibus Agreement
(as hereinafter defined) are used herein as therein defined and,
in addition,
the following terms shall have the following meanings (terms
defined in the
singular to have the corresponding meaning when used in the
plural, and vice
versa):
"Amortization Period" means the ten year period ending
on the January
1, 2007.
"Default Rate" means, at any time, the lesser of 18%
per annum or the
highest rate not prohibited by applicable law.
"LIBOR Rate" means, with respect to any Effective
Period (as herein
defined) occurring during the term of this Note, an interest
rate per
annum equal the rate published under the heading "London
Interbank Offered
Rates (LIBOR)" for dollar deposits in the London market for
a one month
maturity, as published in the "Money Rates" column of the
Eastern Edition
of the Wall Street Journal on the first Business Day of the
calendar month
in which such Effective Period commences.
"Maturity Date" means January 2, 2002.
"Omnibus Agreement" means that Omnibus Agreement, dated
as of
September 2, 1998, by and among the Maker, Fountain
Powerboat Industries,
Inc., Fountain Power, Inc., Transamerica Business Credit
Corporation, and
General Electric Capital Corporation, in its individual
capacity and in
its capacity as agent for itself and the other Lenders (as
such term is
defined in the Omnibus Agreement), as the same may be
amended,
supplemented, restated, extended, renewed, replaced or
otherwise modified
and in effect from time to time.
"Payment Date" means the first day of each month,
commencing October
1, 1998 and continuing thereafter until and including the
Maturity Date.
Until the Option to Convert (as defined below) is exercised,
the Contract
Rate for a given period (the "Effective Period") shall be equal
to the sum of
(i) two and 70/100 percent (2.70%) per annum plus (ii) the LIBOR
Rate for such
Effective Period. The first Effective Period shall begin on the
date hereof,
and shall continue to (but shall not include) the first Payment
Date. Each
subsequent Effective Period shall begin on the day immediately
after the last
day of the previous Effective Period to (but shall not include)
the next
Payment Date.
So long as no Default or Event of Default exists and all of
the terms and
conditions of this Note and the other Loan Documents are
fulfilled, Maker may
elect to convert (the "Option to Convert") the Contract Rate to a
fixed per
annum simple interest rate (which, determined as hereinafter set
out, is
referred to as the "Fixed Contract Rate") effective on any
Payment Date upon at
least 30 but no more than 60 days prior written notice (the
"Notice Date") to
Payee accompanied by a Conversion Fee of $500.00 (which notice
shall be
irrevocable and shall be sent to the attention of Payee's
Business Center
Manager, 00 Xxx Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000-0000). Such
notice shall
state the Payment Date on which Maker elects the Fixed Contract
Rate to apply
(the "Fixed Contract Rate Effective Date"). Upon receipt of
notice of such
Option to Convert, and the accompanying sums due, the Payee shall
calculate the
amount of the Periodic Installments thereafter due commencing on
the Fixed
Contract Rate Effective Date using the following: (I) the
outstanding principal
balance of this Note on the Fixed Contract Rate Effective Date,
(ii) the Fixed
Contract Rate (determined as hereinafter set out), and (iii) the
balance of the
original Amortization Period (hereinafter defined). In addition,
Maker shall
pay to Payee, if necessary, prior to the Fixed Contract Rate
Effective Date, an
additional sum sufficient to amortize the then-unpaid principal
over the
balance of the Amortization Period at the Contract Rate
applicable for the
first Periodic Installment that was due under the Original Note.
If Maker elects to exercise this Option to Convert, the
Fixed Contract
Rate shall be equal to the sum of
(a) Two and 93/100 percent (2.93%) per annum plus
(b) the applicable Current Rate (as defined below):
(I) If there are eighteen (18) months or
less than
eighteen (18) months remaining before the Maturity
Date,
the "Current Rate" shall be the per annum interest
rate
listed for "1-Year" Treasury, constant maturity,
under the
column indicating an average rate as stated in the
Federal
Reserve Statistical Release H.15 (519) for the
second
calendar month preceding the calendar month in
which the
Fixed Contract Rate will be effective. If, for
any reason
whatsoever, the Federal Reserve Statistical
Release H.15
(519) is no longer published, the Current Rate
shall be
equal to the latest annualized interest rate for
"one year"
U.S. Treasury Bills as reported by the Federal
Reserve
Board on a weekly-average basis, adjusted for
constant
maturity as indicated in the "Money Rates" column
of the
Wall Street Journal, Eastern Edition, published on
the
first Business Day of the calendar month preceding
the
month in which the Fixed Contract Rate will be
effective.
(ii) If there are more than eighteen (18)
months
remaining before the Maturity Date, the "Current
Rate"
shall be determined in the same manner as noted in
subparagraph (a) above except it shall be based
upon the
rate listed for "2-Year" Treasury bills.
Subject to the other provisions hereof, the principal and
interest on this
Note is payable in lawful money of the United States in thirty-
nine (39)
consecutive monthly installments, due as hereinafter provided,
each in the
amount of One Hundred Twenty-Three Thousand One Hundred Three and
07/100
Dollars ($123,103.07) (each, whether or not increased as
described below, a
"Periodic Installment") and a fortieth (40th) and final
installment ("Final
Installment"), due and payable on the Maturity Date, in the
amount of the total
outstanding unpaid principal and accrued but unpaid interest.
THIS IS A
BALLOON NOTE, AND ON THE MATURITY DATE A SUBSTANTIAL PORTION OF
THE PRINCIPAL
AMOUNT OF THIS NOTE WILL REMAIN UNPAID BY THE MONTHLY PAYMENTS
HEREIN REQUIRED.
The first Periodic Installment shall be due and payable on
October 1, 1998, and
the following Periodic Installments shall be due and payable on
each Payment
Date thereafter. All payments shall be applied first to interest
and then to
principal; provided that the payment received in respect of the
first Periodic
Installment shall be applied first to the aggregate amount of
interest accrued
on (a) the Original Note from and including September 1, 1998 to
but excluding
the date of this Note and (b) this Note from and including the
date hereof to
but excluding October 1, 1998, and any remaining balance of such
first Periodic
Installment shall be applied to the principal hereof. The
acceptance by Payee
of any payment which is less than payment in full of all amounts
due and owing
at such time shall not constitute a waiver of Payee's right to
receive payment
in full at such time or at any prior or subsequent time. All
interest
calculated by reference to the LIBOR Rate shall be calculated on
the basis of a
360 day year for the number of days actually elapsed and will be
charged at the
Contract Rate (or if an Event of Default or from and after the
Maturity Date,
at the Default Rate) on the outstanding principal balance of this
Note for each
calendar day on which any principal is outstanding. All interest
calculated by
reference to the Fixed Contract Rate shall be calculated on the
basis of a 365
day year (366 day leap year) for the number of days actually
elapsed and will
be charged at the Contract Rate (or if an Event of Default or
from and after
the Maturity Date, at the Default Rate) on the outstanding
principal balance of
this Note for each calendar day on which any principal is
outstanding.
In the absence of the Borrower's election of the Option to
Convert, the
amount and number of the Periodic Installments will not change
with
fluctuations in the Contract Rate. Any increase in the Contract
Rate shall be
reflected by a corresponding decrease in the portion of the
Periodic
Installment credited to the remaining unpaid principal balance.
Any decrease
in the Contract Rate shall be reflected as a corresponding
increase in the
portion of the Periodic Installment credited to the remaining
unpaid principal
balance. Notwithstanding the foregoing, at the end of each three
(3) month
period commencing with the first Payment Date hereof, Maker
agrees to pay to
Payee forthwith an additional sum ("Quarterly Payment"), if any,
sufficient to
amortize the then-unpaid principal over the balance of the
original
Amortization Period hereof at the Contract Rate applicable for
the first
Periodic Installment.
If, and for so long as, the amount of interest due exceeds
the amount of
the Periodic Installment, Maker agrees to pay forthwith, in
addition to (I) any
Periodic Installment then due and (ii) any Quarterly Payment, the
amount by
which said interest exceeds the Periodic Installment. In the
event interest
only is required to be paid during any period, the interest for
such period
shall be due and payable monthly as it accrues in arrears and the
amount of
such "interest only" installment shall be calculated on the
unpaid principal
balance existing at the commencement of such period but the
amount of such
installment in excess of interest due at the Contract Rate on the
principal
balance during such period shall be applied to repayment of
principal.
This Note is one of the Notes issued pursuant to, and is one
of the Notes
identified in, the Omnibus Agreement. This Note and the Payee
are entitled to
all of the rights, benefits and security of the Omnibus Agreement
and of the
other Loan Documents. This Note is secured by the Security
Documents
identified in the Omnibus Agreement, including without limitation
the Deed of
Trust.
Time is of the essence hereof. If any installment or any
other sum due
under this Note or any Loan Document is not received within
fifteen (15) days
after its due date, the Maker agrees to pay, in addition to the
amount of each
such installment or other sum, a late payment charge of four
percent (4%) of
said installment or other sum in order to compensate the Payee
for extra costs
and expenses caused by such late payment.
If an Event of Default shall occur, then (subject to the
provisions of the
Omnibus Agreement) at any time thereafter the entire principal
sum remaining
unpaid, together with all interest thereon and any other sum
payable under this
Note or any Loan Document at the election of Payee, shall
immediately become
due and payable, with interest thereon at the Default Rate from
the date of
such accelerated maturity until paid (both before and after any
judgment).
Except as expressly set forth in Section 2.05 of the Omnibus
Agreement,
prepayment of this Note is prohibited. If and to the extent that
the Maker
shall give notice of its intention to prepay this Note pursuant
to Section 2.05
of the Omnibus Agreement, then on the date for prepayment
specified in such
notice there shall be due and payable in full the entire
outstanding principal
of and interest on this Note and, in addition thereto, a
prepayment premium
equal to the amount determined in accordance with the following
table:
If Prepayment is Made The Prepayment Premium is
Prior to January 1, 1999 $ 200,000.00
Thereafter and prior to
January 1, 2000 $ 100,000.00
January 1, 2000 and
thereafter $ 0.00
It is the intention of the parties hereto to comply with the
applicable
usury laws; accordingly, it is agreed that, notwithstanding any
provision to
the contrary in this Note or any Loan Document, in no event shall
this Note or
any Loan Document require the payment or permit the collection of
interest in
excess of the maximum amount permitted by applicable law. If any
such excess
interest is contracted for, charged or received under this Note
or any Loan
Document, or if all of the principal balance shall be prepaid, so
that under
any of such circumstances the amount of interest contracted for,
charged or
received under this Note or any Loan Document on the principal
balance shall
exceed the maximum amount of interest permitted by applicable
law, then in such
event (a) the provisions of this paragraph shall govern and
control, (b)
neither Maker nor any other person or entity now or hereafter
liable for the
payment hereof shall be obligated to pay the amount of such
interest to the
extent that it is in excess of the maximum amount of interest
permitted by
applicable law, (c) any such excess which may have been collected
shall be
either applied as a credit against the then unpaid principal
balance or
refunded to Maker, at the option of the Payee, and (d) the
effective rate of
interest shall be automatically reduced to the maximum lawful
contract rate
allowed under applicable law as now or hereafter construed by the
courts having
jurisdiction thereof. It is further agreed that without
limitation of the
foregoing, all calculations of the rate of interest contracted
for, charged or
received under this Note or any Loan Document which are made for
the purpose of
determining whether such rate exceeds the maximum lawful contract
rate, shall
be made, to the extent permitted by applicable law, by
amortizing, prorating,
allocating and spreading in equal parts during the period of the
full stated
term of the indebtedness evidenced hereby, all interest at any
time contracted
for, charged or received from Maker or otherwise by Payee in
connection with
such indebtedness; provided, however, that if any applicable
state law is
amended or the law of the United States of America preempts any
applicable
state law, so that it becomes lawful for the Payee to receive a
greater
interest per annum rate than is presently allowed, the Maker
agrees that, on
the effective date of such amendment or preemption, as the case
may be, the
lawful maximum hereunder shall be increased to the maximum
interest per annum
rate allowed by the amended state law or the law of the United
States of
America.
The Maker and all sureties, endorsers, guarantors or any
others (each such
person, other than the Maker, an "Obligor") who may at any time
become liable
for the payment hereof jointly and severally consent hereby to
any and all
extensions of time, renewals, waivers or modifications of, and
all
substitutions or release of, security or of any party primarily
or secondarily
liable on this Note or any Loan Document or any term and
provision of either,
which may be made, granted or consented to by Payee, and agree
that suit may be
brought and maintained against any one or more of them, at the
election of
Payee without joinder of any other as a party thereto, and that
Payee shall not
be required first to foreclose, proceed against, or exhaust any
security hereof
in order to enforce payment of this Note. The Maker and each
Obligor hereby
waive presentment, demand for payment, notice of nonpayment,
protest, notice of
protest, notice of dishonor, and all other notices in connection
herewith, as
well as filing of suit (if permitted by law) and diligence in
collecting this
Note or enforcing any of the security hereof, and agree to pay
(if permitted by
law) all expenses incurred in collection, including Payee's
actual attorneys'
fees for time in fact incurred at such attorneys' standard hourly
billing
rates, without regard to any statutory presumption.
This Note and the other Loan Documents constitute the entire
agreement of
the Maker and Payee with respect to the subject matter hereof and
supersedes
all prior understandings, agreements and representations, express
or implied.
THIS NOTE SHALL BE GOVERNED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF
NORTH CAROLINA.
No variation or modification of this Note, or any waiver of
any of its
provisions or conditions, shall be valid unless in writing and
signed by an
authorized representative of Maker and Payee. Any such waiver,
consent,
modification or change shall be effective only in the specific
instance and for
the specific purpose given.
Any provision in this Note or any Loan Document which is in
conflict with
any statute, law or applicable rule shall be deemed omitted,
modified or
altered to conform thereto.
IN WITNESS WHEREOF, this Note has been executed, UNDER SEAL,
the day and
year first above written.
ATTEST: FOUNTAIN POWERBOATS, INC.
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
Payee hereby consents to the amendment and restatement of the
Original Note
pursuant to the foregoing Amended and Restated Promissory Note.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
Name:
Title:
7
R#261578.4
[Execution Copy]
AMENDED AND RESTATED PROMISSORY NOTE
September 2, 0000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx
FOR VALUE RECEIVED, FOUNTAIN POWERBOATS, INC., a North
Carolina
corporation ("Maker"), promises, jointly and severally if more
than one, to pay
to the order of GENERAL ELECTRIC CAPITAL CORPORATION or any
subsequent holder
hereof (each, a "Payee") at its office located at 0000 Xxxxxxxx
Xxxx, Xxxxx
0000, Xxxxxxxxx, XX 00000 or at such other place as Payee or the
holder hereof
may designate, the principal sum of EIGHT HUNDRED FIFTY-FIVE
THOUSAND FIFTY AND
41/100 DOLLARS ($855,050.41), with interest thereon in arrears,
from the date
hereof through and including dates of payment, at a floating per
annum simple
interest rate ("Contract Rate") as hereinafter calculated.
This Note amends and restates, and evidences the current
principal balance
outstanding under, that promissory note, dated July 11, 1996,
issued by
Xxxxxxxx X. Xxxxxxxx, Xx., in the principal amount of
$1,067,810.66, and made
payable to the order of the Payee first named above (the
"Original Note"), the
liability for which was assumed by the Maker under and pursuant
to the Aircraft
Loan Assumption Agreement (as such term is defined in the Omnibus
Agreement
referred to below). This Note does not extinguish the
indebtedness in respect
of accrued and unpaid interest on the Original Note, which shall
be repaid as
hereinafter provided.
Unless otherwise defined herein, terms defined in the
Omnibus Agreement
(as hereinafter defined) are used herein as therein defined and,
in addition,
the following terms shall have the following meanings (terms
defined in the
singular to have the corresponding meaning when used in the
plural, and vice
versa):
"Default Rate" means, at any time, the lesser of 18%
per annum or the
highest rate not prohibited by applicable law.
"LIBOR Rate" means, with respect to any Effective
Period (as herein
defined) occurring during the term of this Note, an interest
rate per
annum equal the rate published under the heading "London
Interbank Offered
Rates (LIBOR)" for dollar deposits in the London market for
a one month
maturity, as published in the "Money Rates" column of the
Eastern Edition
of the Wall Street Journal on the first Business Day of the
calendar month
in which such Effective Period commences.
"Maturity Date" means August 1, 2004.
"Omnibus Agreement" means that Omnibus Agreement, dated
as of
September 2, 1998, by and among the Maker, Fountain
Powerboat Industries,
Inc., Fountain Power, Inc., Transamerica Business Credit
Corporation, and
General Electric Capital Corporation, in its individual
capacity and in
its capacity as agent for itself and the other Lenders (as
such term is
defined in the Omnibus Agreement), as the same may be
amended,
supplemented, restated, extended, renewed, replaced or
otherwise modified
and in effect from time to time.
"Payment Date" means the first day of each month,
commencing October
1, 1998 and continuing thereafter until and including the
Maturity Date.
Until the Option to Convert (as defined below) is exercised,
the Contract
Rate for a given period (the "Effective Period") shall be equal
to the sum of
(i) two and 70/100 percent (2.70%) per annum plus (ii) the LIBOR
Rate for such
Effective Period. The first Effective Period shall begin on the
date hereof,
and shall continue to (but shall not include) the first Payment
Date. Each
subsequent Effective Period shall begin on the day immediately
after the last
day of the previous Effective Period to (but shall not include)
the next
Payment Date.
So long as no Default or Event of Default exists and all of
the terms and
conditions of this Note and the other Loan Documents are
fulfilled, Maker may
elect to convert (the "Option to Convert") the Contract Rate to a
fixed per
annum simple interest rate (which, determined as hereinafter set
out, is
referred to as the "Fixed Contract Rate") effective on any
Payment Date upon at
least 30 but no more than 60 days prior written notice (the
"Notice Date") to
Payee accompanied by a Conversion Fee of $500.00 (which notice
shall be
irrevocable and shall be sent to the attention of Payee's
Business Center
Manager, 00 Xxx Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000-0000). Such
notice shall
state the Payment Date on which Maker elects the Fixed Contract
Rate to apply
(the "Fixed Contract Rate Effective Date"). Upon receipt of
notice of such
Option to Convert, and the accompanying sums due, the Payee shall
calculate the
amount of the Periodic Installments thereafter due commencing on
the Fixed
Contract Rate Effective Date using the following: (I) the
outstanding principal
balance of this Note on the Fixed Contract Rate Effective Date,
(ii) the Fixed
Contract Rate (determined as hereinafter set out), and (iii) the
balance of the
original term hereof. In addition, Maker shall pay to Payee, if
necessary,
prior to the Fixed Contract Rate Effective Date, an additional
sum sufficient
to amortize the then-unpaid principal over the balance of the
original term
hereof at the Contract Rate applicable for the first Periodic
Installment that
was due under the Original Note.
If Maker elects to exercise this Option to Convert, the
Fixed Contract
Rate shall be equal to the sum of
(a) Three and 17/100 percent (3.17%) per annum plus
(b) the applicable Current Rate (as defined below):
(i) If there are eighteen (18) months or
less than
eighteen (18) months remaining before the Maturity
Date,
the "Current Rate" shall be the per annum interest
rate
listed for "1-Year" Treasury, constant maturity,
under the
column indicating an average rate as stated in the
Federal
Reserve Statistical Release H.15 (519) for the
second
calendar month preceding the calendar month in
which the
Fixed Contract Rate will be effective. If, for
any reason
whatsoever, the Federal Reserve Statistical
Release H.15
(519) is no longer published, the Current Rate
shall be
equal to the latest annualized interest rate for
"one year"
U.S. Treasury Bills as reported by the Federal
Reserve
Board on a weekly-average basis, adjusted for
constant
maturity as indicated in the "Money Rates" column
of the
Wall Street Journal, Eastern Edition, published on
the
first Business Day of the calendar month preceding
the
month in which the Fixed Contract Rate will be
effective.
(ii) If there are more than eighteen (18) but
less
than forty-two (42) months remaining before the
Maturity
Date, the "Current Rate" shall be determined in
the same
manner as noted in subparagraph (i) above except
it shall
be based upon the rate listed for "2-Year"
Treasury bills.
(iii) If there are more than forty-two
(42) but
less than sixty (60) months remaining before the
Maturity
Date, the "Current Rate" shall be determined in
the same
manner as noted in subparagraph (i) above except
it shall
be based upon the rate listed for "3-Year"
Treasury bills.
(iv) If there are more than sixty (60) but
less than
eighty-four (84) months remaining before the
Maturity Date,
the "Current Rate" shall be determined in the same
manner
as noted in subparagraph (i) above except it shall
be based
upon the rate listed for "4-Year" Treasury bills.
(v) If there are more than eighty-four (84)
but less
than one hundred twenty (120) months remaining
before the
Maturity Date, the "Current Rate" shall be
determined in
the same manner as noted in subparagraph (i) above
except
it shall be based upon the rate listed for "5-
Year"
Treasury bills.
Subject to the other provisions hereof, the principal and
interest on this
Note is payable in lawful money of the United States in seventy
(70)
consecutive monthly installments, due as hereinafter provided,
each in the
amount of Fifteen Thousand One Hundred Eighty and 55/100 Dollars
($15,180.55 )
(each, whether or not increased as described below, a "Periodic
Installment")
and an seventy-first (71st) and final installment ("Final
Installment"), due
and payable on the Maturity Date, in the amount of the total
outstanding unpaid
principal and accrued but unpaid interest. The first Periodic
Installment
shall be due and payable on October 1, 1998, and the following
Periodic
Installments shall be due and payable on each Payment Date
thereafter. All
payments shall be applied first to interest and then to
principal; provided
that the payment received in respect of the first Periodic
Installment shall be
applied first to the aggregate amount of interest accrued on (a)
the Original
Note from and including September 1, 1998 to but excluding the
date of this
Note and (b) this Note from and including the date hereof to but
excluding
October 1, 1998, and any remaining balance of such first Periodic
Installment
shall be applied to the principal hereof. The acceptance by
Payee of any
payment which is less than payment in full of all amounts due and
owing at such
time shall not constitute a waiver of Payee's right to receive
payment in full
at such time or at any prior or subsequent time. All interest
calculated by
reference to the LIBOR Rate shall be calculated on the basis of a
360 day year
for the number of days actually elapsed and will be charged at
the Contract
Rate (or if an Event of Default or from and after the Maturity
Date, at the
Default Rate) on the outstanding principal balance of this Note
for each
calendar day on which any principal is outstanding. All interest
calculated by
reference to the Fixed Contract Rate shall be calculated on the
basis of a 365
day year (366 day leap year) for the number of days actually
elapsed and will
be charged at the Contract Rate (or if an Event of Default or
from and after
the Maturity Date, at the Default Rate) on the outstanding
principal balance of
this Note for each calendar day on which any principal is
outstanding.
In the absence of the Borrower's election of the Option to
Convert, the
amount and number of the Periodic Installments, moreover, will
not change with
fluctuations in the Contract Rate. Any increase in the Contract
Rate shall be
reflected by a corresponding decrease in the portion of the
Periodic
Installment credited to the remaining unpaid principal balance.
Any decrease
in the Contract Rate shall be reflected as a corresponding
increase in the
portion of the Periodic Installment credited to the remaining
unpaid principal
balance. Notwithstanding the foregoing, at the end of each three
(3) month
period commencing with the first Payment Date hereof, Maker
agrees to pay to
Payee forthwith an additional sum ("Quarterly Payment"), if any,
sufficient to
amortize the then-unpaid principal over the balance of the
original term hereof
at the Contract Rate applicable for the first Periodic
Installment.
If, and for so long as, the amount of interest due exceeds
the amount of
the Periodic Installment, Maker agrees to pay forthwith, in
addition to (I) any
Periodic Installment then due and (ii) any Quarterly Payment, the
amount by
which said interest exceeds the Periodic Installment. In the
event interest
only is required to be paid during any period, the interest for
such period
shall be due and payable monthly as it accrues in arrears and the
amount of
such "interest only" installment shall be calculated on the
unpaid principal
balance existing at the commencement of such period but the
amount of such
installment in excess of interest due at the Contract Rate on the
principal
balance during such period shall be applied to repayment of
principal.
This Note is one of the Notes issued pursuant to, and is one
of the Notes
identified in, the Omnibus Agreement. This Note and the Payee
are entitled to
all of the rights, benefits and security of the Omnibus Agreement
and of the
other Loan Documents. This Note is secured by the Security
Documents
identified in the Omnibus Agreement, including without limitation
the Deed of
Trust.
Time is of the essence hereof. If any installment or any
other sum due
under this Note or any Loan Document is not received within
fifteen (15) days
after its due date, the Maker agrees to pay, in addition to the
amount of each
such installment or other sum, a late payment charge of four
percent (4%) of
said installment or other sum in order to compensate the Payee
for extra costs
and expenses caused by such late payment.
If an Event of Default shall occur, then (subject to the
provisions of the
Omnibus Agreement) at any time thereafter the entire principal
sum remaining
unpaid, together with all interest thereon and any other sum
payable under this
Note or any Loan Document at the election of Payee, shall
immediately become
due and payable, with interest thereon at the Default Rate from
the date of
such accelerated maturity until paid (both before and after any
judgment).
Except as expressly set forth in Section 2.05 of the Omnibus
Agreement,
prepayment of this Note is prohibited. If and to the extent that
the Maker
shall give notice of its intention to prepay this Note pursuant
to Section 2.05
of the Omnibus Agreement, then on the date for prepayment
specified in such
notice there shall be due and payable in full the entire
outstanding principal
of and interest on this Note and, in addition thereto, a
prepayment premium
equal to the amount determined in accordance with the following
table:
If Prepayment is Made The Prepayment Premium is
Prior to August 1, 1999 $ 10,678.11
August 1, 1999 and thereafter $ 0.00
It is the intention of the parties hereto to comply with the
applicable
usury laws; accordingly, it is agreed that, notwithstanding any
provision to
the contrary in this Note or any Loan Document, in no event shall
this Note or
any Loan Document require the payment or permit the collection of
interest in
excess of the maximum amount permitted by applicable law. If any
such excess
interest is contracted for, charged or received under this Note
or any Loan
Document, or if all of the principal balance shall be prepaid, so
that under
any of such circumstances the amount of interest contracted for,
charged or
received under this Note or any Loan Document on the principal
balance shall
exceed the maximum amount of interest permitted by applicable
law, then in such
event (a) the provisions of this paragraph shall govern and
control, (b)
neither Maker nor any other person or entity now or hereafter
liable for the
payment hereof shall be obligated to pay the amount of such
interest to the
extent that it is in excess of the maximum amount of interest
permitted by
applicable law, (c) any such excess which may have been collected
shall be
either applied as a credit against the then unpaid principal
balance or
refunded to Maker, at the option of the Payee, and (d) the
effective rate of
interest shall be automatically reduced to the maximum lawful
contract rate
allowed under applicable law as now or hereafter construed by the
courts having
jurisdiction thereof. It is further agreed that without
limitation of the
foregoing, all calculations of the rate of interest contracted
for, charged or
received under this Note or any Loan Document which are made for
the purpose of
determining whether such rate exceeds the maximum lawful contract
rate, shall
be made, to the extent permitted by applicable law, by
amortizing, prorating,
allocating and spreading in equal parts during the period of the
full stated
term of the indebtedness evidenced hereby, all interest at any
time contracted
for, charged or received from Maker or otherwise by Payee in
connection with
such indebtedness; provided, however, that if any applicable
state law is
amended or the law of the United States of America preempts any
applicable
state law, so that it becomes lawful for the Payee to receive a
greater
interest per annum rate than is presently allowed, the Maker
agrees that, on
the effective date of such amendment or preemption, as the case
may be, the
lawful maximum hereunder shall be increased to the maximum
interest per annum
rate allowed by the amended state law or the law of the United
States of
America.
The Maker and all sureties, endorsers, guarantors or any
others (each such
person, other than the Maker, an "Obligor") who may at any time
become liable
for the payment hereof jointly and severally consent hereby to
any and all
extensions of time, renewals, waivers or modifications of, and
all
substitutions or release of, security or of any party primarily
or secondarily
liable on this Note or any Loan Document or any term and
provision of either,
which may be made, granted or consented to by Payee, and agree
that suit may be
brought and maintained against any one or more of them, at the
election of
Payee without joinder of any other as a party thereto, and that
Payee shall not
be required first to foreclose, proceed against, or exhaust any
security hereof
in order to enforce payment of this Note. The Maker and each
Obligor hereby
waive presentment, demand for payment, notice of nonpayment,
protest, notice of
protest, notice of dishonor, and all other notices in connection
herewith, as
well as filing of suit (if permitted by law) and diligence in
collecting this
Note or enforcing any of the security hereof, and agree to pay
(if permitted by
law) all expenses incurred in collection, including Payee's
actual attorneys'
fees for time in fact incurred at such attorneys' standard hourly
billing
rates, without regard to any statutory presumption.
This Note and the other Loan Documents constitute the entire
agreement of
the Maker and Payee with respect to the subject matter hereof and
supersedes
all prior understandings, agreements and representations, express
or implied.
THIS NOTE SHALL BE GOVERNED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF
NORTH CAROLINA.
No variation or modification of this Note, or any waiver of
any of its
provisions or conditions, shall be valid unless in writing and
signed by an
authorized representative of Maker and Payee. Any such waiver,
consent,
modification or change shall be effective only in the specific
instance and for
the specific purpose given.
Any provision in this Note or any Loan Document which is in
conflict with
any statute, law or applicable rule shall be deemed omitted,
modified or
altered to conform thereto.
[Signature follows on separate page]
IN WITNESS WHEREOF, this Note has been executed, UNDER SEAL,
the day and
year first above written.
ATTEST: FOUNTAIN POWERBOATS, INC.
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx,
Xx.
Title: President
[CORPORATE SEAL]
Payee hereby consents to the amendment and restatement of the
Original Note
pursuant to the foregoing Amended and Restated Promissory Note.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
Name:
Title:
19
R#261782.5
Drawn by and return to: Xxxxxxx Xxxxx, Esquire
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC
P. O. Xxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
[Execution Copy]
NORTH CAROLINA )
)
BEAUFORT COUNTY )
FIRST AMENDMENT TO DEED OF TRUST
COLLATERAL INCLUDES FIXTURES
THIS FIRST AMENDMENT TO DEED OF TRUST (this "Amendment"), is
made as of
the 2nd day of September, 1998, by and among FOUNTAIN POWERBOATS,
INC., a North
Carolina corporation, whose address is 0000 Xxxxxxxx'x Xxxxx
Xxxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 (hereinafter referred to as the "Grantor"),
XXXXXXX X.
XXXXX, the substitute Trustee under the Existing Deed of Trust
referred to
below and a resident of Wake County, North Carolina, whose
address is Xxxxxx
Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, 0000 Xxxxx Xxxxx Xxxxxxx Xxxxxx,
000
Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000
(hereinafter referred
to as the "Trustee"), and GENERAL ELECTRIC CAPITAL CORPORATION,
a New York
corporation, whose address is 0000 Xxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, acting in (i) its individual corporate capacity
("GECC"), (ii)
in its capacity as the "Beneficiary under the Existing Deed of
Trust referred
to below (in such capacity, the "Original Beneficiary") and (iii)
its capacity
as the agent for the ratable benefit of the lenders now or from
time to time
hereafter party to the Omnibus Agreement referred to below (in
such capacity,
the "Agent" or, in the Agent's capacity as the beneficiary
hereunder and under
the Deed of Trust as defined below, the "Beneficiary"); and
amends, modifies
and supplements the following instrument (said instrument,
together with all
prior amendments, supplements and modifications thereto and
thereof, if any, is
referred to herein as the "Existing Deed of Trust"):
Deed of Trust, Assignment of Rents and Security Agreement,
dated
December 31, 1996, by and among the Grantor, Xxxxxxx X.
Xxxxxxxx,
Xx., as Trustee, and GECC, which Deed of Trust is recorded
at Book
1063, Page 337, in the Office of the Register of Deeds ,
beaufort
County, North Carolina.
RECITALS:
A. The Existing Deed of Trust was first given as a part of
the security
for the promissory note referred to therein (the "Original Note")
evidencing a
loan made by GECC to the Grantor in the original principal amount
of
$10,000,000 (the "GECC Loan"), and encumbers certain real
property as more
particularly described therein (the "Original Property").
B. Pursuant to the Omnibus Agreement referred to below,
the Original
Note has been amended and restated by an Amended and Restated
Promissory Note,
dated the date hereof, executed by the Grantor and GECC and made
payable to the
order of GECC in the principal amount of $9,007,797.00 (the
Original Note, as
the same has been so amended and restated by said Amended and
Restated
Promissory Note, and together with all promissory notes delivered
in
substitution or exchange therefor, in each case as the same may
be modified,
amended, supplemented, restated, extended, consolidated, renewed
or replaced
and in effect from time to time, is referred to herein as the
"Amended GECC
Note").
C. The Grantor, GECC and the Agent, together with Fountain
Powerboat
Industries, Inc., Fountain Power, Inc. and Transamerica Business
Credit
Corporation ("Transamerica" and, together with GECC, the
"Lenders") have
entered into an Omnibus Agreement, dated the date hereof (as the
same may be
amended, supplemented, restated, extended, renewed, replaced or
otherwise
modified and in effect from time to time, the "Omnibus
Agreement"). Pursuant to
and subject to the terms of the Omnibus Agreement, (1) GECC and
the Grantor
have agreed to amend and restate the terms of another note
evidencing a loan
made by GECC to Xxxxxxxx X. Xxxxxxxx, Xx. on July 11, 1996 in the
original
principal amount of $1,067,810.66 (the "Aircraft Loan"), the
liability for
which was subsequently assumed by the Grantor pursuant to the
Aircraft Loan
Assumption Agreement (as defined in the Omnibus Agreement), said
amendment and
restatement being set forth in, and the outstanding principal
balance of said
loan being evidenced by, that Amended and Restated Promissory
Note, dated the
date hereof, executed by the Borrower in the principal amount of
$855,050.41
and payable to the order of GECC (the "Amended Aircraft Note"),
and (2)
Transamerica has agreed to make a loan of $4,000,000 to the
Grantor (the
"Transamerica Loan"; the GECC Loan, the Aircraft Loan and the
Transamerica Loan
are sometimes referred to herein collectively as the "Loans" and
individually
as a "Loan"), which loan is evidenced by that Promissory Note,
dated the date
hereof, executed by the Borrower in the principal amount of
$4,000,000.00 and
payable to the order of Transamerica (the "Transamerica Note").
D. Pursuant to the Omnibus Agreement, in addition to all
of the other
collateral described therein or in the other Security Documents,
the Grantor
has agreed that all of the property encumbered by the Deed of
Trust (as
hereinafter defined) shall secure not only the GECC Loan but all
of the Loans
on a ratable basis, and that the Agent, for the ratable benefit
of the lenders
now or from time to time hereafter party to the Omnibus Agreement
(the
"Lenders"), shall succeed to all of GECC's right, title and
interest in, to and
under the Deed of Trust (as hereinafter defined) as beneficiary
and hold the
beneficial interest thereunder as security for the payment of the
principal of,
premium, if any, and interest on the Loans and all of the other
Obligations (as
hereinafter defined). In addition, the parties wish to provide
that the
Trustee shall hold the property encumbered by the Existing Deed
of Trust,
together with the additional property encumbered pursuant to this
Amendment,
for the account of the Beneficiary for the ratable benefit of the
Lenders, as
security for the payment of the principal of, premium, if any,
and interest on
the Loans and all of the other Obligations.
E. The Grantor has acquired certain additional real
property (the
"Additional Property"), which property is adjacent to the
Original Property and
which, together with the Original Property, is more particularly
described in
Exhibit A attached hereto and incorporated herein by reference
(the Original
Property and the Additional Property are collectively referred to
as the
"Property"). As a condition of the undertakings of the Lenders
under the
Omnibus Agreement, the Grantor is required, and the Grantor has
agreed, to
convey to the Trustee the Additional Property under and subject
to, and as a
part of, the property encumbered by the lien of the Deed of
Trust. By a
conveyance of, and a grant of the security interest in, all of
the Property,
the Grantor desires to secure the payment of the principal of,
premium, if any,
and interest on the Loans and the Notes (as hereinafter defined),
together with
any renewals or extensions thereof, in whole or in part, and all
of the other
Obligations, including without limitation the additional payments
agreed to be
made pursuant to the Deed of Trust.
F. The parties also desire to make certain other
modifications and
amendments to the Existing Deed of Trust.
NOW, THEREFORE, the Grantor, the Trustee, the Original
Beneficiary and the
Beneficiary hereby agree as follows:
1. Definitions. (a) Except as otherwise provided herein,
terms defined
in the Existing Deed of Trust are used herein as therein defined.
2.
3. (b) The following terms defined in the Omnibus
Agreement are used
herein as therein defined: "Assignment of Rents", "Default Rate",
"Loan
Documents", "Security Documents" and "Required Lenders".
4.
5. (c) In addition to the terms defined above in the
first paragraph of
and in the Recitals to this Amendment, the terms as defined
below, for all
purposes of this Amendment (except as herein otherwise expressly
provided or
unless the context otherwise requires), shall have the meanings
set forth
herein:
6.
"Deed of Trust" means the Existing Deed of Trust, as
amended pursuant
to this Amendment and as the same may be amended,
supplemented, restated,
extended, renewed, replaced or otherwise modified and in
effect from time
to time.
"Improvements" shall have the meaning assigned to such
term in
Section 4 hereof.
"Notes" means the Amended GECC Note, the Amended
Aircraft Note and
the Transamerica Note, in each case together with all
promissory notes
delivered in substitution or exchange therefor, in each case
as the same
may be modified, amended, supplemented, restated, extended,
consolidated,
renewed or replaced and in effect from time to time.
"Obligations" shall have the meaning assigned to such
term in Section
3 hereof.
"Personal Property" shall have the meaning assigned to
such term in
Section 4 hereof.
"Rents" shall have the meaning assigned to such term in
Section
4 hereof.
"Trust Estate" shall have the meaning assigned to such
term in
Section 4 hereof.
(d) Any term defined in the singular (whether herein, in
the Existing
Deed of Trust or in the Omnibus Agreement) shall have the
corresponding meaning
when used in the plural, and vice versa.
(e) Any terms that are defined in this Amendment which are
used without
express definition in the text of any of the modifications to the
Existing Deed
of Trust made hereunder shall, as part of the Deed of Trust, have
the meanings
so assigned to them in this Amendment. Any terms that are
defined in the
Omnibus Agreement, and identified in paragraph (b) of this
Section, which terms
are used without express definition in the text of any of the
modifications to
the Existing Deed of Trust made hereunder shall, as part of the
Deed of Trust,
have the meanings so assigned to them in the Omnibus Agreement.
1. Transfer of Original Beneficiary's Interest. The
Original
Beneficiary hereby transfers, conveys and assigns to the
Beneficiary all of its
right, title and interest in, to and under the Existing Deed of
Trust and the
original "Trust Estate" thereunder, to be held by the Beneficiary
for the
ratable benefit of the Lenders to secure the repayment of the
principal of,
premium, if any, and interest on the Loans and the Notes and any
and all other
Obligations. The Beneficiary hereby accepts the aforesaid
transfer, conveyance
and assignment.
2.
3. Security for Obligations. The Grantor agrees that,
from and after
the date of this Amendment, the Deed of Trust shall secure the
Loans, the
Notes, and any and all liabilities and obligations of the Grantor
thereunder or
under the Omnibus Agreement, the Security Documents or the other
Loan
Documents (i) for the payment of the principal of the Loans and
the Notes in
the aggregate principal amount of $13,862,847.41, together with
all premium, if
any, and interest thereon; (ii) for the payment of the principal
of and
interest, if any, on any and all other "Obligations" (as such
term is defined
in the Omnibus Agreement); (iii) for the payment of all
reasonable attorney's
fees, court costs and expenses of whatever nature incurred in
collection of
such indebtedness and the enforcement or protection of the
interest of the
Beneficiary and the Lenders under the Deed of Trust, (iv) for the
payment of
all sums advanced by the Beneficiary of the Lenders to protect
the Trust
Estate, with interest thereon at the Default Rate; (v) for the
performance of
the Grantor's obligations and agreements contained in the Deed of
Trust, the
Notes, the Omnibus Agreement, the Security Documents, the other
Loan Documents,
and any other instrument or modifications or amendments thereof
given to
evidence or further secure the payment and performance of any
obligation or
indebtedness secured hereby (all of the foregoing, including the
"Obligations"
as defined in the Omnibus Agreement, are collectively referred to
herein as the
"Obligations").
4.
5. Conveyance. As security for the repayment and
performance of all of
the Obligations, the Grantor hereby irrevocably grants,
transfers, conveys and
assigns to the Trustee, IN TRUST, WITH POWER OF SALE, for the
benefit and
security of the Beneficiary held for the ratable benefit of the
Lenders, under
and subject to the terms and conditions of the Deed of Trust, the
Property
located in the County of Beaufort, State of North Carolina,
described in
Exhibit A attached to this Amendment and by this reference
incorporated herein;
6.
7. TOGETHER WITH all rents, issues, profits, royalties,
income and other
benefits derived from the Property (collectively the "Rents"),
subject to the
right, power and authority hereinafter given to the Grantor to
collect and
apply such Rents (the Rents have also been assigned to the
Beneficiary pursuant
to a separate Assignment of Rents);
8.
9. TOGETHER WITH all leasehold estate, right, title and
interest of the
Grantor in and to all leases or subleases covering the Property
or any portion
thereof now or hereafter existing or entered into, and all right,
title and
interest of the Grantor thereunder, including, without
limitation, all cash or
security deposits, advance rentals and deposits or payments of
similar nature;
10.
11. TOGETHER WITH all right, title and interest of the
Grantor in and to
all options to purchase or lease the Property or any portion
thereof or
interest therein, and any greater estate in the Property owned or
hereafter
acquired;
12.
13. TOGETHER WITH all interests, estate or other claims
(but none of the
obligations), both in law and in equity, which the Grantor now
has or may
hereafter acquire in the Property;
14. TOGETHER WITH all easements, rights-of-way and rights
used in
connection therewith or as a means of access thereto, and all
tenements,
hereditaments and appurtenances thereof and thereto;
15.
16. TOGETHER WITH all right, title and interest of the
Grantor, now owned
or hereafter acquired, in and to any land lying within the right-
of-way of any
street, open or proposed, adjoining the Property, and any and all
sidewalks,
alleys and strips of land adjacent to or used in connection with
the Property;
17.
18. TOGETHER WITH any and all buildings and improvements
now or hereafter
erected thereon, including, but not limited to, the fixtures,
attachments,
appliances, equipment, machinery, and other articles attached to
the buildings
and other improvements on the Property (hereinafter called the
"Improvements");
19.
20. TOGETHER WITH all right, title and interest of the
Grantor in and to
all tangible and intangible personal property now or hereafter
owned or leased
by the Grantor relating to or associated with the Property,
including, without
limitation, all the Grantor's right, title and interest in, to
and under (a)
all furniture, furnishings, machinery, apparatus, equipment,
fittings, fixtures
and other articles of tangible personal property now owned or
leased or
hereafter acquired by the Grantor and now or at any time
hereafter located on
or at the Property and the Improvements now or hereafter erected
thereon or
used in connection with the Property and/or the Improvements, and
the operation
and maintenance thereof; (b) all proceeds or sums payable in lieu
of or as
compensation for the loss or damage to any property described in
(a) above or
to the Property or the Improvements; (c) all rights in and to all
pertinent
present and future fire and/or hazard insurance policies
(including, but not
limited to, insurance proceeds) covering the Property, the
Improvements or the
property described in (a) above; (d) all awards made by any
public body or
decreed by any court of competent jurisdiction for a taking or
for degradation
of value of the Property, the Improvements or the property
described in (a)
above in any eminent domain proceeding and all payments made in
respect of a
conveyance made in lieu of any such taking; (e) all proceeds of
every kind and
description of the property described in clauses (a) through (d)
above (all of
the foregoing is referred to herein collectively as the "Personal
Property");
21.
22. TOGETHER WITH all other interest of every kind and
character which
the Grantor now has or at any time hereafter acquires, in and to
the real and
personal property described herein, and all property which is
used or useful in
connection therewith, including rights of ingress and egress and
all
reversionary rights or interests of the Grantor with respect to
such property;
and any proceeds thereof (including insurance proceeds), any
additions and
accessions thereto, and any replacements or renewals of all of
the foregoing;
23.
24. TOGETHER WITH all the estate, interest, right, title,
other claim or
demand, including claims or demands with respect to the proceeds
(including
premium refunds) of insurance in effect with respect to the Trust
Estate, as
herein defined, which the Grantor now has or may hereafter
acquire in the
Property and Improvements, and any and all awards made for the
taking by
eminent domain, or by any proceeding or purchase in lieu thereof,
of the whole
or any part of the Trust Estate (as hereinafter defined),
including, without
limitation, any awards resulting from a change of grade of
streets and awards
for severance damages;
25.
26. TOGETHER WITH all (to the full extent legally
assignable) licenses,
permits and authorizations (issued in the name of the Grantor)
necessary for
the operation of the Property and Improvements as a boat
manufacturing
facility;
27.
28. The entire estate, property and interest conveyed by
this Amendment
to the Trustee may hereinafter be referred to as the "Trust
Estate".
29.
30. TO HAVE AND TO HOLD the Property, the Improvements and
the Trust
Estate, with all rights, privileges and appurtenances thereunto
belonging or
appertaining, as hereinabove described, to the Trustee, his
heirs, successors
and assigns in fee simple forever, upon the trusts and for the
uses and
purposes hereinafter set forth;
31.
32. AND THE GRANTOR COVENANTS WITH THE TRUSTEE that it is
seized of the
Property and Improvements in fee simple and good and marketable
title to the
remainder of the Trust Estate, and has the right to convey the
same; that it
will warrant and defend the same against the lawful claims of all
persons
whomsoever and that the Property and Improvements are free and
clear of all
liens and encumbrances, except those, if any, set forth in
Exhibit B attached
to this Amendment and incorporated herein by reference.
33.
THIS CONVEYANCE IS MADE IN TRUST
FOR THE PURPOSE OF SECURING
a. Payment of the indebtedness in the aggregate principal
amount of
$13,862,847.41, with interest and premium (if any) thereon,
evidenced by the
Notes from time to time executed by the Grantor, which have been
or may
hereafter be delivered to and made payable to the order of the
respective
Lenders, and which by this reference are hereby made a part
hereof, and any and
all modifications, extensions and renewals thereof. The Deed of
Trust also
secures all attorney's fees, court costs and expenses of whatever
kind incident
to the collection of the indebtedness and the enforcement or
protection of the
Beneficiary's interest under the Deed of Trust, and any and all
other
Obligations;
b. Payment of all sums advanced by the Beneficiary or any
Lender to
protect the Trust Estate, with interest thereon at the Default
Rate; and
c. Performance of the Grantor's obligations and agreements
contained in
the Deed of Trust, the Notes, the Omnibus Agreement, the Security
Documents and
all of the other Loan Documents.
1. Covenants, Etc. Applicable. All covenants, obligations
and
undertakings of the Grantor, and all other terms, conditions,
defaults and
other provisions, contained in the Existing Deed of Trust
relating in any
manner to the "Trust Estate" (as defined in the Existing Deed of
Trust) or any
part thereof shall be deemed to apply to the Trust Estate (as
defined herein)
and each part thereof, whether or not expressly referred to
herein.
2.
(a) Security Interest. The Grantor hereby grants to the
Beneficiary
for the ratable benefit of the Lenders a security interest in the
Personal
Property located on or at the Property, including without
limitation, any and
all property of similar type or kind, and any replacements or
renewals thereof,
hereafter located on or at the Property, for the purpose of
securing all of the
Obligations. This Amendment constitutes a Security Agreement as
that term is
used in the Uniform Commercial Code of North Carolina (the
"UCC").
(b)
(c) The Grantor hereby warrants, represents and covenants
as follows:
(d)
(i) Except for the security interest granted hereby,
the Grantor is, and
as to portions of the Personal Property to be acquired after
the date hereof
will be, the sole owner (or lessee in the case of Personal
Property leased by
the Grantor) of the Trust Estate, free from any adverse
lien, security
interest, encumbrance or adverse claim thereon of any kind
whatsoever. The
Grantor will notify the Beneficiary of, and will defend the
Trust Estate
against, all claims and demands of all persons at any time
claiming the same or
any interest therein.
(i) Except for inventory of the Grantor sold in the
ordinary course of
its business, the Grantor will not lease, sell, convey or in
any manner
transfer the Personal Property without the prior written
consent of the
Beneficiary.
(i) The Personal Property is not used or bought for
personal, family or
household purposes.
(i) Except for inventory of the Grantor sold in the
ordinary course of
its business, the Personal Property will be kept on or at
the Property. The
Grantor will not remove the Personal Property from the
Property without the
prior written consent of the Beneficiary, except such
portions or items of
Personal Property which are consumed or worn out in ordinary
usage, all of
which shall be promptly replaced by the Grantor.
(i) The Grantor maintains a place of business in the
State of North
Carolina, and the Grantor will immediately notify the
Beneficiary in writing of
any change in its place of business as set forth in the Deed
of Trust.
(i) At the request of the Beneficiary, the Grantor
will execute one or
more financing statements and renewals and amendments
thereof pursuant to the
Uniform Commercial Code of North Carolina in form
satisfactory to the
Beneficiary, and will pay the cost of filing the same in all
public offices
wherever filing is deemed by the Beneficiary to be necessary
or desirable.
(a) All covenants, obligations and undertakings of the
Grantor, and
all other terms, conditions, defaults and other provisions,
contained in the
Deed of Trust relating in any manner to the "Personal Property"
(as defined in
the Existing Deed of Trust) shall be deemed to apply to the
Personal Property
whether or not expressly referred to herein.
(b)
2. Construction of Terms. (a) The terms set forth in the
table
appearing in Schedule A attached hereto and incorporated herein
by reference,
as used in the Existing Deed of Trust, henceforth shall be deemed
to refer to
the terms defined in this Amendment or (if so indicated) in the
Omnibus
Agreement as set forth opposite such terms.
3.
4. (b) In addition, each of the following words or
phrases used in the
Existing Deed of Trust, henceforth shall be construed to refer to
the Grantor's
indebtedness in respect of the principal of, premium, if any, and
interest on
the Loans and the Notes and in respect of all other Obligations:
"indebtedness
secured hereby", "indebtedness evidenced by the Note" or any
phrase like or
similar thereto or words of similar intent.
5.
6. References to Beneficiary. (a) The following
references in the
Existing Deed of Trust to the term "Beneficiary" henceforth shall
be construed
to refer to the Lenders:
7.
(i) those set forth in paragraph (a) of Section 1.05
of the Existing
Deed of Trust;
(ii) that set forth in the first sentence of paragraph
(c) of Section
1.05 of the Existing Deed of Trust;
(iii) those set forth in paragraphs (b) and (c) of
Section 1.14
of the Existing Deed of Trust;
(iv) that set forth in Section 1.24 of the Existing
Deed of Trust;
(v) those set forth in the fourth sentence of
paragraph (a) of
Section 1.25 of the Existing Deed of Trust;
(vi) those set forth in paragraph (e) of Section 4.01
of the Existing
Deed of Trust;
(vii) that set forth in the first sentence of
Section 4.02 of the
Existing Deed of Trust; and
(vii) the first such reference set forth in Section
5.10 of the
Existing Deed of Trust.
(b) The following references in the Existing Deed of Trust
to the term
"Beneficiary" henceforth shall be construed to refer to the Agent
or any Lender
or to the Agent and the Lenders, as the context may require:
(i) those set forth in the first sentence of paragraph
(a) of
Section 1.07 of the Existing Deed of Trust;
(ii) that those set forth in paragraph (b) of Section
1.07 of the
Existing Deed of Trust;
(iii) those set forth in paragraph (c) of Section
1.07 of the
Existing Deed of Trust;
(iv) those set forth in paragraph (b) of Section 1.08
of the Existing
Deed of Trust;
(v) those set forth in Section 1.12 of the Existing
Deed of Trust;
(vi) those set forth in Section 1.17 of the Existing
Deed of Trust;
(vii) that set forth in Section 1.21 of the
Existing Deed of
Trust;
(viii) those set forth in the last sentence of
paragraph (a) of
Section 1.25 of the Existing Deed of Trust;
(ix) those set forth in the second paragraph of
paragraph (c) of
Section 1.25 of the Existing Deed of Trust;
(x) that set forth in paragraph (d) of Section 1.25 of
the Existing
Deed of Trust;
(xi) that set forth in paragraph (h) of Section 4.01 of
the Existing
Deed of Trust;
(xii) that set forth in the last sentence of
subparagraph (c)(4)
of Section 4.02 of the Existing Deed of Trust;
(xiii) that set forth in the last sentence of the
last paragraph
of Section 4.02 of the Existing Deed of Trust; and
(xiv) those set forth in Section 5.11 of the
Existing Deed of
Trust.
1. Additional Specific Amendments.
2.
(a) Section 1.20 of the Existing Deed of Trust is hereby
amended and
restated in its entirety as follows:
(b)
"1.20 Powers. Without affecting the liability of
any other
person liable for the payment of the Obligations, if any,
and without
affecting the lien or charge of this Deed of Trust upon any
portion
of the Trust Estate not then or theretofore released as
security for
the full amount of all Obligations, all (but not less than
all) of
the Lenders may, or the Beneficiary (at the direction of all
of the
Lenders) may, from time to time and without notice, (i)
release any
person so liable, (ii) extend the maturity or alter any of
the terms
of any such obligation, (iii) grant other indulgences, (iv)
release
or reconvey (or cause to be released or reconveyed at any
time at the
Lenders' option) any parcel, portion or all of the Trust
Estate, (v)
take or release any other or additional security for any of
the
Obligations, (vi) make compositions or other arrangements
with
debtors in relation thereto or (vii), as provided herein,
advance
additional funds to protect the security hereof or pay or
discharge
the obligations of the Grantor hereunder, or under the Loan
Documents
or the Security Documents, and all amounts so advanced, with
interest
thereon, at the Default Rate, shall be secured hereby. The
Grantor
consents that the provisions of N.C. Gen. Stat. 45-45.1 or
any
similar statute hereafter enacted in replacement or in
substitution
thereof shall be inapplicable to this Deed of Trust.
(a) Paragraph (g) of Section 4.01 of the Existing Deed of
Trust is hereby
amended and restated in its entirety as follows:
(b)
"(g) Either (i) there has occurred a breach of or
default under
any other term, covenant, agreement, condition, provision,
representation or warranty in this Deed of Trust and such
breach or
default is not fully cured within the stated cure period
therefore,
within the stated cure period for a similar breach or
default under
the Omnibus Agreement or the Security Documents or, in the
absence of
any such stated cure period, within thirty (30) days (but in
no event
shall this provision be construed to add to, increase or
duplicate
any stated cure period) after the earlier of (A) the first
day on
which a responsible officer of the Grantor has knowledge
thereof or
(B) written notice thereof has been given to the Grantor by
the
Beneficiary or any Lender, or (ii) any "Event of Default"
(as defined
in any other Loan Document or Security Document) shall
occur."
(a) The second paragraph of Section 4.03 of the Existing
Deed of Trust is
hereby amended and restated in its entirety as follows:
(b)
"Upon application of the Beneficiary, it shall be
lawful for and
the duty of the Trustee, and he is hereby authorized and
empowered,
to expose to sale and to sell the Property and the
Improvements
(either in whole or in separate parcels and in such order as
the
Trustee may determine), and the Personal Property at public
auction
for cash. After having first complied with all applicable
requirements of North Carolina law with respect to the
exercise of
powers of sale contained in deeds of trust and upon such
sale, the
Trustee shall convey title to the purchaser in fee simple.
After
retaining from the proceeds of such sale just compensation
for his
services and all expenses incurred by him, including a
trustee's
commission not exceeding three percent (3%) of the bid, the
Trustee
shall apply the residue of the proceeds in accordance with
the
provisions of Section 45-21.31 of the North Carolina General
Statutes. The Grantor agrees that in the event of sale
hereunder,
the Beneficiary or any Lender shall have the right to bid
thereat.
The Trustee may require the successful bidder at any sale to
deposit
immediately with the Trustee cash or certified check in an
amount not
to exceed ten percent (10%) of the bid, provided notice of
such
requirement is contained in the advertisement of the sale.
The bid
may be rejected if the deposit is not immediately made, and
thereupon
the next highest bidder may be declared to be the purchaser.
Such
deposit shall be refunded in case a resale is had;
otherwise, it
shall be applied to the purchase price. If the Personal
Property is
sold hereunder, it need not be at the place of sale. The
published
notice, however, shall state the time and place where such
property
may be inspected prior to sale. If a foreclosure proceeding
is
commenced by the Trustee but not completed, the Trustee's
fee shall
be one percent (1%) of the then-outstanding principal
balance of the
Notes if the termination occurs prior to the first public
auction
sale and two percent (2%) of the then-outstanding principal
balance
of the Notes if the termination occurs after the first
public auction
sale."
(a) The Section 4.05 of the Existing Deed of Trust is
hereby amended and
restated in its entirety as follows:
(b)
"4.05 Remedies Not Exclusive. The Trustee, the
Beneficiary and
the respective Lenders, and each of them, shall be entitled
to
enforce payment and performance of the Obligations and to
exercise
all rights and powers under this Deed of Trust or under any
other
Loan Document or other agreement or any laws now or
hereafter in
force, notwithstanding some or all of the indebtedness and
obligations secured hereby may now or hereafter be otherwise
secured,
whether by mortgage, deed of trust, pledge, lien, assignment
or
otherwise. Neither the acceptance of this Deed of Trust nor
its
enforcement, whether by court action or pursuant to the
power of sale
or other powers herein contained, shall prejudice or in any
manner
affect the Trustee's, the Beneficiary's or any Lender's
right to
realize upon or enforce any other security now or hereafter
held by
the Trustee, the Beneficiary or such Lender. The Trustee,
the
Beneficiary and the Lenders, and each of them, shall be
entitled to
enforce this Deed of Trust and any other security now or
hereafter
held by the Beneficiary, the Trustee or any Lender in such
order and
manner as the Trustee, the Beneficiary or the Required
Lenders, as
applicable, may in their absolute discretion determine. No
remedy
herein conferred upon or reserved to the Trustee, the
Beneficiary or
the Lenders is intended to be exclusive of any other remedy
herein or
by law provided or preclusive of any other remedy herein or
by law
provided or permitted, but each shall be cumulative and
shall be in
addition to every other remedy given hereunder or now or
hereafter
existing at law or in equity or by statute. Every power or
remedy
given by any of the Loan Documents to the Trustee, the
Beneficiary or
any Lender (or to which any of them may be otherwise
entitled) may be
exercised, concurrently or independently, from time to time
and as
often as may be deemed expedient by the Trustee, the
Beneficiary or
such Lender and any of them may pursue inconsistent
remedies."
(a) The Section 5.02 of the Existing Deed of Trust is
hereby amended and
restated in its entirety as follows:
(b)
"5.02 Successors and Assigns. This Deed of Trust
applies
to, inures to the benefit of and binds all parties hereto
(including
the Lenders), their heirs, legatees, devisees,
administrators,
executors, successors and assigns. The term "Beneficiary"
shall mean
the Agent under the Omnibus Agreement and any person or
entity that
shall be a successor Agent thereunder. The term "Lender"
shall mean
an owner and holder of a Note, whether or not named as a
Lender
herein."
(a) The Section 5.12 of the Existing Deed of Trust is
hereby amended and
restated in its entirety as follows:
(b)
"5.12 Non-Waiver. The acceptance by the
Beneficiary or any
Lender of any sum after the same is due shall not constitute
a waiver
of the right either to require prompt payment, when due, of
all other
sums hereby secured or to declare a default as herein
provided. The
acceptance by the Beneficiary or any Lender of any sum in an
amount
less than the sum then due shall be deemed an acceptance on
account
only and upon condition that it shall not constitute a
waiver of the
obligation of the Grantor to pay the entire sum then due.
The
Grantor's failure to pay the entire sum then due shall be
and
continue to be a default notwithstanding such acceptance of
such
amount on account, as aforesaid. At all times thereafter
and without
regard to whether the entire sum then due shall have been
paid (and
notwithstanding the acceptance by Beneficiary or any Lender
thereof
of further sums on account, or otherwise), the Beneficiary,
the
Lenders and the Trustee shall be entitled to exercise all
rights in
this instrument conferred upon them, or any of them, upon
the
occurrence of a default. The right to proceed with a sale
under any
notice of default, and election to sell, or the right to
exercise any
other rights or remedies hereunder, shall in no way be
impaired,
whether any of such amounts are received prior or subsequent
to such
proceeding, election or exercise. Consent by the
Beneficiary or the
Lenders (or any of them) to any transaction or action of the
Grantor
which is subject to consent or approval of the Beneficiary
or the
Lenders (or any of them) hereunder or under the Omnibus
Agreement
shall not be deemed a waiver of the right to require such
consent or
approval to future or successive transactions or actions."
1. Execution by Trustee. The Trustee joins in the
execution of this
Amendment for the sole purpose of acknowledging his receipt of
notice of the
terms and provisions hereof, his acceptance of the conveyances
made herein for
the purposes herein described, and his agreement to be bound
thereby.
2.
3. Ratification, Etc. Except as herein expressly modified
and amended,
the Existing Deed of Trust shall be and continue in full force
and effect.
None of the parties hereto intends that anything in this
Amendment shall be
construed as a novation, and this Amendment does not effect a
novation. The
Grantor hereby ratifies and confirms the conveyances and
assignments provided
in, and the security provided by and its duties, obligations and
responsibilities under, the Existing Deed of Trust, as the same
heretofore may
have been and by this Amendment hereby is modified and amended,
and
acknowledges that the Existing Deed of Trust, as so modified,
supplemented and
amended, is fully enforceable against the property therein
described. The
Existing Deed of Trust, all prior amendments and supplements
thereto and
modifications thereof, if any, and this Amendment shall be
construed together
as a single instrument.
4.
5. North Carolina Law . This Amendment shall be construed
in accordance
with and governed by, and any dispute arising out of or related
to the
relationship established among the parties from time to time
party hereto in
connection with this Amendment (and whether arising in contract,
tort, equity,
or otherwise) shall be resolved in accordance with, the internal
laws and not
the conflicts of law provisions of the State of North Carolina.
This Amendment
is intended to be effective as an instrument executed under seal.
6.
7. Counterparts. This Amendment may be executed in one or
more
counterparts, each of which shall be an original and all of
which, together,
shall constitute but one instrument. Any duplicate original of
this instrument
may be recorded with the Register of Deeds of any county in which
the Property,
or any portion thereof, is located.
8.
9.
10.
[Signatures follow on separate pages]
IN WITNESS WHEREOF, the Grantor, the Trustee, the Original
Beneficiary and
the Beneficiary have executed this Amendment under seal as of the
day and year
first above written.
GRANTOR:
ATTEST: FOUNTAIN POWERBOATS, INC., a
North Carolina corporation
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboats, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Deed of
Trust,
signed by the party named above]
[Signatures continued from preceding page]
TRUSTEE:
(SEAL)
Xxxxxxx X. Xxxxx, as Trustee
NORTH CAROLINA
WAKE COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that Xxxxxxx X. Xxxxx, Trustee,
personally
came before me this day and acknowledged the foregoing instrument
in his
capacity as Trustee.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Deed of
Trust,
signed by the party named above]
[Signatures continued from preceding page]
ORIGINAL BENEFICIARY AND
BENEFICIARY:
ATTEST: GENERAL ELECTRIC CAPITAL
CORPORATION,
a New York corporation,
individually and as Agent
By:
Secretary Name:
Title:
[CORPORATE SEAL]
STATE OF ______________
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
State of ____________________, do hereby certify that
______________________________ personally came before me this day
and
acknowledged that [s]he is the _________ Secretary of General
Electric Capital
Corporation, a New York corporation, and that by authority duly
given and as
the act of the corporation, the foregoing instrument was signed
in its name by
its _____ President, sealed with its corporate seal and attested
by
himself/herself as its _________ Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Deed of
Trust,
signed by the parties named above]
SCHEDULE A
TO
FIRST AMENDMENT TO DEED OF TRUST
The terms set forth in the following table, as used in the
Existing Deed of
Trust, henceforth shall be deemed to refer to the terms defined
in this
Amendment or (if so indicated) in the Omnibus Agreement as set
forth opposite
such terms.
The following term used
in the Existing Deed of Trust Shall be deemed to refer to
"Assignment of Rents" the Assignment of Rents (as defined
in the
Omnibus Agreement)
"Beneficiary" the Agent, acting in its capacity
as such for
the ratable benefit of the Lenders
from time to
time party to the Omnibus Agreement
"this Deed of Trust" the Deed of Trust
"Default Rate" the Default Rate (as defined in the
Omnibus
Agreement)
"Improvements" the Improvements
"loan" or "loans" the Loans
"Loan Agreement" the Omnibus Agreement
"Loan Instruments" the Loan Documents(as defined in
the
Omnibus Agreement)
"Note" the Notes
"Personal Property" the Personal Property
"Property" the Property
"Rents" the Rents
"Security Agreement" the Borrower Security Agreement (as
defined in
the Omnibus Agreement)
"Trust Estate" the Trust Estate
EXHIBIT A
Legal Description of the Property
EXHIBIT B
Permitted Liens and Encumbrances
TRACT I:
1. The lien of all taxes for the year 1998 and thereafter,
which are not yet
delinquent.
2. Right of way to State Highway Commission, recorded in Book
529, page 278,
Beaufort County Registry.
3. Permit to Carolina Telephone & Telegraph Company recorded in
Book 474,
Page 275, Beaufort County Registry.
4. Rights of way to Carolina Power & Light Company recorded in
Book 541, Page
76; Book 602, Page 207; Book 614, Page 258; Book 702, Page
415; Book 782,
Page 15; Book 886, Page 73; and, Book 886, Page 72, Beaufort
County
Registry.
5. Rights of others in and to the use of the perpetual non-
exclusive sixty
(60) foot access easement for ingress, egress, and regress
which is
located adjacent to and on the West side of subject
property.
6. Rights of adjoining property owners in and to ditches
affecting subject
property.
7. UCC to the benefit of General Electric Capital Corporation
in XXX Xxxx #00-
0000, Xxxxxxxx County Registry.
8. Deed of Trust to Xxxxxxx X. Xxxxxxxx, Xx., Trustee(s) for
General Electric
Capital Corporation, dated December 31, 1996, in the amount
of
$10,000,000.00 recorded in Book 1063, Page 337, Beaufort
County Registry.
(To be modified).
9. Assignment of Rents recorded in Book 1063, Page 372,
Beaufort County
Registry. (To be modified).
10. Survey entitled, "Survey for Fountain Powerboats, Inc.",
dated October 12,
1987 and revised August 28 and 29, 1990; September 5, 1990,
by Xxxxxx X.
Xxxxxxx, Registered Land Surveyor reveals the following: a)
power poles
and electrical lines situated on and crossing over subject
property; b)
easement ten (10) feet in width for telephone, power and
cable television
along the Northeasterly lot line; c) ten (10) foot by
seventy (70) foot
sight easement in the Northernmost corner of subject
property; d) ditch
running along the Southwesterly lot line and a portion
running through
the subject property; and e) existing pump house belonging
to the property
adjoining to the Southeast encroaches onto subject property.
TRACT II:
1. The lien of all taxes for the year 1998 and thereafter,
which are not yet
delinquent.
2. Easements to Carolina Power & Light Company recorded in Book
468, Page 43;
Book 474, Page 275; Book 540, Page 571; Book 541, Page 76;
Book 803, Page
936; Book 803, Page 937; Book 813, Page 154; and, Book 878,
Page 95,
Beaufort County Registry.
3. Riparian rights or title to that portion of subject property
lying below
the highwater xxxx of Pamlico River and the canal.
4. Rights of others in and to the use of the Pamlico River and
the canal.
5. Rights of adjoining property owners in and to ditches
affecting subject
property.
6. UCC to the benefit of General Electric Capital Corporation
in XXX Xxxx #00-
0000, Xxxxxxxx County Registry.
7. Deed of Trust to Xxxxxxx X. Xxxxxxxx, Xx., Trustee(s) for
General Electric
Capital Corporation, dated December 31, 1996, in the amount
of
$10,000,000.00 recorded in Book 1063, Page 337, Beaufort
County Registry.
(To be modified).
8. Assignment of Rents recorded in Book 1063, Page 372,
Beaufort County
Registry. (To be modified).
9. Survey entitled, "Site Plan for Fountain Powerboats, Inc.",
dated June 27,
1990 and revised August 29 and 31, 1990; and September 5,
1990, by Xxxxxx
X. Xxxxxxx, Registered Land Surveyor reveals the following:
a) power
poles, power lines, fire hydrants, indicator posts, control
panel,
electrical transformers, catch basins, bulkheads and water
pump affecting
subject property; b) Pamlico River along the Northerly lot
line; and c)
swale and canal affecting subject property.
TRACT III:
1. The lien of all taxes for the year 1998 and thereafter,
which are not yet
delinquent.
2. Easements to Carolina Power & Light Company recorded in Book
468, Page 43;
Book 474, Page 275; Book 540, Page 571; Book 541, Page 76;
Book 803, Page
936; and, Book 803, Page 937 Beaufort County Registry.
3. Riparian rights or title to that portion of subject property
lying below
the highwater xxxx of Pamlico River and the canal.
4. Rights of others in and to the use of the Pamlico River and
the canal.
5. Rights of adjoining property owners in and to ditches
affecting subject
property.
6. UCC to the benefit of General Electric Capital Corporation
in XXX Xxxx #00-
0000, Xxxxxxxx County Registry.
7. Deed of Trust to Xxxxxxx X. Xxxxxxxx, Xx., Trustee(s) for
General Electric
Capital Corporation, dated December 31, 1996, in the amount
of
$10,000,000.00 recorded in Book 1063, Page 337, Beaufort
County Registry.
(To be modified).
8. Assignment of Rents recorded in Book 1063, Page 372,
Beaufort County
Registry. (To be modified).
9. Any encroachments, overlaps, boundary line disputes,
easements,
measurements, variations in area or content, party walls or
other facts
which a correct survey and inspection of the premises would
show
subsequent to October 16, 1996.
12
R#2611783.3
[Execution Copy]
FIRST AMENDMENT TO AIRCRAFT CHATTEL MORTGAGE
THIS FIRST AMENDMENT TO AIRCRAFT CHATTEL MORTGAGE (this
"Amendment") is
made this 2nd day of September, 1998, by and among
XXXXXXXX X. XXXXXXXX, XX., an individual with a place of
business at 1653
Xxxxxxxx'x Beach Road, X.X. Xxxxxx 000, Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000
("RMF");
FOUNTAIN POWERBOATS, INC., a North Carolina corporation with
its principal
place of business at 1653 Xxxxxxxx'x Beach Road, X.X. Xxxxxx
000,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Borrower"); and
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
having an
office at 0000 Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000,
both individually (in its individual corporate capacity,
"GECC") and in
its capacity as the agent for the lenders from time to time
to the Omnibus
Agreement referred to below (in such capacity, the "Agent").
BACKGROUND:
A. RMF and GECC heretofore entered into that Aircraft
Chattel Mortgage,
dated as of July 11, 1996, recorded by the Federal Aviation
Administration on
September 17, 1996 at its office in Oklahoma City, Oklahoma under
document
number DD011087 (the "Mortgage"), pursuant to which RMF
encumbered the Aircraft
(as described and defined in the Mortgage) as security for the
promissory note
referred to therein (the "Original Note") evidencing a loan made
by GECC to RMF
in the original principal amount of $1,067,810.66 (the "Aircraft
Loan").
B. Pursuant to a Transfer and Assumption Agreement, dated
October 1,
1997, recorded by the Federal Aviation Administration on December
4, 1997 at
its office in Oklahoma City, Oklahoma under document number
FF23142 (the
"Transfer and Assumption Agreement"), RMF transferred and
conveyed the Aircraft
to the Borrower, subject to the Mortgage, and the Borrower
assumed liability
for the repayment of the principal of, premium, if any, and
interest on the
Original Note.
C. Pursuant to the Omnibus Agreement referred to below,
the Original
Note has been amended and restated by an Amended and Restated
Promissory Note,
dated the date hereof, executed by the Borrower and made payable
to the order
of GECC in the principal amount of $9,007,797.00 (the Original
Note, as the
same has been so amended and restated by said Amended and
Restated Promissory
Note, and together with all promissory notes delivered in
substitution or
exchange therefor, in each case as the same may be modified,
amended,
supplemented, restated, extended, consolidated, renewed or
replaced and in
effect from time to time, is referred to herein as the "Amended
Aircraft
Note").
D. The Borrower, GECC and the Agent, together with
Fountain Powerboat
Industries, Inc., Fountain Power, Inc. and Transamerica Business
Credit
Corporation ("Transamerica" and, together with GECC, the
"Lenders") have
entered into an Omnibus Agreement, dated the date hereof (as the
same may be
amended, supplemented, restated, extended, renewed, replaced or
otherwise
modified and in effect from time to time, the "Omnibus
Agreement"), pursuant to
which, among other things, (1) GECC and the Borrower have agreed
to amend and
restate the terms of another note evidencing a loan made by GECC
to Xxxxxxxx X.
Xxxxxxxx, Xx. on July 11, 1996 in the original principal amount
of
$1,067,810.66 (the "Aircraft Loan"), the liability for which was
subsequently
assumed by the Borrower pursuant to the Aircraft Loan Assumption
Agreement (as
defined in the Omnibus Agreement), said amendment and restatement
being set
forth in, and the outstanding principal balance of said loan
being evidenced
by, that Amended and Restated Promissory Note, dated the date
hereof, executed
by the Borrower in the principal amount of $855,050.41 and
payable to the order
of GECC (the "Amended Aircraft Note"), and (2) Transamerica has
agreed to make
a loan of $4,000,000 to the Borrower (the "Transamerica Loan";
the GECC Loan,
the Aircraft Loan and the Transamerica Loan are sometimes
referred to herein
collectively as the "Loans" and individually as a "Loan"), which
loan is
evidenced by that Promissory Note, dated the date hereof,
executed by the
Borrower in the principal amount of $4,000,000.00 and payable to
the order of
Transamerica (the "Transamerica Note").
E. Pursuant to the Omnibus Agreement, the Borrower has
agreed that the
Aircraft and all other property encumbered by the Mortgage shall
secure not
only the Aircraft Loan but all of the Loans on a ratable basis,
and that the
Agent, for the ratable benefit of the Lenders now or from time to
time
hereafter party to the Omnibus Agreement, shall succeed to all of
GECC's right,
title and interest in, to and under the Mortgage and hold the
Aircraft and
other assets encumbered thereby, for the ratable benefit of the
Lenders, as
security for the payment of the principal of, premium, if any,
and interest on
the Loans and the payment and performance of the other
Obligations (as such
term is defined in the Omnibus Agreement).
NOW, THEREFORE, in consideration of the premises and for
other good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the parties hereto, intending to be legally bound
hereby, agree
as follows:
1. Definitions. (a) Unless otherwise defined herein,
terms defined in
the Omnibus Agreement are used herein as therein defined.
(b) The terms as defined below, for all purposes of this
Amendment
(except as herein otherwise expressly provided or unless the
context otherwise
requires), shall have the meanings set forth herein:
"Collateral" means the Aircraft and any and all other
assets now or
hereafter conveyed or encumbered by the Mortgage.
"Notes" means the Amended GECC Note, the Amended
Aircraft Note and
the Transamerica Note, in each case together with all
promissory notes
delivered in substitution or exchange therefor, in each case
as the same
may be modified, amended, supplemented, restated, extended,
consolidated,
renewed or replaced and in effect from time to time.
"RMF Security Agreement" means that Security Agreement,
dated
September 30, 1997, by and between the Borrower and RMF
pursuant to which
the Borrower granted to RMF a security interest in the
Collateral in order
to secure the Borrower's indebtedness to RMF evidenced by
the Borrower's
promissory note, dated September 30, 1997, in the principal
amount of
$415,820.57 payable to the order of RMF.
(c) Any term defined in the singular (whether herein or in
the Omnibus
Agreement) shall have the corresponding meaning when used in the
plural, and
vice versa.
2. Transfer to the Agent. GECC hereby transfers, conveys
and assigns to
the Agent all of its rights in, to and under the Mortgage, the
Collateral and
the Transfer and Assumption Agreement, to be held by the Agent
for the ratable
benefit of the Lenders to secure the repayment of the principal
of, premium, if
any, and interest on the Loans and the Notes and the payment and
performance of
any and all other Obligations. The Agent hereby accepts the
aforesaid
transfer, conveyance and assignment.
3. Security for Obligations. RMF and the Borrower hereby
agree that
henceforth the Collateral shall secure the payment when due of
the principal,
premium, if any, and interest on the Loans and the Notes, and the
payment when
due and performance of any and all other Obligations. In
confirmation of the
foregoing, the Borrower hereby conveys, pledges and mortgages to
the Agent, for
the ratable benefit of the Lenders, the Aircraft, including
without limitation
the equipment described in the Mortgage and/or in the schedules
attached
thereto, to have and to hold the same unto the Agent until all
the entire
principal of, premium, if any, and interest on the Loans and the
Notes, and all
of the other Obligations, are paid in full.
4. Construction of Mortgage Terms. The terms set forth in
the following
table, as used in the Mortgage, shall be deemed to refer to the
terms defined
in this Agreement (or in the Omnibus Agreement, as the case may
be) as set
forth opposite such terms:
The following term used
in the Mortgage Shall be deemed to refer to
"loan" or "loans" the Loans
"Note" the Notes
"Mortgagee" the Agent, acting in its
capacity as
such for the ratable benefit
of the
Lenders from time to time
party to
the Omnibus Agreement
"Mortgagor" the Borrower
In addition, the phrase "indebtedness secured hereby" and the
phrase
"indebtedness of Mortgagor to Mortgagee" shall be construed to
refer to the
Borrower's indebtedness in respect of the principal of, premium,
if any, and
interest on the Loans and Notes and in respect of all other
Obligations.
5. Representations. The Borrower hereby represents and
warrants to the
Agent that:
(a) each of the representations and warranties set
forth in the
Mortgage is true and correct on the date hereof (it being
understood that,
for purposes of this paragraph, each reference therein to
the "Mortgagor"
shall be construed to refer to the Borrower and each
reference therein to
the "Note" shall be construed to refer to the Loans, the
Notes and the
other Obligations);
(b) the Borrower has the corporate power and authority
to enter into
this Amendment and to do all acts and things as are required
or
contemplated hereunder and under the Mortgage, as modified
and amended
hereby (as so modified and amended, the "Amended Mortgage"),
to be done,
observed and performed by it;
(c) this Amendment has been duly authorized, validly
executed and
delivered by one or more authorized officers of the Borrower
and this
Amendment and the Amended Mortgage each constitutes the
legal, valid and
binding obligation of the Borrower enforceable against it in
accordance
with its terms;
(d) the execution and delivery of this Amendment and
Borrower's
performance hereunder and under the Amended Mortgage do not
and will not
require the consent or approval of any court, regulatory
authority or
governmental authority or agency having jurisdiction over
the Borrower;
(e) none of the execution and delivery by the Borrower
of this
Amendment, the consummation of the transactions herein
contemplated or
compliance with the provisions hereof or of the Amended
Mortgage does or
will (i) violate, conflict with, result in the breach of, or
constitute a
default under (A) any applicable laws, (B) the Articles of
Incorporation,
Bylaws or board resolutions of any Fountain Corporation, (C)
any
instrument, agreement or contract to which any Fountain
Corporation is a
party, or by or to which any Fountain Corporation or any
properties of any
Fountain Corporation may be affected, bound or subject, or
(D) any order,
writ, injunction or decree of any court, arbitrator or
governmental or
regulatory authority, or (ii) result in the creation or
imposition of any
lien, charge or encumbrance upon any assets of any Fountain
Corporation
(except those created hereunder).
6. Subordination. RMF hereby agrees that the RMF Security
Agreement and
the security interest in the Collateral created thereunder shall
be and is
hereby made unconditionally junior, subordinate and in all
respects subject to
the Amended Mortgage, as the same may be further amended,
supplemented,
restated, extended, renewed, replaced or otherwise modified and
in effect from
time to time, and to all of the liens and encumbrances on and
against the
Collateral created by or pursuant thereto. RMF further agrees
that unless and
until all of the Loans, the Notes and all other Obligations are
finally and
indefeasibly paid and satisfied in full, he shall take no action
to foreclose
or otherwise enforce the RMF Mortgage or to liquidate, sell or
realize upon the
Collateral or any thereof. The terms of RMF's subordination are
more fully set
forth in a Subordination Agreement, dated the date hereof, by and
from RMF to
and in favor of the Agent and the Lenders, a copy of which is
attached hereto
as Exhibit A.
7. Counterparts. This Amendment may be executed in
multiple
counterparts, each of which shall be deemed to be an original and
all of which,
taken together, shall constitute one and the same agreement.
8. Law of Contract. This Amendment shall be deemed to be
made pursuant
to the laws of the State of North Carolina with respect to
agreements made and
to be performed wholly in the State of North Carolina and shall
be construed,
interpreted, performed and enforced in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be
executed by their respective officers duly authorized to do so,
as of the day
and year first above written.
THE BORROWER:
ATTEST: FOUNTAIN
POWERBOATS, INC.
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboats, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of
______________, 1998.
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Aircraft
Mortgage,
signed by the party named above]
[Signatures continued from preceding page]
RMF:
(SEAL)
Xxxxxxxx X.
Xxxxxxxx, Xx.
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that Xxxxxxxx X. Xxxxxxxx, Xx.
personally
came before me this day and acknowledged the execution of the
foregoing
instrument.
WITNESS my hand and notarial seal, this _____ day of August,
1998.
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
0This is a signature page to the First Amendment to Aircraft
Mortgage,
signed by the parties named above]
[Signatures continued from preceding page]
GECC AND THE AGENT:
ATTEST: GENERAL ELECTRIC CAPITAL
CORPORATION,
a New York corporation,
individually and as Agent
By:
Secretary Name:
Title:
[CORPORATE SEAL]
STATE OF ______________
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
State of ____________________, do hereby certify that
______________________________ personally came before me this day
and
acknowledged that [s]he is the _________ Secretary of General
Electric Capital
Corporation, a New York corporation, and that by authority duly
given and as
the act of the corporation, the foregoing instrument was signed
in its name by
its _____ President, sealed with its corporate seal and attested
by
himself/herself as its _________ Secretary.
WITNESS my hand and notarial seal, this _____ day of August,
1998.
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Aircraft
Mortgage,
signed by the party named above]
11
R#261950.3
Drawn by and return to: Xxxxxxx Xxxxx, Esquire
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
P. O. Xxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
[Execution Copy]
NORTH CAROLINA )
)
BEAUFORT COUNTY )
FIRST AMENDMENT TO ASSIGNMENT OF RENTS AND LEASES
THIS FIRST AMENDMENT TO ASSIGNMENT OF RENTS AND LEASES (this
"Amendment"),
is made as of the 2nd day of September, 1998, by and between
FOUNTAIN
POWERBOATS, INC., a North Carolina corporation, whose address is
0000
Xxxxxxxx'x Xxxxx Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(hereinafter referred
to as the "Assignor"), and GENERAL ELECTRIC CAPITAL CORPORATION,
a New York
corporation, whose address is 0000 Xxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, acting both in its capacity as "Assignee" under
the Existing
Assignment, as hereinafter defined ("GECC" or, in such capacity,
the "Original
Assignee") and in its capacity as the agent for the ratable
benefit of the
lenders now or from time to time hereafter party to the Omnibus
Agreement
referred to below (in such capacity, the "Agent" or, as the
assignee hereunder
and under the Assignment, as hereinafter defined, the
"Assignee"); and amends,
modifies and supplements the following instrument (said
instrument, together
with all prior amendments, supplements and modifications thereto
and thereof,
if any, is referred to herein as the "Existing Assignment"):
Assignment of Rents and Leases, dated December 31, 1996, by
and
between the Assignor and GECC, which Assignment of Rents and
Leases
is recorded at Book 1063, Page 372, in the Office of the
Register of
Deeds , beaufort County, North Carolina.
RECITALS:
A. The Existing Assignment was first given as security for
the
promissory note referred to therein (the "Original Note")
evidencing a loan
made by GECC to the Assignor in the original principal amount of
$10,000,000
(the "GECC Loan"), and encumbers certain rents, leases and other
assets arising
from or relating to the real property (and the improvements
thereon) as more
particularly described therein (the "Original Trust Estate").
B. Pursuant to the Omnibus Agreement referred to below,
the Original
Note has been amended and restated by an Amended and Restated
Promissory Note,
dated the date hereof, executed by the Assignor and GECC and made
payable to
the order of GECC in the principal amount of $9,007,797.00 (the
Original Note,
as the same has been so amended and restated by said Amended and
Restated
Promissory Note, and together with all promissory notes delivered
in
substitution or exchange therefor, in each case as the same may
be modified,
amended, supplemented, restated, extended, consolidated, renewed
or replaced
and in effect from time to time, is referred to herein as the
"Amended GECC
Note").
C. The Assignor, GECC and the Agent, together with
Fountain Powerboat
Industries, Inc., Fountain Power, Inc. and Transamerica Business
Credit
Corporation ("Transamerica" and, together with GECC, the
"Lenders") have
entered into an Omnibus Agreement, dated the date hereof (as the
same may be
amended, supplemented, restated, extended, renewed, replaced or
otherwise
modified and in effect from time to time, the "Omnibus
Agreement"). Pursuant
to and subject to the terms of the Omnibus Agreement, (1) GECC
and the Assignor
have agreed to amend and restate the terms of another note
evidencing a loan
made by GECC to Xxxxxxxx X. Xxxxxxxx, Xx. on July 11, 1996 in the
original
principal amount of $1,067,810.66 (the "Aircraft Loan"), the
liability for
which was subsequently assumed by the Assignor pursuant to the
Aircraft Loan
Assumption Agreement (as defined in the Omnibus Agreement), said
amendment and
restatement being set forth in, and the outstanding principal
balance of said
loan being evidenced by, that Amended and Restated Promissory
Note, dated the
date hereof, executed by the Borrower in the principal amount of
$855,050.41
and payable to the order of GECC (the "Amended Aircraft Note"),
and (2)
Transamerica has agreed to make a loan of $4,000,000 to the
Assignor (the
"Transamerica Loan"; the GECC Loan, the Aircraft Loan and the
Transamerica Loan
are sometimes referred to herein collectively as the "Loans" and
individually
as a "Loan"), which loan is evidenced by that Promissory Note,
dated the date
hereof, executed by the Borrower in the principal amount of
$4,000,000.00 and
payable to the order of Transamerica (the "Transamerica Note").
D. Pursuant to the Omnibus Agreement, the Assignor has
agreed that all
of the assets and property assigned pursuant to or otherwise
encumbered by the
Existing Assignment, together with the additional assets and
property assigned
to the Agent under this Amendment, shall secure not only the GECC
Loan but all
of the Loans on a ratable basis and that the Agent, for the
ratable benefit of
the lenders now or from time to time hereafter party to the
Omnibus Agreement
(the "Lenders"), shall succeed to all of GECC's right, title and
interest in,
to and under the Assignment (as hereinafter defined) as the
assignee thereunder
and hold the assignee's interest thereunder and in and to all
such assets and
property as security for the payment of the principal of,
premium, if any, and
interest on the Loans and the payment and performance of the
other
"Obligations" (as such term is defined in the Omnibus Agreement).
E. The Assignor has acquired certain additional real
property (which,
together with the improvements thereon, is referred to herein as
the
"Additional Trust Estate"), which property is adjacent to the
Original Trust
Estate and which, together with the Original Trust Estate. is
more particularly
described in Exhibit A attached hereto and incorporated herein by
reference
(the Original Trust Estate and the Additional Trust Estate are
collectively
referred to as the "Trust Estate"). As a condition of the
undertakings of the
Lenders under the Omnibus Agreement, the Assignor is required,
and the Assignor
has agreed, to assign, convey and transfer to the Agent, for the
ratable
benefit of the Lenders, the rents and leases affecting any part
of the
Additional Trust Estate under and subject to, and as a part of,
the property
encumbered by the lien of the Assignment. By an assignment of
all of the rents
and leases at any time affecting any or all of the Trust Estate,
the Assignor
desires to secure the payment and performance of the Loans, the
Notes with
interest and premium, if any, and any renewals or extensions
thereof, in whole
or in part, and the payment and performance of all of the other
Obligations"
(as such term is hereinafter defined), including without
limitation the
additional payments hereinafter agreed to be made.
F. The Assignor and the Assignee desire to make certain
other
modifications and amendments to the Existing Assignment.
NOW, THEREFORE, the Assignor, the Assignee and GECC hereby
agree as
follows:
1. Definitions. (a) Except as otherwise provided herein,
terms defined
in the Existing Assignment are used herein as therein defined.
2.
3. (b) The following terms defined in the Omnibus
Agreement are used
herein as therein defined: "Deed of Trust", "Event of Default",
"Loan
Documents" and "Security Documents".
4.
5. (c) In addition to the terms defined above in the
first paragraph of
and in the Recitals to this Amendment, the terms as defined
below, for all
purposes of this Amendment (except as herein otherwise expressly
provided or
unless the context otherwise requires), shall have the meanings
set forth
herein:
6.
"Assignment" means the Existing Assignment, as amended
pursuant to
this Amendment and as the same may be amended, supplemented,
restated,
extended, renewed, replaced or otherwise modified and in
effect from time
to time.
"Leases" shall have the meaning assigned to such term
in Section
4 hereof.
"Notes" means the Amended GECC Note, the Amended
Aircraft Note and
the Transamerica Note, in each case together with all
promissory notes
delivered in substitution or exchange therefor, in each case
as the same
may be modified, amended, supplemented, restated, extended,
consolidated,
renewed or replaced and in effect from time to time.
"Obligations" shall have the meaning assigned to such
term in Section
3 hereof.
"Rents" shall have the meaning assigned to such term in
Section
4 hereof.
(d) Any term defined in the singular (whether herein, in
the Existing
Assignment or in the Omnibus Agreement) shall have the
corresponding meaning
when used in the plural, and vice versa.
(e) Any terms that are defined in this Amendment, and any
term defined in
the Omnibus Agreement and identified in paragraph (b) of this
Section, which
are used without express definition in the text of any of the
modifications to
the Existing Assignment made hereunder shall, as part of the
Assignment, have
the meanings so assigned to them in this Amendment or the Omnibus
Agreement, as
the case may be.
1. Transfer of Assignee's Interest. GECC, as assignee
under the
Existing Assignment, hereby transfers, conveys and assigns to the
Agent all of
its rights in, to and under the Assignment and "Rents" and
"Leases" referred to
therein and all of the assets and property conveyed, assigned or
otherwise
encumbered thereby or pursuant thereto, to be held by the Agent
for the ratable
benefit of the Lenders to secure the repayment of the principal
of, premium, if
any, and interest on the Loans and the Notes and the payment and
performance of
any and all other Obligations. The Agent hereby accepts the
aforesaid
transfer, conveyance and assignment.
2.
3. Security for Obligations. The Assignor agrees that,
from and after
the date of this Amendment, the Assignment shall secure the
Loans, the Notes,
and any and all liabilities and obligations of the Assignor
thereunder or under
the Omnibus Agreement, the Security Documents or the other Loan
Documents (i)
for the payment of the principal of the Loans and the Notes in
the aggregate
principal amount of $13,862,847.41, together with all premium, if
any, and
interest thereon; (ii) for the payment of the principal of and
interest, if
any, on any and all other "Obligations" (as such term is defined
in the Omnibus
Agreement); (iii) for the payment of all reasonable attorney's
fees, court
costs and expenses of whatever nature incurred in collection of
such
indebtedness and the enforcement or protection of the interest of
the Assignee
and the Lenders under the Assignment, (iv) for the payment of all
sums advanced
by the Assignee of the Lenders to protect the Trust Estate, with
interest
thereon at the Default Rate; (v) for the performance of the
Assignor's
obligations and agreements contained in the Assignment, the
Notes, the Omnibus
Agreement, the Security Documents, the other Loan Documents, and
any other
instrument or modifications or amendments thereof given to
evidence or further
secure the payment and performance of any obligation or
indebtedness secured
hereby (all of the foregoing, including the "Obligations" as
defined in the
Omnibus Agreement, are collectively referred to herein as the
"Obligations").
4.
5. Assignment and Conveyance. As security for the
repayment and
performance of all of the Obligations, the Assignor hereby
conveys, transfers
and assigns unto the Assignee, its successors and assigns, all
the rights,
interests and privileges that the Assignor as lessor has and may
have in the
leases now existing or hereafter made and affecting the Trust
Estate or any
part thereof (the "Leases") as the Leases may have been or may
from time to
time be hereafter modified, extended or renewed, with all rents,
income and
profits due and becoming due therefrom (the "Rents"). The
Assignor will, on
request of the Assignee, execute assignments of any future leases
affecting any
part of the Trust Estate. Notwithstanding any provision herein
to the
contrary, the Assignment, and the assignments made herein, are
intended to be
an absolute present assignment from the Assignor to the Assignee
and not merely
the passing of a security interest. The Rents and Leases are
hereby assigned
absolutely by the Assignor to the Assignee for the ratable
benefit of the
Lenders, contingent only upon the occurrence of an Event of
Default (as defined
in the Omnibus Agreement).
6.
7. Covenants, Etc. Applicable. All covenants, obligations
and
undertakings of the Assignor, and all other terms, conditions,
defaults and
other provisions, contained in the Existing Assignment relating
in any manner
to the "Leases", the "Rents" and/or "Trust Estate" (each as
defined in the
Existing Assignment) or any part thereof shall be deemed to apply
to the Rents,
Leases and Trust Estate (each as defined herein), whether or not
expressly
referred to herein.
8.
9. Construction of Terms. (a) The terms set forth in the
table
appearing in Schedule A attached hereto and incorporated herein
by reference,
as used in the Existing Assignment, henceforth shall be deemed to
refer to the
terms defined in this Amendment or (if so indicated) in the
Omnibus Agreement
as set forth opposite such terms.
10.
11. (b) In addition, (i) each reference in the Existing
Assignment to
the debt secured thereby shall be construed to refer to the debt
evidenced by
the Notes and the other Obligations and (ii) each reference in
the Existing
Assignment to an "Event of Default" (including any "Event of
Default" under or
as defined in the "Note" or the "Deed of Trust") shall be deemed
to refer to an
Event of Default under, and as defined in, the Omnibus Agreement.
12.
13. Additional Specific Amendments.
14.
(a) The first sentence of the fourth paragraph of the
Existing Assignment
is hereby amended and restated in its entirety as follows:
(b)
"The acceptance of this Assignment and the collection
of Rents
or the payments under the Leases hereby assigned shall not
constitute
a waiver of any rights of the Assignee or any Lender under
the terms
of the Notes or any other Loan Documents."
(a) The penultimate sentence of the fifth paragraph of the
Existing
Assignment (being the first full paragraph on page 2 of the
Existing
Assignment) is hereby amended and restated in its entirety as
follows:
(b)
"In no event, however, shall the Assignee or any Lender
be
liable under any Lease of any part of the Trust Estate for
the return
of any security deposit in any amount in excess of the
amount
delivered to the Assignee or such Lender, as the case may
be, by the
Assignor."
(a) The eighth paragraph of the Existing Assignment (being
the fourth
full paragraph on page 2 of the Existing Assignment) is hereby
amended and
restated in its entirety as follows:
(b)
"Neither the Assignee nor any Lender shall be obligated
to
perform or discharge any obligation or duty to be performed
or
discharged by the Assignor under any of the Leases. The
Assignor
hereby agrees to indemnify the Assignee and the Lenders for,
and to
save them harmless from, any and all liability arising from
any of
the Leases or from this Assignment, except for gross
negligence or
willful misconduct of the Assignee or such Lender, as the
case may
be, during any period in which the Assignee is in possession
of the
Trust Estate. This Assignment shall not place
responsibility for the
control, care, management or repair of the Trust Estate upon
the
Assignee or any Lender, or make the Assignee or any Lender
responsible or liable for any negligence in the management,
operation, upkeep, repair or control of the Trust Estate
resulting in
loss or injury or death to any lessee, licensee, employee or
stranger
prior to the Assignee's assuming actual operation or
management of
the Trust Estate following an Event of Default."
(a) The penultimate paragraph of the Existing Assignment
(being the
penultimate paragraph on page 3 of the Existing Assignment) is
hereby amended
and restated in its entirety as follows:
(b)
"Neither the existence of this Assignment nor the
exercise of the
privilege to collect the Rents shall be construed as a
waiver by the
Assignee or any Lender, or any of their respective
successors and assigns,
of the right to enforce payment and performance of the
Obligations, in
strict accordance with the terms and provisions of the Notes
and the other
Loan Documents."
1. Ratification, Etc. Except as herein expressly modified
and amended,
the Assignment shall be and continue in full force and effect.
Neither the
Assignor nor the Assignee intends that anything in this Amendment
shall be
construed as a novation, and this Amendment does not effect a
novation. The
Assignor hereby ratifies and confirms the conveyances and
assignments provided
in, and the security provided by and its duties, obligations and
responsibilities under, the Existing Assignment, as the same
heretofore may
have been and by this Amendment hereby is modified and amended,
and
acknowledges that the Existing Assignment, as so modified,
supplemented and
amended, is fully enforceable against the Rents, Leases and other
assets and
property therein described. The Existing Assignment, all prior
amendments and
supplements thereto and modifications thereof, if any, and this
Amendment shall
be construed together as a single instrument.
2.
3. North Carolina Law . This Amendment shall be construed
in accordance
with and governed by, and any dispute arising out of or related
to the
relationship established among the parties from time to time
party hereto in
connection with this Amendment (and whether arising in contract,
tort, equity,
or otherwise) shall be resolved in accordance with, the internal
laws and not
the conflicts of law provisions of the State of North Carolina.
This Amendment
is intended to be effective an instrument executed under seal.
4.
5. Counterparts. This Amendment may be executed in two or
more
counterparts, each of which shall be an original and all of
which, together,
shall constitute but one instrument. Any duplicate original of
this instrument
may be recorded with the Register of Deeds of any county in which
the Land, or
any portion thereof, is located.
6.
7.
8.
9.
10.
11.
12.
[Signatures follow on separate pages]
IN WITNESS WHEREOF, the Assignor, GECC and the Agent have
executed this
Amendment under seal as of the day and year first above written.
ASSIGNOR:
ATTEST: FOUNTAIN POWERBOATS, INC., a
North Carolina corporation
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboats, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Assignment
of Rents,
signed by the party named above]
[Signatures continued from preceding page]
GECC AND AGENT:
ATTEST: GENERAL ELECTRIC CAPITAL
CORPORATION,
a New York corporation,
individually and as Agent
By:
Secretary Name:
Title:
[CORPORATE SEAL]
STATE OF ______________
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
State of ____________________, do hereby certify that
______________________________ personally came before me this day
and
acknowledged that [s]he is the _________ Secretary of General
Electric Capital
Corporation, a New York corporation, and that by authority duly
given and as
the act of the corporation, the foregoing instrument was signed
in its name by
its _____ President, sealed with its corporate seal and attested
by
himself/herself as its _________ Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the First Amendment to Assignment
of Rents,
signed by the parties named above]
SCHEDULE A
TO
FIRST AMENDMENT TO ASSIGNMENT OF RENTS
The terms set forth in the following table, as used in the
Existing Assignment,
henceforth shall be deemed to refer to the terms defined in this
Amendment or
(if so indicated) in the Omnibus Agreement as set forth opposite
such terms.
The following term used
in the Mortgage Shall be deemed to refer to
this "Assignment" the Assignment
"Assignee" the Agent, acting in its
capacity as such
for the ratable benefit of the
Lenders
from time to time party to the
Omnibus
Agreement
"Deed of Trust" the Deed of Trust (as defined
in the
Omnibus Agreement)
"Event of Default" an Event of Default (as defined
in the Omnibus
Agreement)
"Leases" the Leases
"Loan Instruments" the Loan Documents (as defined
in the Omnibus Agreement)
"Note" the Notes
"Rents" the Rents
"Trust Estate" the Trust Estate
EXHIBIT A
Legal Description of Trust Estate
5
R#262003.3
[Execution Copy]
CORPORATE GUARANTY
Date: September 2, 1998
TO: The Agent and each of the Lenders from time to time party to
the Omnibus Agreement referred to below
c/o General Electric Capital Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
This Guaranty is issued pursuant to that Omnibus Agreement,
dated the date
hereof (as the same may be amended, supplemented, restated,
extended, renewed,
replaced or otherwise modified and in effect from time to time,
the "Omnibus
Agreement"), by and among the FOUNTAIN POWERBOATS, INC., a North
Carolina
corporation (the "Customer"), the undersigned, Transamerica
Business Credit
Corporation, a Delaware corporation, and General Electric Capital
Corporation,
a New York corporation acting both in its individual corporate
capacity and in
its capacity as agent for the lenders from time to time party to
the Omnibus
Agreement (the "Lenders"). Unless otherwise defined herein,
terms defined in
the Omnibus Agreement are used herein as therein defined.
To induce you to make and/or modify the Loans as
contemplated by the
Omnibus Agreement, but without in any way binding you to do so,
the
undersigned, for good and valuable consideration, the receipt and
sufficiency
of which is hereby acknowledged, do hereby jointly and severally
guarantee to
you, your successors and assigns, the due regular and punctual
payment when due
of the principal of, premium, if any, and interest on the Notes
and of any and
all of the other Obligations (whether consisting of principal,
interest,
premium, rent, late charges, indemnities, an original balance, an
accelerated
balance, liquidated damages, a balance reduced by partial
payment, a deficiency
after sale or other disposition of any leased equipment,
collateral or
security, or any other type of sum of any kind whatsoever) that
the Customer
may owe to you now or at any time hereafter, and do hereby
further jointly and
severally guarantee to you, your successors and assigns, the due,
regular and
punctual performance of any and all non-payment Obligations. The
undersigned
do hereby further jointly and severally guarantee to pay upon
demand all
losses, costs, attorneys' fees and expenses which may be suffered
by you by
reason of Customer's default or default of the undersigned.
One of the undersigned, FOUNTAIN POWERBOAT INDUSTRIES, INC.,
a Nevada
corporation, owns all of the stock of the Customer and therefore
receives a
direct financial benefit as a result of the credit extended by
you to the
Customer. The remaining undersigned guarantor is a wholly owned
subsidiary of
the Customer and likewise shall be directly benefitted as a
result of the
credit extended by you to the Customer. The undersigned
acknowledge that they
are familiar with the financial condition of the Customer and
acknowledge that
you have no obligation to provide the undersigned with
information regarding
the present or future financial condition of the Customer.
This Guaranty is a guaranty of prompt payment and
performance (and not
merely a guaranty of collection). Nothing herein shall require
you to first
seek or exhaust any remedy against the Customer, its successors
and assigns, or
any other Person obligated with respect to the Obligations, or to
first
foreclose, exhaust or otherwise proceed against any Collateral
given in
connection with the Obligations. Each of the undersigned hereby
waives any and
all rights under Sections 26-7 et seq. of the North Carolina
General Statutes
and any similar subsequent law pursuant to which the undersigned
might
otherwise be entitled to require that you pursue collection
against collateral
and/or primary obligors. It is agreed that you may, upon any
breach or default
of the Customer, or at any time thereafter, make demand upon the
undersigned
and receive payment and performance of the Obligations, with or
without notice
or demand for payment or performance by the Customer, its
successors or
assigns, or any other Person. Suit may be brought and maintained
against the
undersigned, at your election, without joinder of the Customer or
any other
Person as parties thereto. The obligations of each signatory to
this Guaranty
shall be joint and several, and the obligations of the
undersigned shall be
joint and several with any other Person who shall guaranty the
payment or
performance of all or any part of the Obligations.
Each of the undersigned agrees that its obligations under
this Guaranty
shall be primary, absolute, continuing and unconditional,
irrespective of and
unaffected by any of the following actions or circumstances
(regardless of any
notice to or consent of the undersigned): (a) the genuineness,
validity,
regularity or enforceability of the Omnibus Agreement, any Note,
any other Loan
Document or any other instrument, agreement or document; (b) any
extension,
renewal, amendment, change, waiver or other modification of any
Loan Document
or any other instrument, agreement or document; (c) the absence
of, or delay
in, any action to enforce any Loan Document, this Guaranty or any
other
instrument, agreement or document; (d) failure or delay by any of
you in
obtaining any other guaranty of the Obligations (including,
without limitation,
your failure to obtain the signature of any other guarantor
hereunder); (e) the
release of, extension of time for payment or performance by, or
any other
indulgence granted to the Customer or any other Person with
respect to the
Obligations by operation of law or otherwise; (f) the existence,
value,
condition, loss, subordination or release (with or without
substitution) of, or
failure to have title to or perfect and maintain a security
interest in, or the
time, place and manner of any sale or other disposition of any
leased
equipment, any collateral or security given in connection with
the Obligations,
or any other impairment (whether intentional or negligent, by
operation of law
or otherwise) of the rights of the undersigned; (g) the
Customer's voluntary or
involuntary bankruptcy, assignment for the benefit of creditors,
reorganization, or similar proceedings affecting the Customer or
any of its
assets; or (h) any other action or circumstances which might
otherwise
constitute a legal or equitable discharge or defense of a surety
or guarantor.
This Guaranty may be terminated upon delivery to each of you
(at your
address for notice provided in or pursuant to the Omnibus
Agreement) of a
written termination notice from the undersigned. However, as to
all
Obligations (whether matured, unmatured, absolute, contingent or
otherwise)
incurred by the Customer prior to your receipt of such written
termination
notice (and regardless of any subsequent amendment, extension or
other
modification which may be made with respect to such Obligations),
this Guaranty
shall nevertheless continue and remain undischarged until all
such Obligations
(together with interest and premium , if any, thereon accruing or
due either
before or after your receipt of such written termination notice,
with respect
to all of which this Guaranty shall continue in full force and
effect
notwithstanding any such termination) are indefeasibly paid and
performed in
full.
Each of the undersigned agrees that this Guaranty shall
remain in full
force and effect or be reinstated (as the case may be) if at any
time payment
or performance of any of the Obligations (or any part thereof) is
rescinded,
reduced or must otherwise be restored or returned by you, all as
though such
payment or performance had not been made. If, by reason of any
bankruptcy,
insolvency or similar laws affecting the rights of creditors, you
shall be
prohibited from exercising any of your rights or remedies against
the Customer
or any other Person or against any property, then, as between you
and the
undersigned, such prohibition shall be of no force and effect,
and you shall
have the right to make demand upon, and receive payment from, the
undersigned
of all amounts and other sums that would be due to you upon a
default with
respect to the Obligations.
Notice of acceptance of this Guaranty and of any default by
the Customer
or any other Person is hereby waived. Presentment, protest,
demand, and notice
of protest, demand and dishonor of any of the Obligations, and
the exercise of
possessory, collection or other remedies for the Obligations, are
hereby
waived. Each of the undersigned warrants that it has adequate
means to obtain
from the Customer on a continuing basis financial data and other
information
regarding the Customer and is not relying upon you to provide any
such data or
other information. Without limiting the foregoing, notice of
adverse change in
the Customer's financial condition or of any other fact which
might materially
increase the risk of the undersigned is also waived. All
settlements,
compromises, accounts stated and agreed balances made in good
faith between the
Customer, its successors or assigns, and you shall be binding
upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the
undersigned by the
Customer or any other obligor for any of the Obligations is
hereby subordinated
in right of payment to the final and indefeasible payment in full
to you of all
Obligations and is hereby assigned to you as a security therefor.
Each of the
undersigned hereby irrevocably and unconditionally waives and
relinquishes all
statutory, contractual, common law, equitable and all other
claims against the
Customer, any other obligor for any of the Obligations, any
collateral
therefor, or any other assets of the Customer or any such other
obligor, for
subrogation, reimbursement, exoneration, contribution,
indemnification, setoff
or other recourse in respect of sums paid or payable to you by
the undersigned
hereunder, and the each of the undersigned hereby further
irrevocably and
unconditionally waives and relinquishes any and all other
benefits which it
might otherwise directly or indirectly receive or be entitled to
receive by
reason of any amounts paid by, or collected or due from, it, the
Customer or
any other obligor for any of the Obligations, or realized from
any of their
respective assets.
Any controversy or claim arising out of or relating to this
Guaranty shall
be determined by arbitration in accordance with the Commercial
Arbitration
Rules of the American Arbitration Association. The number of
arbitrators shall
be three. One arbitrator shall be appointed by the Lenders, one
by the
undersigned and the third arbitrator, who shall serve as chairman
of the
tribunal, shall be appointed by the American Arbitration
Association. The
place of arbitration shall be Charlotte, North Carolina. Any
arbitral award
arising form any arbitration pursuant to this paragraph shall be
final and
binding upon all parties hereto.
Notwithstanding the provisions of preceding paragraph or any
similar
provision contained in any other Loan Document, neither the
commencement or
pendency of, or demand by any party for, any arbitration
proceedings to
determine any controversy or claim arising out of or relating to
this Guaranty
shall preclude the Lenders or the Agent, if an Event of Default
shall have
occurred, from causing the maturity of the Obligations or the
Notes to be
accelerated or enforcing any rights or remedies (including,
without limitation,
foreclosure, sale, liquidation or other rights or remedies) with
respect to any
Collateral, all of which rights and remedies (including, without
limitation,
the right to cause the maturity of the Obligations or the Notes
to be
accelerated) may be exercised if an Event of Default shall have
occurred,
notwithstanding the commencement or pendency of or demand for any
such
proceedings.
This Guaranty is intended by the parties as a final
expression of the
guaranty of the undersigned and is also intended as a complete
and exclusive
statement of the terms thereof. No course of dealing, course of
performance or
trade usage, nor any other evidence of any kind, shall be used to
supplement or
modify any of the terms hereof. Nor are there any conditions to
the full
effectiveness of this Guaranty. This Guaranty and each of its
provisions may
only be waived, modified, varied, released, terminated or
surrendered, in whole
or in part, by a duly authorized written instrument signed the
Lenders. No
failure by you to exercise your rights hereunder shall give rise
to any
estoppel against you, or excuse the undersigned from performing
hereunder.
Your waiver of any right to demand performance hereunder shall
not be a waiver
of any subsequent or other right to demand performance hereunder.
This Guaranty shall bind the undersigned and their
respective successors
and assigns and the benefits thereof shall extend to and include
the Agent, the
Lenders and their respective successors and assigns. In the
event of default
hereunder, you may at any time inspect the records of the
undersigned or, at
your option, each of the undersigned shall furnish you with a
current
independent audit report.
If any provisions of this Guaranty are in conflict with any
applicable
statute, rule or law, then such provisions shall be deemed null
and void to the
extent that they may conflict therewith, but without invalidating
any other
provisions hereof.
Each signatory on behalf of a corporate guarantor warrants
that he had
authority to sign on behalf of such corporation and by so
signing, to bind said
guarantor corporation hereunder.
[Signatures follow on separate pages]
IN WITNESS WHEREOF, this Guaranty is executed the day and
year first above
written.
ATTEST: FOUNTAIN
POWERBOAT
INDUSTRIES,
INC.
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
ATTEST: FOUNTAIN POWER,
INC.
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
R#266438.2
[Execution Copy]
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made this 2nd day of
September, 1998,
("Agreement"), by and between GENERAL ELECTRIC CAPITAL
CORPORATION, a New York
corporation with an address at 0000 Xxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxx
Xxxxxxxx, acting not in its individual capacity but in its
capacity for the
ratable benefit of the Lenders (as hereinafter defined) from time
to time party
to the Omnibus Agreement referred to below (in such capacity, the
"Agent"), and
FOUNTAIN POWERBOAT INDUSTRIES, INC., a corporation organized and
existing under
the laws of the State of Nevada, with its chief executive offices
and principal
place of business located at 0000 Xxxxxxxx'x Xxxxx Xxxx,
Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000 (the "Debtor").
This Agreement is given in connection with the loans
referenced in and
governed by that Omnibus Agreement, dated the date hereof (as the
same may be
amended, supplemented, restated, extended, renewed, replaced or
otherwise
modified and in effect from time to time, the "Omnibus
Agreement"), among
Fountain Powerboats, Inc., a North Carolina corporation (the
"Borrower"),
Fountain Power, Inc., a North Carolina corporation, the Debtor,
General
Electric Capital Corporation, a New York corporation acting in
its individual
corporate capacity (in such capacity, "GECC"), Transamerica
Business Credit
Corporation, a Delaware corporation ("Transamerica" and, together
with GECC and
any other lender from time to time party to the Omnibus
Agreement, the
"Lenders").
WITNESSETH:
WHEREAS, the Borrower is indebted to the respective Lenders
in the
aggregate principal amount of $13,862,847.71, as evidenced by the
Notes (as
such term is defined, and used hereinafter as so defined, in the
Omnibus
Agreement); and
WHEREAS, the Notes are secured by the Deed of Trust (as such
term is
defined, and used hereinafter as so defined, in the Omnibus
Agreement) which
encumbers certain real property located in Beaufort County, North
Carolina and
described in Exhibit A attached hereto and incorporated herein by
reference
(the "Real Property"); and
WHEREAS, as a condition to GECC's modification of the terms
of the GECC
Loan and the Aircraft Loan (as such terms are defined, and used
hereinafter as
so defined, in the Omnibus Agreement) pursuant to the Omnibus
Agreement and
Transamerica's making of the Transamerica Loan (as such term is
defined, and
used hereinafter as so defined, in the Omnibus Agreement)
pursuant to the
Omnibus Agreement, the Lenders have required and the Debtor
agreed to grant to
the Agent the security interests hereinafter set forth. The
Debtor owns all of
the issued and outstanding capital stock of the Borrower and
shall derive
direct financial benefit from the transactions contemplated by
the Omnibus
Agreement.
NOW, THEREFORE, in consideration of the promises herein
contained and of
certain other good and valuable consideration, the receipt and
sufficiency of
which are hereby acknowledged, The Debtor and the Agent hereby
agree as
follows:
1. DEFINITIONS.
Unless otherwise defined in this Agreement, terms defined in
the Omnibus
Agreement are used herein as therein defined.
2. CREATION OF SECURITY INTEREST.
The Debtor hereby gives, grants and assigns to the Agent,
its successors
and assigns forever, for the ratable benefit of the Lenders, a
security
interest in and against any and all of the following property:
(a) Tangible Personal Property. All furniture,
furnishings, machinery,
apparatus, equipment fittings, fixtures and other articles of
tangible personal
property now owned or leased or hereafter acquired by the Debtor,
wherever
located (but specifically including any such property now or
hereafter located
on the Real Property and any additional real property now or
hereafter owned by
the Debtor (the "Additional Property") (the Real Property and the
Additional
Property hereinafter referred to as the "Property"), including
but not limited
to, goods, machinery, tools, equipment (including fire, sprinkler
and alarm
systems; air conditioning, heating, refrigerating, electronic
monitoring,
entertainment, and recreational equipment; window or structural
cleaning rigs;
maintenance equipment; equipment relating to exclusion of vermin
or insects,
removal of dust, refuse or garbage; and all other equipment of
every kind),
elevators, indoor and outdoor furniture (including tables,
chairs, planters,
desks, sofas, shelves, lockers and cabinets), wall beds, wall
safes, furniture,
furnishings, appliances (including ice boxes, refrigerators,
fans, heaters,
stoves, water heaters and incinerators), rugs, carpets and other
floor
coverings, draperies and drapery rods and brackets, awnings,
window shades,
venetian blinds, curtains, lamps, chandeliers, and other lighting
fixtures and
office maintenance and other supplies and the proceeds and
products of all of
the foregoing and all replacements and renewals thereof (the
foregoing being
hereafter referred to as the "Tangible Personal Property").
(b) Inventory. All of the Debtor's inventory now owned or
hereafter
acquired, including but not limited to (i) goods intended for
sale, use or
lease by the Debtor or to be furnished by the Debtor under
contracts of
service, (ii) all raw materials, goods in process, finished
goods, materials
and supplies of every nature used or usable in connection with
the manufacture,
packing, shopping, advertising, selling, leasing or furnishing of
such goods
(specifically including, but not limited to, all molds, metals,
plastics,
upholstery, windscreens, fiberglass, and other components in boat
manufacture),
and any and all items including machinery and equipment used or
consumed in the
operation of the business of the Debtor or which contribute to
the finished
product or to the sale, promotion, and shipment thereof, in which
the Debtor
now or at any time hereafter may have an interest, whether or not
such
inventory is listed on any reports furnished to the Agent from
time to time;
(iii) all inventory whether or not the same is in transit or in
the
constructive, actual, or exclusive occupancy or possession of the
Debtor or is
held by the Debtor or by others for the Receivables (as hereafter
defined),
including, without limitation, all goods covered by purchase
orders, and
contracts with suppliers and all goods billed and held by
suppliers; (iv) all
inventory which may be located on premises of the Debtor or of
any carrier,
forwarding agents, truckers, warehousemen, vendors, selling
agents, or third
parties; (v) all general intangibles relating to or arising out
of inventory;
(vi) all documents evidencing or representing the same, all
documents of
title, all negotiable and non-negotiable warehouse receipts
representing the
same; and (vii) all products and proceeds of the foregoing
(including cash,
accounts receivable, non-cash trade ins, and non-cash-proceeds),
wherever the
foregoing may be located (referred to herein collectively as
"Inventory").
(c) Insurance Policies. All rights in and to all pertinent
present and
future fire and/or hazard insurance policies (including, but not
limited to,
insurance proceeds) covering the Property, any improvements
thereon (the
"Improvements") or the property described in (a) and (b) above.
(d) Awards. All awards made by any public body or decreed
by any court
of competent jurisdiction for a taking or for degradation of
value of the
Property, the Improvements or the property described in (a) above
in any
eminent domain proceeding and all payments made in respect of a
conveyance made
in lieu of any such taking.
(e) Lease Rights and Security Deposits. All of the
Debtor's rights and
interests in and to all present and future leases of the
Property and
Improvements or any part thereof and/or all rental income and/or
security
deposits, whether payable pursuant to any present or future lease
or otherwise
growing out of any occupancy or use of the Property and the
Improvements.
(f) Accounts Receivable and General Intangibles Relating to
Debtor. (i)
All obligations and indebtedness of every kind at any time owing
to the Debtor
from whatever source arising, and including (without limitation)
all accounts,
accounts receivable, tax refunds, refunds, payments or proceeds
under any
insurance policies, instruments, contract rights, chattel paper,
general
intangibles and documents, whether secured or unsecured, now
existing or
hereafter created; (ii) any and all sums and property recovered
by the Debtor
or any trustee, receiver or fiduciary acting on the Debtor's
behalf as a result
of or arising from a fraudulent or preferential transfer or
payment (as
determined under present or future federal or state law or
regulations relating
to bankruptcy, insolvency or other relief or debtors) made by the
Debtor or on
the Debtor's behalf; (iii) all of the Debtor's rights as an
unpaid seller,
including stoppage in transit, replevin, detinue and reclamation;
(iv) all
customer lists and other documents containing names, addresses
and other
information regarding the Debtor's customers, subscribers and
those to whom the
Debtor provides any services, and all supplier lists of the
Debtor; (v) all
books, records, files, computer tapes, programs, software, discs
and other
material or documents relating to the recording, billing or
analyzing of any of
the above; (vi) all now or hereafter existing balances, credits,
deposits
(general or special, time or demand, provisional or final),
accounts and all
other sums credited by, maintained with or due from the Debtor or
any of the
Debtor's affiliates to the Debtor or subject to withdrawal by the
Debtor,
together with all goods, inventory, and merchandise returned by
or reclaimed by
or repossessed from customers wherever such goods, inventory, and
merchandise
are located, and all proceeds thereto; and (vii) all products and
proceeds of
any of the foregoing in any form, including cash, insurance
proceeds,
negotiable instruments and other evidences of indebtedness,
chattel paper,
security agreements and other documents (all of the foregoing
being herein
referred to as "Receivables").
All trade names, symbols, logos, copyrights, patents, patent
applications,
federal trademark registrations, any trademark applications now
or hereafter
filed with respect thereto and any federal trademark
registrations issued or
issuing with respect thereto, and all goodwill associated with
the trademarks
and patents.
All goodwill and all other general intangibles of every kind
and
description now or hereafter owned by the Debtor.
(g) Motor Vehicles. All motor vehicles and trailers now or
hereafter
owned by the Debtor.
(h) Proceeds. All proceeds or sums payable in lieu of or
as compensation
for the loss or damage to any property described in (a) through
(g) above.
(i) Additions, Accessions, Substitutes. Any and all
additions,
attachments, accessories and accessions thereto, any and all
substitutions,
replacements or exchanges therefor, and any and all insurance
and/or other
proceeds thereof.
All of the foregoing personal property is hereinafter
individually and
collectively referred to as the "Collateral".
The foregoing security interest is given to secure the
payment when due of
the principal of, premium, if any, and interest on the Notes and
the payment
and performance of any and all of the other Obligations.
3. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF DEBTOR.
The Debtor hereby represents, warrants and covenants as of
the date hereof
and as of the date of execution of each Collateral Schedule
hereto that:
(a) Debtor is, and will remain, duly organized, existing
and in good
standing under the laws of the State set forth in the first
paragraph of this
Agreement, has its chief executive offices at the location set
forth in such
paragraph, and is, and will remain, duly qualified and licensed
in every
jurisdiction wherever necessary to carry on its business and
operations;
(b) Debtor has adequate power and capacity to enter into,
and to perform
its obligations, under this Agreement, the Omnibus Agreement and
each of the
other Loan Documents to which the Debtor is a party;
(c) This Agreement and the other Loan Documents have been
duly
authorized, executed and delivered by Debtor and constitute
legal, valid and
binding agreements enforceable under all applicable laws in
accordance with
their terms, except to the extent that the enforcement of
remedies may be
limited under applicable bankruptcy and insolvency laws;
(d) No approval, consent or withholding of objections is
required from
any governmental authority or instrumentality with respect to the
entry into,
or performance by, Debtor of any of the Loan Documents, except
such as may have
already been obtained;
(e) The entry into, and performance by, Debtor of the Loan
Documents will
not (i) violate any of the organizational documents of Debtor or
any judgment,
order, law or regulation applicable to Debtor, or (ii) result in
any breach of,
constitute a default under, or result in the creation of any
lien, claim or
encumbrance on any of Debtor's property (except for liens in
favor of the
Agent) pursuant to, any indenture, mortgage, deed of trust, bank
loan, credit
agreement, or other agreement or instrument to which Debtor is a
party;
(f) There are no suits or proceedings pending or threatened
in court or
before any commission, board or other administrative agency
against or
affecting Debtor which could, in the aggregate, have a material
adverse effect
on Debtor, its business or operations, or its ability to perform
its
obligations under the Loan Documents, except those disclosed in
Schedules to
the Omnibus Agreement;
(g) All financial statements delivered to the Lenders in
connection with
the Omnibus Agreement have been prepared in accordance with
generally accepted
accounting principles, and since the date of the most recent
financial
statement, there has been no material adverse change;
(h) The Collateral is not, and will not be, used by Debtor
for personal,
family or household purposes;
(i) The Collateral constituting Tangible Personal Property
and Inventory
is, and will remain, in good condition and repair and Debtor will
not be
negligent in the care and use thereof;
(j) Debtor is, and will remain, the sole and lawful owner,
and in
possession of the Collateral (except for Inventory in transit to
dealers for
sale and except for Inventory sold in the ordinary course of
business), and has
the sole right and lawful authority to grant the security
interest described in
this Agreement; and
(k) The Collateral is, and will remain, free and clear of
all liens,
claims and encumbrances of every kind, nature and description,
except for (i)
liens in favor of the Agent, (ii) liens for taxes not yet due or
for taxes
being contested in good faith and which do not involve, in the
reasonable
judgment of the Agent, any risk of the sale, forfeiture or loss
of any of the
Collateral, and (iii) inchoate materialmen's, mechanic's,
repairmen's and
similar liens arising by operation of law in the normal course of
business for
amounts which are not delinquent (all of such permitted liens
being hereinafter
referred to as "Permitted Liens").
4. COLLATERAL.
(a) Until the declaration of any default hereunder, Debtor
shall remain
in possession of the Collateral; provided, however, that the
Agent shall have
the right to possess (i) any chattel paper or instrument that
constitutes a
part of the Collateral, and (ii) any other Collateral which
because of its
nature may require that the Agent's security interest therein be
perfected by
possession. The Lenders, their respective successors and
assigns, and their
respective agents, shall have the right to examine and inspect
any of the
Collateral at any time during normal business hours. Upon any
request from the
Agent, Debtor shall provide the Agent with notice of the then
current locations
of the Collateral, specifically including the names and addresses
of dealers to
whom Inventory is sent from time to time.
(b) Debtor shall (i) use the Collateral only in its trade
or business,
(ii) maintain all of the Collateral in good condition and working
order, (iii)
use and maintain the Collateral only in compliance with all
applicable laws,
and (iv) keep all of the Collateral free and clear of all liens,
claims and
encumbrances (except for Permitted Liens).
(c) Debtor shall not, without the prior written consent of
the Agent, (i)
part with possession of any of the Collateral (except to dealers
for sale of
Inventory, to the Agent, or for maintenance and repair), (ii)
remove any of the
Collateral from the continental United States, or (iii) sell,
rent, lease,
mortgage, grant a security interest in or otherwise transfer or
encumber
(except for Permitted Liens) any of the Collateral.
Notwithstanding the
foregoing, the Debtor may ship Inventory to dealers outside the
continental
United States for sale, provided payment is made in full prior to
shipment or
is secured by an irrevocable letter of credit from a domestic
bank.
(d) Debtor shall pay promptly when due all taxes, license
fees,
assessments and public and private charges levied or assessed on
any of the
Collateral, on the use thereof, or on this Agreement or any of
the other Loan
Documents. At its option, the Lenders may discharge taxes,
liens, security
interests or other encumbrances at any time levied or placed on
the Collateral
and may pay for the maintenance, insurance and preservation of
the Collateral
or to effect compliance with the terms of this Agreement or any
of the other
Loan Documents. Debtor shall reimburse the Lenders, on demand,
for any and all
costs and expenses incurred by the Agent in connection therewith
and agrees
that such reimbursement obligation shall be secured hereby.
(e) Debtor shall, at all times, keep accurate and complete
records of the
Collateral, and the Agent, its successors and assigns, and their
respective
agents, shall have the right to examine, inspect, and make
extracts from all of
Debtor's books and records relating to the Collateral at any time
during normal
business hours. Such reports shall be in such detail, form and
scope as the
Agent shall require. The Agent and the Agent's agents and
representatives may
at all times have access to, examine and inspect the Inventory,
the Tangible
Personal Property, and all records pertaining thereto. The
Debtor now keeps
and shall continue to keep correct and accurate records itemizing
and
describing the kind, type, quality and quantity of Inventory, the
Debtor's cost
therefor and the selling price thereof, the daily withdrawals
therefrom and the
additions thereto. Any equipment and molding designated by the
Agent shall be
tagged so as to disclose the security interest of the Agent in
such personalty.
(f) If agreed by the parties, the Lenders may, but shall in
no event be
obligated to, accept substitutions and exchanges of property for
property, and
additions to the property, constituting all or any part of the
Collateral. Any
property which may be substituted, exchanged or added as
aforesaid shall
constitute a portion of the Collateral and shall be subject to
the security
interest granted herein. Additions to, reductions or exchanges
of, or
substitutions for, the Collateral, payments on account of any
obligation or
liability secured hereby, increases in the obligations and
liabilities secured
hereby, or the creation of additional obligations and liabilities
secured
hereby, may from time to time be made or occur without affecting
the provisions
of this Agreement or the provisions of any obligation or
liability which this
Agreement secures.
(g) Any third person at any time and from time to time
holding all or any
portion of the Collateral shall be deemed to, and shall, hold the
Collateral as
the agent of, and as pledge holder for, the Agent. At any time
and from time
to time, the Agent may give notice to any third person holding
all or any
portion of the Collateral that such third person is holding the
Collateral as
the agent of, and as pledge holder for, the Agent.
5. INSURANCE.
The Collateral shall at all times be held at Debtor's risk,
and Debtor
shall keep it insured against loss or damage by fire and extended
coverage
perils, theft, burglary, and for any or all Collateral which are
vehicles, for
risk of loss by collision, and where requested by the Agent
against other risks
as required thereby, for the full replacement value thereof, with
companies, in
amounts and under policies acceptable to Agent. Debtor shall, if
the Agent so
requires, deliver to the Agent policies of certificates of
insurance evidencing
such coverage. Each policy shall name the Agent as loss payee
thereunder,
shall provide for coverage to the Agent regardless of the breach
by Debtor of
any warranty or representation made therein, shall not be subject
to co-
insurance, and shall provide for thirty (30) days written notice
to the Agent
of the cancellation or material modification thereof (unless such
insurance
coverage is not obtainable). Debtor hereby appoints the Agent as
its attorney
in fact to make proof of loss, claim for insurance and
adjustments with
insurers, and to execute or endorse all documents, checks or
drafts in
connection with payments made as a result of any such insurance
policies.
Proceeds of insurance shall be applied, at the option of the
Required Lenders,
to repair or replace the Collateral or to reduce any of the
Obligations.
6. REPORTS.
(a) Debtor shall promptly notify the Agent in the event of
(i) any change
in the name of Debtor, (ii) any relocation of its chief executive
offices,
(iii) any relocation of any of the Collateral, (iv) any of the
Collateral being
lost, stolen, missing, destroyed, materially damaged or worn out,
or (v) any
lien, claim or encumbrance attaching or being made against any of
the
Collateral other than Permitted Liens.
(b) Debtor agrees to furnish its annual financial
statements and such
interim statements as the Lenders may require in form
satisfactory to the
Lenders and as required in the Omnibus Agreement. Any and all
financial
statements submitted and to be submitted to the Lenders have and
will have been
prepared on a basis of generally accepted accounting principles,
and are and
will be complete and correct and fairly present Debtor's
financial condition as
at the date thereof. The Lenders may at any reasonable time
examine the books
and records of Debtor and make copies thereof.
7. FURTHER ASSURANCES.
(a) Debtor shall, upon request of the Agent, furnish to the
Agent such
further information, execute and deliver to the Agent such
documents and
instruments (including, without limitation, Uniform Commercial
Code financing
statements) and do such other acts and things, as the Agent may
at any time
reasonably request relating to the perfection or protection of
the security
interest created by this Agreement or for the purpose of carrying
out the
intent of this Agreement. Without limiting the foregoing, Debtor
shall
cooperate and do all acts deemed necessary or advisable by the
Agent to
continue in the Agent a perfected first security interest in the
Collateral,
and shall obtain and furnish to the Agent any subordinations,
releases,
landlord, lessor, or mortgagee waivers, and similar documents as
may be from
time to time requested by, and which are in form and substance
satisfactory to,
the Agent.
The Debtor shall provide to the Lenders, a schedule of all
Receivables,
Tangible Personal Property, and Inventory to the extent required
by the Omnibus
Agreement. The Debtor shall also notify the Agent of any patent
and trademark
applications filed each fiscal quarter and take such measures as
the Agent may
require to confirm the assignment and to perfect the security
interests granted
hereby.
If any Inventory is in the possession or control of any of
the Debtor's
agents or processors, the Debtor shall notify them of the Agent's
security
interest therein, and upon the Agent's request, instruct them to
hold all such
Inventory for the Agent's account and subject them to the Agent's
instructions.
If at any time the Agent determines that the Agent's
security interest in
any boat constituting a portion of Inventory is required to be
perfected by the
filing of a marine vessel mortgage, the Debtor agrees to execute
such a vessel
mortgage (in form and substance satisfactory to the Agent) and
cause such
mortgage to be filed in appropriate governmental offices so as to
perfect the
Agent's security interests in such vessel.
(b) Debtor hereby grants to the Agent the power to sign
Debtor's name and
generally to act on behalf of Debtor to execute and file
applications for
title, transfers of title, financing statements, notices of lien
and other
documents pertaining to any or all of the Collateral. Debtor
shall, if any
certificate of title be required or permitted by law for any of
the Collateral,
obtain such certificate showing the lien hereof with respect to
the Collateral
and promptly deliver same to the Agent.
(c) Debtor shall indemnify and defend the Agent and the
Lenders, and
their respective successors and assigns, and their respective
directors,
officers and employees, from and against any and all claims,
actions and suits
(including, without limitation, related attorneys' fees) of any
kind, nature or
description whatsoever arising, directly or indirectly, in
connection with any
of the Collateral.
(d) The Agent shall have no duty or care with respect to
the Collateral,
except that the Agent shall exercise reasonable care with respect
to Collateral
in its custody, but shall be deemed to have exercised reasonable
care if such
property is accorded treatment substantially equal to that which
it accords its
own property, or if it takes such action with respect to the
Collateral as the
Debtor shall request in writing. No failure to comply with any
such request
nor any omission to do any such act requested by the Debtor shall
be deemed a
failure to exercise reasonable care, nor shall the Agent's
failure to take
steps to preserve rights against any parties or property be
deemed a failure to
have exercised reasonable care with respect to Collateral in its
custody.
8. EVENTS OF DEFAULT.
Debtor shall be in default under this Agreement and each of
the other Loan
Documents upon the occurrence of any of the following "Event(s)
of Default":
(a) Either the Borrower or the Debtor fails to pay any
installment or
other amount due or coming due under any of the Loan Documents to
which it is a
party within ten (10) days after its due date;
(b) Any attempt by Debtor, without the prior written
consent of the
Required Lenders, to sell, rent, lease, mortgage, grant a
security interest in,
or otherwise transfer or encumber (except for Permitted Liens and
except as
elsewhere permitted herein) any of the Collateral;
(c) Debtor fails to procure, or maintain in effect at all
times, any of
the insurance on the Collateral in accordance with Section 5 of
this Agreement;
(d) Debtor or the Borrower breaches any of its other
obligations under
any of the Loan Documents and fails to cure the same within
thirty (30) days
after written notice thereof from the Agent or any Lender;
(e) Any warranty, representation or statement made by
Debtor or the
Borrower in any of the Loan Documents or otherwise in connection
with any of
the Obligations shall be false or misleading in any material
respect;
(f) Any of the Collateral being subjected to, or being
threatened with,
attachment, execution, levy, seizure or confiscation in any legal
proceeding or
otherwise;
(g) The occurrence of an "Event of Default" under the
Omnibus Agreement
or any other Loan Document; or any default by Debtor or the
Borrower under any
other agreement between Debtor or the Borrower and any Lender
after the passage
of any applicable cure period set out in such agreement;
(h) Any dissolution, termination of existence, merger,
consolidation,
change in controlling ownership, insolvency, or business failure
of Debtor, the
Borrower or any guarantor or other obligor for any of the
Obligations
(collectively "Guarantor"), except as permitted in the Omnibus
Agreement, or if
Debtor or any Guarantor is a natural person, any death or
incompetency of
Debtor or such Guarantor;
(i) The appointment of a receiver for all or any part of
the property of
Debtor, the Borrower or any Guarantor, or any assignment for the
benefit of
creditors by Debtor, the Borrower or any Guarantor; or
(j) The filing of a petition by Debtor, the Borrower or any
Guarantor
under any bankruptcy, insolvency or similar law, or the filing of
any such
petition against Debtor, the Borrower or any Guarantor if the
same is not
dismissed within thirty (30) days of such filing.
9. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an Event of Default under this
Agreement, the
Required Lenders, at their option, may declare any or all of the
Obligations,
including without limitation the Notes, to be immediately due and
payable,
without demand or notice to Debtor, the Borrower, or any
Guarantor. The
obligations and liabilities accelerated thereby shall bear
interest (both
before and after any judgment) until paid in full at the lower of
eighteen
percent (18%) per annum or the maximum rate not prohibited by
applicable law.
(b) Upon such declaration of default, the Agent shall have
all of the
rights and remedies of a secured party under the Uniform
Commercial Code, and
under any other applicable law. Without limiting the foregoing,
the Agent
shall have the right to (i) notify any account debtor of Debtor
or any obligor
on any instrument which constitutes part of the Collateral to
make payment to
the Agent, (ii) with or without legal process, enter any premises
where the
Collateral may be and take possession and/or remove said
Collateral from said
premises, (iii) sell the Collateral at public or private sale, in
whole or in
part, and have the right to bid and purchase at said sale, (iv)
lease or
otherwise dispose of all or part of the Collateral, applying
proceeds therefrom
to the obligations then in default, and/or (v) use, without
charge or liability
to the Agent, any of the Debtor's labels, trade names,
trademarks, patents,
patent applications, licenses, certificates of authority,
advertising
materials, or any of the Debtor's other properties or interests
in properties
of similar nature in advertising for sale, selling or otherwise
realizing upon
any of the Collateral. If requested by the Agent, Debtor shall
promptly
assemble the Collateral and make it available to the Agent at a
place to be
designated by the Agent which is reasonably convenient to both
parties. The
Agent may also render any or all of the Collateral unusable at
the Debtor's
premises and may dispose of such Collateral on such premises
without liability
for rent or costs. Any notice which the Agent is required to
give to Debtor
under the Uniform Commercial Code of the time and place of any
public sale or
the time after which any private sale or other intended
disposition of the
Collateral is to be made shall be deemed to constitute reasonable
notice if
such notice is given to the last known address of Debtor at least
five (5) days
prior to such action.
(c) Proceeds from any sale or lease or other disposition
shall be
applied: first, to all costs of repossession, storage, and
disposition
including without limitation attorneys', appraisers', and
auctioneers' fees;
second, to discharge the Obligations; and lastly, to Debtor, if
there exists
any surplus. Debtor and the Borrower (as the case may be) shall
remain fully
liable for any deficiency.
(d) In the event this Agreement, any Note or any other Loan
Documents to
which the Debtor is a party are placed in the hands of an
attorney for
collection of money due or to become due or to obtain performance
of any
provision thereof, Debtor agrees to pay all reasonable attorneys'
fees incurred
by the Agent or any Lender at such attorneys' standard hourly
rates for time in
fact incurred (without regard to any statutory presumption), and
further agrees
that payment of such fees is secured hereunder. Debtor and the
Agent agree
that such fees to the extent not in excess of fifteen percent
(15%) of subject
amount owing after default (if permitted by law, or such lesser
sum as may
otherwise be permitted by law) shall be deemed reasonable.
(e) The Agent's rights and remedies hereunder or otherwise
arising are
cumulative and may be exercised singularly or concurrently.
Neither the
failure nor any delay on the part of the Agent to exercise any
right, power or
privilege hereunder shall operate as a waiver thereof, nor shall
any single or
partial exercise of any right, power or privilege preclude any
other or further
exercise thereof or the exercise of any other right, power or
privilege. The
Agent shall not be deemed to have waived any of its rights
hereunder or under
any other agreement, instrument or paper signed by Debtor unless
such waiver be
in writing and signed by the Required Lenders. A waiver on any
one occasion
shall not be construed as a bar to or waiver of any right or
remedy on any
future occasion.
(f) Any controversy or claim arising out of or relating to
this Master
Security Agreement shall be determined by arbitration in
accordance with the
Commercial Arbitration Rules of the American Arbitration
Association. The
number of arbitrators shall be three. One arbitrator shall be
appointed by
each of the parties and the third arbitrator, who shall serve as
chairman of
the tribunal, shall be appointed by the American Arbitration
Association. The
place of arbitration shall be Charlotte, North Carolina. Any
arbitral award
arising form any arbitration pursuant to this paragraph shall be
final and
binding upon all parties hereto. Notwithstanding the foregoing
or any similar
provision contained in any other Loan Document, neither the
commencement or
pendency of, or demand by any party for, any arbitration
proceedings to
determine any controversy or claim arising out of or relating to
this Agreement
or any other Loan Document shall preclude the Lenders or the
Agent, if an Event
of Default shall have occurred, from causing the maturity of the
Obligations or
the Notes to be accelerated or enforcing any rights or remedies
(including,
without limitation, foreclosure, sale, liquidation or other
rights or remedies)
with respect to any Collateral, all of which rights and remedies
(including,
without limitation, the right to cause the maturity of the
Obligations or the
Notes to be accelerated) may be exercised if an Event of Default
shall have
occurred, notwithstanding the commencement or pendency of or
demand for any
such proceedings.
10. INVENTORY AND RECEIVABLES COVENANTS.
The following are covenants applicable to Inventory and
Receivables
generally:
(a) The Agent's security interest in the Inventory will
continue through
all stages of manufacture and will, without further act, attach
to raw
materials, to goods in process, to finished goods, to all
products of the
foregoing, to the Receivables (as defined in the Agreement) and
all other
proceeds resulting from the sale or other disposition thereof and
to all such
Inventory that may be rejected, returned, reclaimed, repossessed
or stopped in
transit.
(b) Inventory shall be kept only at the address identified
on the first
page of this Security Agreement, and shall not be removed
therefrom except for
purposes of sale and promotion in the regular course of the
Debtor's business.
(c) No Inventory has been or shall be consigned without the
Required
Lenders' prior written consent; no Inventory is or shall ever be
stored with a
bailee, warehouseman or similar party without the Required
Lenders' prior
written consent, and in such event the Debtor will, concurrently
with delivery
to such party, cause any such party to issue and deliver to the
Agent, in form
acceptable to the Required Lenders, warehouse receipts in the
Agent's name
evidencing the storage of such Inventory.
(d) Until the occurrence of an Event of Default, the Debtor
may, subject
to the provisions of this Agreement, sell finished Inventory, but
only in the
ordinary course of the Debtor's business; however, in no event
shall the Debtor
make any sale of Inventory which would cause a breach of the
Debtor's
warranties, representations and covenants under this Agreement.
A sale of
Inventory in the ordinary course of the Debtor's business does
not include a
transfer in partial or total satisfaction of a debt owing by the
Debtor. The
Debtor agrees to report the receipt or creation of all sales or
other
dispositions of Inventory to the Agent. The Debtor hereby agrees
to execute
and deliver to the Agent, in form satisfactory to the Agent, a
formal
assignment or schedule of accounts receivable or other proceeds
resulting from
the sale or other disposition of Inventory but in the absence of
such
assignment or schedule this Agreement shall constitute such
assignment or
schedule and the grant of a security interest therein.
(e) The Agent shall not, under any circumstances, be liable
for any error
or omission or delay of any kind occurring in the settlement,
collection or
payment of any Receivables or any instrument received in payment
thereof or for
any damage resulting therefrom. The Agent shall not be liable
for or
prejudiced by any loss, depreciation or other damage to
Receivables or other
Collateral unless caused by the Agent's willful and malicious
act, and the
Agent shall have no duty to take any action to preserve or
collect any
Receivable or other Collateral.
(f) The Agent may notify customers at any time that
Receivables have been
assigned to the Agent and collect them directly in the Agent's
own name but,
unless and until the Agent does so or gives the Debtor other
instructions, the
Debtor shall, at its cost and expense, collect and otherwise hold
for the Agent
as trustee of an express trust for the Agent's benefit all
amounts of unpaid
Receivables, and, if so requested by the Agent, shall not
commingle such
collections with the Debtor's own funds or use the same for any
purpose.
(g) As to any Receivable forming part of the Collateral,
unless the
Required Lenders otherwise consent in writing: (i) all
Receivables are and will
be bona fide existing obligations of the customer named therein,
for a fixed
sum as set forth in the invoice relating thereto, created by the
sale and
actual delivery of goods or other property or the rendition of
services or the
furnishing of other good and sufficient consideration to the
customer in the
regular course of business; (ii) all unpaid balances appearing on
the Debtor's
books and records and any invoice or statement delivered or to be
delivered to
the Agent relating to any Receivable are and shall be true and
correct in all
respects; (iii) all shipping or delivery receipts and other
documents furnished
or to be furnished to the Agent in connection therewith are all
and will be
genuine, complete, correct, valid and enforceable in accordance
with the
Debtor's terms; and (vi) no Receivable has arisen or shall arise
out of a
contract or purchase order containing provisions prohibiting
assignment thereof
or the creation of a security interest therein and the Debtor has
not received
and shall not accept any note, or other instrument with respect
to any
Receivable or in payment thereof which is not assigned and
delivered to the
Agent immediately.
(h) To facilitate the maintenance of the Agent's records,
the Debtor
shall: (i) hold in trust for the Agent's benefit all items
constituting proof
of shipment or delivery of all goods sold and services rendered
together with
copies of all of the Debtor's invoices to customers; and (ii)
furnish the Agent
promptly with copies of such information as the Agent may
reasonable require.
The Debtor's billing of customers on such invoices or otherwise
shall be
conclusive evidence of the assignment to the Agent of the
Receivables
represented thereby, whether or not the Debtor executes any other
document.
The items to be provided under this paragraph are to be in form
satisfactory to
the Agent and are executed and delivered to the Agent from time
to time solely
for the Agent's convenience in maintaining records of the
Collateral; the
Debtor's failure to give any of such items to the Agent shall not
affect,
terminate, modify or otherwise limit the Agent's lien or security
interest in
the Collateral.
11. MISCELLANEOUS.
(a) This Agreement, the Notes and/or any of the other Loan
Documents may
be assigned, in whole or in part, by the Lenders without notice
to Debtor, and
Debtor hereby waives any defense, counterclaim or cross-complaint
by Debtor
against any assignee, agreeing that the Lenders shall be solely
responsible
therefor.
(b) All notices to be given in connection with this
Agreement shall be in
writing, shall be addressed to the parties at their respective
addresses set
forth hereinabove (unless and until a different address may be
specified in a
written notice to the other party), and shall be deemed given
when given in the
manner prescribed by the Deed of Trust.
(c) The Agent may correct patent errors herein and fill in
all blanks
herein or in any Collateral Schedule consistent with the
agreement of the
parties.
(d) Time is of the essence hereof. This Agreement shall be
binding,
jointly and severally, upon all parties described as the "Debtor"
and their
respective heirs, executors, representatives, successors and
assigns, and shall
inure to the benefit of the Agent, its successors and assigns.
(e) This Agreement and the other Loan Documents constitute
the entire
agreement between the parties with respect to the subject matter
hereof and
supersede all prior understandings (whether written, verbal or
implied) with
respect thereto. This Agreement shall not be changed or
terminated orally or
by course of conduct, but only by a writing signed by both
parties hereto.
Section headings contained in this Agreement have been included
for convenience
only, and shall not affect the construction or interpretation
hereof.
(f) In the event of any inconsistency between this
Agreement and the
Omnibus Agreement, the Omnibus Agreement shall be controlling.
(g) This Agreement shall continue in full force and effect
until all of
the Obligations have been indefeasibly paid in full to the
Lenders. This
Agreement shall automatically be reinstated in the event that any
Lender is
ever required to return or restore the payment of all or any
portion of the
Obligations (all as though such payment had never been made).
[Signatures follow on separate pages]
IN WITNESS WHEREOF, Debtor and the Agent, intending to be
legally bound
hereby, have duly executed this Agreement in one or more
counterparts, each of
which shall be deemed to be an original, as of the day and year
first
aforesaid.
THE DEBTOR:
ATTEST: FOUNTAIN
POWERBOAT
INDUSTRIES,
INC.
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
[This is a signature page to the Security Agreement,
signed by the party named above]
[This page intentionally left blank]
[Signatures continued from preceding page]
THE AGENT:
GENERAL
ELECTRIC CAPITAL
CORPORATION, as Agent
By:
Name:
Title:
[This is a signature page to the Security Agreement,
signed by the party named above]
EXHIBIT A
Legal Description
3
R#262023.5
[Execution Copy]
COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS AND RELATED APPLICATIONS
THIS COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND
RELATED APPLICATIONS (this "Assignment") is made this 2nd day of
September,
1998, by and
from : FOUNTAIN POWERBOATS, INC., a North Carolina corporation
(the
"Assignor"),
to: GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, acting
in its capacity as agent (in such capacity, the "Agent") for
the
ratable benefit of the lenders from time to time party to
that
certain Omnibus Agreement, dated September 2, 1998 (as the
same may
be amended, supplemented, restated, extended, renewed,
replaced or
otherwise modified and in effect from time to time, the
"Omnibus
Agreement"), by and among the Assignor, Fountain Powerboat
Industries, Inc., a Nevada corporation, Fountain Power,
Inc., a North
Carolina corporation, General Electric Capital Corporation,
a New
York corporation acting in its individual corporate
capacity,
Transamerica Business Credit Corporation, a Delaware
corporation, and
the Agent.
WHEREAS, the Omnibus Agreement requires Assignor to submit
to Agent, on a
quarterly basis, a document confirming the Security Interest of
Agent, FOR THE
RATABLE BENEFIT OF THE LENDERS, in all patents and trademarks
with respect to
which Assignor has filed an application or an assignment
subsequent to the date
of the last such document so submitted to the Agent; and
WHEREAS, Assignor has filed federal trademark registration
applications
and/or received trademark applications or registrations by
assignment with
respect to the trademarks listed on Schedule A (collectively, the
"Trademarks"); and
WHEREAS, the parties hereto desire to confirm and perfect
the security
interest (the "Security Interest") granted to Agent for the
ratable benefit of
the Lenders in the Trademarks and all patents and other
trademarks of the
Assignor, in accordance with the Omnibus Agreement;
NOW, THEREFORE, subject to the terms, conditions and
limitations set forth
in the Omnibus Agreement, and in consideration of the mutual
covenants,
warranties and promises set forth in the Omnibus Agreement, and
other good and
valuable consideration, the full receipt and sufficiency of which
are hereby
acknowledged, Assignor hereby grants and conveys unto Agent, for
the ratable
benefit of the Lenders, a first lien Security Interest in and to:
(i) all
trademarks, service marks, copyrights, patents and other
intellectual property
now owned or hereafter acquired by the Assignor, including,
without limitation,
the Trademarks (collectively, the "Intellectual Property"); (ii)
any federal,
state or foreign applications filed with respect to the
Intellectual Property;
(iii) any federal, state or foreign registrations issued or
issuing with
respect to the Intellectual Property; (iv) all proceeds of the
Intellectual
Property, including, but not limited to, any and all royalties
and any claims
and demands arising out of any infringement of the Intellectual
Property,
including the right to settle disputes concerning such claims and
demands; and
(v) all goodwill associated with the Intellectual Property, such
grant being
hereby effected for the purposes and subject to the terms,
conditions and
limitations set forth in the Omnibus Agreement.
Assignor hereby appoints the Agent, with full power of
substitution, to
file and record this Collateral Assignment of Security Interest
in Patents,
Trademarks and Related Applications, to transact all business in
the United
States Patent and Trademark Office in connection therewith, to
receive any
confirmatory documents relating thereto, and to take any and all
action before
the Patent and Trademark Office to give effect to this Collateral
Assignment of
Security Interest in Patents, Trademarks and Related Applications
and to the
Omnibus Agreement referred to herein, all for the ratable benefit
of the
Lenders.
[Signature follows on a separate page]
IN WITNESS WHEREOF, Assignor has duly executed this
Collateral Assignment
of Security Interest in Patents, Trademarks and Related
Applications as of the
day and year first above written.
ATTEST: FOUNTAIN POWERBOATS, INC., a
North Carolina corporation
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboats, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of August,
1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
SCHEDULE A
Assigned Trademarks
Registration No. Xxxx
1,604,523 FOUNTAIN
1,606,329 Miscellaneous
Design
1
R#262076.3
[Execution Copy]
ASSIGNMENT OF
COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS AND RELATED APPLICATIONS
THIS ASSIGNMENT (this "Assignment") is made this 2nd day of
September,
1998, by and
from : GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, acting
in its individual corporate capacity (in such capacity,
"GECC")
to: GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, acting
in its capacity as agent (in such capacity, the "Agent") for
the
ratable benefit of the lenders from time to time party to
that
certain Omnibus Agreement, dated September 2, 1998 (as the
same may
be amended, supplemented, restated, extended, renewed,
replaced or
otherwise modified and in effect from time to time, the
"Omnibus
Agreement"), by and among Fountain Powerboats, Inc., a North
Carolina
corporation ("Fountain"), Fountain Powerboat Industries,
Inc., a
Nevada corporation, Fountain Power, Inc., a North Carolina
corporation, Transamerica Business Credit Corporation, a
Delaware
corporation, GECC and the Agent.
WHEREAS, Fountain has heretofore executed and delivered to
GECC a
Collateral Assignment of Security Interest in Patents, Trademarks
and Related
Applications, dated December 31, 1996 which has been filed with
the United
States Patent and Trademark Office at Reel 1541, Page 374 (the
"Collateral
Assignment"); and
WHEREAS, pursuant to the Omnibus Agreement, GECC has agreed
to assign to
the Agent all of its right, title and interest in and to the
Collateral
Assignment and in and to the Security Interest (as such term is
defined in the
Collateral Assignment), to be held by the Agent, for the ratable
benefit of the
Lenders, as security for the Obligations (as such term is
defined, and used
herein as so defined, in the Omnibus Agreement) from time to time
owing to the
lenders from time to time party to the Omnibus Agreement (the
"Lenders"); and
WHEREAS, Fountain has agreed that all of the assignee's
right, title and
interest in and to the Collateral Assignment and the Security
Interest shall be
so held by the Agent, for the ratable benefit of the Lenders, as
security for
the Obligations, and Fountain joins in this Assignment to confirm
such
agreement.
NOW, THEREFORE, in consideration of the premises and for
other good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, GECC hereby assigns, transfers and conveys to the
Agent all of
GECC's right, title and interest in, to and under the Collateral
Assignment and
the Security Interest, which the Agent shall and hereby agrees to
hold for the
ratable benefit of the Lenders as security for the Obligations.
Fountain hereby agrees that the Collateral Assignment and
the Security
Interest shall secure any and all of the Obligations from time to
time owing to
the Lenders. To confirm the same, Fountain hereby further agrees
that, subject
to the terms, conditions and limitations set forth in the Omnibus
Agreement and
the other Loan Documents (as defined in the Omnibus Agreement),
and in
consideration of the mutual covenants, warranties and promises
set forth in the
Omnibus Agreement, and other good and valuable consideration, the
full receipt
and sufficiency of which are hereby acknowledged, Fountain hereby
grants and
conveys unto Agent, for the ratable benefit of the Lenders, a
first lien
security interest in and to the trademarks identified in the
Collateral
Assignment (the "Trademarks"), any trademark applications filed
with respect
thereto and any federal trademark registrations issued or issuing
with respect
thereto, and all goodwill associated with the Trademarks, such
grant being
hereby effected for the purposes and subject to the terms,
conditions and
limitations set forth in the Omnibus Agreement.
GECC and Fountain hereby appoint General Electric Capital
Corporation, in
its capacity as Agent, for the ratable benefit of the Lenders,
with full power
of substitution, to file and record this Assignment, to transact
all business
in the United States Patent and Trademark Office in connection
with this
Assignment and the Collateral Assignment, to receive any
confirmatory documents
relating thereto, and to take any and all action before the
Patent and
Trademark Office to give effect to this Assignment, to the
Collateral
Assignment and to the Omnibus Agreement.
[Signatures follow on separate pages]
IN WITNESS WHEREOF, the parties have duly executed this
Assignment as of
the day of and year first above written.
GECC AND THE AGENT:
ATTEST: GENERAL ELECTRIC CAPITAL
CORPORATION,
a New York corporation,
individually and as Agent
By:
Secretary Name:
Title:
[CORPORATE SEAL]
STATE OF ______________
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
State of ____________________, do hereby certify that
______________________________ personally came before me this day
and
acknowledged that [s]he is the _________ Secretary of General
Electric Capital
Corporation, a New York corporation, and that by authority duly
given and as
the act of the corporation, the foregoing instrument was signed
in its name by
its _____ President, sealed with its corporate seal and attested
by
himself/herself as its _________ Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the Assignment of Collateral
Assignment
of Security Interest in Patents, Trademarks and Related
Applications,
signed by the parties named above]
[Signatures continued from preceding page]
FOUNTAIN:
ATTEST: FOUNTAIN POWERBOATS, INC., a
North Carolina corporation
By:
Secretary Name: Xxxxxxxx X.
Xxxxxxxx, Xx.
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboats, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of
August, 1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
[This is a signature page to the Assignment of Collateral
Assignment
of Security Interest in Patents, Trademarks and Related
Applications,
signed by the parties named above]
3
R#266433.2
[Execution Copy]
COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS AND RELATED APPLICATIONS
THIS COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND
RELATED APPLICATIONS (this "Assignment") is made this 2nd day of
September,
1998, by and
from : FOUNTAIN POWERBOAT INDUSTRIES, INC., a Nevada
corporation (the
"Assignor"),
to: GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, acting
in its capacity as agent (in such capacity, the "Agent") for
the
ratable benefit of the lenders from time to time party to
that
certain Omnibus Agreement, dated September 2, 1998 (as the
same may
be amended, supplemented, restated, extended, renewed,
replaced or
otherwise modified and in effect from time to time, the
"Omnibus
Agreement"), by and among the Assignor, Fountain Powerboats,
Inc., a
North Carolina corporation, Fountain Power, Inc., a North
Carolina
corporation, General Electric Capital Corporation, a New
York
corporation acting in its individual corporate capacity,
Transamerica
Business Credit Corporation, a Delaware corporation, and the
Agent.
WHEREAS, the Omnibus Agreement requires Assignor to submit
to Agent, on a
quarterly basis, a document confirming the Security Interest of
Agent, FOR THE
RATABLE BENEFIT OF THE LENDERS, in all patents and trademarks
with respect to
which Assignor has filed an application or an assignment
subsequent to the date
of the last such document so submitted to the Agent; and
WHEREAS, Assignor has filed federal trademark registration
applications
and/or received trademark applications or registrations by
assignment with
respect to the trademarks listed on Schedule A (collectively, the
"Trademarks"); and
WHEREAS, the parties hereto desire to confirm and perfect
the security
interest (the "Security Interest") granted to Agent for the
ratable benefit of
the Lenders in the Trademarks and all patents and other
trademarks of the
Assignor, in accordance with the Omnibus Agreement;
NOW, THEREFORE, subject to the terms, conditions and
limitations set forth
in the Omnibus Agreement, and in consideration of the mutual
covenants,
warranties and promises set forth in the Omnibus Agreement, and
other good and
valuable consideration, the full receipt and sufficiency of which
are hereby
acknowledged, Assignor hereby grants and conveys unto Agent, for
the ratable
benefit of the Lenders, a first lien Security Interest in and to:
(i) all
trademarks, service marks, copyrights, patents and other
intellectual property
now owned or hereafter acquired by the Assignor, including,
without limitation,
the Trademarks (collectively, the "Intellectual Property"); (ii)
any federal,
state or foreign applications filed with respect to the
Intellectual Property;
(iii) any federal, state or foreign registrations issued or
issuing with
respect to the Intellectual Property; (iv) all proceeds of the
Intellectual
Property, including, but not limited to, any and all royalties
and any claims
and demands arising out of any infringement of the Intellectual
Property,
including the right to settle disputes concerning such claims and
demands; and
(v) all goodwill associated with the Intellectual Property, such
grant being
hereby effected for the purposes and subject to the terms,
conditions and
limitations set forth in the Omnibus Agreement.
Assignor hereby appoints the Agent, with full power of
substitution, to
file and record this Collateral Assignment of Security Interest
in Patents,
Trademarks and Related Applications, to transact all business in
the United
States Patent and Trademark Office in connection therewith, to
receive any
confirmatory documents relating thereto, and to take any and all
action before
the Patent and Trademark Office to give effect to this Collateral
Assignment of
Security Interest in Patents, Trademarks and Related Applications
and to the
Omnibus Agreement referred to herein, all for the ratable benefit
of the
Lenders.
[Signature follows on a separate page]
IN WITNESS WHEREOF, Assignor has duly executed this
Collateral Assignment
of Security Interest in Patents, Trademarks and Related
Applications as of the
day and year first above written.
ATTEST: FOUNTAIN POWERBOAT INDUSTRIES,
INC., a
Nevada corporation
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Powerboat Industries, Inc., a Nevada
corporation, and
that by authority duly given and as the act of the corporation,
the foregoing
instrument was signed in its name by its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of August,
1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
SCHEDULE A
Assigned Trademarks
None
3
R#266436.2
[Execution Copy]
COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS AND RELATED APPLICATIONS
THIS COLLATERAL ASSIGNMENT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND
RELATED APPLICATIONS (this "Assignment") is made this 2nd day of
September,
1998, by and
from : FOUNTAIN POWER, INC., a North Carolina corporation (the
"Assignor"),
to: GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, acting
in its capacity as agent (in such capacity, the "Agent") for
the
ratable benefit of the lenders from time to time party to
that
certain Omnibus Agreement, dated September 2, 1998 (as the
same may
be amended, supplemented, restated, extended, renewed,
replaced or
otherwise modified and in effect from time to time, the
"Omnibus
Agreement"), by and among the Assignor, Fountain Powerboats,
Inc., a
North Carolina corporation, Fountain Powerboat Industries,
Inc., a
Nevada corporation, General Electric Capital Corporation, a
New York
corporation acting in its individual corporate capacity,
Transamerica
Business Credit Corporation, a Delaware corporation, and the
Agent.
WHEREAS, the Omnibus Agreement requires Assignor to submit
to Agent, on a
quarterly basis, a document confirming the Security Interest of
Agent, FOR THE
RATABLE BENEFIT OF THE LENDERS, in all patents and trademarks
with respect to
which Assignor has filed an application or an assignment
subsequent to the date
of the last such document so submitted to the Agent; and
WHEREAS, Assignor has filed federal trademark registration
applications
and/or received trademark applications or registrations by
assignment with
respect to the trademarks listed on Schedule A (collectively, the
"Trademarks"); and
WHEREAS, the parties hereto desire to confirm and perfect
the security
interest (the "Security Interest") granted to Agent for the
ratable benefit of
the Lenders in the Trademarks and all patents and other
trademarks of the
Assignor, in accordance with the Omnibus Agreement;
NOW, THEREFORE, subject to the terms, conditions and
limitations set forth
in the Omnibus Agreement, and in consideration of the mutual
covenants,
warranties and promises set forth in the Omnibus Agreement, and
other good and
valuable consideration, the full receipt and sufficiency of which
are hereby
acknowledged, Assignor hereby grants and conveys unto Agent, for
the ratable
benefit of the Lenders, a first lien Security Interest in and to:
(i) all
trademarks, service marks, copyrights, patents and other
intellectual property
now owned or hereafter acquired by the Assignor, including,
without limitation,
the Trademarks (collectively, the "Intellectual Property"); (ii)
any federal,
state or foreign applications filed with respect to the
Intellectual Property;
(iii) any federal, state or foreign registrations issued or
issuing with
respect to the Intellectual Property; (iv) all proceeds of the
Intellectual
Property, including, but not limited to, any and all royalties
and any claims
and demands arising out of any infringement of the Intellectual
Property,
including the right to settle disputes concerning such claims and
demands; and
(v) all goodwill associated with the Intellectual Property, such
grant being
hereby effected for the purposes and subject to the terms,
conditions and
limitations set forth in the Omnibus Agreement.
Assignor hereby appoints the Agent, with full power of
substitution, to
file and record this Collateral Assignment of Security Interest
in Patents,
Trademarks and Related Applications, to transact all business in
the United
States Patent and Trademark Office in connection therewith, to
receive any
confirmatory documents relating thereto, and to take any and all
action before
the Patent and Trademark Office to give effect to this Collateral
Assignment of
Security Interest in Patents, Trademarks and Related Applications
and to the
Omnibus Agreement referred to herein, all for the ratable benefit
of the
Lenders.
[Signature follows on a separate page]
IN WITNESS WHEREOF, Assignor has duly executed this
Collateral Assignment
of Security Interest in Patents, Trademarks and Related
Applications as of the
day and year first above written.
ATTEST: FOUNTAIN POWER, INC.,
a North Carolina corporation
By:
Secretary Name: Xxxxxxxx X. Xxxxxxxx
Title: President
[CORPORATE SEAL]
NORTH CAROLINA
_______________ COUNTY
I, _______________________________, a Notary Public of
___________ County,
North Carolina, do hereby certify that
______________________________
personally came before me this day and acknowledged that [s]he is
the _________
Secretary of Fountain Power, 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 its _____ President, sealed
with its
corporate seal and attested by himself/herself as its _________
Secretary.
WITNESS my hand and notarial seal, this _____ day of August,
1998.
__________________________
Notary Public
[NOTARY SEAL]
My commission expires:
______________________
SCHEDULE A
Assigned Trademarks
None
5
R#263885.3
[Execution Copy]
ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL
A. For Value Received the undersigned hereby assign, transfer
and set over to
GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as
agent for the
Lenders from time to time party to the Omnibus Agreement
referenced below
To the attention of Operations Manager
Address Xxxxx 000, 0 Xxxxx Xxxx Xxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000
And its successors (herein called the "Assignee") Policy No.
00-000-000
issued by
THE NORTH WESTERN MUTUAL LIFE INSURANCE COMPANY
MILWAUKEE, WISCONSIN
(herein called the "Insurer") and any supplementary
contracts issued in
connection therewith (said policy and contracts being herein
called the
"Policy"), upon the life of
Xxxxxxxx X. Xxxxxxxx, Xx.
of Beaufort County, North Carolina and all
claims, options,
privileges, rights, title and interest therein and
thereunder (except as
provided in Paragraph C hereof), subject to all the terms
and conditions
of the Policy and to all superior liens, if any, acceptance
of this
assignment agrees to the conditions and provisions herein
set forth.
A. It is expressly agreed that, without detracting from the
generality of the
foregoing, the following specific rights are included in
this assignment and
pass by virtue hereof:
1. The sole right to collect form the Insurer the net
proceeds of the
Policy when it becomes a claim by death or maturity;
2. The sole right to surrender the Policy and receive the
surrender
value thereof at any time provided by the terms of the
Policy and at
such other times as the Insurer may allow;
3. The sole right to obtain one or more loans or advances
on the Policy,
either from other persons, and to pledge or assign the
Policy as
security for such loans or advances;
4. The sole right to collect and receive all distributions
or shares of
surplus, dividend deposits or additions to the Policy
now or
hereafter made or apportioned thereto, and to exercise
any and all
options contained in the Policy with respect thereto;
provided, that
unless and until the Assignee shall notify the Insurer
in writing to
the contrary, the distributions or shares of surplus,
dividend
deposits and additions shall continue on the plan in
force at the
time of this assignment; and
5. The sole right to exercise all nonforfeiture rights
permitted by the
terms of the Policy or allowed by the Insurer and to
receive all
benefits and advantages derived therefrom.
A. It is expressly agreed that the following specific rights,
so long as the
Policy has not been surrendered, are reserved and excluded
from this assignment
and do not pass by virtue hereof:
1. The right to collect from the Insurer any disability
benefit payable
in cash that does not reduce the amount of insurance;
2. The right to designate and change the beneficiary;
3. The right to elect any optional mode of settlement
permitted by the
Policy or allowed by the Insurer; but the reservation
of these rights
shall in no way limit the right of the Assignee to
surrender the
Policy complete with all its incidents or impair any
other right of
the Assignee hereunder, and any designation or change
of beneficiary
or election of a mode of settlement shall be made
subject to this
assignment and to the rights of the Assignee hereunder.
A. This assignment is made and the Policy is to be held as
collateral
security for any and all liabilities of the undersigned
(either now existing or
that may hereafter arise) to the Lenders and/or the Assignee
that shall now or
at any time hereafter be evidenced by any note or notes now
or hereafter issued
pursuant to, or that shall exist or shall hereafter arise
under, that Omnibus
Agreement, dated September 2, 1998 (as the same may be
amended, supplemented,
restated, extended, renewed, replaced or otherwise modified
and in effect from
time to time, the "Omnibus Agreement"), by and among the
undersigned, Fountain
Power Industries, Inc., Fountain Power, Inc., General
Electric Capital
Corporation (in its individual corporate capacity),
Transamerica Business
Credit Corporation and the Assignee in its capacity as agent
for the Lenders
(all such liabilities under the Omnibus Agreement or any
such note or notes and
that are secured or to be secured hereby are referred to
herein as the
"Liabilities").
B. The Assignee covenants and agrees with the undersigned as
follows:
1. That any balance of sums received hereunder from the
Insurer
remaining after payment of the then existing
Liabilities, matured or
unmatured, shall be paid by the Assignee to the persons
entitled
thereto under the terms of the Policy had this
assignment not been
executed;
2. That the Assignee will not exercise either the right to
surrender the
Policy or (except for the purpose of paying premiums)
the right to
obtain policy loans from the Insurer, until there has
been default in
any of the Liabilities or a failure to pay any premium
when due, nor
until twenty days after the Assignee shall have mailed,
by first-
class mail, to the undersigned at the addresses last
supplied in
writing to the Assignee specifically, referring to this
assignment,
notice of intention to exercise such right; and
3. That the Assignee will upon request forward without
reasonable delay
to the Insurer the Policy for endorsement of any
designation or
change of beneficiary or any election of an optional
mode of
settlement.
A. The Insurer is hereby authorized to recognize the Assignee's
claims to
rights hereunder without investigating the reason for any
action taken by the
Assignee, or the validity or the amount of the Liabilities
or the existence of
any default therein, or the giving of any notice under
Paragraph E(2) above or
otherwise, or the application to be made by the Assignee of
any amounts to be
paid to the Assignee. The sole signature of the Assignee
shall be sufficient
for the exercise of any rights under the Policy assigned
hereby and the sole
receipt of the Assignee for any sums received shall be a
full discharge and
release therefor to the Insurer. Checks for all or any part
of the sums
payable under the Policy and assigned herein, shall be drawn
to the exclusive
order of the Assignee if, when, and in such amounts as may
be, requested by the
Assignee.
B. Neither the Assignee or any Lender shall be under any
obligation to pay
any premium, or the principal of or interest on any loans or
advances on the
Policy whether or not obtained by the Assignee or the
Lenders, or any other
charges on the Policy, but any such amounts so paid by the
Assignee or the
Lenders from its or their own funds shall become a part of
the Liabilities
hereby secured, shall be due immediately, and shall draw
interest at a rate
fixed by the Lenders from time to time not exceeding 18% per
annum.
C. The exercise of any right, opinion, privilege or power given
herein to the
Assignee shall be at the option of the Assignee, but (except
as restricted by
Paragraph E(2) above) the Assignee may exercise any such
right, option,
privilege or power without notice to, or assent by, or
affecting the liability
of, or releasing any interest hereby assigned by the
undersigned, or any of
them.
D. All (but not less than all) of the Lenders, or the Assignee
at the
direction of all (but not less than all) of the Lenders, may
take or release
other security, may release any party primarily or
secondarily liable for any
of the Liabilities, may grant extensions, renewals or
indulgences with respect
to the Liabilities, or may apply to the Liabilities in such
order as the
Lenders shall determine, the proceeds of the Policy hereby
assigned or any
other amount received on account of the Policy by the
exercise of any right
permitted under this assignment, without resorting or regard
to other security.
E. In the event of any conflict between the provisions of this
assignment and
provisions of the note or other evidence of any Liability,
with respect to the
Policy or rights of collateral security therein, the
provisions of this
assignment shall prevail.
F. Each of the undersigned declares that no proceedings in
bankruptcy are
pending against him and that his property is not subject to
any assignment for
the benefit of creditors.
Signed and Sealed this ______ day of August, 1998.
FOUNTAIN
POWERBOATS,
INC., Owner
By: (L.S.)
Witness Xxxxxxxx X.
Xxxxxxxx, President
Attest:
Secretary
[CORPORATE SEAL]
SEAL]
Address:
0000 Xxxxxxxx'x Xxxxx
Xxxx
X.X. Xxxxxx 000
Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000
CORPORATE ACKNOWLEDGMENT
STATE OF NORTH CAROLINA
}ss:
COUNTY OF ___________________
On the ____ day of August, 1998, before me personally came
Xxxxxxxx X.
Xxxxxxxx, Xx., who being duly sworn, did depose and say that he
resides in
Beaufort County, North Carolina, that he is the President of
Fountain
Powerboats, Inc., the corporation described in and which executed
the foregoing
assignment; that he knows the seal of said corporation; that the
seal affixed
to said assignment is such corporate seal; that it was so affixed
by order of
the Board of Directors of said corporation, and that he signed
his name thereto
by like order.
Notary
Public
My commission expires: ____________________________
************
Assignment recorded and filed at the Home Office of The
Northwestern Mutual
Life Insurance Company (the "Company"). The Company assumes no
responsibility
as to the validity or effect of any assignment.
This _____ day of August, 1998.
THE
NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY
By:
Name:
Position:
