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Page 1 of __
Exhibit Index Page 13
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended Dec. 31, 1995
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
Commission File Number 1-8912
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SBM INDUSTRIES, INC.
---------------------------------------------
(Name of Small Business Issuer in it Charter)
Delaware 86-1805030
- ---------------------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2 Madison Avenue, Suite 201
Larchmont, New York 10538
- ---------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
(914) 833-0649
--------------
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, $1.00 par value American Stock Exchange
- ----------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
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Check if disclosure of no delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year were $16,531,000.
Based on the closing sales price on March 25, 1996, the aggregate
market value of the voting stock held by non-affiliates of the registrant
was approximately $2,899,908.
The number of shares outstanding of the registrant's common stock was
2,027,616 at March 21, 1995.
DOCUMENTS INCORPORATED BY REFERENCE: Part III -Definitive Proxy
Statement relating to May 7, 1996 Annual Meeting of Shareholders. Parts I
and II - Annual Report to Shareholders for the year ended December 31, 1995.
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PART I
Item I. Description of Business
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General
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SBM Industries, Inc. (the "Company") is a holding company whose
operating subsidiary corporations are engaged in the distribution of watch
batteries and related products and in book publishing. The Company was
organized in 1935 as an Illinois corporation, was reincorporated as a
Delaware corporation in 1985, and changed its name from Speed-O-Print
Business Machines Corporation in 1992. The Company's principal executive
offices have been located in Larchmont, New York since 1992.
Acquisition of Star Struck, Inc.
-------------------------------
On July 1, 1992, the Company acquired all the shares of stock of Star
Struck, Inc., a Connecticut corporation ("SSI") from Kenneth Karlan and
Keith Sessler in exchange for shares of the Company's stock.
Business of SSI
---------------
SSI, whose principal offices are in Bethel, Connecticut, is a
distributor of watch batteries throughout the United States. In addition to
selling watch batteries, SSI also sells alkaline, photo and hearing aid
batteries, jewelry findings, tools, supplies, and plastic bags and
manufactures and sells watch straps.
SSI made three acquisitions in 1994 that expanded its business. SSI
acquired assets relating to the distribution and manufacture of watch straps
from Freedman & Sons Corp. in August 1994 and from R. C. Manufacturing, Inc.
in September 1994. On October 1, 1994, SSI also acquired assets relating to
the distribution of watch batteries from Time Craft Industries,
Incorporated. The aggregate of the purchase prices of these three
acquisitions was approximately $1.3 million.
SSI sells its products through direct mail and telemarketing to
jewelry stores, supermarket chains and other retail vendors.
SSI competes in a competitive, but highly fragmented industry.
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SSI's business does not depend on the availability of raw materials.
SSI distributes watch batteries for Sony, Eveready, Maxell, Renata, Rayovac
and Varta under the manufacturer's and SSI's private label. SSI sells its
watch straps under the Sahara, Town & Country, Downing and R. C.
Manufacturing tradenames.
SSI has approximately 6,000 active customers. SSI's two largest
customers account for 16% and 12% of its sales, respectively.
Governmental regulation is not a specific influence on the business of
SSI, and generally compliance with environmental regulations have not been
burdensome to SSI.
SSI expended no money on research and development in 1994 or 1995.
SSI has approximately 125 full-time employees, and 25 part-time
employees.
Acquisition of Assets of Carlton Press, Inc.
--------------------------------------------
On December 6, 1993, the Company's subsidiary, SBM Press Acquisition
Corp., purchased assets of Carlton Press, Inc. for $1,050,000 and of its
subsidiary Mitchell-Randolph Advertising Corp. for $150,000. SBM Press
Acquisition Corp. then changed its name to Carlton Press Corp.
Business of Carlton Press, Inc.
-------------------------------
Carlton Press Corp. ("Carlton") is a subsidy book publisher. Carlton
publishes manuscripts submitted by authors for which it charges the authors
a publishing fee. Although most of its revenue is derived from the
contracts with the authors, Carlton also receives royalty revenues from
sales of the books.
Carlton competes in a competitive industry where there are numerous
other competitors.
Carlton's business does not depend on the availability of raw
materials.
Carlton published approximately 200 books in 1995.
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Government regulation is not a specific influence on the business of
Carlton and generally compliance with environmental regulations have not
been burdensome to Carlton.
Carlton expended no money on research and development in 1994 or 1995.
Carlton has 20 employees, all of whom are full-time employees.
Sale of Radio Broadcasting Business
-----------------------------------
On January 31, 1994, the Company's subsidiary WWMY-FM Broadcasting
Inc. ("WWMY") sold all of its assets used in connection with its FM radio
station in Eden, North Carolina. Between July 1991 and the date of sale,
WWMY had derived all of its revenues from a brokerage agreement under which
the broadcasting facilities had been made available to Voyager
Communications, Inc. After the sale, WWMY engaged in no further business
activity and became dormant.
Investments
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The Company generally holds its liquid assets in government
securities. Government securities include only such securities as defined
in the Investment Company Act of 1940, as amended.
General
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The Company does not hold any patents, trademarks, licenses,
franchises or concessions in connection with its business, except as
described above.
The Company expended no money on research and development in 1994 or
1995.
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Item 2. Properties.
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The Company leases offices in Larchmont, New York for use as its
executive offices.
SSI owns property located in the Francis J. Clarke Industrial Park at
8 Francis J. Clarke Circle in Bethel, Connecticut. The property consists of
2.344 acres of land and a warehouse/office building. The building, as
originally constructed in 1990, comprised 10,500 square feet. A 10,000
square-foot addition to the building was completed in May 1994.
Approximately sixty percent of the building is used as a warehouse and
remaining forty percent is used as offices by SSI. The warehouse space
contains a loading dock. The property is encumbered by a mortgage.
SSI's subsidiary, R. C. Manufacturing, Inc., leases a manufacturing
and office facility in St. Petersburg, Florida, comprising approximately
5,000 square feet.
Carlton leases approximately 5,000 square feet of office space in New
York, New York for use as executive and editorial offices.
Item 3. Legal Proceedings.
-----------------
In Re SBM Industries, Inc. Securities Litigation pending in the United
------------------------------------------------
States District Court for the Southern District of New York. This is a
consolidated action in which plaintiffs, allegedly suing on behalf of all
shareholders similarly situated, allege securities fraud as to the Company's
originally published reports of earnings for the first three quarters of
1994. The defendants have denied any improper conduct and intend to defend
themselves vigorously.
Item 4. Submission of Matters to a Vote of Security
Holders.
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None.
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PART II
Item 5. Market for Common Equity and Related
Stockholder Matters.
------------------------------------
The principal United States market in which the Company's common stock
is traded is the American Stock Exchange. See page 14 of the Company's 1995
Annual Report to Shareholders, in the section entitled "Market and Dividend
Information", which is incorporated herein by reference, for information
concerning the high and low sales prices for the Company's common stock for
each quarter of 1994 and 1995. As of March 21, 1996, the Company had
approximately 800 shareholders of common stock. No dividends were paid by
the Company during the 1994 and 1995 fiscal years.
Item 6. Management's Discussion and Analysis or
Plan of Operation.
---------------------------------------
See pages 12 through 13 of the Company's 1995 Annual Report to
Shareholders, which is incorporated herein by reference.
Item 7. Financial Statements and Supplementary Data.
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See pages 2 through 11 of the Company's 1995 Annual Report to
Shareholders, which are incorporated herein by reference.
Item 8. Changes in and Disagreements on Accounting
and Financial Disclosure.
------------------------------------------
None.
PART III
Item 9. Directors and Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of
the Exchange Act.
-------------------------------------------------
See the sections entitled "Nominees for Election as Directors" and
"Executive Officers and Executive Compensation" and "Compliance with Section
16(a) of the Exchange Act" in the Company's Proxy Statement for the Annual
Meeting of Shareholders to be held on May 7, 1996 which are incorporated
herein by reference, for information concerning directors, executive
officers, promoters and control persons of the Company.
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Item 10. Executive Compensation.
----------------------
See the section entitled "Executive Officers and Executive
Compensation" in the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held on May 7, 1996, which is incorporated herein by
reference, for information concerning executive compensation.
Item 11. Security Ownership of Certain Beneficial Owners
and Management.
-----------------------------------------------
See the sections entitled "Executive Officers and Executive
Compensation -- Stock Options," "Security Ownership of Management" and
"Other Principal Holders of Voting Securities" in the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on May 7, 1996
which are incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions.
----------------------------------------------
See the section entitled "Nominees for Election as Directors --
Additional Information" in the Company's Proxy Statement for the Annual
Meeting of Shareholders to be held on May 7, 1996, which is incorporated
herein by reference.
Item 13. Exhibits, Lists and Reports on Form 8-K.
---------------------------------------
(a) 1. & 2. Financial Statements.
--------------------
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1995 has been furnished as an exhibit to this Annual
Report on Form 10-KSB. Pages 1 through 19 of such Annual Report to
Shareholders contain the Consolidated Balance Sheet as of December 31, 1995,
and the Consolidated Statements of Operations, Shareholders' Investment and
Cash Flows and Notes to Consolidated Financial Statements for each of the
two years ended December 31, 1995 and 1994, and the Auditors' Report
covering the aforementioned financial statements. These Financial
Statements and the Auditors' Report thereon are incorporated herein by
reference.
(a) Exhibits
--------
(3) The Articles of Incorporation and Bylaws of the Company, as
amended, filed as Exhibit to a report on Form 8, Amendment No. 1 to the
Company's Form 10-K for the fiscal year ended December 31, 1988 and filed
May 26, 1989, are incorporated herein by reference, and Amendment to the
Articles of Incorporation of the Company, changing the name of the Company,
filed as an exhibit to the Company's report
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on 8-K dated September 15, 1992 and filed September 29, 1992, is
incorporated herein by reference.
(4) Certificate of Rights, Designations and Preferences relating to
the 1992 Series A Preferred Stock, filed as Exhibit (4) to the Company's
report on Form 8-K dated September 15, 1992 and filed September 29, 1992, is
incorporated herein by reference.
(10) Material Contracts.
(a) Employment Agreements, each dated September 15, 1992 by
and between the Company and each of Kenneth Karlan and
Keith Sessler respectively, filed as Exhibit (10)(b) to
the Company's report on Form 10-KSB for the fiscal year
ended December 31, 1992, filed March 31, 1993, are
incorporated herein by reference.
(b) 1992 Incentive Stock Option Plan of the Company, an
Exhibit to the Company's Notice of Annual Meeting of
Shareholders and Proxy Meeting for Annual Meeting to be
held August 25, 1992, and filed August 13, 1992, is
incorporated herein by reference.
(c) Term Loan Agreement, dated July 6, 1996, between Star
Struck, Inc. and First Fidelity Bank.
(d) Guaranty and Suretyship Agreement, dated July 6, 1996
from the Company to First Fidelity Bank.
(e) Mortgage, Assignment of Lease and Security Agreement,
dated July 6, 1995, between Star Struck, Inc., as
mortgagor, and First Fidelity Bank, as mortgagee, in
the amount of $800,000.00, secured by property known as
8 Francis J. Clarke Circle, Bethel, Connecticut (the
"Property").
(f) Second Mortgage, dated March 18, 1990, by and between
Star Investors, as Mortgagor, and Union Trust Company,
as Mortgagee, in the amount of $150,000, secured by a
second mortgage on the Property, filed as Exhibit
(10)(e) to
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the Company's report on Form 10-KSB for the fiscal year
ended December 31, 1992, filed March 31, 1993, is
incorporated herein by reference.
(g) Pledge Agreement, dated December 6, 1993, between SBM
Industries, Inc. and Michael Sheldon and Carlton Press,
Inc., filed as Exhibit 10(h) to the Company's report on
Form 10-KSB for the year ended December 31, 1993, filed
March 31, 1994.
(h) Consulting Agreement, dated December 6. 1993, between
SBM Acquisition Corp. and Carlton Press, Inc., filed as
Exhibit 10(i) to the Company's report on Form 10-KSB
for the year ended December 31, 1993, filed March 31,
1994.
(i) Non-Compete Agreement, dated December 6, 1993, among
Michael Sheldon, SBM Press Acquisition Corp. and SBM
Industries, Inc., filed as Exhibit 10(j) to the
Company's report on Form 10-KSB for the year ended
December 31, 1993, filed March 31, 1994.
(11) Statement re: Computation of Per Share Earnings. See page 2 of
the Company's 1995 Annual Report to Shareholders for a description of the
computation of the Company's per share earnings, which description is
incorporated herein by reference.
(13) 1995 SBM Industries, Inc. Annual Report to Shareholders (which,
except for those portions thereof incorporated by reference in this Form 10-
KSB Annual Report, is furnished for the information of the Commission, but
is not deemed to be "filed" as part of this report).
(21) List of Subsidiaries of Registrant, filed as Exhibit 21 to the
Company's report on Form 10-KSB for the year ended December 31, 1994, filed
on March 31, 1995.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SBM INDUSTRIES INC.
/s/Peter Nisselson
By:____________________________
Peter Nisselson, President,
Secretary and Chief Executive
Officer, March 29, 1996
/s/Lawrence J. Goldstein
By:____________________________
Lawrence J. Goldstein,
Vice President and Treasurer
March 29, 1996
Dated: March 29, 1996
In accordance with the Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
s/Peter Nisselson
_____________________________________
Peter Nisselson, March 29, 1996
(Director)
s/Lawrence J. Goldstein
_____________________________________
Lawrence J. Goldstein, March 29, 1996
(Director)
s/Kenneth Karlan
_____________________________________
Kenneth Karlan, March 29, 1996
(Director)
s/Robert Morris
_____________________________________
Robert Morris, March 29, 1996
(Director)
s/Arthur Salzfass
_____________________________________
Arthur Salzfass, March 29, 1996
(Director)
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s/Keith Sessler
_____________________________________
Keith Sessler, March 29, 1996
(Director)
s/Michael Sweedler
_____________________________________
Michael Sweedler, March 29, 1996
(Director)
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EXHIBIT INDEX
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Exhibit
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(3) The Articles of Incorporation and Bylaws of the Company, as *
amended, filed as Exhibit to a report on Form 8, Amendment No. 1 to the
Company's Form 10-K for the fiscal year ended December 31, 1988 and filed May
26, 1989, are incorporated herein by reference, and Amendment to the Articles of
Incorporation of the Company, changing the name of the Company, filed as an
exhibit to the Company's report on Form 8-K dated September 15, 1992 and filed
September 29, 1992, is incorporated herein by reference.
(4) Certificate of Rights, Designations and Preferences relating *
to the 1992 Series A Preferred Stock, filed as Exhibit (4) to the Company's
report on Form 8-K dated September 15, 1992 and filed September 29, 1992, is
incorporated herein by reference.
(10) Material Contracts.
(a) Employment Agreements, each dated September 15, 1992 by *
and between the Company and each of Kenneth Karlan and Keith
Sessler respectively, filed as Exhibit (10)(b) to the
Company's report on Form 10-KSB for the fiscal year ended
December 31, 1992, filed March 31, 1993, is incorporated
herein by reference.
(b) 1992 Incentive Stock Option Plan of the Company, an *
Exhibit to the Company's Notice of Annual Meeting of
Shareholders and Proxy Meeting for Annual Meeting to be held
August 25, 1992, and filed August 13, 1992, is incorporated
herein by reference.
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(c) Term Loan Agreement, dated July 6, 1996, between Star
Struck, Inc. and First Fidelity Bank.
(d) Guaranty and Suretyship Agreement, dated July 6, 1996,
from the Company to First Fidelity Bank.
(e) Mortgage, dated July 6, 1995, Star Struck, Inc., as
mortgagor, and First Fidelity Bank, in the amount of
$800,000.00, secured by property known as 8 Francis J.
Clarke Circle, Bethel, Connecticut (the "Property").
(f) Second Mortgage, dated March 18, 1990, by and between *
Star Investor, as Mortgagor, and Union Trust
Company, as Mortgagee, in the amount of $150,000,
secured by a second mortgage on the Property,
filed as Exhibit (10)(e) to the Company's report
on Form 10-KSB for the fiscal year ended December
31, 1992, filed March 31, 1993, is incorporated
herein by reference.
(g) Pledge Agreement, dated December 6, 1993, between SBM *
Industries, Inc. and Michael Sheldon and Carlton Press,
Inc., filed as Exhibit 10(h) to the Company's report
on Form 10-KSB for the year ended December 31, 1993,
filed March 31, 1994.
(h) Consulting Agreement, dated December 6, 1993, between *
SBM Acquisition Corp. and Carlton Press, Inc., filed
as Exhibit 10(i) to the
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Company's report on Form 10-KSB for the year ended December
31, 1993, filed March 31, 1994.
(i) Non-Compete Agreement, dated December 6, 1993, among *
Michael Sheldon, SBM Press Acquisition Corp. and
SBM Industries, Inc., filed as Exhibit 10(j) to
the Company's report on Form 10-KSB for the year
ended December 31, 1993, filed March 31, 1994.
(11) Statement re: Computation of Per Share Earnings. See **
page 2 of the Company's 1995 Annual Report to Shareholders for a
description of the computation of the Company's per share earnings,
which description is incorporated herein by reference.
(13) 1995 SBM Industries, Inc. Annual Report to Shareholders **
(which, except for those portions thereof incorporated by reference in
this Form 10-KSB Annual Report, is furnished for the information of
the Commission, but is not deemed to be "filed" as part of this
report).
(21) List of Subsidiaries of Registrant, filed as Exhibit
21 to the Company's report on Form 10-KSB for the year ended December
31, 1994, filed on March 31, 1995.
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* Incorporated by reference.
** To be filed by Amendment.
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EXHIBIT 10(c)
[LOGO OF UNION TRUST] Union Trust Company Term Loan Agreement-Commercial
A First Fidelity Bank (Connecticut)
THIS TERM LOAN AGREEMENT (together with all schedules and exhibits hereto and
any amendments or modifications hereto in effect from time to time, this
"Agreement"), is made this 6th day of July, 1995, by and between STAR STRUCK,
----- ----- -- -------------
INC. (the "Borrower") and FIRST FIDELITY BANK (the "Bank").
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The Borrower has applied to the Bank for a loan in the principal amount of EIGHT
------
HUNDRED THOUSAND AND XX/100 Dollars ($800,000.00 ) (the "Loan"). The Loan
- ---------------------------- ----------
shall be evidenced by a Term Note (together with any amendments or modifications
thereto in effect from time to time, the "Note").
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and intending to be legally bound hereby, the
Bank and the Borrower agree as follows:
A. Terms of Loan Agreement.
1. Payment of Principal. The principal balance of the Loan shall be paid
in ninety-six (96) consecutive [x] monthly [ ] quarterly installments
---------------
in the amount of THREE THOUSAND THREE HUNDRED THIRTY-THREE AND 33/100
----------------------------------------------------
Dollars ($3,333.33) each, commencing August 1, 1995, and continuing on
-------- -------- --
the same day of each such consecutive period thereafter, with a final
installment in the amount of the remaining unpaid principal balance
outstanding hereunder together with any accrued, unpaid interest
thereon due and payable on July 6, 2003.
------ ----
2. Interest Payments. The Borrower shall pay the Bank, together with each
principal installment as set forth in Paragraph A.1. hereof, interest
in arrears on the unpaid principal balance of the Loan. Interest on the
outstanding principal balance of the Loan shall accrue at a per annum
rate equal at all times to either (I) the Bank's Base Rate (defined
below) plus three-quarters percent (3/4%).
-------------- ---
3. Computation. Interest and any fees or compensation based upon a per
annum rate shall be calculated on the basis of a 360 day year for the
actual number of days elapsed.
4. Debiting of Account. The Borrower agrees to maintain an account (the
"Account") at the Bank continuously until the Liabilities due hereunder
are paid in full. The Bank may, and the Borrower authorizes the Bank
to, debit the Account for the amount of any payment as and when such
payment becomes due hereunder. Notwithstanding the foregoing, the Bank
may, and the Borrower authorizes the Bank to, debit any account
maintained by the Borrower with the Bank for the amount of any payment,
as and when such payment becomes due hereunder, whether such payment is
for accrued interest, principal or expense. Such authorization shall
not affect the Borrower's obligation to pay when due all amounts
payable hereunder, whether or not there are sufficient funds in any
accounts of the Borrower. The foregoing rights of the Bank to debit the
Borrower's accounts shall be in addition to, and not in limitation of,
any rights of set-off which the Bank and/or any Affiliate may have
hereunder or under any Loan Document nor shall the rights hereunder
limit the Bank's recourse to any particular source of funds or monies.
5. Additional Terms. Additional terms pertaining to the time, place and
mode of making payments are described in the Note.
6. Prepayment. If interest hereunder accrues at a floating rate,
prepayment of principal may be made at any time without prepayment
penalty or premium. If interest hereunder accrues at a fixed rate, the
Loan may be prepaid, in whole or in part, at any time, provided, that
any prepayment (whether in whole or in part and whether made
voluntarily or because of accelerations) will also be accompanied by
(i) all accrued and unpaid interest on the Loan and all other fees,
expenses, and other sums due and owing hereunder, and (ii) and amount
equal to the amount described in Exhibit B hereto (the "Make Whole
Premium"), or if no amount is listed in Exhibit B, then the Make Whole
Premium shall be determined by the Bank, in its sole discretion in
accordance with normal banking practices. The Bank's determination of
the Make Whole Premium shall be conclusive and binding, absent manifest
error. All payments received on the Note may be applied in such order
as the Bank in its sole discretion shall determine.
7. Fees. The Borrower shall pay to the Bank a nonrefundable one-time
facility fee equal to N/A TWO THOUSAND FIVE HUNDRED FORTY AND XX/100
Dollars ($2,540.00) on or before the date of this Agreement. The
Borrower acknowledges that this facility fee is a liquidated damages
amount, and together with amounts payable by the Borrower to the Bank
under Paragraph J.3. hereof, constitutes reasonable compensation to the
Bank for the Bank's expenses and services arising in connection with
the negotiation of this Agreement, the Note and all other Loan
Documents executed in connection herewith and preparing for the closing
of the transaction described herein. Notwithstanding anything to the
contrary in this Agreement, the Bank may charge the Borrower an
additional facility fee in the event that the Loan is ever modified,
renewed or extended.
6010-7204 (3-94) 1 of 12
<PAGE>
B. Definitions. As used herein, the following terms shall have the following
meanings:
1. Affiliate. The term "Affiliate" means First Fidelity Bancorporation
and any of its direct and indirect affiliates and subsidiaries.
2. Base Rate. The term "Base Rate" means the rate of interest established
by the Bank as its reference rate in making loans, and is not tied to
any external rate of interest or index. The rate of interest charged
hereunder shall change automatically and immediately as of the date of
any change in the Base Rate, without notice to the Borrower.
3. Collateral. The term "Collateral" means any and all property of any
Obligor (as defined below) now or hereafter in the possession, custody
or control of the Bank or any Affiliate including, but not limited to,
any balance or share of any deposit, trust or agency account of any
Obligor and all collateral described in any and all Loan Documents (as
defined below), the additional collateral described in Section G
hereof, any additional collateral more fully described in the Schedule
(defined below), and any other property of any Obligor now or hereafter
subject to a security agreement, mortgage, pledge agreement,
assignment, hypothecation or other document granting the Bank or any
Affiliate a security interest or other lien or encumbrance.
4. Consolidated. The term "Consolidated" means an accounting presentation
which includes any consolidated subsidiaries of the Borrower.
5. GAAP. The term "GAAP" means generally accepted accounting principles in
effect from time to time in the United States.
6. Liabilities. The term "Liabilities" means any and all indebtedness and
obligations of every kind and description of the Borrower owing to the
Bank or any Affiliate, whether or not under the Loan Documents, and
whether such debts or obligations are primary or secondary, direct or
indirect, absolute or contingent, sole, joint or several, secured or
unsecured, due or to become due, contractual or tortious, arising by
operation of law, by overdraft, or otherwise, or now or hereafter
existing, including, without limitation, principal, interest, fees,
late fees, expenses, attorneys' fees and costs, and/or the allocated
costs and fees of the Bank's in-house legal counsel, that have been or
may hereafter be contracted or incurred.
7. Loan Documents. The term "Loan Documents" means any and all credit
accommodations, notes, loan agreements, and any other agreements and
documents, now or hereafter existing, creating, evidencing,
guarantying, securing or relating to any or all of the Liabilities,
together with all amendments, modifications, renewals, or extensions
thereof.
8. Obligor. The term "Obligor" means the Borrower and each and every
maker, endorser, guarantor, or surety of or for the Liabilities.
9. Schedule. The term "Schedule" means the Schedule of Additional
Terms to Term Loan Agreement which is attached hereto.
C. Representations and Warranties. The Borrower represents and warrants with
respect to itself and, to the extent applicable, each of its consolidated
subsidiaries, that:
1. Organization;Authority. As to each Borrower that is not an individual,
it is a [x] corporation [ ] partnership [ ] sole proprietorship duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization or formation and is duly qualified as
a foreign corporation and is in good standing under the laws of each
jurisdiction in which it is required to be qualified because of the
business it conducts or the property it owns. If the Borrower is an
individual, he is an adult and is legally competent. The Borrower has
the necessary power, authority, and legal right to own, or lease and
enjoy undisturbed, its assets and engage in its business as now
conducted and it has the necessary power, authority, and legal right to
enter into and perform this Agreement, the Note, and any other Loan
Document to which it is a party. The execution and performance of the
Loan Documents have been duly authorized by all necessary proceedings
and upon their execution and delivery, they will be valid, binding and
enforceable in accordance with their terms, and the Borrower's
execution and performance of the Loan Documents to which it is a party
will not violate any orders, laws or regulations applicable to the
Borrower, any organizational documents of the Borrower, or any
instruments, indentures or agreements (including any provisions
pertaining to subordinated debt) to which the Borrower is a party or by
which the Borrower or any of its properties are bound; and all consents
, approvals, licenses, franchises, patents, trademarks and other
general intangibles required in connection with this Agreement, the
other Loan Documents or the operation of the Borrower's business have
been obtained and are in full force and effect. The Borrower's
subsidiaries and affiliates, if any, are duly organized, validly
existing, and in good standing under the laws of the jurisdictions of
their organization:
2. Use of Proceeds;No Purchases of Margin Stock. The proceeds of the Loan
will be used only in connection with the Borrower's business, for the
following purposes: to refinance existing mortgage plus refund
construction costs for addition to mortgaged property. None of the
proceeds of the Loan will be used to purchase or carry any "margin
security" or extend credit for such purpose within the meaning of
Regulations G or U of the Board of Governors of the Federal Reserve
System;
3. Financial Statements. All financial statements as to ownership of the
Borrower and its assets, and other statements and information delivered
to the Bank were prepared in accordance with GAAP, consistently
applied, are true and correct, and disclose all presently outstanding
indebtedness or obligations of the Borrower, including contingent
obligations, obligations under leases of property from others, and all
liens and encumbrances, including tax liens, against its properties and
assets; and there have been no adverse changes in the Borrower's
financial condition or business since the date of such statements;
4. Suits. There are no actions, suits, proceedings, or claims pending or
threatened against the Borrower or any of its property; and the
Borrower's business is in compliance with all applicable orders, laws
and regulations;
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5. Defaults. The Borrower is not in default under any agreement to which
the Borrower is a party xxx which the Borrower or any of its property
is bound, or under any indenture or instrument evidencing any
indebtedness of the Borrower, and neither the Borrower's execution of
nor performance under the Loan Documents will create a default or any
lien or encumbrance under any such agreement, indenture or instrument
other than a lien or encumbrance in favor of the Bank;
6. ERISA. No employee benefit plan established or maintained by the
Borrower which is subject to the Employee Retirement Income Security
Act 29 U.S.C. (S) 1001 et seq. ("ERISA") has an accumulated funding
deficiency (as such term is defined in ERISA). No material liability to
the Pension Benefit Guaranty Corporation (or any successor thereto
under ERISA) has been incurred by the Borrower with respect to any such
plan and no Reportable Event under ERISA has occurred. The Borrower has
no actual or anticipated liability under Section 4971 of the Internal
Revenue Code ("Code") (relating to tax on failure to meet the minimum
funding standard of Section 412 of the Code) with respect to any
employee benefit plan to which it contributes but which is not
maintained or established by it;
7. Tax Returns and Taxes. The Borrower has filed all federal, state, and
local tax returns required to be filed and has paid all taxes,
assessments, and governmental charges and levies thereon, including
interest and penalties, except where the same are being contested in
good faith by appropriate proceedings and for which adequate reserves
have been set aside, and no liens for taxes have been filed and no
claims are being assessed by a governmental authority with respect to
any taxes. The charges, accruals and reserves on the books of the
Borrower with respect to taxes or other governmental charges are
adequate;
8. Compliance with Laws. The Borrower has complied with all requirements
of foreign, federal, state, and local law in connection with the
acquisition, ownership, and operation of the Borrower's business and
property, including, without limitation, any and all applicable
requirements of environmental protection laws;
9. Environmental Compliance. To the best of the Borrower's knowledge,
after due inquiry and investigation, the Borrower and all previous
owners and/or operators of the real and/or personal property of the
Borrower have not engaged in any conduct, resulting in the discharging
of hazardous substances or wastes into the atmosphere or waters, or
onto lands. The Borrower has not received a summons, citation,
directive, letter, or other communication, written or oral, from any
jurisdiction, political subdivision, agency, or instrumentality
thereof, concerning any intentional or unintentional action or omission
on the Borrower's part resulting in the discharging of hazardous
substances into the atmosphere or waters, or onto lands; and
10. Affirmance of Additional Representations and Warranties. The Borrower
hereby makes and affirms, for itself and if applicable, for its
consolidated subsidiaries, any additional representations and
warranties set forth on the Schedule.
D. Conditions. The obligation of the Bank to make the Loan to the Borrower is
subject to and conditioned upon each of the following: (i) the fees due to
the Bank under Sections A.7. and J.3. of this Agreement have been paid to
the Bank; (ii) the representations and warranties contained in Section C
hereof are true and correct on and as of the date of the Loan; (iii) no
Event of Default described in Section H, and no event which, with the giving
of notice, or the passage of time, or both, would become an Event of
Default, has occurred and is continuing; (iv) all of the Loan Documents
remain in full force and effect; and (v) the Bank has received the following
documents, duly executed and delivered by the Obligor thereunder, and in
form and substance satisfactory to the Bank:
a. The Note(s) and this Agreement;
b. If the Borrower is a corporation, certified resolutions of the Board of
Directors of the Borrower authorizing the Borrower to borrow hereunder
and to execute, deliver and perform its obligations under the Loan
Documents. If the Borrower is a partnership, the Borrower shall deliver
to the Bank a certified document executed by all general partners of
the Borrower authorizing the Borrower to borrow hereunder and
authorizing the Borrower's execution, delivery and performance of the
Loan Documents. Such resolution or document shall contain such other
provisions as shall be required by the Bank;
c. The following security, subordination, and/or guaranty documents, and
related instruments necessary to perfect any interest in the Collateral
described therein: UCC-1 Financing Statements; Mortgage, Assignment of
Leases and Security Agreement; Guaranty and Suretyship Agreement; and
d. Such other documents as the Bank may reasonably require, including,
without limitation, proof of insurance, appraisals of real and/or
personal property, environmental analysis, other agreements,
instruments, or indentures to which an Obligor is a party, including,
without limitation, financing statements, proofs, opinions of the
Borrower's counsel and/or other professionals, guaranties and other
written assurances.
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E. Affirmative Covenants. The Borrower covenants and agrees that so long as
there are any outstanding liabilities hereunder or otherwise, the Borrower
and each of its consolidated subsidiaries (except that if this box [ ] is
checked these covenants shall not apply to such consolidated subsidiaries)
shall:
1. Financial Statements. Furnish to the Bank the following financial
information: (i) not later than ninety (90) days after the end of each
fiscal year, consolidated and consolidating [ ] audited [x] reviewed
[ ] compiled year-end financial statements for the Borrower (if the
boxes herein are left blank, then the type of financial statement shall
be determined by the Bank at its sole discretion), and if applicable,
for each of its consolidated subsidiaries, including, but not limited
to, statements of financial condition contingent liabilities income and
cash flows, a reconciliation of net worth, notes to financial
statements (all of the above prepared in accordance with GAAP,
consistently applied, by an independent certified public accountant
acceptable to the Bank, and certified as true, correct, and complete by
the Borrower's chief financial officer) and any other information that
may assist the Bank in assessing the Borrower's financial condition;
(ii) not later than sixty (60) days after the end of each interim
fiscal quarter, the Borrower's consolidated and consolidating financial
statements, including, but not limited to, statements of financial
condition, income and cash flows, and a reconciliation of net worth
(all of the above prepared in a format acceptable to the Bank,
certified as true, correct, and complete by the Borrower's chief
financial officer); (iii) the following statements and schedules
relating to the Borrower's business, [ ] monthly [ ] quarterly or at
such other times as may be requested by the Bank:
[ ] accounts receivable agings [ ] accounts payable agings
[ ] inventory schedules [ ] other __________________;
and/or (iv) such information respecting the operations, financial or
otherwise, of the Borrower or any of its subsidiaries, as the Bank may
from time to time reasonably request;
2. Compliance Certificate. Furnish to the Bank, together with each set of
financial statements described in Paragraphs E.1. (i) and (ii) above, a
compliance certificate, in the form attached hereto as Exhibit A,
signed by the Borrower (if an individual) or the Borrower's chief
financial officer, certifying that (i) all representations and
warranties set forth in this Agreement and in any other Loan Document
remain true and correct; (ii) none of the covenants in this Agreement
or in any other Loan Document has been breached; (iii) no event has
occurred which, alone, or with the giving of notice or the passage of
time, or both, would constitute an Event of Default under this
Agreement or under the other Loan Documents; and (iv) no material
adverse change has occurred in the Borrower's financial condition.
3. Notice of Certain Events. Promptly give written notice to the Bank of
(i) the details of any Reportable Events (as defined in ERISA) which
have occurred; (ii) the occurrence of any event which alone or with
notice, the passage of time, or both, would constitute an Event of
Default; (iii) the commencement of any proceeding or litigation which,
if adversely determined, would adversely affect its financial condition
or ability to conduct its business; and (iv) the formation of any
subsidiary of the Borrower after the date of this Agreement, which
notice shall be accompanied by the resolution of the Board of Directors
of such subsidiary authorizing such subsidiary to execute a guaranty of
the Liabilities, satisfactory in form and substance to the Bank,
together with such guaranty duly executed by such subsidiary;
4. Preservation of Property;Insurance. Keep and maintain, and require its
subsidiaries to keep and maintain, all of its and their property and
assets in good order and repair, maintain extended coverage, general
liability, business interruption, hazard, property and other insurance
in amounts deemed sufficient by the Bank and as is customary for
businesses similar to the Borrower's business, and deliver to the Bank
certificates of all such insurance in effect; and cause all such
policies covering any Collateral and business interruption to contain
loss payee endorsements in favor of the Bank and to be subject to
cancellation or reduction in coverage only upon 30 days prior written
notice thereof to the Bank at its address set forth in this Agreement;
5. Taxes. Pay and discharge, and require its subsidiaries to pay and
discharge, when due, all taxes, assessments or other governmental
charges imposed on them or any of their respective properties, unless
the same are currently being contested in good faith by appropriate
proceedings and adequate reserves are maintained therefor;
6. Operation of Properties. Operate its properties, and cause those of its
subsidiaries to be operated in compliance with all applicable orders,
rules and regulations promulgated by the jurisdictions and agencies
thereof where such properties are located, and duly file or cause to be
filed such reports and/or information returns as may be required or
appropriate under applicable orders, regulations or law;
7. Access to Properties, Books and Records. Permit the Bank's
representatives and/or agents full and complete access to any or all of
the Borrower's and its subsidiaries' properties and financial records,
to make extracts from and/or audit such records and to examine and
discuss the Borrower's properties, business, finances and affairs with
the Borrower's officers and outside accountants;
8. Environmental Liens. In the event that there shall be filed a lien
against any property of the Borrower by any jurisdiction, political
subdivision, agency, or instrumentality thereof, arising from an
intentional or unintentional act or omission of the Borrower, resulting
in the discharging of hazardous substances or wastes into the
atmosphere or waters, or onto lands, then, within thirty (30) days from
the date that the Borrower is given notice that the lien has been
placed against such property, or within such shorter period of time in
the event that such jurisdiction, political subdivision, agency , or
instrumentality thereof has commenced steps to cause such property to
be sold pursuant to the lien, the Borrower shall either (i) pay the
claim and remove the lien fro the applicable property or (ii) furnish
to such jurisdiction, political subdivision, agency, or instrumentality
thereof that imposed the lien one of the following: (a) a bond
satisfactory to such jurisdiction, political subdivision, agency, or
instrumentality thereof in the amount of the claim out of which the
lien arises; (b) a cash deposit in the amount of the claim out of which
the lien arises; or (c) other security reasonably satisfactory to such
jurisdiction, political subdivision, agency, or instrumentality thereof
in an amount sufficient to discharge the claim out of which the lien
arises;
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9. Removal of Hazardous Substances. Should the Borrower cause or permit
any intentional or unintentional act or omission resulting in the
discharging of hazardous substances or wastes into the atmosphere or
waters, or onto lands resulting in danger to the natural resources
without having obtained a permit issued by the appropriate governmental
authorities, the Borrower shall promptly clean up same in accordance
with all applicable federal, state, and local orders, statutes, laws,
ordinances, rules and regulations; and
10. Additional Affirmative Covenants. The Borrower further affirmatively
covenants and agrees that it shall perform any other affirmative
covenants set forth in the Schedule and in the Loan Documents to which
the Borrower is a party.
F. Negative Covenants. So long as any Liabilities are outstanding, the Borrower
and its consolidated subsidiaries (except that if this box [ ] is checked,
these covenants shall not apply to such consolidated subsidiaries) shall
not, without the prior written consent of the Bank (in this section only, if
a blank in any of the following paragraphs is completed with the letters NA
or N/A, that paragraph in this section only is not applicable):
1. Incur Indebtedness; Creation of Lien. Incur, create, or assume any
indebtedness including, without limitation, obligations under
capitalized leases, except indebtedness owing to the Bank, indebtedness
existing on the date hereof and previously reported in writing to and
permitted by the Bank, and trade indebtedness arising in the ordinary
course of business; make any loans or advances to others including,
without limitation, officers, directors, shareholders, principals,
partners or affiliates of the Borrower or any Obligor; or create,
permit, or suffer the creation of any liens, security interests, or
other encumbrances on any of its property, real or personal, except
liens, security interests or encumbrances in favor of the Bank or
existing on the date hereof and previously reported in writing to and
permitted by the Bank;
2. Sale of Assets; Liquidation; Merger; Acquisitions. Convey, lease, sell,
transfer or assign any assets except in the ordinary course of the
Borrower's business for value received, liquidate or discontinue its
normal operations with intent to liquidate, enter into any merger or
consolidation, or acquire all or substantially all of the assets, stock
or other equity interests of another entity;
3. Payment of Dividends; Redemption of Stock. Pay any dividends, make any
withdrawal from its capital, make any other distributions and/or
repurchase, redeem, or otherwise acquire or set aside reserves to
acquire, any of its outstanding stock, partnership or other equity
interests, except for such actions by any subsidiaries in favor of the
Borrower;
4. Accounts. Sell, assign, transfer or dispose of any of its accounts or
notes receivable, with or without recourse, except to the Bank;
5. Guaranty Obligations. Become a guarantor, surety, obligor or otherwise
become directly, indirectly or contingently liable for the debts or
obligations of others, except for the benefit of the Bank or its
Affiliates, and except as an endorser of checks or drafts negotiated in
the ordinary course of the Borrower's business;
6. Lease Obligations. Incur, create, or assume any commitment to make any
Lease Payments if the aggregate amount payable thereunder in any one
fiscal year would exceed $ N/A ; "Lease Payments" means any direct or
-----
indirect payment or payments, whether as rent or otherwise, including
fees or service or finance charges, under any lease, rental or other
agreement for the use of the property of any person and/or entity other
than the Borrower whether or not such agreement contains an option to
purchase;
7. Sale-Leaseback Transactions. Enter into any sale-leaseback transaction
or any transaction howsoever termed which would have the same or
substantially the same result or effect as a sale-leaseback;
8. Prepayment of Other Indebtedness. Prepay any amounts not required to be
prepaid, except to the Bank or any Affiliate, or cause or permit to be
accelerated any amounts on any outstanding indebtedness now existing or
hereafter arising;
9. Compensation. Permit salaries, withdrawals, bonuses or other
compensation to officers, directors, shareholders, principals, partners
or affiliates of the Borrower to exceed the aggregate amount of $ N/A
-----
per year;
10. Expenses for Fixed Assets. Expend for fixed assets during any one
fiscal year an aggregate amount exceeding $ N/A ;
-----
11. Sale or Issuance of Corporate Stock. If the Borrower is a corporation,
sell, issue, or agree to sell or issue, any equity interest (voting,
non-voting, preferred or common) of the Borrower, or purchase any such
equity interest;
12. Investments. Purchase or make any investment in the stock, securities,
or evidence of indebtedness of or loan to any other person or entity
(including, without limitation, entities owned or controlled by any
officers, directors, shareholders, principals, partners or affiliates
of the Borrower) except (i) the United States Government or its
agencies, or (ii) certificates of deposit of United States domestic
banks having a ratio of qualifying total capital to weighted risk
assets of not less than eight percent (8%), at least four percent (4%)
of which is Tier 1 capital, and having total capital and surplus in
excess of $50,000,000. "Qualifying total capital" and "Tier 1 capital"
shall be defined from time to time pursuant to regulations published by
the Office of the Comptroller of the Currency and the Federal Deposit
Insurance Corporation;
13. Hazardous Substances. Cause or permit to exist a discharging of
hazardous substances or wastes into the atmosphere or waters or onto
lands unless the discharging is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state, or
local governmental authorities;
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14. Consolidated Current Ratio. Permit the ratio of Consolidated Current
Assets to Consolidated Current Liabilities at any time to be less than
.71 : 1.0;
---------
15. Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth
at any time to be less than $5000,000.00; "Tangible Net Worth" is
-----------
defined, at any date, as (i) the aggregate amount at which all assets
of the Borrower would be shown on a balance sheet at such date after
deducting capitalized research and development costs, capitalized
interest, debt discount and expense, goodwill, patents, trademarks,
copyrights, franchises, licenses, amounts owing from officers,
directors, shareholders, principals, partners or affiliates of the
Borrower and any investments in any entities owned or controlled by any
of the foregoing, and such other assets as are properly classified as
"intangible assets" less (ii) the aggregate amount of indebtedness,
liabilities (including tax and other proper accruals) and reserves of
the Borrower and its consolidated subsidiaries (excluding Approved
Subordinated Debt); "Approved Subordinated Debt" means any subordinated
indebtedness for borrowed money that is permitted by this Agreement and
that is owing on the date hereof or is hereafter subordinated to the
Liabilities on terms approved in writing by the Bank;
16. Debt to Equity Ratio Requirements. Permit the ratio of Consolidated
Total Liabilities to Consolidated Tangible Net Worth at any time to
exceed 1.5 : 1.0 "Total Liabilities" is defined at any date as all
-----------
liabilities of the Borrower which would properly appear on the
liabilities side of a balance sheet, other than capital stock, capital
surplus, retained earning, minority interests, deferred credit,
Approved Subordinated Debt and contingency reserves unders GAAP; or
17. Additional Negative Covenants. The Borrower and its subsidiaries shall
not undertake any activities prohibited by any othe negative covenants
set forrh in the Schedule.
G. Additional Collateral. As additional collateral security for the payment of
the Borrower's Liabilities to the Bank hereunder, under the other Loan
Documents, and/or otherwise, the Borrower hereby assigns, pledges, transfers
and grants to the Bank a continuing, first priority security interest in and
lien upon all funds, balances, deposits, accounts, certificates of deposit,
securities and/or other property of any kind of the Borrower and/or in which
the Borrower has an interest, now or hereafter in the possession, custody,
or control of the Bank or any Affiliate.
H. Events of Default. Each of the following shall constitute an event of
default ("Event of Default") hereunder;
1. Breach. A breach by any Obligor of any term, provision, obligation,
covenant, representation, or warranty arising under (i) this Agreement
or any other Loan Document, including, without limitation, failure to
make any payment when due; (ii) any present or future agreement or
instrument with or in favor of the Bank, including, without limitation,
the failure to make any payment when due; or (iii) any present or
future agreement or instrument for borrowed money or other financial
accommodations with any other person or entity;
2. Bankruptcy; Insolvency. (i) Any Obligor commences any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under the
United States Bankruptcy Code or under any similar foreign, federal,
state, or local statute, or any dissolution or liquidation proceeding,
or makes a general assignment for the benefit of creditors, or takes
any action for the purpose of effecting any of the foregoing; (ii) any
bankruptcy, reorganization, debt arrangement, or other case or
proceeding under the United States Bankruptcy Code or under any similar
foreign, federal, state or local statute, or any dissolution or
liquidation proceeding, is involuntarily commenced against or in
respect of any Obligor or an order for relief is entered in any such
proceeding; (iii) the appointment, or the filing, of a petition seeking
the appointment, of a custodian, receiver, trustee, or liquidator for
any Obligor or any of its property, or the taking of possession of any
part of the property of any Obligor at the instance of any governmental
authority; or (iv) any Obligor becomes insolvent (however defined), is
generally not paying its debts as they become due, or has suspended
transaction of its usual business;
3. Death; Reorganization. The death, dissolution, merger, consolidation,
or reorganization of any Obligor;
4. Material Misstatement. Any statement, representation or warranty made
in or pursuant to this Agreement or any other Loan Document or to
induce the Bank to enter into this Agreement shall prove to be untrue
or misleading in any material respect;
5. Debt, Liens, Loans, Lease Payments. Any Obligor (i) incurs or assumes
additional debt other than debt incurred for normal consumer purposes,
debt to the Bank and/or an Affiliate and/or trade debt in the ordinary
course of its business; (ii) makes any loans or advances to officers,
directors, shareholders, principals, partners or affiliates of the
Borrower or any Obligor; (iii) creates, permits or grants any lien or
security interest in any of its property on which the Bank has a lien
and/or security interest, or (iv) incurs, creates or assumes any
commitment, either directly or indirectly, for rent, service fees or
charges or finance charges under any lease, rental, sale-lease back or
other agreement for use of the property of any person and/or entity
other than the Borrower;
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6. Entry of Judgment. The filing, entry, or issuance of any judgment,
execution, garnishment, attachment, distraint, or lien against any
Obligor or its property, or the entry of any order enjoining or
rejoining any Obligor and/or restraining or seizing any property of any
Obligor; or
7. Transfer of Assets. Any Obligor transfers or sells all or substantially
all of its assets, without the prior written consent of the Bank.
I. Remedies.
1. Acceleration of Liabilities; Rights of Bank. Upon the occurrence of an
Event of Default described in Section H (other than the Events of
Default described in Paragraph H.2.), at the Bank's sole option, the
Bank's commitment, if any, to make any further advances or loans to the
Borrower under any Loan Document shall terminate and all Liabilities
shall immediately become due and payable in full, all without protest,
presentment, demand or further notice of any kind to the Borrower or
any other Obligor, all of which are expressly waived. Upon the
occurrence of any Event of Default described in Paragraph H.2.,
immediately and automatically, the Bank's commitment, if any, to make
any further advances or loans to the Borrower under any Loan Document,
shall terminate and all Liabilities shall immediately become due and
payable in full, all without protest, presentment, demand or further
notice of any kind to the Borrower or any other Obligor, all of which
are expressly waived. Upon and following an Event of Default, the Bank
may, at its option, exercise any and all rights and remedies it has
under this Agreement, any other Loan Document and/or applicable law,
including, without limitation, the right to charge and collect interest
on the principal portion of the Liabilities at a rate equal to the
lesser of (i) the hightest rate of interest set forth in the Loan
Documents, or (ii) the highest rate of interest allowed by law, such
rate of interest to apply to the Liabilities, at the Bank's option,
upon and after an Event of Default, maturity, whether by acceleration
or otherwise, and after the entry of a judgment with respect to any or
all of the Liabilities. Upon and following an Event of Default, the
Bank may proceed to protect and enforce the Bank's rights under any
Loan Document and/or under applicable law by action at law, in equity
or other appropriate proceeding including, without limitation, an
action for specific performance of any provision contained herein or in
any other Loan Document.
2. Right of Set-off. If any of the Liabilities shall be due and payable or
any one or more Events of Default shall have occurred, whether or not
the Bank shall have made demand under any Loan Document and regardless
of the adequacy of any collateral for the Liabilities or other means of
obtaining repayment of the Liabilities, the Bank shall have the right,
without notice to the Borrower or to any other Obligor, and is
specifically authorized hereby to set-off against and apply to the then
unpaid balance of the Liabilities any items or funds of the Borrower
and/or any Obligor held by the Bank or any Affiliate, any and all
deposits (whether general or special, time or demand, matured or
unmatured) or any other property of the Borrower and/or any Obligor,
including, without limitation, securities and/or certificates of
deposit, now or hereafter maintained by the Borrower and/or any Obligor
for its or their own account with the Bank or any Affiliate, and any
other indebtedness at any time held or owing by the Bank or any
Affiliate, to or for the credit or the account of the Borrower and/or
any Obligor, even if effecting such set-off results in a loss or
reduction of interest or the imposition of a penalty applicable to the
early withdrawal of time deposits. For such purpose, the Bank shall
have, and the Borrower hereby grants to the Bank, a first lien on and
security interest in such deposits, property,funds, and accounts, and
the proceeds thereof. The Borrower further authorizes any Affiliate,
upon and following the occurrence of an Event of Default, at the
request of the Bank, and without notice to the Borrower, to turn over
to the Bank any property of the Borrower, including, without
limitation, funds and securities, held by the Affiliate for the
Borrower's account and to debit any deposit account maintained by the
Borrower with such Affiliate (even if such deposit account is not then
due or there results a loss or reduction of interest or the imposition
of a penalty in accordance with law applicable to the early withdrawal
of time deposits), in the amount requested by the Bank up to the amount
of the Liabilities, and to pay or transfer such amount or property to
the Bank for application to the Liabilities.
3. Remedies Cumulative; No Waiver. The rights, powers and remedies of the
Bank provided in this Agreement and in any of the Loan Documents are
cumulative and not exclusive of any right, power or remedy provided by
law or equity. No failure or delay on the part of the Bank in the
exercise of any right, power or remedy shall operate as a waiver
thereof, or shall any single or partial exercise preclude any other or
further exercise thereof, or the exercise of any other right, power or
remedy.
4. Continuing Enforcement of the Loan Documents. If, after receipt of any
payment of all or any part of the Liabilities, the Bank is compelled or
agrees, for settlement purposes, to surrender such payment to any
person or entity for any reason, then this Agreement and the other Loan
Documents shall continue in full force and effect or be reinstated, as
the case may be. The provisions of this paragraph shall survive the
termination of this Agreement and the other Loan Documents and shall be
and remain effective notwithstanding the payment of the Liabilities,
the cancellation of the Agreement, the release of any security
interest, lien or encumbrance securing the Liabilities or any other
action which the Bank may have taken in reliance upon its receipt of
such payment.
J. Miscellaneous.
1. Waiver of Demand. The Borrower (i) waives demand, presentment, protest,
notice of protest, and notice of dishonor of this Agreement; (ii)
consents to any and all extensions of time, renewals, waivers, or
modifications that may be granted by the Bank with respect to the
payment or other provisions of this Agreement; and (iii) agrees that
makers, endorsers, guarantors, and sureties for the indebtedness
evidenced hereby may be added or released without notice to the
Borrower and without affecting the Borrower's liability hereunder. The
liability of the Borrower hereunder shall be absolute and
unconditional.
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2. Notices. Notices and communications under this Agreement shall be in
writing and shall be in writing and shall be given (i) hand-delivery,
(ii) first class mail (postage prepaid), or (iii) reliable overnight
commercial courier (charges prepaid) to the addresses listed in this
Agreement. Notice by overnight courier shall be deemed to have been
given and received on the date scheduled for delivery. Notice by mail
shall be deemed to have been given and received three (3) calendar days
after the date first deposited in the United States Mail. Notice by
had-delivery shall be deemed to have been given and received upon
delivery. A party may change its address by giving written notice to
the other party as specified herein.
3. Costs and Expenses. Whether or not the transactions contemplated by the
Loan Documents are fully consummated, the Borrower shall promptly pay
(or reimburse, as the Bank may elect) all costs and expenses which the
Bank has incurred or may hereafter incur in connection with the
negotiation preparation, reproduction, interpretation, perfection,
protection of collateral, administration and enforcement of this
Agreement and the other Loan Documents, the collection of all amounts
due under this Agreement and the other Loan Documents, and all
amendments, modifications, consents or waivers, if any, to the Loan
Documents. The Borrower's reimbursement obligations under this
Paragraph shall survive any termination of this Agreement or any other
Loan Document.
4. Payment Due on a Day Other than a Business Day. If any payment due or
action to be taken under this Agreement or any other Loan Document
falls due or is required to be taken on a day that the Bank is not open
for business, such payment or action shall be made or taken on the next
succeeding day when the Bank is open for business and such extended
time shall be included in the computation of interest.
5. Governing Law. This Agreement shall be construed in accordance with and
governed by the substantive laws of the State of Connecticut without
reference to conflict of laws principles.
6. Integration; Amendment. This Agreement and the other Loan Documents
constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations
and prior writings with respect to the subject matter hereof and
thereof. No amendment of this Agreement, and no waiver of any one or
more of the provisions hereof shall be effective unless set forth in
writing and signed by the parties hereto.
7. Successors and Assigns. This Agreement (i) shall be binding upon the
Borrower and the Bank and, where applicable, their respective heirs,
executors, administrators, successors and assigns, and (ii) shall inure
to the benefit of the Borrower and the Bank and, where applicable,
their respective heirs, executors, administrators, successors and
permitted assigns; provided, however, that the Borrower may not assign
its rights or obligations hereunder or any interest herein without the
prior written consent of the Bank, and any such assignment or attempted
assignment by the Borrower shall be void and of no effect with respect
to the Bank. The Bank may from time to time sell or assign, in whole or
in part, or grant participations in the Loan and/or the Agreement
and/or the obligations evidenced thereby. The Borrower authorizes the
Bank to provide information concerning the Borrower to any prospective
purchaser, assignee or participant.
8. Severability and Consistency. The illegality, unenforceability or
inconsistency of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the
legality, enforceability or consistency of the remaining provisions of
this Agreement or any instrument or agreement required hereunder. The
Loan Documents are intended to be consistent. However, in the event of
any inconsistencies among any of the Loan Documents, such inconsistency
shall not affect the validity or enforceability of any Loan Document.
The Borrower agrees that in the event of any inconsistency or ambiguity
in any of the Loan Documents, the Loan Documents shall not be construed
against any one party but shall be interpreted consistent with the
Bank's policies and procedures.
9. Consent to Jurisdiction and Service of Process. The Borrower
irrevocably appoints each and every owner, partner an/or officer of the
Borrower as its attorneys upon whom may be served any notice, process
or pleading in any action or proceeding against it arising out of or in
connection with this with Agreement or any of the Loan Documents. If
service of process cannot be delivered to the Borrower as specified by
statute, the Borrower agrees that, court approval, it may be served by
regular or certified mail at the address set forth herein. The Borrower
hereby consents and agrees the (i) any action or proceeding against it
may be commenced and maintained in any court within the State of
Connecticut or in the United States District Court for the District of
Connecticut by service of process on any such owner, partner and/or
officer and (ii) the courts of the State of Connecticut and the United
States District Court for the District of Connecticut shall have
jurisdiction with respect to the subject matter hereof and the person
of the Borrower and all collateral for the Liabilities. The Borrower
agrees that any action brought by the Borrower shall be commenced and
maintained only in a court in the federal judicial district or county
in which the Bank has its principal place of business in Connecticut.
10. Joint and Several Liability. In the event that the Borrower consists of
more than one person or entity, the Liabilities of each such person or
entity shall be joint and several and the word "Borrower" means each of
them, any of them and/or all of them.
8 of 12
<PAGE>
11. Judicial Proceedings; Waivers.
THE BORROWER AND THE BANK ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT,
ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY THE BANK OR THE BORROWER OR ANY SUCCESSOR OR ASSIGN OF
THE BANK OR THE BORROWER, ON OR WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO,
OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY AND EACH
PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING,
ANY SPECIAL EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (iii) THIS SECTION
IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THE BANK WOULD
NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET FORTH IN THIS
SECTION WERE NOT A PART OF THIS AGREEMENT.
12. Prejudgment Remedies.
The Borrower and any endorser, surety and guarantor hereby acknowledges
that this Loan constitutes a commercial transaction. Pursuant to
Section 52-278f of the Connecticut General Statutes, the Borrower
hereby waives and relinquishes all rights to notice and hearing as
provided in Sections 52-278a through 52-278g of said Connecticut
General Statutes prior to the securing of any prejudgment remedy
against the Borrower in connection with the Liabilities or any of the
instruments or documents executed in connection herewith.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement, on
the day and year first above written.
______________________________________ ______________________________________
Name: Name:
Address: _____________________________ Address: _____________________________
_____________________________ _____________________________
STAR STRUCK, INC.
______________________________________
Corporation or Partnership Name
/s/ Kenneth Karlan
By: __________________________________
First Fidelity Bank Name: Kenneth Karlan
formerly Title: President
Union Trust Company
8 F. J. Clarke Cir
Address:______________________________
Bethel, CT 06801
______________________________
FIRST FIDELITY BANK
/s/ John Riley
By:____________________________________
Name: John R. Riley
Title: Ass. Vice President
300 Main Street
Address: ______________________________
Stamford, CT 06904
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<PAGE>
SCHEDULE OF ADDITIONAL TERMS
TO TERM LOAN AGREEMENT
DATED JULY 6, 1995,
BY AND BETWEEN THE BORROWER AND THE BANK
----------------------------------------
I. (a) The information to be furnished to Bank under Paragraph E.1 shall also
be provided for SBM Industries, Inc. ("Guarantor") and such information shall
include a listing or real estate holdings (including percentage of ownership and
ownership status), and any other information requested by Bank, and such
information must be prepared on a fully audited basis by a certified public
accountant acceptable to Bank.
(b) Not later than ninety (90) days after the end of each interim fiscal
half year, Borrower shall provide Bank with management - prepared financial
statements of Borrower, including, without limitation, statements of financial
condition, income and cash flows, a reconciliation of net worth, a listing of
all contingent liabilities, and any other information requested by Bank.
II. (a) Borrower shall maintain a debt service coverage ratio of not less than
1.2 to 1, measured annually, and defined as the ratio of (i) Borrower's net
income plus amounts (without duplication) that have been deducted in determining
net income for such period for interest expense, real estate tax expense and
depreciation and amortization expense, to (ii) the aggregate principal and
interest payable on all indebtedness of Borrower for the same period.
(b) Within one (1) year after the date of this Agreement, Borrower shall
maintain at the Bank an operating account of not less than $100,000.00.
(c) If at any time during the term of the Loan, the outstanding balance of
the Loan exceeds 81% of the appraised value of the real property mortgaged to
the Bank located at 8 Francis J. Clarke Circle, Bethel, CT (the "Property"), the
Borrower shall be required to pay down the outstanding balance of the Loan to an
amount which is equal to or less than 81% of the appraised value of the
Property.
(d) Borrower shall not cause or permit any transfer of all or any portion
of the Property, whether voluntarily, involuntarily or by operation of law,
without the prior written consent of Bank. A "transfer" includes any sale or
conveyance; the execution of an installment sale agreement; the creation or
imposition of any mortgage, lien, security interest or other encumbrance on the
Property; the transfer (whether in one transaction or a series of transactions)
or pledge of any interest in Borrower; and the lease of the Property other than
to a tenant for occupancy of less than twenty percent of the usable space of any
building(s) on the Property. With regard to any lease of the Property to a
tenant for occupancy, the terms of such lease shall be subject to approval by
the Bank and the Bank shall receive a copy for such lease within fifteen (15)
days after execution.
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<PAGE>
Exhibit A
to Term Loan Agreement
dated July 6, 1995,
------ --
by and between the Borrower and the Bank
COMPLIANCE CERTIFICATE OF BORROWER
FOR THE FISCAL YEAR ENDING ________________, 19__ OR
FOR THE FISCAL QUARTER ENDING _______________, 19__
This Compliance Certificate, signed by _____________________ (if the Borrower is
an individual) the Borrower, or (if the Borrower is not an individual) the Chief
Financial Officer of the Borrower, is delivered to the Bank pursuant to Section
E.2. of the Term Loan Agreement (the "Agreement").
The undersigned certifies that he/she is authorized to execute this Compliance
Certificate on behalf of the Borrower and hereby certifies on behalf of the
Borrower as follows:
(i) all representations and warranties set forth in the Agreement and in
any other Loan Document (as defined in the Agreement) remain true and correct;
(ii) none of the covenants in the Agreement or in any of the other Loan
Documents has been breached; and
(iii) no event has occurred which, alone, or with the giving of notice or
the passage of time, or both, would constitute an event of default (as defined
in the Agreement) under the Agreement or under any of the Loan Documents. No
material adverse change has occurred in the Borrower's financial condition.
The foregoing representations concerning the Borrower's financial condition are
made to the Bank with the understanding that the Bank will rely on these
representations.
STAR STRUCK, INC.
__________________________________
Name of Borrower
By: ______________________________
Name:
Title:
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<PAGE>
Exhibit B
Make Whole Premium
12 of 12
<PAGE>
EXHIBIT 10(d)
[LOGO OF UNION TRUST] Union Trust Company Guaranty and Suretyship
Agreement - Corporation/Partnership -
Commercial (Connecticut)
July 6, 1995
----------- --
To induce First Fidelity Bank (the "Bank") to make loans, extensions of credit
or other financial accommodations to STAR STRUCK, INC. (the "Borrower"), now or
-------------------
in the future, to secure the observance, payment, and performance of the
Liabilities (as defined below) and with full knowledge that the Bank would not
make the said loans, extensions of credit, or financial accommodations without
this Guaranty and Suretyship Agreement (together with any amendments or
modifications hereto in effect from time to time, the "Guaranty"), which shall
be a contract of suretyship, the Guarantor (as defined below), jointly and
severally and unconditionally, and intending to be legally bound hereby, agrees
as follows:
A. Liabilities Secured. The Guarantor, jointly and severally, hereby guarantees
the full, prompt, and unconditional payment of the Liabilities (as defined
below), when and as the same shall become due, whether at the stated
maturity date, by acceleration, or otherwise, and the full, prompt, and
unconditional performance of each and every term and condition of every
transaction to be kept and performed by the Borrower and any other Obligor
under the Loan Documents (as defined below). This Guaranty is a primary
obligation of the Guarantor and shall be a continuing inexhaustible Guaranty
without limitation as to amount or duration and may not be revoked except by
notice in writing by the Guarantor to the Bank and received by the Bank at
least thirty (30) days prior to the date set for such revocation. No such
notice shall affect the Guarantor's liability under this Guaranty for any
loan, extension of credit or other financial accommodation made to or
committed to be made to the Borrower or any Obligor by the Bank and/or any
Affiliate occurring prior to the effective date of the revocation,
regardless of whether such loan, extension of credit or financial
accommodation is made before or after notice of revocation.
B. Definitions. As used herein, the following terms shall have the following
meanings:
1. Affiliate. The term "Affiliate" means First Fidelity Bancorporation and
any of its direct and indirect affiliates and subsidiaries.
2. Collateral. The term "Collateral" means all property of the Guarantor
and/or any Obligor, now or hereafter in the possession of the Bank or
any Affiliate, in any capacity whatsoever including, but not limited
to, any balance or share of any deposit, trust or agency account, and
all property and assets of the Guarantor and/or any Obligor now or
hereafter subject to a security agreement, pledge, mortgage,
assignment, or other document or agreement granting the Bank or any
Affiliate a security interest therein or lien or encumbrance thereon.
3. GAAP. The term "GAAP" means generally accepted accounting principles in
effect from time to time in the United States.
4. Guarantor. The term "Guarantor" means all of the persons and entities
who are signatories to this Guaranty other than the Bank.
5. Liability. The term "Liability" or "Liabilities" means any and all
obligations and indebtedness of every kind and description of the
Borrower owing to the Bank or to any Affiliate, whether or not under
the Loan Documents, and whether such debts or obligations are primary
or secondary, direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, contractual or
tortious, arising by operation of law, by overdraft, or otherwise, or
now or hereafter existing, including, without limitation, principal,
interest, fees, late fees, expenses, attorneys' fees and costs, and/or
allocated fees and costs of the Bank's in-house legal counsel, that
have been or may hereafter be contracted or incurred.
6. Loan Documents. The term "Loan Documents" means this Guaranty, and any
and all credit accommodations, notes loan agreements, and any other
agreements and documents, now or hereafter existing, creating,
evidencing, guarantying, securing or relating to any or all of the
Liabilities, together with all amendments, modifications, renewals, or
extensions thereof.
7. Obligor. The term "Obligor" means the Borrower and each and every
maker, endorser, guarantor, or surety, including, without limitation,
the Guarantor, of or for the Liabilities.
C. Representations and Warranties; Covenants. The Guarantor covenants,
represents and warrants as of the date hereof and at all times hereafter
until the Liabilities are fully paid and performed, and any commitment to
make loans, extensions of credit, or other financial accommodations to the
Borrower have been terminated, as follows:
1. Obligations of the Guarantor. This Guaranty and any other Loan Document
to which the Guarantor is a party are the legal, valid, and binding
obligations of the Guarantor, enforceable against it in accordance with
their terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights
generally. The loans or credit accommodations made by the Bank to the
Borrower and the assumption by the Guarantor of its obligations
hereunder and under any other Loan Document to which the Guarantor is a
party will result in material benefits to the Guarantor. This Guaranty
was entered into by the Guarantor for commercial purposes; and
2. Books and Records; Financial Statements and Information; Tax Returns.
All financial statements heretofore delivered by the Guarantor to the
Bank are true, correct, and complete in all material respects, and
fairly represent the Guarantor's financial condition as of the date
hereof, and no information has been omitted which would make the
information previously furnished misleading or incorrect in any
material respect. The Guarantor shall keep and maintain complete and
accurate books and records and shall permit representatives of the Bank
to examine and audit the Guarantor's (and its subsidiaries, if any)
books and records and to inspect the Guarantor's facilities and
properties. The Guarantor shall furnish to the Bank the following
financial information: (i) not later than ninety (90) days after the
end of each fiscal year, consolidated and consolidating x audited
reviewed compiled year-end financial statements for the Guarantor (if
the boxes herein are left blank, then the type of financial statement
shall be determined by the Bank at its sole discretion), and if
applicable, for each of its consolidated subsidiaries, including, but
not limited to, statements of financial condition, income and cash
flows, a reconciliation of net worth, notes to financial statements
(all of the above prepared in accordance with GAAP, consistently
applied, by an independent
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<PAGE>
certified public accountant acceptance to the Bank, and certified as
true, correct, and complete by the Guarantor's chief financial officer)
and any other information that may assist the Bank in assessing the
Guarantor's financial condition; (ii) not later than sixty (60) days
after the end of each interim fiscal quarter, the Guarantor's
consolidated and consolidating financial statements, including, but not
limited to, statements of financial condition, income and cash flows,
and a reconciliation of net worth (all of the above prepared in a
format acceptable to the Bank, certified as true, correct, and complete
by the Guarantor's chief financial officer); (iii) the following
statements and schedules relating to the Guarantor's business monthly
quarterly or at such other times as may be requested by the Bank:
[_] accounts receivable agings [_] accounts payable agings
[_] inventory schedules [_] Other_____________________;
and/or (iv) such information respecting the operations, financial or
otherwise, of the Guarantor or any of its subsidiaries, as the Bank may
from time to time reasonably request. The Guarantor shall prepare and
timely file all federal, state and local tax returns required to be
filed by the Guarantor and shall submit to the Bank a copy of its
federal tax return immediately after filing same with the Internal
Revenue Service.
D. No Limitation of Liability. Without incurring responsibility to the
Guarantor and without impairing or releasing the obligations of the
Guarantor to the Bank or to any Affiliate, the Bank may, at any time, and
from time to time, without the consent of, or notice to the Guarantor, upon
any terms or conditions, and in whole or in part:
1. Payment Terms. Change the manner, place, or terms of payment, and/or
change or extend the time for payment, or renew or alter, any of the
Liabilities, any security therefor or any of the Loan Documents
evidencing same, and the Guaranty herein made shall apply to the
Liabilities and the Loan Documents as so changed, extended, renewed, or
altered;
2. Sale of Property. Sell, exchange, release, surrender, realize upon, or
otherwise deal with in any manner and in any order, any property,
including the Collateral, by whomsoever at any time pledged, mortgaged,
or in which a security interest is given to secure, or howsoever
securing, the Liabilities;
3. Failure to Exercise Rights. Exercise or refrain from exercising any
rights against the Borrower or any other Obligor (including the
Guarantor) or against any Collateral for the Liabilities or otherwise
act or refrain from action;
4. Settlement of Liabilities. Settle or compromise any Liabilities,
whether in a proceeding or not, and whether voluntarily or
involuntarily, dispose of any Collateral therefor, with or without
consideration, or settle or compromise any liability incurred directly
or indirectly in respect thereof or hereof, and/or subordinate the
payment of all or any part thereof to the payment of any Liabilities,
whether due or not;
5. Application of Funds. Apply any sums by whomsoever paid or howsoever
realized to any Liabilities in any order deemed appropriate by the
Bank;
6. Release of Obligations. Add, release, settle, modify, or
discharge other obligation of any Obligor or any other party who is in
any way obligated for any of the Liabilities;
7. Additional Security. Accept any additional security for the
Liabilities; and/or
8. Any Other Action. Take any other action which might constitute a
defense available to, or a discharge of, the Borrower or any other
Obligor (including the Guarantor), in respect of the Liabilities.
The invalidity, irregularity, or unenforceability of all or any part of the
liabilities or any Loan Document or any agreement or instrument or
instrument relating thereto, or the lack of validity, enforceability,
perfection, impairment or loss of any liens or security interests granted
in connection therewith, whether caused by any action or inaction of the
Bank or any Affiliates, or otherwise, shall not affect, impair, or be a
defense to the Guarantor's obligations under this Guaranty.
E. Waiver of Subrogation. The Guarantor irrevocably waives any present or
future claim, right or remedy to which the Guarantor is or becomes entitled
that arises hereunder and/or from the performance by the Guarantor hereunder
to be subrogated to the Bank's rights against the Borrower or any other
Obligor and/or any present or future claim, right or remedy to seek
contribution, reimbursement, exoneration, indemnification, payment or the
like from the Borrower or any other Obligor on account of this Guaranty or
any other Loan Document and/or to participate in any security which the Bank
now has or hereafter acquires, whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise.
If, notwithstanding such waiver, any funds or property shall be paid or
transferred to the Guarantor on account of such subrogation, reimbursement,
exoneration, indemnification, or contribution at any time when all of the
Liabilities have not been paid in full, the Guarantor shall hold such funds
and/or property in trust for the Bank and shall forthwith pay over or
deliver to the Bank such funds and/or property to be applied by the Bank to
the Liabilities.
F. Events of Default. The occurrence of any one of the following shall
constitute an event of default ("Event of Default") under this Guaranty:
1. Breach. A breach by any Obligor of any term, obligation, provision,
covenant, representation or warranty arising under (i) this Guaranty or
any other Loan Document, including, without limitation, failure to make
any payment when due hereunder or under any Loan Document; (ii) any
present or future agreement or instrument with or in favor of the Bank
and/or any Affiliate, including, without limitation, the failure to
make any payment when due; or (iii) any present or future agreement or
instrument for borrowed money or other financial accommodations with
any other person or entity;
2. Bankruptcy; Insolvency. (i) Any Obligor commences any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under the
United States Bankruptcy Code or under any similar foreign, federal,
state, or local statute, or any dissolution or liquidation proceeding,
or makes a general assignment for the benefit of creditors, or takes
any action for the purpose of effecting any of the foregoing; (ii) any
bankruptcy, reorganization, debt arrangement, or other case or
proceeding under the United States Bankruptcy Code or under any similar
foreign, federal, state, or local statute, or any dissolution or
liquidation proceeding is involuntarily commenced against or in respect
of any Obligor or an order for relief is entered in any such
proceeding, (iii) the appointment, or the filing of a petition seeking
the appointment, of a custodian, receiver, trustee, or liquidator for
any Obligor or any of its property, or for the taking of possession of
any part of the property of any Obligor at the instance of any
governmental authority; or (iv) any Obligor becomes insolvent (however
defined), is generally not paying its debts as they become due, or
suspends transaction of its usual business;
3. Entry of Judgment. The filing, entry, or issuance of any judgment,
execution, garnishment, attachment, distraint, or lien against any
Obligor or any of its property, or the entry of any order enjoining or
restraining any Obligor and/or restraining or seizing any property of
any Obligor;
4. Death; Reorganization. The death, dissolution, merger, consolidation,
or reorganization of any Obligor;
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<PAGE>
5. Material Misstatement. Any statement, representation or warranty made
in or pursuant to this Guaranty or any other Loan Document or to induce
the Bank to accept this Guaranty or enter into the transactions in
respect of which this Guaranty has been delivered shall prove to be
untrue or misleading in any material respect;
6. Additional Debt; Granting of Security Interest. Any Obligor incurs
additional debt other than debt incurred for normal consumer purposes,
debt to the Bank and/or an Affiliate and/or trade debt in the ordinary
course of Obligor's business or transfers or grants any lien or
security interest in any of its property on which the Bank has a lien
and/or security interest, without the prior written consent of the
Bank;
7. Litigation Against Collateral. The institution of any litigation,
action or proceeding in which the Collateral is subject to forfeiture
or the forfeiture of the Collateral is sought; or
8. Transfer of Property. Any Obligor transfers or sells all or
substantially all of its assets, without the prior written consent of
the Bank.
G. Remedies.
1. Acceleration of Liabilities; Rights of Bank. Upon the occurrence of an
Event of Default described in Section F hereof (other than any Event of
Default described in Paragraph F.2.) at the Bank's sole option, all
Liabilities shall immediately become due and payable in full, all
without protest, presentment, demand or further notice of any kind to
the Guarantor or any other Obligor, all of which are expressly waived.
Upon the occurrence of any of the Events of Default described in
Paragraph F.2. hereof, immediately and automatically, all Liabilities
shall become due and payable in full, all without protest, presentment,
demand or further notice of any kind to the Guarantor or any other
Obligor, all of which are expressly waived. Upon and following an Event
of Default, the Bank may, at its option, exercise any and all rights
and remedies it has under this Guaranty, any other Loan Document and/or
applicable law including, without limitation, an action for specific
performance to enforce or aid in the enforcement of any provision
contained herein or in any other Loan Document.
2. Right of Set-off. If any of the Liabilities shall be due and payable
and whether or not the Bank shall have made any demand under this
Guaranty, and regardless of the adequacy of any Collateral for the
Liabilities or other means of obtaining repayment of the Liabilities,
the Bank shall have the right, without notice to the Guarantor or to
any other Obligor, and is specifically authorized hereby to apply
toward and set-off against and apply to the then unpaid balance of the
Liabilities any items or funds of the Guarantor and/or any Obligor held
by the Bank or any Affiliate, any and all deposits (whether general or
special, time or demand, matured or unmatured) or any other property of
the Guarantor and/or any Obligor, including, without limitation,
securities and/or certificates of deposit, now or hereafter maintained
by the Guarantor and/or any Obligor for its or their own account with
the Bank, and any other indebtedness at any time held or owing by the
Bank or any Affiliate to or for the credit or the account of the
Guarantor and/or any Obligor, even if effecting such set-off results in
a loss or reduction of interest or the imposition of a penalty
applicable to the early withdrawal of time deposits. For such purpose,
the Bank shall have, and the Guarantor hereby grants to the Bank, a
first lien on and security interest in such deposits, property, funds
and accounts and the proceeds thereof. The Guarantor further authorizes
any Affiliate, upon and following the occurrence of an Event of
Default, at the request of the Bank, and without notice to the
Guarantor, to turn over to the Bank any property of the Guarantor held
by the Affiliate of the Guarantor's account and to debit any deposit
account maintained by the Guarantor with such Affiliate (even if such
deposit account is not then due or there results a loss or reduction of
interest or the imposition of a penalty in accordance with law
applicable to the early withdrawal of time deposits), in the amount
requested by the Bank up to the amount of the Liabilities, and to pay
or transfer such amount or property to the Bank for application to the
Liabilities.
3. Remedies Cumulative; No Waiver. The rights, powers and remedies of the
Bank provided in this Guaranty and the other Loan Documents are
cumulative and concurrent, and are not exclusive of any right, power or
remedy available to the Bank. No failure or delay on the part of the
Bank in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise preclude any
other or further exercise thereof, or the exercise of any other right,
power or remedy.
4. Continuing Enforcement of the Loan Documents. If, after receipt of any
payment of all or any part of the Liabilities or the obligations of the
Guarantor to the Bank, the Bank is compelled or agrees, for settlement
purposes, to surrender such payment to any person or entity for any
reason, then this Guaranty and the other Loan Documents shall continue
in full force and effect or be reinstated, as the case may be. The
provisions of this paragraph shall survive the termination of this
Guaranty and the other Loan Documents and shall be and remain effective
notwithstanding the payment of the Liabilities, the cancellation of the
Guaranty or any other Loan Document, the release of any security
interest, lien or encumbrance securing the Liabilities or any other
action which the Bank may have taken in reliance upon its receipt of
such payment.
H. Miscellaneous.
1. Notices. Notices and communications under this Guaranty shall be in
writing and shall be given by (i) hand-delivery, (ii) first class mail
(postage prepaid), or (iii) reliable overnight commercial courier
(charges prepaid), to the addresses set forth in the Guaranty. Notice
by overnight courier shall be deemed to have been given and received on
the date scheduled for delivery. Notice by mail shall be deemed to have
been given and received three (3) calendar days after the date first
deposited in the Untied States Mail. Notice by hand-delivery shall be
deemed to have been given and received upon delivery. A party may
change its address by giving written notice to the other party as
specified herein.
2. Costs and Expenses. Whether or not the transactions contemplated by the
Loan Documents are fully consummated, the Guarantor shall promptly pay
(or reimburse, as the Bank may elect) all costs and expenses which the
Bank has incurred or may hereafter incur in connection with the
negotiation, preparation, reproduction, interpretation, perfection,
protection of Collateral, administration and enforcement of this
Guaranty and the other Loan Documents, the collection of all amounts
due under this Guaranty and the other Loan Documents, and all
amendments, modifications, consents or waivers, if any, to this
Guaranty and the other Loan Documents. The Guarantor's reimbursement
obligations under this paragraph shall survive any termination of the
Loan Documents.
3. Governing Law. This Guaranty shall be construed in accordance with and
governed by the substantive laws of the State of Connecticut without
reference to conflict of laws principles.
4. Integration; Amendment; No Third Party Beneficiary. This Guaranty and
the other Loan Documents constitute the sole agreement of the parties
with respect to the subject matter hereof and thereof and supersede all
oral negotiations and prior writings with respect to the subject matter
hereof and thereof. No amendment of this Guaranty, and no waiver of any
one or more of the provisions hereof shall be effective unless set
forth in writing and signed by the parties hereto. The Guarantor and
the Bank do not intend any benefits of this Guaranty to inure to any
third party and no third party (including the Borrower) shall have any
status, right or entitlement under this Guaranty.
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5. Successors and Assigns. This Guaranty (i) shall be binding upon the
Guarantor and the Bank, where applicable, their respective heirs,
executors, administrators, successors and assigns, and (ii) shall inure
to the benefit of the Guarantor and the Bank and, where applicable,
their respective heirs, executors, administrators, successors and
permitted assigns; provided, however, that the Guarantor may not assign
its rights or obligations hereunder or any interest herein without the
prior written consent of the Bank, and any such assignment or attempted
assignment by the Guarantor shall be void and of no effect with respect
to the Bank. The Bank may from time to time sell or assign, in whole or
in part, or grant participations in some or all of the Loan Documents
and/or the obligations evidenced thereby. The Guarantor authorizes the
Bank to provide information concerning the Guarantor to any prospective
purchaser, assignee or participant.
6. Severability and Consistency. The illegality, unenforceability or
inconsistency of any provision of this Guaranty or any instrument or
agreement required hereunder shall not in any way affect or impair the
legality, enforceability or consistency of the remaining provisions of
this Guaranty or any instrument or agreement required hereunder. The
Loan Documents are intended to be consistent. However, in the event of
any inconsistencies among any of the Loan Documents, such inconsistency
shall not affect the validity or enforceability of each Loan Document.
The Guarantor agrees that in the event of any inconsistency or
ambiguity in any of the Loan Documents, the Loan Documents shall not be
construed against any one party but shall be interpreted consistent
with the Bank's policies and procedures.
7. Consent to Jurisdiction and Service of Process. The Guarantor
irrevocably appoints each and every owner, partner, and/or officer of
the Guarantor as its attorneys upon whom may be served any notice,
process or pleading in any action or proceeding against the Guarantor
arising out of or in connection with this Guaranty or any of the other
Loan Documents. If service of process cannot be delivered to the
Guarantor as specified by statute, the Guarantor agrees that, with
court approval, it may be served by regular or certified mail at the
address set forth herein. The Guarantor hereby consents that (i) any
action or proceeding against it may be commenced and maintained in any
court within the State of Connecticut or in the United States District
Court for the District of Connecticut by service of process on such
owner, partner and/or officer; and (ii) such courts shall have
jurisdiction with respect to the subject matter hereof and the person
of the Guarantor and all Collateral for the Liabilities. The Guarantor
agrees that any action brought by the Guarantor shall be commenced and
maintained only in a court in the federal judicial district or county
in which the Bank has its principal place of business in Connecticut.
8. Joint and Several Liability. In the event that the Guarantor consists
of more than one person or entity, the Liabilities or obligations of
each such person or entity shall be joint and several and the word
"Guarantor" means each of them, any of them and/or all of them.
9. Judicial Proceedings; Waivers.
THE GUARANTOR AND THE BANK ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT,
ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY THE BANK OR THE GUARANTOR OR ANY SUCCESSOR OR ASSIGN OF
THE BANK OR THE GUARANTOR, ON OR WITH RESPECT TO THIS GUARANTY OR ANY
OF THE OTHER LOAN DOCUMENTS OR THE DEALINGS OF THE PARTIES WITH RESPECT
HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY
AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (iii)
THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS GUARANTY AND THE
BANK WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET FORTH
IN THIS SECTION WERE NOT A PART OF THIS GUARANTY. THE GUARANTOR HEREBY
WAIVES PRESENTMENT, NOTICE OF DISHONOR AND PROTEST OF ALL INSTRUMENTS
INCLUDED IN OR EVIDENCING THE LIABILITIES OR THE COLLATERAL, IF ANY,
AND ALL OTHER NOTICES AND DEMANDS WHATSOEVER, WHETHER OR NOT RELATING
TO SUCH INSTRUMENTS.
10. Prejudgment Remedies.
The Guarantor hereby acknowledges that this Guaranty constitutes a
commercial transaction. Pursuant to Section 52-278f of the Connecticut
General Statutes, the Guarantor hereby waives and relinquishes all
rights to notice and hearing as provided in Section 52-278a through 52-
278g of said Connecticut General Statutes prior to the securing of any
prejudgment remedy against the Guarantor in connection with the
Liabilities or any of the instruments or documents executed in
connection herewith.
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered to the
Bank by the Guarantor on the day and year first above written.
SMB INDUSTRIES, INC.
Corporation of Partnership Name
First Fidelity Bank /s/ Peter Nisselson
formerly By:___________________________________
Union Trust Company Name: Peter Nisselson
Title: President
2 Madison Avenue
Address: _____________________________
Larchmont, NY 10538
_____________________________
ACKNOWLEDGED AND ACCEPTED:
FIRST FIDELITY BANK
/s/ John R. Riley
By: ________________________________
Name: John R. Riley
Title: Assistant Vice President
Address: 300 Main Street
____________________________
Stamford, CT 06904
____________________________
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PARTNERSHIP ACKNOWLEDGEMENT (Non-Corporate General Partner)
STATE OF CONNECTICUT )
) SS.:
COUNTY OF )
I CERTIFY that on _______________, 19__, ___________________, the general
partner of __________________, a ______________________ general/limited
partnership, personally appeared before me, who I am satisfied to be the person
who signed the foregoing instrument, and acknowledged that he/she was authorized
to execute the same as the act of said partnership.
__________________________________
Name: ____________________________
Title: ___________________________
PARTNERSHIP ACKNOWLEDGEMENT (Corporate General Partner)
STATE OF CONNECTICUT )
) SS.:
COUNTY OF )
I CERTIFY that on ________________, 19__, ______________, the ___________
of __________________, a ____________________ corporation, the general partner
of _______________, a _____________ general/limited partnership, personally
appeared before me, who I am satisfied to be the person who signed the foregoing
instrument, and acknowledged that he/she was authorized to execute the same as
the act of said partnership.
__________________________________
Name: ____________________________
Title: ___________________________
CORPORATE ACKNOWLEDGEMENT
STATE OF CONNECTICUT )
) SS.:
COUNTY OF FAIRFIELD )
I CERTIFY that on July 6, 1995, Peter Nisselson, the President of SBM
------- -- --------------- ---------- ----
INDUSTRIES, INC., a President corporation, personally appeared before me, who I
- ---------------- ---------
am satisfied to be the person who signed the foregoing instrument, and
acknowledged that he/she was authorized to execute the same as the act said
corporation.
/s/ Thomas A. Banahan
_____________________________________
Thomas A. Banahan
Name: _______________________________
Commissioner of Superior Court
Title: ______________________________
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EXHIBIT 10(e)
[LOGO OF UNION TRUST COMPANY] Union Trust Company
A First Fidelity Bank
Mortgage, Assignment of Leases, and
Security Agreement-Commercial
(Connecticut)
Record and Return to:
First Fidelity Bank
300 Main Street
- ---------------------------------
Stamford, CT 06904
- ---------------------------------
Attn: John R. Riley
- ---------------------------------
THIS MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT (this "Mortgage")
dated July 6, 1995, is made by STAR STRUCK, INC., having an office at 8 Francis
J. Clark Cir., Bethel, CT (the "Mortgage") in favor of First Fidelity Bank (the
"Bank").
A. Liabilities Secured. This Mortgage is executed, acknowledged and delivered
by the Mortgagor to secure and enforce the following obligations and
liabilities:
1. Present and Future Liabilities. ANY AND ALL PRESENT AND FUTURE
OBLIGATIONS AND INDEBTEDNESS OF EVERY KIND AND DESCRIPTION OF THE
MORTGAGOR TO THE BANK AND/OR ANY AFFILIATE (as herein defined) arising
out of all sums due under the Loan Documents (as herein defined) in
connection with financial accommodations in the principal amount of up
to EIGHT HUNDRED THOUSAND AND XX/100 Dollars ($800,000.00) at the
interest rate set forth in the Promissory Note attached hereto as
Exhibit A and incorporated herein by reference, including, without
limitation, principal, interest, fees, late fees, expenses, attorneys'
fees and costs and/or allocated fees and costs of the Bank's in-house
legal counsel, that have been or may hereafter be contracted or
incurred (collectively, the "Liabilities"); and
2. Performance; Loan Documents. The performance of all of the terms,
covenants, conditions, agreements, obligations and liabilities of the
Mortgagor under this Mortgage, and all credit accommodations, loan
agreements, notes, and any other agreements and documents, now or
hereafter existing, creating, evidencing, guarantying, securing or
relating to any or all of the Liabilities, together with all
amendments, modifications, renewals or extensions thereof (all of the
foregoing collectively referred to as the "Loan Documents").
The Liabilities secured by this Mortgage were obtained solely for the
purpose of carrying on or acquiring a business or commercial investment and
not for residential, consumer or household purposes.
B. Definitions. As used herein, the following terms shall have the following
meanings:
1. Affiliate. The term "Affiliate" means First Fidelity Bancorporation and
any of its direct and indirect affiliates and subsidiaries.
2. Obligor. The term "Obligor" means the Mortgagor, and each and every
maker, endorser, guarantor, or surety of or for the Liabilities.
3. Uniform Commercial Code. The term "Uniform Commercial Code" means the
Uniform Commercial Code in effect from time to time in Connecticut.
C. Grant of Mortgage. To secure the payment and performance of all Liabilities,
the Mortgagor hereby mortgages, grants, conveys, gives, bargains, sells,
confirms and assigns to the Bank, and grants to the Bank a lien on and a
security interest in, all of the land, buildings, improvements, fixtures,
equipment, easements, rights, appurtenances, leases, rents, contract rights
and all of the following property, whether presently in existence or to come
into existence at some future time (collectively, the "Mortgaged Property"):
1. Real Property.
Street Address: 8 Francis J. Clarke Circle
----------------------------------------------------
Municipality/County/State: Bethel, Fairfield County, Connecticut
-----------------------------------------
Tax Lot and Block: Map 10, Block 23, Lot 150-31
-------------------------------------------------
Dead Book Volume 527, Page 329
---------------------------------------------------
as more fully described in the attached Schedule A, together with all
buildings, structures and improvements of every kind erected thereon
(the "Real Property");
2. Fixtures; Leases; Estates, etc. All fixtures, machinery, equipment and
other articles of real, personal or mixed property attached to, situate
or installed in or upon, or used in the operation or maintenance of,
the Real Property or any plant or business situated thereon, whether or
not such real, personal or mixed property is or shall be affixed to the
Real Property, and all replacements, substitutions, accretions and
proceeds of the foregoing (collectively, "Fixtures"). All leases,
licenses, occupancy agreements or agreements to lease all or any part
of the Real Property and all extensions, renewals, amendments, and
modifications thereof, and any options, rights of first refusal or
guarantees relating thereto (collectively, "Leases"); all rents,
income,
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receipts, revenues, security deposits, escrow accounts, reserves,
issues, profits, awards and payments of any kind payable under the
Leases or otherwise arising from the Real Property (collectively, the
"Income"); all contract rights, accounts receivable and general
intangibles relating to the Real Property or the use, occupancy,
maintenance, construction, repair or operation thereof; all management
agreements, franchise agreements, utility agreements and deposits, all
maps, plans, surveys and specifications; all warranties and guaranties;
all permits, licenses and approvals; all insurance policies. All
estates, rights, tenements, hereditaments, privileges, easements, and
appurtenances of any kind benefiting the Real Property; all means of
access to and from the Real Property, whether public or private; all
water and mineral rights; all rights of the Mortgagor as grantor,
declarant or unit owner under any condominium master deed, declaration
or by-laws or in any association applicable to the Real Property; and
3. Proceeds. All "Proceeds" of any of the above-described property, which
term shall have the meaning given to it in the Uniform Commercial code
and shall additionally include whatever is received upon the use,
lease, sale, exchange, collection, or other utilization or any
disposition of any of the foregoing property, voluntary or involuntary,
whether cash or non-cash, including proceeds of insurance and
condemnation awards, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment
and inventory.
D. Extent and Priority of Lien of Mortgage.
1. Purchase Money Mortgage. If all or any part of the Liabilities secured
by this Mortgage were used in whole or in part to fund the acquisition
of all or any part of the Mortgaged Property, this Mortgage shall
constitute a purchase money mortgage and shall be entitled to all
benefits as such under applicable laws of the state in which the
Mortgaged Property is located.
2. Future Advances. This Mortgage secures all existing and future advances
under the Loan Documents; provided, however, that repayment of all
future advances shall not extend beyond the date of the original debt
as set forth in the Loan Documents. Without limiting anything contained
in any provision of this Mortgage, this Mortgage secures the
Mortgagor's obligation to repay all advances of principal under the
Liabilities made at closing or thereafter and all interest, late
charges, fees, and other amounts due under the Liabilities or this
Mortgage, and in addition thereto (i) all advances by the Bank to the
Mortgagor or any other person to pay costs of erection, construction,
alteration, repair, restoration, maintenance and/or completion of any
part of the Mortgaged Property, (ii) any and all advances made or costs
incurred by the Bank for the payment of taxes, assessments, maintenance
charges, insurance premiums, and similar charges with respect to the
Mortgaged Property, (iii) any and all costs incurred for the protection
of all or any part of the Mortgaged Property or the lien of this
Mortgage, and (iv) any and all legal fees, costs, and other expenses
incurred by the Bank by reason of any default or otherwise in
connection with the Liabilities.
3. Changes in Mortgage. The Mortgagor and the Bank may agree to change the
interest rate and/or the maturity date applicable to the Liabilities,
release collateral for the Liabilities or otherwise alter any other
term of the Loan Documents; none of such changes shall affect the
priority of the lien on this Mortgage.
4. Defeasance. This Mortgage shall terminate upon indefeasible payment and
performance in full of the Liabilities. Thereupon, the Bank shall
release the Mortgaged Property and shall execute at the request of the
Mortgagor a release of this Mortgage and any other instrument to that
effect deemed necessary or desirable.
E. Assignment of Leases. The Mortgagor hereby assigns and pledges to the Bank,
as further security for the payment of the Liabilities, all existing and
future Leases and Income. The Mortgagor shall, upon demand, deliver to the
Bank the original and/or an executed copy of each such Lease. The Mortgagor
grants to the Bank the right to (i) enter the Mortgaged Property and collect
the Income with or without taking possession of the Mortgaged Property; (ii)
with or without legal process, dispossess by usual summary proceeding any
tenant defaulting in the performance of its obligations under its lease;
(iii) let the Mortgaged Property or any part thereof; and (iv) apply the
Income to the payment of any charges and expenses of the Mortgaged Property
or to the repayment of the Liabilities in such order and amounts as the Bank
shall determine in its sole discretion. This assignment shall continue in
effect until this Mortgage is paid in full and discharged of record;
however, so long as there shall exist no Event of Default (hereinafter
defined), the Mortgagor shall have a license to collect the Income as it
becomes due, but not prior to the accrual. Without the prior written consent
of the Bank, the Mortgagor shall not enter into, or amend, modify or
terminate, any Lease of the Mortgaged Property. The Mortgagor shall not
collect any of the rent from the Mortgaged Property in advance of the time
when the same shall become due under any lease or tenancy arrangement or, in
any event, more than one (1) month in advance. The provisions of this
Paragraph are for the sole benefit of the Bank and are not for the benefit
of any other person or entity.
F. Security Agreement. This Mortgage constitutes a security agreement under the
Uniform Commercial Code and shall be deemed to constitute a financing
statement. The Mortgagor hereby grants to the Bank a security interest in
the personal and other property included in the Mortgaged Property, and all
replacements of, substitutions for, and additions to, such property, and the
Proceeds thereof. The Mortgagor shall, all the Mortgagor's own expense,
execute, deliver, and file any financing or continuation statements or other
security agreements the Bank may require from time to time, to perfect,
confirm, and maintain the lien of this Mortgage with respect to such
property. Without limiting the foregoing, the Mortgagor hereby irrevocably
appoints the Bank (and any of its attorneys, officers, employees or agents)
as the Mortgagor's true and lawful attorney-in-fact, said appointment being
coupled with an interest, with full power of substitution in the name of the
Mortgagor, the Bank or otherwise, for the sole use and benefit of the Bank
in its sole discretion but at the Mortgagor's expense, to exercise to the
extent permitted by law, in its name or in the name of the Mortgagor or
otherwise, the powers set forth herein, whether or not any of the
Liabilities are due (i) to execute, deliver and/or file financing statements
and other agreements for or on behalf of the Mortgagor; (ii) to notify
lessees under any Lease of the Bank's interest therein and require such
lessees to pay all sums due thereunder to the Bank; and (iii) to correspond
and negotiate directly with insurance carriers.
G. Representations and Covenants.
1. Payment and Performance. The Mortgagor shall pay and perform promptly
as and when due (i) the Liabilities in accordance with their stated
terms and conditions; (ii) all obligations and liabilities under any
Permitted Encumbrances (hereinafter defined); and (iii) all of its
obligations as landlord under the Leases.
2. Warranty of Title. The Mortgagor warrants to the Bank that the
Mortgagor has good and marketable fee simple absolute title to the
Mortgaged Property subject only to those exceptions to title which are
more particularly described in the title report issued to the Bank and
which exceptions are accepted by the Bank in connection with this
transaction (the "Permitted Encumbrances"). The Mortgagor hereby
covenants that the Mortgagor shall (i) preserve such title and the
validity and priority of the lien of this Mortgage and shall forever
warrant and defend the same to the Bank against all lawful claims
whatsoever excepting only those claiming under Permitted Encumbrances;
and (ii) execute, acknowledge, and deliver all such further documents
or assurances, cause to be done all such further acts as may at any
time hereafter be required by the Bank to protect fully the lien of
this Mortgage and pay all costs related thereto.
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3. Insurance. The Mortgagor hereby covenants to obtain and maintain at all
times, throughout the xxx of this Mortgage, insurance covering the
Mortgaged Property, in such amounts, on such xxx and written by such
companies, as the Bank may xxx from time to time, including, but not
limited to (i) comprehensive general public liability insurance; (ii)
an "All-Risk" policy covering damage due to fire and extended hazard
insurance (together with vandalism and malicious mischief
endorsements); (iii) if the Mortgaged Property is required or eligible
to be insured pursuant to the Flood Disaster Protection Act of 1973 or
the National Flood Insurance Act of 1968, flood insurance; and (iv)
business interruption and/or rental loss coverage. Each insurance
policy required under this Paragraph shall be written or endorsed so as
to (i) contain a standard mortgagee or secured party endorsement, as
the case may be, or its equivalent; (ii) make all losses and all
returns of unearned premiums payable directly to the Bank, without
contribution; (iii) with respect to public liability coverage, name the
Bank as an additional insured, as its interest may appear; and (iv)
waive all rights of set-off, counterclaim, deduction, or subrogation
against the Mortgagor (so as not to interfere with the Bank's rights).
Each insurance policy required under this Paragraph shall contain a
provision to the effect that such policy shall not be canceled,
altered, in any way limited in coverage, or reduced in amount unless
the Bank is notified in writing at least thirty (30) days prior to such
change. At least thirty (30) days prior to the expiration of any such
policy, the Mortgagor shall furnish evidence satisfactory to the Bank
that such policy has been renewed, replaced, or is no longer required
by this Paragraph, together with proof of payment of any premiums then
owing. At the request of the Bank, the Mortgagor shall deliver all
original insurance policies to the Bank. The Mortgagor shall not take
out any separate or additional insurance with respect to the Mortgaged
Property which is contributing in the event of loss, unless it is
properly compatible with all of the requirements of this Paragraph.
4. Taxes and Other Charges. The Mortgagor shall prepare and timely file
all federal, state, and local tax returns required to be filed by the
Mortgagor and promptly pay and discharge all taxes, assessments, water
and sewer rents, and other governmental charges or claims of any kind
imposed upon the Mortgagor, the Mortgaged Property, or on any of the
Mortgagor's other property before the same shall become in default or
become a lien upon such property except for those taxes, assessments,
and other governmental charges then being contested in good faith by
the Mortgagor by appropriate proceedings and for which the Mortgagor
has maintained adequate reserves in the sole judgment of the Bank. The
Mortgagor shall submit to the Bank, upon request, an affidavit signed
by the Mortgagor certifying that all federal, state, and local tax
returns have been filed to date and all real property taxes,
assessments, and other governmental charges with respect to the
Mortgagor's properties have been paid to date.
5. Tax Escrows. The Mortgagor shall, if requested by the Bank, pay to the
Bank at the time of each installment of principal and interest due
under any of the Loan Documents, one twelfth (1/12) of the annual taxes
and assessments levied or assessed against the Mortgaged Property, as
estimated by the Bank, from time to time, unless the Mortgagor
demonstrates to the Bank that it is paying such taxes and assessments
to a holder of a prior Permitted Encumbrance. Such payment shall be
held by the Bank to be used by the Bank in payment of such taxes and
assessments. If such escrow funds are not sufficient to pay such taxes
and assessments, as the same become payable, the Mortgagor shall pay to
the Bank, upon request, such additional amounts as the Bank shall
estimate to be sufficient to make up any such deficiency. No amount
paid to the Bank hereunder shall be deemed to be trust funds but may be
commingled with general funds of the Bank, and no interest shall be
payable thereon. If the Mortgagor is not required to pay such tax
escrows pursuant to this Section, the Mortgagor shall provide to the
Bank, not later than the last date such payment is due and payable
without interest or penalty, official receipted tax bills, canceled
checks, or other satisfactory to the Bank evidencing that such taxes
and assessments have been paid in a timely manner.
6. Transfer of Title. Without the prior written consent of the Bank in
each instance, which consent may be given or withheld in the Bank's
sole discretion, the Mortgagor shall not voluntarily or involuntarily
cause or permit, any transfer of the Mortgaged Property or any portion
thereof, whether voluntary, involuntary, by operation of law, or
otherwise, nor shall the Mortgagor enter into any agreement or
transaction to transfer, or accomplish in form or substance a transfer,
of the Mortgaged Property. A "transfer" of the Mortgaged Property
includes (i) the direct or indirect sale, transfer or conveyance of the
Mortgaged Property or any portion thereof or interest therein; (ii) the
execution of an installment sale contract or similar instrument
affecting all or a portion of the Mortgaged Property; (iii) the
transfer (whether in one transaction or a series of transactions) of
stock, partnership or other ownership interests constituting a
controlling interest in the Mortgagor (if the Mortgagor is a
partnership, joint venture or corporation); and (iv) a lease or leases
which, separately or in the aggregate, cover cumulatively more than
twenty percent (20%) of the usable space on the Mortgaged Property.
7. No Liens; Removal of Fixtures. At no time during the term of this
Mortgage shall the Mortgagor create or suffer to exist any mortgage,
lien, security interest, encumbrance, attachment, levy, distraint, or
other judicial process or burden of any kind on the Mortgaged Property
or any part thereof, whether superior or inferior to the lien of this
Mortgage, without the prior written consent of the Bank, which consent
may be given or withheld in the Bank's sole discretion. The Mortgagor
shall not remove or suffer to be removed from the Mortgaged Property
any fixtures presently or in the future located on the Mortgaged
Property (unless such fixtures have been replaced with similar fixtures
of equal or greater utility and value).
8. Maintenance and Repair; Compliance with Laws. The Mortgaged Property
shall, at the Mortgagor's own cost and expense, be kept and maintained
in good repair, working order, and condition, and in compliance with
all applicable laws, ordinances, codes, rules and regulations
(collectively, "Legal Requirements") of any federal, state or local
governmental entity or authority having jurisdiction (collectively,
"Governmental Authorities"). The Mortgagor agrees to comply, and to
cause its tenants to comply with all Legal Requirements made or
promulgated by any Governmental Authority now or hereafter applicable
to the Mortgaged Property. The Mortgagor shall from time to time make,
or cause to be made, all necessary and proper repairs and replacements
required under Legal Requirements, the Leases, or otherwise required to
keep the Mortgaged Property in good condition and the Mortgagor shall
abstain from and shall not permit the commission of waste on or about
the Mortgaged Property. The Mortgagor shall not remove, demolish,
materially alter, or discontinue the use of the Mortgaged Property, or
permit the Mortgaged Property to become vacant, deserted, or unguarded.
The Bank shall have the right, but not the obligation, to enter upon
and inspect the Mortgaged Property at any reasonable hour.
9. Damage, Destruction and Condemnation. If all or any part of the
Mortgaged Property shall be partially or totally damaged or destroyed,
or if title to or the use of the whole or any part of the Mortgaged
Property shall be taken or condemned by a competent authority for any
public use or purpose, then (i) there shall be no abatement or
reduction in the amounts payable by the Mortgagor under the Loan
Documents, and the Mortgagor shall continue to be obligated to make
such payments; (ii) the Mortgagor shall immediately give notice thereof
to the Bank in accordance with the terms of this Mortgage; (iii) the
Mortgagor hereby authorizes and directs any affected insurance company
or condemning authority to make payment of such proceeds directly to
the Bank as its interest appears; and (iv) the Mortgagor hereby
authorizes and empowers the Bank to settle, adjust or compromise, any
claims for loss, damage,
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destruction to or condemnation of the Mortgaged Property. The Mortgagor
shall pay all costs of collection of insurance proceeds payable on
account of such damage or destruction. The Mortgagor shall, at its sole
cost and expense, diligently prosecute any condemnation proceeding and
shall consult with the Bank, its attorneys, and experts and cooperate
with it in the defense of any such proceedings. The Bank shall have the
right, in any condemnation proceedings, to do or refrain from doing
whatever it deems necessary or convenient. The Mortgagor shall have no
claim against the insurance proceeds and/or condemnation proceeds, or
be entitled to any portion thereof, and all rights to insurance and/or
condemnation proceeds are hereby assigned to the Bank to the extent of
the Liabilities as remain unpaid. The Bank shall have the option, in
its sole discretion, of paying or applying all or any part of the
insurance proceeds and/or condemnation proceeds payable to the Bank
hereunder to (i) reduction of the Liabilities; (ii) restoration,
replacement and rebuilding of the Mortgaged Property; or (iii) payment
to the Mortgagor.
10. Required Notices. The Mortgagor shall immediately notify the Bank of
(i) the receipt of notice from any Governmental Authority relating to
the Mortgaged Property or alleging a violation of Legal Requirements;
(ii) a substantial change in the occupancy or use of all or any part of
the Mortgaged Property; (iii) the receipt of any notice from the holder
of any Permitted Encumbrance; (iv) the commencement of any litigation
affecting or potentially affecting in a material and adverse way the
financial condition of the Mortgagor or the value of the Mortgaged
Property; or (v) the discovery, discharge or release for which the
Mortgagor is or may be responsible under Applicable Environmental Laws
(hereinafter defined).
11. Financial Statements. The Mortgagor shall keep and maintain complete
and accurate books and records and shall permit representatives and/or
agents of the Bank to examine and audit the Mortgagor's (and its
parent's and subsidiaries', if applicable) books, records and financial
information and to inspect the Mortgagor's facilities and properties.
The Mortgagor shall provide to the Bank not later than ninety (90) days
after the end of each fiscal year of the Mortgagor, financial
information, in form and substance acceptable to the Bank, for the
immediately preceding fiscal year and such other information respecting
the operations, financial or otherwise, of the Mortgagor, as the Bank
may from time to time reasonably request. The Mortgagor shall prepare
and timely file all federal, state and local tax returns required to be
filed by the Mortgagor and shall submit to the Bank a copy of its
federal tax return immediately after filing same with the Internal
Revenue Service. The Mortgagor shall furnish to the Bank, at its
request, certified rent rolls and leases, as applicable, with respect
to the Mortgaged Property within ninety (90) days after the end of each
fiscal year.
H. Environmental Representations and Covenants.
1. Applicable Environmental Laws.
a. The term "Applicable Environmental Laws" means (i) all Legal
Requirements of any Governmental Authority pertaining to the
preservation or enhancement of the quality of the environment or
regulating or restricting the use, transfer, storage, disposal,
release, discharge, production or remediation of any substance or
material deemed by such Governmental Authority to be hazardous to
the environment; (ii) any and all laws, regulations, and executive
orders, whether federal, state or local, pertaining to
environmental matters, as the same may now exist or hereafter
exist or be amended or supplemented from time to time. Any terms
mentioned in this Mortgage which are defined in any Applicable
Environmental Law shall have the meanings ascribed to such terms
in said laws; provided, however, that if any of such laws are
amended so as to broaden any term defined therein, such broader
meaning shall apply subsequent to the effective date of such
amendment.
b. The Mortgagor represents and warrants that (i) neither the
Mortgagor nor the Mortgaged Property are in violation of any
Applicable Environmental Law, or subject to any existing, pending,
or threatened investigation or inquiry by any Governmental
Authority pertaining to an alleged violation of any Applicable
Environmental Law; and (ii) the Mortgaged Property is not subject
to the provisions of Title 22a "Environmental Protection" of the
Connecticut General Statutes, including, particularly, Sections
22a-448 through 22a-457 of the Connecticut General Statutes, or
any rules, regulations or executive orders issued thereunder, or
any amendments or successor statutes thereto (collectively,
"EPS"), except as disclosed in writing to the Bank.
2. Covenants. The Mortgagor shall not cause or permit the Mortgaged
Property to be in violation of, or do anything which would subject the
Mortgagor or the Mortgaged Property to any remedial obligations under
any Applicable Environmental Law, and shall promptly notify the Bank in
writing of any existing, pending, or threatened investigation or
inquiry by any Governmental Authority in connection with any Applicable
Environmental Law:
a. The Mortgagor shall immediately take all steps necessary to
determine whether hazardous materials have been disposed of or
otherwise released or discharged on, from or affecting the
Mortgaged Property;
b. The Mortgagor will not install, or permit in the Mortgaged
Property any substance deemed hazardous by federal or state
regulations. If any such materials are found to be present in the
Mortgaged Property, the Mortgagor agrees to remove the same
promptly upon discovery at its sole cost and expense;
c. The Mortgagor shall duly file or cause to be duly filed with all
Governmental Authorities having jurisdiction such reports and/or
information returns as may be required or appropriate under all
Applicable Environmental Laws;
d. If any lien or judgment shall be filed with respect to the
Mortgaged Property arising from a violation of Applicable
Environmental Laws, then the Mortgagor shall, within thirty (30)
days from the date that the Mortgagor is given notice of such lien
or judgment (or within such shorter period of time if any
Governmental Authority has commenced steps to have the Mortgaged
Property sold), pay the claim and remove the lien from the
Mortgaged Property;
e. If there shall occur any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, or dumping of hazardous materials on,
from or affecting the Mortgaged Property, or otherwise caused or
permitted by the Mortgagor in violation of Applicable
Environmental Laws, the Mortgagor shall promptly clean it up in
accordance with the provisions of all Applicable Environmental
Laws and to the satisfaction of the Bank;
f. If required by the Bank, the Mortgagor shall obtain a policy of
environmental liability insurance insuring the Mortgaged Property
in such amounts and with a carrier reasonably satisfactory to the
Bank, such policy to conform with the requirements of Paragraph
G.3; and
g. The Mortgagor shall not, without the Bank's prior written consent,
enter into a Lease where the lessee would be subject to EPS.
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3. Right to Inspect and Cure. The Bank shall have the right to conduct or
have conducted by its agents contractors such environmental
inspections, audits, and testing as the Bank shall deem necessary or
advisable from time to time at the sole cost and expense of the
Mortgagor. The cost of such tests shall be added to the Liabilities and
shall be secured by this Mortgage. If the Mortgagor fails to comply
with any Applicable Environmental Law, then the Bank may, at its sole
discretion, in addition to any of its other remedies under this
Mortgage, cause the Mortgaged Property to be in compliance with such
laws and the cost of such compliance shall be added to the sums secured
by this Mortgage and shall bear interest at the Default Rate (hereafter
defined).
I. Indemnification. The Mortgagor hereby agrees to and does hereby indemnify,
protect, defend, and hold harmless the Bank, and any entity which "controls"
the Bank, within the meaning of Section 15 of the Securities Act of 1933, as
amended, any member, officer, director, official, agent, employee, or
attorney of the Bank, and their respective heirs, successors, and assigns
(collectively, the "Indemnified Parties"), from and against any and all
losses, damages, expenses, or liabilities of any kind or nature, and from
any suits, claims, or demands, including counsel fees incurred in
investigating or defending such claim, suffered by any of them and caused
by, relating to, arising out of, resulting from, or in any way connected
with the Loan Documents or the transactions contemplated therein (unless
determined by a final judgment of a court of competent jurisdiction to have
been caused solely by the gross negligence or willful misconduct of the
Indemnified Parties). In case any action shall be brought against the Bank
or any other Indemnified Party in respect to which indemnity may be sought
against the Mortgagor, the Bank or such other Indemnified Party shall
promptly notify the Mortgagor; provided however, that the failure to so
notify the Mortgagor shall not relieve the Mortgagor of any liability it may
have under these indemnification provisions or from any liability which it
may otherwise have to the Bank or such other Indemnified Party. Promptly
following such notification, the Mortgagor shall assume the defense thereof,
including the employment of counsel selected by the Mortgagor and
satisfactory to the Bank or such other Indemnified Party, and the payment of
all costs and expenses relating thereto. The Bank shall have the right, at
its sole option, but at the Mortgagor's sole cost and expense, to employ
separate counsel in any such action and to participate in the defense
thereof. The Mortgagor shall not be liable for any settlement of any such
action unless the Mortgagor consents, which consent shall be reasonably
given, but if settled with the Mortgagor's consent, or if there be a final
judgment for the claimant in any such action, the Mortgagor agrees to
indemnify and hold harmless the Bank from and against any loss or liability
by reason of such settlement or judgment. The provisions of this Section
shall survive the repayment of the Liabilities.
J. No Release; No Waiver. Any extension of the time for payment, or any
modification of the amortization of the sums secured by this Mortgage or any
release of any Obligor or all or any part of the Mortgaged Property, granted
by the Bank to the Mortgagor or any other Obligor shall not operate to
release the liability of the Mortgagor, any other Obligor under the terms of
the Loan Documents or this Mortgage or any other collateral for the
Liabilities. Any forbearance by the Bank in exercising any right or remedy
hereunder or otherwise afforded by applicable law shall not be a waiver of,
or preclude the exercise of, any right or remedy.
K. Events of Default. The occurrence of any one of the following shall
constitute an event of default ("Event of Default") under this Mortgage:
1. Breach. A breach by the Mortgagor or any other Obligor of any term,
obligation, provision, covenant, representation or warranty, arising
under (i) this Mortgage or any other Loan Document, including, without
limitation, failure to make any payment when due; (ii) any present or
future agreement with or in favor of the Bank and/or any Affiliate,
including the failure to make any payment when due; or (iii) any
present or future agreement or instrument for borrowed money or other
financial accommodations with any person or entity;
2. Bankruptcy; Insolvency. (i) The Mortgagor or any other Obligor
commences any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under the United States Bankruptcy Code or under any
similar foreign, federal, state, or local statute, or any dissolution
or liquidation proceeding, or makes a general assignment for the
benefit of creditors, or takes any action for the purpose of effecting
any of the foregoing; (ii) any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under the United States
Bankruptcy Code or under any similar foreign, federal, state or local
statute, or any dissolution or liquidation proceeding, is involuntarily
commenced against or in respect of the Mortgagor or any other Obligor
or an order for relief is entered in any such proceeding; (iii) the
appointment, or the filing of a petition seeking the appointment, of a
custodian, receiver, trustee, or liquidator for the Mortgagor or any
other Obligor or any of its property, or the taking of possession of
any part of the property of the Mortgagor or any other Obligor at the
instance of any governmental authority; or (iv) the Mortgagor or any
other Obligor becomes insolvent (however defined), is generally not
paying its debts as they become due, or has suspended transaction of
its usual business;
3. Death; Reorganization. The death, dissolution, merger, consolidation,
or reorganization of the Mortgagor or any other Obligor;
4. Material Misstatement. Any statement, representation or warranty made
in or pursuant to this Mortgage or any other Loan Document or to induce
the Bank to accept this Mortgage or to enter into or accept any other
Loan Document shall prove to be untrue or misleading in any material
respect;
5. Additional Debt; Granting of Security Interest. The Mortgagor or any
other Obligor (i) incurs or assumes additional debt other than debt
incurred for normal consumer purposes, debt to the Bank and/or an
Affiliate and/or trade debt in the ordinary course of its business; or
(ii) creates, permits or grants any lien or security interest in any of
its property on which the Bank has a lien and/or security interest;
6. Entry of Judgment. The filing, entry, or issuance of any judgment,
execution, garnishment, attachment, distraint, or lien against the
Mortgagor or any other Obligor or its property; the entry of any order
enjoining or restraining the Mortgagor or any other Obligor and/or
restraining or seizing any property of the Mortgagor or any other
Obligor; or
7. Transfer of Assets. The Mortgagor transfers all or any part of the
Mortgaged Property or the Mortgagor or any other Obligor transfers or
sells all or substantially all of its assets, without the prior written
consent of the Bank.
L. Remedies. Upon and following the occurrence of an Event of Default:
1. Advances. The Bank shall have the right, at its election, but not the
obligation, to make any payment or expenditure and to take any action
which the Mortgagor should have made or taken or which the Bank deems
advisable to protect the security of this Mortgage or the Mortgaged
Property. Such action shall be without prejudice to any of the Bank's
rights or remedies available under this Mortgage or the other Loan
Documents or otherwise at law or in equity. All such sums, as well as
costs and expenses, advanced by the Bank shall be immediately due from
the Mortgagor to the Bank, shall become part of the Liabilities secured
by this Mortgage and the other Loan Documents, and shall bear interest
(including after any judgment obtained on account of any of the
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Liabilities) at the applicable rate provided the Loan Documents in
effect after maturity or default the "Default Rate") until repayment in
full to the Bank. The Mortgagor agrees that all of the Liabilities and
other obligations of the Mortgagor to the Bank under the Loan
Documents, including, without limitation, obligations to reimburse the
Bank for advances, shall survive the entry of any judgment lien on
account of the Liabilities or any judgment in mortgage foreclosure,
whether such obligations arise before or after the entry of judgment;
2. Other Remedies. The Bank shall have the right, at its election, to take
any one or more of the following actions: (i) to declare all the
Liabilities secured by this Mortgage to be immediately due and payable
(except that upon the occurrence of any Event of Default described in
Paragraph K.2., such Liabilities shall automatically be due and payable
without notice or demand); (ii) to obtain judgment for the Liabilities
together with interest after such judgment at the Default Rate until
payment in full is received by the Bank and to obtain execution upon
the Mortgaged Property or other property of the Mortgagor on account of
such judgment; (iii) to obtain possession of the Mortgaged Property and
(with or without obtaining possession) to enforce the Leases, collect
the Income and rent the Mortgaged Property, either in its name or in
the name of the owner, and apply the income and rents, at the Bank's
option, to the payment of any charges and expenses of the Mortgaged
Property in such order and amounts as the Bank in its sole discretion
may determine, being accountable only for such rents and profits
collected by it while in possession; (iv) to foreclose this Mortgage;
(v) to obtain appointment of a receiver of the Mortgaged Property
without the necessity of proving either inadequacy of the security or
insolvency of the Mortgagor or any other Obligor, and the Mortgagor and
each such person waive such proof and consent to the appointment of
such receiver; (vi) to apply on account of the Liabilities, in any
order and amounts as the Bank may determine and whether or not a
deficiency action shall have been instituted, any unexpended money
still retained by the Bank that was paid by the Mortgagor to the Bank
for the payment of, or as security for the payment of, taxes,
assessments, municipal or governmental rates, charges, impositions,
liens, water or sewer rents, or insurance premiums, if any, or in order
to secure the performance of some act by the Mortgagor; (vii) to
collect from the Mortgagor monthly, in advance, so long as the
Mortgagor remains in possession of all or any part of the Mortgaged
Property, the fair and reasonable market value for the Mortgagor's use
and occupation of the Mortgaged Property; and/or (viii) to exercise all
rights of a secured party under the Uniform Commercial Code;
3. Uniform Commercial Code Disposition. With respect to that portion of
the Mortgaged Property governed by the Uniform Commercial Code, the
Bank shall have the right, upon five (5) calendar days' prior written
notice to the Mortgagor (or one (1) day notice by telephone with
respect to Mortgaged Property that is perishable or threatens to
decline rapidly in value), which the Mortgagor hereby acknowledges to
be sufficient, commercially reasonable and proper, to sell, lease or
otherwise dispose of any or all of the Mortgaged Property at any time
and from time to time at public or private sale, with or without
advertisement thereof, and apply the proceeds of any such sale first to
the Bank's expenses in preparing the Mortgaged Property for sale
(including reasonable attorneys' fees) and second to the complete
satisfaction of the Liabilities. The Mortgagor waives the benefit of
any marshaling doctrine with respect to the Bank's exercise of its
rights hereunder. The Mortgagor grants a royalty-free license to the
Bank for all patents, service marks, trademarks, tradenames,
copyrights, computer programs and other intellectual property and
proprietary rights to permit the Bank to exercise all rights granted to
the Bank under this Section. The Bank or anyone else may be the
purchaser of any or all of the Mortgaged Property so sold and
thereafter hold such Mortgaged Property absolutely, free from any claim
or right of whatsoever kind, including any equity of redemption of the
Mortgagor, any such notice, right and/or equity of redemption being
hereby expressly waived and released;
4. No Marshalling. In the event of a foreclosure or other judicial sale of
the Mortgaged Property, the Mortgaged Property may be sold in one or
several parcels in any order the Bank, in its sole discretion, may
determine and without regard to principles of marshalling;
5. Remedies Cumulative; No Waiver. The rights, powers and remedies
hereunder and under the other Loan Documents are cumulative and
concurrent, and are not exclusive of any other rights, powers or
remedies available to the Bank. No failure or delay on the part of the
Bank in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy; and
6. Continuing Enforcement of the Loan Documents. If, after receipt of any
payment of all or any part of the Liabilities, the Bank is compelled or
agrees, for settlement purposes, to surrender such payment to any
person or entity for any reason, then this Mortgage and the other Loan
Documents shall continue in full force and effect or be reinstated, as
the case may be. The provisions of this Paragraph shall survive the
termination of this Mortgage and the other Loan Documents and shall be
and remain effective notwithstanding the payment of the Liabilities,
the release of any security interest, lien or encumbrance securing the
Liabilities or any other action which the Bank may have taken in
reliance upon its receipt of such payment.
M. Miscellaneous.
1. Notices. Notices and communications under this Mortgage shall be in
writing and shall be given by (i) hand-delivery, (ii) first class mail
(postage prepaid), or (iii) reliable overnight commercial courier
(charges prepaid) to the addresses listed in this Mortgage. Notice by
overnight courier shall be deemed to have been given and received on
the date scheduled for delivery. Notice by mail shall be deemed to have
been given and received three (3) calendar days after the date first
deposited in the United States Mail. Notice by hand-delivery shall be
deemed to have been given and received upon delivery. A party may
change its address by giving written notice to the other party as
specified herein.
2. Costs, Expenses and Professional Fees. Whether or not the transactions
contemplated by this Mortgage or any of the other Loan Documents are
fully consummated, the Mortgagor shall promptly pay (or reimburse, as
the Bank may elect) all costs and expenses which the Bank has incurred
or may hereafter incur in connection with the negotiation, preparation,
reproduction, interpretation, perfection, protection of the Mortgaged
Property, administration and enforcement of this Mortgage or any of the
other Loan Documents, including, without limitation, the commencement
and prosecution of a foreclosure action, the collection of all amounts
due under the Loan Documents, and all amendments, modifications,
consents or waivers, if any, to the Loan Documents. Such costs and
expenses shall include, without limitation, the fees and disbursements
of counsel to the Bank (including the Bank's in-house counsel), the
costs of appraisals, searches of public records, costs of filing and
recording documents with public offices, internal and/or external audit
and/or examination fees and costs, stamp, excise and other taxes, the
fees of the Bank's accountants, consultants or other professionals,
costs and expenses from any actual or attempted sale of all or any part
of the Mortgaged Property, and for the care and preparation for sale of
the Mortgaged Property (including insurance costs) and defending and
asserting the rights and claims of the Bank in respect thereof, by
litigation or otherwise. The Mortgagor's reimbursement obligations
under this Paragraph shall survive any termination of the Loan
Documents.
3. Governing Law. This Mortgage shall be construed in accordance with and
governed by the substantive laws of the State of Connecticut without
reference to conflict of laws principles.
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4. Integration; Amendment. This Mortgage and the other Loan Documents
constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all xxx negotiations
and prior writings with respect to the subject matter hereof and
thereof. No amendment of this Mortgage, and no waiver of any one or
more of the provisions hereof shall be effective unless set forth in
writing and signed by the parties hereto.
5. Successors and Assigns. This Mortgage (i) shall be binding upon the
Mortgagor and the Bank and, where applicable, their respective heirs,
executors, administrators, successors and assigns; and (ii) shall inure
to the benefit of the Mortgage and the Bank and, where applicable,
their respective heirs, executors, administrators, successors and
permitted assigns; provided, however, that the Mortgagor may not assign
its rights or obligations hereunder or any interest herein without the
prior written consent of the Bank, and any such assignment or attempted
assignment by the Mortgagor shall be void and of no effect with respect
to the Bank. The Bank may from time to time sell or assign, in whole or
in part, or grant participations in some or all of the Loan Documents
and/or the obligations evidenced thereby. The Mortgagor authorizes the
Bank to provide information concerning the Mortgagor to any prospective
purchaser, assignee or participant.
6. Severability and Consistency. The illegality, unenforceability or
inconsistency of any provision of this Mortgage or any instrument or
agreement required hereunder shall not in any way affect or impair the
legality, enforceability or consistency of the remaining provisions of
this Mortgage or any instrument or agreement required hereunder. The
Loan Documents are intended to be consistent. However, in the event of
any inconsistencies among any of the Loan Documents, such inconsistency
shall not affect the validity or enforceability of any Loan Document.
The Mortgagor agrees that in the event of any inconsistency or
ambiguity in any of the Loan Documents, the Loan Documents shall not be
construed against any one party but shall be interpreted consistent
with the Bank's policies and procedures.
7. Consent to Jurisdiction and Service of Process. The Mortgagor
irrevocably appoints each and every owner, partner and/or officer of
the Mortgagor as its attorneys upon whom may be served any notice,
process or pleading in any action or proceeding against it arising out
of or in connection with this Mortgage or any of the other Loan
Documents. If service of process cannot be delivered to the Mortgagor
as specified by statute, the Mortgagor agrees that, with court
approval, it may be served by regular or certified mail at the address
set forth herein. The Mortgagor hereby consents and agrees that (i) any
action or proceeding against it may be commenced and maintained in any
court within the State of Connecticut or in the United States District
Court for the District of Connecticut by service of process on any such
owner, partner and/or officer; and (ii) the courts of the State of
Connecticut and the United States District Court for the District of
Connecticut shall have jurisdiction with respect to the subject matter
hereof and the person of the Mortgagor and all collateral for the
Liabilities. The Mortgagor agrees that any action brought by the
Mortgagor shall be commenced and maintained only in a court in the
federal judicial district or county in which the Bank has its principal
place of business in Connecticut.
8. Joint and Several Liability. In the event that the Mortgagor consists
of more than one person or entity, the Liabilities of each such person
or entity shall be joint and several and the word "Mortgagor" means
each of them, any of them and/or all of them.
9. Judicial Proceedings; Waivers.
THE MORTGAGOR AND THE BANK ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT,
ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY THE BANK OR THE MORTGAGOR OR ANY SUCCESSOR OR ASSIGN OF
THE BANK OR THE MORTGAGOR, ON OR WITH RESPECT TO THIS MORTGAGE, ANY
OTHER LOAN DOCUMENT, THE MORTGAGED PROPERTY OR THE DEALINGS OF THE
PARTIES WITH RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT
AND NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY;
(ii) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; AND (iii) THIS SECTION IS A SPECIFIC AND MATERIAL
ASPECT OF THIS MORTGAGE AND THE BANK WOULD NOT EXTEND CREDIT TO THE
MORTGAGOR IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF
THIS MORTGAGE.
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10. Prejudgment Remedies.
THE MORTGAGOR AND ANY ENDORSER, SURETY AND GUARANTOR HEREBY
ACKNOWLEDGES THAT THIS MORTGAGE CONSTITUTES A COMMERCIAL TRANSACTION.
PURSUANT TO SECTION 52-278F OF THE CONNECTICUT GENERAL STATUES, THE
MORTGAGOR HEREBY WAIVES AND RELINQUISHES ALL RIGHTS TO NOTICE AND
HEARING AS PROVIDED IN SECTIONS 52-278A THROUGH 52-278G OF SAID
CONNECTICUT GENERAL STATUTES PRIOR TO THE SECURING OF ANY PREJUDGMENT
REMEDY AGAINST THE MORTGAGOR IN CONNECTION WITH THE LIABILITIES OR ANY
OF THE INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
IN WITNESS WHEREOF, the Mortgagor, intending to be legally bound hereby, has
executed and sealed this Mortgage, on the day and year first above written.
WITNESSES:
_____________________________________ _____________________________________
Name: Name:
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
_____________________________________
Name:
Address: ____________________________
____________________________
WITNESSES:
_____________________________________ _____________________________________
Name: Name:
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
_____________________________________
WITNESSES: STAR STRUCK, INC.
Corporation or Partnership Name
/s/ Thomas A. Banahan /s/ Kenneth Karlan
_____________________________________ _____________________________________
Name: Thomas A. Banahan Name: Kenneth Karlan, President
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
/s/ Alexander Breiner
_____________________________________ (Corporate Seal)
Name: Alexander Breiner
Address: ____________________________
____________________________
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INDIVIDUAL ACKNOWLEDGEMENT
STATE OF CONNECTICUT )
) SS.:
COUNTY OF )
I CERTIFY that on _____________, 19____, ________________________ personally
appeared before me, who I am satisfied to be the person(s) who signed the
foregoing instrument, and acknowledged that he/she/they executed the same as
his/her/their own act.
_____________________________________
Name: _______________________________
Title: ______________________________
PARTNERSHIP ACKNOWLEDGEMENT (Non-Corporate General Partner)
STATE OF CONNECTICUT )
) SS.:
COUNTY OF )
I CERTIFY that on ________________, 19____, _______________________________, the
general partner of ______________________________, a __________________________
general/limited partnership, personally appeared before me, who I am satisfied
to be the person who signed the foregoing instrument, and acknowledged that
he/she was authorized to execute the same as the act of said partnership.
_____________________________________
Name: _______________________________
Title: ______________________________
PARTNERSHIP ACKNOWLEDGEMENT (Corporate General Partner)
STATE OF CONNECTICUT )
) SS.:
COUNTY OF )
I CERTIFY that on ________________, 19____, __________________________, the
___________________________ of ___________________________, a _________________
corporation, the general partner of ________________, a general/limited
partnership, personally appeared before me, who I am satisfied to be the person
who signed the foregoing instrument, and acknowledged that he/she was authorized
to execute the same as the act of said partnership.
_____________________________________
Name: _______________________________
Title: ______________________________
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CORPORATE ACKNOWLEDGEMENT
STATE OF CONNECTICUT )
) SS: STAMFORD
COUNTY OF FAIRFIELD )
I CERTIFY that on July 6, 1995, Kenneth Karlan, the President of STAR STRUCK,
------- -- -------------- --------- ------------
INC., a Connection corporation, personally appeared before me, who I am
- ---- ----------
satisfied to be the person who signed the foregoing instrument, and acknowledged
that he/she was authorized to execute the same as the act of said corporation.
/s/ Alexander Breiner
________________________________________
Alexander Breiner
Name: __________________________________
Commissioner of the Superior Court
Title: _________________________________
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Schedule A
to Mortgage, Assignment of Leases, and Security Agreement - Commercial
dated July 6, 1995,
------ --
by the Mortgagor in favor of the Bank
(Attach legal description or mortgaged property)
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SCHEDULE A
(Description)
All that certain piece or parcel of land, located in the Town of Bethel, County
of Fairfield and State of Connecticut, shown and designated as Lot No. 28 on a
certain map entitled, "Town of Bethel, Connecticut, Francis J. Clarke Industrial
Park, Subdivision Plan, Prepared for Bethel Economic Development Commission by
Lord-Wood, Larson Assoc., Inc., Engineers & Planners, Kasper Assoc., Surveyors
and Engineers, Dated July 9, 1984, Revised October 9, 1984, Scale 1" = 100',"
which map is certified by Paul F. Varko, L.S. No. 11627 and which map was filed
in the Land Records of the Town of Bethel on October 24, 1984, in Map File No.
18, Map Nos. 172, 173 and 174.
Together with the right to pass and repass for all purposes over the roads as
shown on the above map to and from Route 53.
Said premises are further described as follows:
All that piece or parcel of land as shown on a map entitled, "PLOT PLAN, LOT NO.
28, FRANCIS J. CLARKE CIRCLE, BETHEL, CONNECTICUT, SCALE 1" = 40', DATED 5/27/87
BY KASPER ASSOCIATES, JAMES J. KENNY CONN. L.S. LIC. #7027."
Commencing at a point said point being the northeasterly corner of the parcel
herein described said point being the northwesterly corner of other lands of the
Town of Bethel said point also being on the southerly street-line of Francis J.
Clarke Circle;
Thence South 30 deg. 19 min. 56 sec. West bounded southeasterly by other land of
the Town of Bethel a distance of 332.98 feet to a point;
Thence North 89 deg. 42 min. 04 sec. West bounded southwesterly by Lot No. 30 a
distance of 199.93 feet to a point;
Thence North 09 deg. 49 min. 51 sec. East bounded northwesterly by Lot No. 29 a
distance of 455.63 feet to a point;
Thence by a curve to the right along the southerly streetline of Francis J.
Clarke Circle having a radius of 270.00 feet and an arc length of 125.13 feet to
a point of tangency;
Thence South 53 deg. 36 min. 56 sec. East along the southerly streetline of
Francis J. Clarke Circle a distance of 124.12 feet to a point of curvature;
Thence by a curve to the left along the southerly streetline of Francis J.
Clarke Circle having a radius of 290.00 feet and an arc length of 86.60 feet to
the point and place of commencement.
Said above parcel contains 2.344 acres, more or less.
Exhibit A
Promissory Note
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EXHIBIT A
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Term Note with Agreement - Commercial
(Connecticut)
Obligor #__________________________
Obligation #_______________________
BORROWER: STAR STRUCK, INC. Stamford, Connecticut
$800,000.00 July 6, 1995
FOR VALUE RECEIVED, and intending to be legally bound hereby, the Borrower,
jointly and severally and unconditionally promises(s) to pay to the order of
FIRST FIDELITY BANK (the "Bank") the principal sum of EIGHT HUNDRED THOUSAND AND
XX/100 DOLLARS ($800,000.00) (the "Loan"), together with interest thereon in
accordance with the payment provisions hereinafter set forth.
A. Terms of Note.
1. Payment of Principal. The principal balance hereunder shall be paid in
ninety-six (96) consecutive monthly installments in the amount of THREE THOUSAND
THREE HUNDRED THIRTY-THREE AND 33/100 Dollars ($3,333.33) each, commencing on
August 1, 1995 and continuing on the same day of each consecutive period
thereafter, with a final installment in the amount of the remaining unpaid
principal balance outstanding hereunder due and payable on July 6, 2003 (the
"Maturity Date"). The Borrower acknowledges that if all 96 regular monthly
payments of principal and interest are timely made, a balloon payment of
principal in the amount of $480,000.32 would be due on the Maturity Date as the
final installment.
2. Interest Payments. The Borrower agrees to pay to the Bank, together
with each principal payment as set forth in the preceding paragraph, interest,
in arrears, on the outstanding principal balance hereunder until the entire
principal balance hereunder, together with accrued, unpaid interest thereon is
paid in full. Interest on the outstanding principal balance hereunder shall
accrue at (i) the Bank's Base Rate plus three-quarters percent (3/4%) per annum.
The applicable interest rate will change automatically and immediately as of the
date of any change in the Bank's Base Rate, without notice to Borrower or any
guarantor.
3. Computation of Interest. Interest charged hereunder shall be computed
daily on the basis of a 360 day year for the actual number of days elapsed.
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4. Payment Terms. All payments made hereunder shall be made on the due
date thereof, in immediately available funds and in lawful currency of the
United States of America. All payments made hereunder shall be made to the Bank
at its offices set forth in this Note or at such other address as the Bank shall
notify Borrower of in writing.
5. Incorporation by Reference. This Note is the note referred to in that
certain Loan Agreement dated July 6, 1995, between the Bank and the Borrower
(together with any exhibits, amendments and modifications thereto in effect from
time to time, the "Loan Agreement") and is subject to the terms and conditions
thereof, which terms and conditions are incorporated herein including, without
limitation, terms pertaining to payment, definitions, representations,
warranties, covenants, events of default, remedies and miscellaneous terms. Any
capitalized term used herein without definition shall have the meaning set forth
in the Loan Agreement.
6. Debiting of Account. The Borrower agrees to maintain an account (the
"Account") at the Bank continuously until the Liabilities due hereunder are paid
in full. The Bank may, and the Borrower authorizes the Bank to debit the Account
for the amount of any payment as and when such payment becomes due hereunder.
The foregoing rights of the Bank to debit the Borrower's accounts shall be in
addition to, and not in limitation of, any rights of set-off which the Bank may
have hereunder or under any Loan Document nor shall the rights hereunder limit
the Bank's recourse to any particular source of funds or monies.
7. Late Charge. If any payment is not paid in full when the same is due,
the Borrower shall pay the Bank a fee on such unpaid amount equal to five
percent (5%) of such amount.
8. Default Rate. At the Bank's option, interest will be assessed on any
principal which remains unpaid at the maturity of this Note, whether by
acceleration or otherwise, or upon the occurrence of an Event of Default, at a
rate which is four percent (4%) higher than the rate otherwise charged hereunder
(the "Default Rate") provided that at no time shall the Default Rate exceed the
highest rate of interest allowed by law. Such Default Rate of interest shall
also be charged during any period of time after the entry of a judgment with
respect to this Note.
9. Prepayment. If interest hereunder accrues at a floating rate,
prepayment of principal may be made at any time without prepayment penalty or
premium. If interest hereunder accrues at a fixed rate, the Loan may be prepaid,
in whole or in part, at any time, provided, that any prepayment (whether in
whole or in part and whether made
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voluntarily or because of acceleration) will also be accompanied by (i) all
accrued and unpaid interest on the Loan and all other fees, expenses, and other
sums due and owing hereunder, and (ii) an amount equal to the amount described
in Exhibit B to the Loan Agreement (the "Make Whole Premium"), or, if no amount
is listed in Exhibit B thereto, then the Make Whole Premium shall be determined
by the Bank, in its sole discretion in accordance with normal banking practices.
The Bank's determination of the Make Whole Premium shall be conclusive and
binding, absent manifest error. All payments received on this Note may be
applied in such order as the Bank in its sole discretion shall determine.
10. Prejudgment Remedies. The Borrower and any endorser, surety and
guarantor hereby acknowledges that this Loan constitutes a commercial
transaction. Pursuant to Section 52-278f of the Connecticut General Statutes,
the Borrower hereby waives and relinquishes all rights to notice and hearing as
provided in Sections 52-278a through 52-278g of said Connecticut General
Statutes prior to the securing of any prejudgment remedy against the Borrower in
connection with the Liabilities or any of the instruments or documents executed
in connection herewith.
IN WITNESS WHEREOF, the Borrower has duly executed and delivered to the Bank
this Note, as of the day and year first above written.
STAR STRUCK, INC.
By: __________________________________
Name:
Title:
Address: _____________________________
_____________________________
FIRST FIDELITY BANK
Address: 300 Main Street
Stamford, Connecticut 06904
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