COMMERCIAL CREDIT AGREEMENT
THIS AGREEMENT made and entered into as of the 28th day of June 1996, by
and between HARDWICK BANK AND TRUST COMPANY ("Hardwick") and the TRUSTEES OF THE
VININGS INVESTMENT PROPERTIES TRUST, a Massachusetts business trust
("Borrower").
WITNESSETH:
WHEREAS, Borrower has requested that Hardwick extend a line of credit (the
Credit Line") to Borrower in amount not to exceed the principal sum of Two
Million and No/100 Dollars ($2,000,000);
WHEREAS, Hardwick is willing to extend the Credit Line to Borrower upon the
terms and conditions of the Agreement and the other Financing Documents
(hereinafter defined).
NOW, THEREFORE, in consideration of the premises and in further
consideration of the agreements, covenants, promises, conditions,
representations and warranties hereinafter set forth, the parties do hereby
agree as follows:
ARTICLE 1
TERMS AND DEFINITIONS
Certain terms used in this Agreement are defined herein. In addition to the
other terms hereinafter defined, the following terms shall have the meanings set
forth in this Article 1:
1.01. "Affiliate": means any trustee, officer or shareholder of Borrower or
any person, corporation, partnership or other entity who or which, directly or
indirectly or beneficially, owns any beneficial interest in Borrower, or any
member of the immediate family of any such officer, trustee or shareholder, or
any Person which is controlled by, controls, or is under common control with
Borrower.
1.02. "Agreement": means this Commercial Credit Agreement, as it may be
amended, modified or supplemented from time to time.
1.03. "Banking Day": means a day when Hardwick is open to the public for
ordinary banking business.
1.04. "Base Rate": means the variable rate of interest per annum defined as
the "Base Rate" in the Master Note (as referred to and defined in Article 2 of
this Agreement).
1.05. "Borrower": means the Trustees of the Vinings Investment Properties
Trust., a Massachusetts business trust, which was formerly known as Mellon
Participating Mortgage Trust Commercial Properties Series 85/10.
1.06 "Credit Line": means the line of credit established by Hardwick in
favor of Borrower pursuant to Section 4.01 of this Agreement in an amount not to
exceed at any time or times the principal sum of Two Million and No/100
($2,000,000).
1.07. "Credit Line Loan Account": means the account on the books of
Hardwick in which will be recorded loans and advances against the Credit Line,
payments made by Borrower on advances against the Credit Line and other
appropriate debits and credits as provided in this Agreement.
1.08. "Credit Line Termination Date": means June 28, 1997
1.09, "Depository Account": means the depository account of Borrower
maintained at Hardwick and identified as account number .
1.10. "Event of Default": means any one or more of the events defined as an
"Event of Default" in Article 8 of this Agreement.
1.11. "Financing Documents": Means collectively, this Agreement, the
documents referred to in Article 2 and all other documents and instruments
evidencing or securing or otherwise relating to the Credit Line.
1.12. "Governmental Authority": means the United States, the State or
Georgia, Gwinnett County, any municipality in which the Real Property may be
located, and any agency, department, commission, board, bureau or
instrumentality of any of them.
1.13. "Guarantors": means Gilbert H. Watts, Jr. ("Watts"), Peter D. Anzo
("Anzo"), and Martin H. Petersen ("Petersen"), Vinings Investment Properties,
Inc., a Maryland corporation ("Vinings"), and PBC Acquisition, Inc., a Delaware
corporation ("PBC").
1.14. "Hardwick": means Hardwick Bank and Trust Company, and its successors
and assigns.
1.15. "Loan Obligations": means the aggregate of all principal and interest
owing from time to time under the Master Note and all expenses, charges and
other amounts owing by Borrower to Hardwick under the Financing Documents.
1.16. "Master Note": means the Master Note, as defined in Article 2 of this
Agreement.
1.17. "Obligations": means all loans, advances, debts, liabilities,
obligations, covenants and duties owing by Borrower to Hardwick of every kind
and nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, whether arising under the Financing Documents or any other
instrument or agreement, whether or not for the payment of money, whether
executed alone or together with another Person or Persons, whether arising by
reason of an extension of credit, opening of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect, absolute or
contingent, now existing or hereafter arising or created, and however acquired.
The term includes, but not by way of limitation, all interest, charges,
expenses, attorneys fees, and other sums chargeable under this or any other
agreement or instrument.
1.18. "Person": means any individual, sole proprietorship, partnership,
joint venture, unincorporated organization, association, firm, corporation,
partnership, institution, entity, party or government (whether national,
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, body, agency or department thereof).
1.19. "Real Property": shall mean the real property described in the
Security Deed (as defined in Article 2 hereof), together with all building
improvements now or hereafter located thereon.
1.20. "UCC": means the Uniform Commercial Code as adopted by the State of
Georgia, as amended from time to time.
ARTICLE 2
FINANCING DOCUMENTS
Borrower has duly authorized, executed and delivered to Hardwick, or caused
the same to be executed, the following documents:
2.01. Master Note. The promissory note (the "Master Note"), dated of even
date herewith, in the principal face of the Credit Line, payable to the order of
Hardwick, evidencing Borrower's obligation to pay the amounts advanced or
re-advanced by Hardwick against the Credit Line with interest and agreed charges
and all renewals, modifications, amendments and substitutions, if any, thereof.
2.02. Guaranty. The Guaranty (the "Guaranty") dated the date hereof whereby
the Guarantors have agreed, among other things, to guaranty to Hardwick the
payment by Borrower of all of its Obligations to Hardwick.
2.03. Security Deed. The Deed to Secure Debt and Security Agreement
(hereinafter the "Security Deed"), from PBC to Hardwick, dated of even date
herewith and conveying the Real Property to Hardwick to Secure the Guaranty;
which Security Deed is to be recorded in the office of the Clerk of the Superior
Court of Gwinnett County, Georgia on or about the date hereof.
2.04. Financing Statements. UCC Financing Statements from PBC in favor of
Hardwick giving notice of the security agreement contained in the Security Deed;
which Financing Statements are to be recorded in the offices of the Clerks of
the Superior Court of Gwinnett County, Georgia on or about the date hereof and
in all other public offices where the filing thereof is necessary to perfect the
security interest of Hardwick.
2.05. Lease Assignment. The Assignment of Leases, Rents and Profits
(hereinafter the "Lease Assignment"), from PBC to Hardwick, dated of even date
herewith and securing the Guaranty; which Lease Assignment is to be recorded in
the office of the Clerk of the Superior Court of Gwinnett County, Georgia, on or
about the date hereof.
ARTICLE 3
CONDITIONS TO DISBURSEMENT
Prior to the advance by Hardwick of any amount against the Credit Line
Borrower shall deliver, or cause to be delivered, to Hardwick, in each case in
form and substance to Hardwick and its counsel, the following (any of which can
be waived by Hardwick in its sole discretion):
3.01. Organizational Documents of Borrower. A copy of Borrower's
Declaration of Trust, together with all amendments thereto and a copy of the
by-laws of Borrower, as amended, each certified as being a true, correct and
complete by Borrower.
3.02. Proceedings of Borrower. Certified copies of all proceedings which
shall have been taken by Borrower to authorize the execution and deliver of this
Agreement and the other Financing Documents to be executed by Borrower and the
transactions contemplated hereby and thereby.
3.03. Corporate Documents of Vinings. A copy of Vinings' articles of
incorporation, certified by the Secretary of State and the State of Maryland,
together with a certificate from the Secretary of State of Maryland certifying
that Vinings is in good standing, and together with a certificate from the
Secretary of State of Georgia certifying that Vinings is a foreign corporation
authorized to do business in the State of Georgia and is in good standing.
3.04. Corporate Proceedings of Vinings. Certified copies of all corporate
proceedings which shall have been taken by Vinings to authorize the execution
and deliver of the Guaranty.
3.05. Corporate Documents of PBC. A copy of PBC' articles of incorporation,
certified by the Secretary of State of the State of Delaware, together with a
certificate from the Secretary of State of Delaware certifying that PBC is in
goody standing, and together with a certificate from the Secretary of State of
Georgia certifying that PBC is a foreign corporation authorized to do business
in the Sate of Georgia and is in good standing.
3.06. Corporate Proceedings of PBC. Certified copies of all corporate
proceedings which shall have been taken by PBC to authorize the execution and
deliver of the Guaranty, the Security Deed, the Lease Assignment and the
Financing Statements.
3.07. Financing Documents. This Agreement and the other Financing
Documents.
3.08. Insurance. The certificates of insurance or insurance policies as
required by Section 6.01 of this Agreement.
3.09. Title Opinion. An opinion of title with respect to the Real Property,
issued by a law firm of recognized expertise, certifying that, in the opinion of
such law firm, the Real Property is owned by Borrower free and clear of all
title defects, liens and encumbrances, except such as may be approved by
Hardwick, and including copies of all exceptions mentioned therein.
3.10. Costs of closing. Borrower shall pay or reimburse Hardwick for the
payment of all out of pocket expenses, including without limitation legal fees
and recording fees and expenses, including recording fees with respect to the
Financing Documents, paid or incurred by Hardwick as the result of the
transactions contemplated by this Agreement, including the out of pocket
expenses of Hardwick's counsel.
ARTICLE 4
CREDIT LINE
4.01. Credit Line. Contemporaneously with the execution and delivery of
this Agreement, the Master Note and the other Financing Documents, Hardwick is,
subject to the terms of this Agreement, hereby establishing in favor of Borrower
the Credit Line. Subject to the terms of this Agreement and if Borrower is not
in default hereunder, and if no condition exists which but for the giving of
notice or the lapse of time, or both, would constitute and Event of Default
hereunder, Borrower will be advanced funds against the Credit Line in accordance
with the terms of this Article 4, until the earlier of
(i) Credit Line Termination Date or (ii) the date that the Credit Line is
terminated as provided for in Section 9.01 hereof.
4.02. Interest. The outstanding principal balance of the Master Note shall
bear interest at a variable rate of interest per annum as provided for in the
Master Note. Borrower shall, in accordance with the terms of the Master Note
make monthly payments of interest to Hardwick on the outstanding principal
balance of the Master Note, and Borrower hereby irrevocably authorizes Hardwick
to draft the Depository Account for the interest due on the Master Note.
Interest on the amount of each advance under the Credit Line shall be calculated
from the date of each such advance.
4.03. Termination of Credit Line. The termination of the Credit Line
pursuant to the provisions of Section 4.01 or Section 9.01 shall not affect the
rights, liabilities and obligations of the parties with respect to advances made
Hardwick prior to the effective date of termination, and upon any termination of
the Credit Line, all provisions of this Agreement and the Financing Documents
shall remain in full force and effect, except for the obligation of Hardwick to
extend credit to Borrower under the Credit Line, until all Obligations of
Borrower to Hardwick shall have been paid in full.
4.04 Credit Line Loan Account. Hardwick shall establish on its books a
Credit Line Loan Account with respect to the Credit Line, and shall enter all
advances against the Credit Line in the Credit Line Loan Account. Hardwick shall
also record in the Credit Line Loan Account in accordance with customary
accounting practice all other charges, expenses and other items properly
chargeable to Borrower with respect to the Credit Line, including interest
charges, all payments made by Borrower on account of the Credit Line and the
interest payable thereon, and other appropriate debits and credits. The debit
balance in the Credit Line Loan Account shall reflect the amount of the
indebtedness of Borrower to Hardwick from time to time under the Credit Line by
reason of advances against the Credit Line and other appropriate charges,
including interest charges. At least once each month Hardwick shall render a
statement of account for the Credit Line Loan Account which statement shall be
considered correct and accepted by Borrower and conclusively binding upon
Borrower unless Borrower notifies Hardwick to the contrary within ten (10) days
of Hardwick's sending such statement to Borrower.
4.05 Advances Against Credit Line. Subject to the terms of this Agreement,
Borrower shall be advanced funds against the Credit Line upon written request,
signed by a duly authorized representative of the Borrower, or upon the verbal
request of a person duly authorized by the Borrower for such purpose. Borrower
agrees that all verbal requests for advances against the Credit Line shall be
confirmed in writing by a duly authorized representative of Borrower by
telecopier or facsimile transmission to Hardwick and by mailing of the original
of such confirmation to Hardwick. Until the Borrower shall direct otherwise, by
written notice actually received by an officer of Hardwick holding a title of
vice president or greater, any one or more of the following persons shall be
authorized to request advances against the Credit Line: Peter D. Anzo and Martin
H. Petersen. Borrower hereby specifically vests such persons with authority to
request advances against the Credit Line. Borrower may, with the prior written
approval of Hardwick and by written authorization of duly authorized officers of
Borrower delivered to Hardwick, change the designation of the persons authorized
to request advances against the Credit Line. In no event and at no time shall
more than three (3) persons be authorized by the Borrower to request advances
against the Credit Line. All advances against the Credit Line shall be made to
the Depository Account unless otherwise directed in writing by one of the
authorized representatives of Borrower. Hardwick agrees that if a request for an
advance against the Credit Line is made on or before 11:00 A. M. Eastern
Standard Time or Eastern Daylight Savings Time, as applicable, on a Banking Day,
such advance will be made on the same Banking Day. If such request is received
after said time, Hardwick may if able, but shall not be required, to make the
advance until the next Banking Day of Hardwick. Notwithstanding the foregoing it
is expressly agreed that in the event that Hardwick should make an advance
against the Credit Line at the request of a person reasonably believed by
Hardwick, its officers or employees, to be a person authorized to request
advances against the Credit Line, Borrower shall be liable for the payment of
same and interest thereon as provided in the Master Note, provided that the
advance is made in the manner provided for herein or the Borrower has otherwise
received the beneficial use of such funds. Hardwick shall have no duty or
obligation to make an advance against the Credit Line other than on a Banking
Day.
ARTICLE 5
WARRANTIES OF BORROWER
Borrower hereby warrants and represents and/or covenants to Hardwick as
follows:
5.01. Status and Authority of Borrower. That Borrower (i) is a business
trust duly organized, existing and in good standing under the laws of the State
of Massachusetts, (ii) is duly qualified to do business in and is in good
standing in every other jurisdiction in which the character of character of the
properties owned by it or in which the transaction of its business makes such
qualification necessary, (iii) has the power, authority and legal right to carry
on the business now being conducted by it and to engage in the transactions
contemplated by the Agreement and the other Financing Documents to be executed
by Borrower, and (iv) the execution and delivery of this Agreement and the
Financing Documents to be executed by Borrower and the performance and
observance of the provisions hereof and thereof have been duly authorized by all
necessary actions on the part of Borrower.
5.02. Validity and Enforceability of Financing Documents. That the
Agreement and the other Financing Documents are in all respects legal, valid and
binding in accordance with their respective terms, subject only to (i)
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally; and (ii) general
principals of equity.
5.03. Conflicting Transactions of Borrower. That the consummation of the
transactions hereby contemplated and the performance of the obligations of
Borrower under and by virtue of the Agreement and the other Financing Documents
to be executed by Borrower will not result in any breach of, or constitute a
default under, any mortgage, security deed, deed of trust, security agreement,
lease, bank loan or credit agreement, trust indenture, corporate charter or
by-laws or any other agreement or instrument to which Borrower is a party or by
which it is bound of affected.
5.04. Pending Litigation. Except as may have been disclosed to Hardwick in
writing, there are no actions, suits or proceedings pending, or to the knowledge
of Borrower threatened, against or affecting Borrower or the Real Property, at
law or in equity, or before or by any Governmental Authority.
5.05. Information Concerning Real Property. That, subject to any limitation
stated therein or in connection therewith, all information by or on the behalf
of Borrower or PBC concerning the Real Property or otherwise for the purpose of
obtaining the financial benefits contemplated by this Agreement, is or will be
at the time the same is furnished, accurate and complete in all material
respects and complete insofar as completeness may be necessary to give Hardwick
a true and accurate knowledge of the subject matter.
5.06. Financial Statements. That the financial statements of Borrower and
the Guarantors which have theretofore been delivered by Borrower or Guarantors
or on behalf of Borrower or Guarantors to Hardwick are materially true in all
respects, and that (i) the financial statements of Borrower, Vinings and PBC
have been prepared in accordance with generally accepted accounting practices,
and (ii) the financial statements of Watts, Petersen and Anzo each fairly
represent the financial condition of the subject thereof as of the respective
dates thereof; and there are no material liabilities, direct or indirect, fixed
or contingent, of Borrower or any Guarantor as of the date of such financial
statements which are not reflected thereon or in the notes thereto. There has
been no material adverse change in the financial condition, business operations
or prospects of Borrower or any Guarantor since the respective dates of said
financial statements; and that no additional borrowings have been made by
Borrower or any Guarantor since the respective dates thereof other than the
borrowing contemplated hereby or as otherwise expressly approved by Hardwick.
5.07. Taxes. Borrower has filed all federal, state and local tax returns
which are required to be filed and has paid, or made adequate provision for the
payment of, all taxes which have become due pursuant to said returns or to
assessments received by Borrower.
5.08. ERISA Requirements. Unless previously disclosed in writing to
Hardwick, Borrower has not established and is not a party to any stock option or
deferred compensation plan or contract for the benefit of its employees or
officers, any pension, profit sharing or retirement plan, or any other agreement
or arrangement with any officer, director or stockholder, member of their
families or trusts for their benefit, and Borrower is in compliance with all
applicable provisions of the Employee Retirement Security Act of 1974, as
amended ("ERISA").
5.09. Regulation U. None of the proceeds of the Credit Line shall be used
directly or indirectly for the purpose of purchasing or carrying any stock in
violation of Regulation U of the Board of Governors of the Federal Reserve
System.
5.10. No Events of Default under Financing Documents. That no Event of
Default by Borrower exists under this Agreement, or under any of the other
Financing Documents, and no event has occurred and is continuing which with
notice or the passage of time, or both, would constitute an Event of Default
under any of the Financing Documents.
ARTICLE 6
AFFIRMATIVE COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Hardwick as follows.
6.01. Insurance. To obtain, or cause to be obtained, such insurance or
evidence of insurance as Hardwick may reasonable require, including, but not
limited to, the following:
(a) Property and Casualty Insurance. As required by the terms of the
Security Deed.
(b) Public Liability and Workmen's Compensation Insurance. A
certificate from an insurance company indicating that Borrower is covered
by public liability and workmen's compensation insurance to the reasonable
satisfaction of Hardwick.
6.02. Collection of Insurance Proceeds. To cooperate with Hardwick in
obtaining for Hardwick the benefits of any insurance or other proceeds lawfully
or equitably payable to Hardwick in connection with the transactions
contemplated hereby and to reimburse Hardwick for any expenses incurred in
connection therewith (including the payment by Borrower of the expense of an
independent appraisal on behalf of Hardwick in case of a fire or other casualty
affecting the Inventory, or any part thereof).
6.03. Change of Name or Use of Tradename. To give Hardwick at least thirty
(30) days prior written notice of (i) any proposes change in the location of the
principal offices or principal place of business of Borrower, (ii) any proposed
change in Borrower's corporate name, and (iii) any proposed use of a trade-name
or other fictitious name by Borrower.
6.04. Financial Statements. For so long as Borrower shall have any
Obligation to Hardwick, Borrower agrees to deliver to Hardwick the following
financial statements and reports:
(a) Financial Statements of Borrower.
(1) As soon as practicable after the end of each fiscal year of
Borrower, but in any event within ninety (90) days thereafter, a copy
of: (i) a balance sheet for Borrower at the end of such year, and (ii)
statements of income and surplus for Borrower for such year, setting
forth in each case in comparative form the figures for the previous
fiscal year of Borrower, all in reasonable detail and accompanied by
an unqualified opinion of a firm of independent certified public
accountants of recognized expertise, reasonably acceptable to
Hardwick, certifying that such financial statements have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis. At the time of the furnishing of such financial
statements Borrower shall, if requested by Hardwick, also furnish
Hardwick with a certificate from the president or the chief financial
officer of Borrower stating that he has reviewed this Agreement, the
other Financing Documents and the affairs of Borrower and that he is
unaware of the occurrence of an event which constitutes an Event of
Default hereunder or which would constitute an Event of Default
hereunder with the giving of notice or the lapse of time, or both, or,
if such an event has occurred, stating the facts with respect thereto.
(2) As soon as practicable after the close of each calendar
quarter of Borrower except the last quarter in each fiscal year of
Borrower, but in any event within thirty (30) days thereafter, a copy
of: (i) a balance sheet for Borrower as of the end of such quarter,
and (ii) statements of income and surplus of Borrower for such
quarter, all in reasonable detail and certified as complete and
correct, subject to changes resulting from year-end adjustments, by
the president or chief financial officer of Borrower. At the time of
the furnishing of such financial statements, Borrower shall, if
Hardwick so requests, also furnish Hardwick with a certificate signed
by the president or the chief financial officer of Borrower stating
that he has reviewed this Agreement, the other Financing Documents and
the affairs of Borrower and that he is unaware of the occurrence of an
event which constitutes an Event of Default hereunder or which would
constitute an Event of Default hereunder with the giving of notice or
the lapse of time, or both, or, if such an event has occurred, stating
the facts with respect thereto.
(3) Such other and further information respecting its affairs and
financial condition as Hardwick may, from time to time, reasonably
request.
6.05. Maintenance of Existence. Borrower will maintain its existence as a
business trust and, in each jurisdiction in which the nature of its business or
the character of the property owned by Borrower makes its qualification
necessary, maintain good standing.
6.06. Accrual of Taxes and Benefit Contributions. During each fiscal year,
accrue all current tax liabilities of all kinds, all required withholding of
income taxes and social security taxes of employees, all required old age and
unemployment contributions, all required payments to any employee benefit plans
maintained by Borrower, and pay the same as they become due.
6.07. Compliance with Laws. Comply with all applicable statues and
governmental regulations governing or regulating the business of Borrower.
6.08. Notice of Legal Action. Give Hardwick prompt notice of any suit or
proceeding against Borrower involving more than $50,000.
6.09. Notice of Damage to or Loss of Collateral. Immediately notify
Hardwick of any event causing a material loss or depreciation in value of the
Real Estate and the amount of such loss or depreciation, except Borrower shall
not be required to notify Hardwick of depreciation resulting from ordinary use.
ARTICLE 7
NEGATIVE COVENANTS OF BORROWER
Until the Loan Obligations have been paid in full, Borrower covenants and
agrees that it will not, without the prior written consent of Hardwick, which in
each case shall not be unreasonable withheld:
7.01. Merger or Consolidation. Merge or consolidate with or into any other
Person. In the event Hardwick consents to any such merger or consolidation and
as a condition thereto, Borrower shall deliver or cause to be delivered to
Hardwick such assurances, including opinions from Borrower's legal counsel,
acceptable to Hardwick, that the Loan Obligations and Hardwick's security
interest and lien on the Real Property are unaffected thereby.
7.02. Transactions with Affiliates. Purchase, acquire, or lease property
from, or sell, transfer or lease any property to any Affiliate, except on terms
which are no less favorable to Borrower than would be the case if such
transactions had been made with disinterested third parties.
7.03. Guaranty of Others Obligations. Be a surety, guarantor or endorser or
otherwise become liable to any Person, other than Hardwick, for or upon the
obligations of any other Person, other than by endorsement of instruments or
items or payment for deposit to the general account of Borrower.
7.07. Loans or Advances by Borrower. Make any loans or advances to any
Person, including officers, trustees and employees of Borrower, except in the
ordinary course of the business of Borrower.
7.08. Accountants. Maintain independent certified public accountants who
are not approved by Hardwick.
ARTICLE 8
DEFAULTS
An Event of Default shall be deemed to have occurred under this Agreement
if:
8.01. Default under Master Note. Borrower shall fail to pay when due and
payable any installment of interest or principal, or principal and interest, as
provided for the Master Note and the continuation of such default beyond any
grace period provided for in the Master Note; or
8.02. Breach of Covenant. Borrower breaches or fails to perform, observe or
meet any term, covenant or condition made herein or in any of the Financing
Documents executed by Borrower (other than a default as referred to in Section
8.01 above) and does not cure same within 10 days after written notice thereof,
with respect to such breaches or failures curable by the payment of money, or
within 15 days after written notice thereof, with respect to all other breaches
and failures, provided, however, that with respect to breaches or failures which
cannot be cured by the payment of money, and cannot reasonably be cured within
such period (but can be cured), no Event of Default shall exist hereunder so
long as Borrower promptly commences and thereafter diligently pursues the cure
thereof and continues to satisfy all of Borrower's monetary obligations under
the Financing Documents, but in any event such period shall not exceed 30 days
from the date of written notice of default or extend the maturity of the Master
Note; or
8.03. Breach of Warranty. Any warranties or representations made or agreed
to be made herein by Borrower shall be breached by Borrower or shall be
determined to have been false or incomplete in any material respect at the time
given or made; or
8.04. Breach Under Financing Documents. Any default or event of default
shall occur and be continuing under the Guaranty, the Security Deed or the Lease
Assignment;
8.05. Judgment Liens. A final judgment shall be rendered by a court of law
or equity against Borrower or any Guarantor and the same shall remain
undischarged for the period of thirty (30) days unless such judgment is fully
covered by collectible insurance. For purposes hereof, the term "final
judgement" shall mean a judgment of a court of competent jurisdiction which is
not subject to further direct review or appeal; or
8.06. Bankruptcy. (i) The fining by Borrower or any Guarantor of a
voluntary petition in bankruptcy under Title 11 of the United States Code, or
the issuing of an order for relief against Borrower or any Guarantor under Title
11 of the United States Code, or (ii) the filing by Borrower or any Guarantor of
any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief for Borrower or any Guarantor under any present or future federal, state
or other law or regulation relating to bankruptcy, insolvency or other relief
for debtors, or (iii) Borrower's or any Guarantor's seeking or consenting to or
acquiescing in the appointment of any custodian, trustee, receiver, conservator
or liquidator of Borrower or such Guarantor or of all or a substantial part of
the property of Borrower or any such Guarantor or of any or all of the rents,
issues, profits, revenues and royalties thereof, of (iv) the making by Borrower
or any Guarantor of a general assignment for the benefit of creditors, or (v)
the entry by a court of competent jurisdiction of an order judgment or decree
approving a petition filed against Borrower or any Guarantor seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
(vi) the appointment of any custodian, trustee, receiver, conservator or
liquidator of Borrower or any Guarantor or of all or substantial part of the
property of Borrower or any such Guarantor or of any or all of the rents,
issues, profits, revenues and royalties thereof without the consent or
acquiescence of Borrower or the respective Guarantor; or
8.07. Secondary Financing and Sale of Real Property. PBC shall, without the
prior written consent of Hardwick, sell, transfer or convey all or any part of
its interest in the Real Property, or any portion thereof, or shall enter into
any secondary financing arrangement with respect to the Real Property, or any
part thereof, without the prior written consent of Hardwick; or
8.08. Ejectment from Real Property. PBC shall be ejected from the Real
Property or any part thereof or from the use and occupancy thereof by reason of
any defect in the title to the Real Property; or
8.09. Adverse Claims to Real Property. In any Person shall file any claim
in any legal or equitable proceeding challenging the priority of the lien and
security interest of Hardwick in the Real Property or any part thereof; or
8.10. Damage to or Loss of Real Property. If there shall occur any material
uninsured damage to or loss or destruction of the Real Property, or any part
thereof; or if the Real Property, or any material portion thereof, is subjected
to waste; or
8.11. Failure to Notify. Borrower shall fail to notify Hardwick in writing
immediately after damage or loss to the Real Property by reason of fire or other
casualty, and prior to the making of any repairs thereto, or to permit Hardwick
to inspect such damage or loss prior to the making of, during and upon
completion of any repairs thereto; or
8.12. Liquidation of Dissolution of Borrower of Corporate Guarantors. If
either Borrower, Vinings or PBC is liquidated or dissolved or its charter
expires or is revoked and is not reinstated within thirty (30) days; or
8.13. Default under Other Documents. If there shall occur any default or
event of default under and as defined in any other agreement now or hereafter
evidencing or securing any indebtedness or Obligation of Borrower or any
Guarantor to Hardwick; or
8.14. Revocation of Guaranty. If any one or more of the Guarantors shall
revoke or rescind or attempt to revoke or rescind the Guaranty or such
Guarantor's obligations thereunder; or
8.15. Death of Guarantor. If either Anzo, Watts or Petersen shall die; or
8.16. Insecurity. If Hardwick should otherwise reasonably deem itself, its
security interest, if any, or any indebtedness hereunder unsafe or insecure or
should Hardwick believe in good faith that the prospect of payment or other
performance by Borrower or any Guarantor is impaired, and Borrower fails upon
request of Hardwick to provide Hardwick such additional collateral as it shall
reasonably request; or
8.17. Failure to Disprove Default. Hardwick shall reasonably suspect the
occurrence of any one or more of the aforesaid Events of Default and Borrower,
upon the request of Hardwick, shall fail to provide evidence reasonably
satisfactory to Hardwick that such Event or Events of Default have not in fact
occurred.
ARTICLE 9
REMEDIES OF HARDWICK
Upon the occurrence of any one or more of the Events of Default set out in
Article 9 hereof, Hardwick, at its option and in addition to and not in lieu of
the remedies provided for in the other Financing Documents, shall be entitled to
proceed to exercise any of the following remedies:
9.01. Termination of Credit Line. Hardwick may immediately and without
notice to Borrower, terminate the Credit Line, whereupon Hardwick shall have no
further duty or obligation to make advances against the Credit Line to Borrower,
except that upon the occurrence of an Event of Default under Section 8.06 the
Credit Line shall automatically be terminated without the necessity of any act
or action on the part of Hardwick.
9.02. Default under Other Financing Documents. Borrower agrees that the
occurrence of such Event of Default shall constitute a default under each of the
other Financing Documents, thereby entitling Hardwick (i) to exercise any of the
various remedies therein and herein provided, including the acceleration of the
indebtedness evidenced by the Master Note and to exercise any or all of the
rights, remedies and powers contained herein and in the other Financing
Documents, and (ii) cumulatively to exercise all other rights, options and
privileges provided by law or in equity.
9.03. Offset and Setoff. Hardwick may, at its option, without any further
notice to Borrower (such notice being hereby expressly waived), set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, or any other indebtedness at any time owing by
Hardwick to Borrower to or for the credit or the account of Borrower against the
Obligations, irrespective of whether any demand has been made hereunder or
whether such obligation is mature. The rights given hereunder are cumulative to
all other rights of set-off under this or any other agreement or by operation of
law or otherwise. Hardwick shall promptly notify Borrower of any such set-off
and application, but failure to do so shall not affect the validity thereof.
9.04. Attorneys' Fees and Expenses. In the event of the occurrence of an
Event of Default and as the result thereof Hardwick shall employ attorneys or
incur other expenses for the collection of payments due hereunder or under any
of the Financing Documents, or the enforcement or observance of any agreement
herein or therein contained, Borrower agrees that it will on demand pay to
Hardwick the reasonable fees and expenses of such attorneys and such other
expenses incurred by Hardwick, including without limitation the reasonable out
of pocket expenses of its attorneys.
9.05. No Waiver of Remedies. No delay or omission to exercise any right or
remedy accruing upon the occurrence of an Event of Default shall impair any such
right or remedy or shall be construed to be a waiver thereof, but each such
right and remedy may be exercised from time to time as often as may be deemed
expedient by Hardwick. No course of dealing between Hardwick and Borrower or any
delay on Hardwick's part in exercising any rights or remedies shall operate as a
waiver of Hardwick's rights or remedies.
9.06. Waiver of Events of Default. Hardwick shall not be liable for any
action or omission on the part of Hardwick, its officers, agents and employees,
except for those arising out of gross negligence or willful misconduct. The
failure by Hardwick at any time or times hereafter to require strict performance
by Borrower of any of the terms, provisions, representations, warranties and
covenants contained in the Agreement or any other of the Financing Documents
shall not waive, affect or diminish any right of Hardwick thereafter to demand
strict compliance and performance therewith and with respect to any other
provisions, warranties, terms and conditions contained herein and therein any
waiver of any Event of Default shall not waive or affect any other Event of
Default, whether prior or subsequent thereto, and whether the same or of a
different type. None of the warranties, conditions, provisions or terms of this
Agreement or the other Financing Documents shall be deemed to have been waived
by any act or knowledge of Hardwick, its agents, officers or employees, but only
by an instrument in writing signed by an officer of Hardwick and directed to
Borrower specifying such waiver. Hardwick may waive any Event of Default
hereunder and its consequences or rescind any declaration of the acceleration of
the Master Note. Such waiver shall also waive the corresponding Event of Default
hereunder and its consequences. In the event of any such waiver or rescission,
or in the event any proceeding taken by Hardwick on account of any Event of
Default shall have been discontinued or abandoned or determined adversely to
Hardwick, then, and in every such case, Hardwick and Borrower shall be restored
to their former positions, respectively, and rights hereunder and under the
other Financing Documents, but no such waiver or rescission shall extend to any
subsequent or other then existing Event of Default or impair any rights,
remedies or powers of Hardwick.
ARTICLE 10
MISCELLANEOUS
10.01. Addresses and Notices. Each notice, demand, election or request
which by any provision of this Agreement is required or permitted to be given
pursuant to this Agreement (hereinafter in this Section referred to as "Notice")
must be in writing and shall be deemed to have been properly given or served by
personal delivery or by depositing same in the United States mail, registered or
certified mail with return receipt requested, postage prepaid, addressed as
follows:
To Borrower: Vinings Investment Properties Trust
3111 Paces Mill Road
Suite A-200
Atlanta, Georgia 30339-5704
Attention: Peter D. Anzo
To Hardwick: Hardwick Bank and Trust Company
P. O. Box 1367
Dalton, Georgia 30722-1367
Attention: Dan Davis
Borrower and Hardwick, by notice given in accordance with this Section 10.01,
shall have the right to change their respective addresses for the giving of
notices and each shall have the right to specify as its address any other
address in the United States of America. Each notice shall be effective upon the
earlier of (i) being personally delivered or (ii) three days after the deposit
thereof in the United States Mail in accordance with this Section, and the time
period in which a response to any notice, demand or request must be given shall
commence to run from the effective date of such notice. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, demand or
request sent.
10.02. Construction of Agreement. This Agreement and the other Financing
Documents supersede and incorporate all representations, promises, and
statements, oral or written, made in connection with the Credit Line. The
Financing Documents are to be construed as part and parcel of this Agreement,
and, by this reference thereto, are incorporated herein and made a part hereof.
In the event of any conflict between the provisions of this Agreement and the
provisions of any of the Financing Documents, the provisions of this Agreement
shall govern. It is, however, the intention of the parties that the terms and
conditions of this Agreement and the Financing Documents shall be liberally
construed as mutually consistent, complementary, or supplementary, rather than
conflicting.
10.03. Assignment. Borrower may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of Hardwick.
10.04. Binding Effect. Whenever in this Agreement one of the parties hereto
is named or referred to, the legal representative, successors and assigns of
such party shall be included in all covenants and agreements contained in this
Agreement by or on behalf of Borrower or by or on behalf of Hardwick shall bind
and inure to the benefit of their respective legal representatives, successors
and assigns.
10.05. Headings. The heading of the Articles, Sections and sub-sections of
this Agreement are for convenience of reference only, and not to be considered a
part hereof and shall not limit or otherwise affect the terms hereof.
10.06. Invalid Provisions Affect No Others. If fulfillment of any provision
hereof or any transaction related hereto at the time performance of such
provisions shall be due, shall involve transcending the limit of validity
presently prescribed by law, with regard to transactions of like character and
amount, the ipso facto, the obligation to be fulfilled shall be reduced to the
limits of such validity; and if any clause or provision herein contained
operates or would prospectively operate to invalidate this Agreement in whole or
in part, then such clause or provision only shall be held for naught, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
10.07. Number and Gender. Whenever the singular or plural number, or the
masculine, feminine or neuter gender is used herein, it shall equally include
the other.
10.08. Amendment and Modification. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by a
written instrument signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
10.09. Survival of Covenants. All covenants, agreements, representations
and warranties made herein and in certificates or reports delivered pursuant
hereto shall be deemed to have been material and relied upon by Hardwick, and
shall survive the execution and delivery of the Master Note and the other
Financing Documents.
10.10. Execution of Counterparts. This Agreement may be executed in several
counterparts, each of which, when executed and delivered, shall be deemed an
original, but such counterparts shall together constitute one and the same
instrument.
10.11. Governing Law. This Agreement shall be governed exclusively, and
shall construed and enforced in accordance with, the applicable laws of the
State of Georgia.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers and Borrower has caused its seal to be affixed
hereon as of the day and year first above written.
VININGS INVESTMENT PROPERTIES TRUST
By: /s/ Peter D. Anzo
Peter D. Anzo, Authorized Trustee, on behalf of
all of the Trustees.
HARDWICK BANK AND TRUST COMPANY
By: /s/ Daniel P. Davis
Vice President