LOAN AGREEMENT
Borrower: Piemonte Foods, Inc., a South Lender: First Union National Bank of South Carolina,
Carolina corporation ("Borrower") ("Lender"), a commercial banking institution
400 Augusta Street Post Office Box 1329
Greenville, South Carolina 29604 Greenville, South Carolina 29602
THIS LOAN AGREEMENT (this "Loan Agreement") is made and entered into to
be effective as of the 4th day of January, 1996, by and between Lender,Borrower,
Piemonte Foods of Indiana, Inc. ("Piemonte of Indiana"), and Origena, Inc.
("Origena").
NOW, THEREFORE, in consideration of Lender making loans of $500,000.00,
$1,600,000.00 and $2,400,000.00 to Borrower for the purposes set forth in
Section , as evidenced by the Notes (as defined below), Lender, Borrower,
Piemonte of Indiana, and Origena enter into this Loan Agreement and hereby
covenant and agree as follows:
1. Definitions. For the purposes hereof:
1.1. "Business Day" means any day on which Lender is open for business.
1.2. "Closing" or "Closing Date" means the date of this Loan Agreement, on
which the closing of the transactions contemplated hereby shall occur.
1.3. "Collateral" means all real and personal property and other interests
securing the Loans as more particularly set forth in Section 5.1 and 5.2.
1.4. "Commitment Letter" means those certain commitment letters issued as
of October 16, 1995 by Lender to Borrower.
1.5. "Event of Default" shall have the meaning set forth in Section 6.
1.6. "GAAP" means generally accepted accounting principles, as in effect
from time to time, consistently applied.
1.8. "Guaranties" means unconditional and unlimited secured guaranties of
Guarantors in a form acceptable to Lender.
1.9. "Guarantors" means Piemonte Foods of Indiana, Inc. and Origena, Inc.,
each separately a "Guarantor".
1.10. "Hazardous Materials" means all materials described as hazardous
wastes or hazardous substances (or having a similar meaning) under any local,
state, or federal environmental law, rule, or
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regulation, and which material's use, storage, and disposal is regulated by such
local, state, or federal environmental law, rule or regulation, as well as any
petroleum, petroleum products, oil, and asbestos.
1.11. "Improvements" means that certain physical plant, as well as any
other buildings or improvements now or hereafter located on the Real Property.
1.12. "Loan No. 1" means the $1,600,000.00 term Loan described in Section
2(a).
1.13. "Loan No. 2" means the $2,400,000.00 term loan described in Section
2.1(b).
1.14. "Loan No. 3" means the line of credit in an amount not to exceed
$500,000.00 as set forth in Section 2.1(c).
1.15. "Loan No. 1 Maturity Date" means October 31, 2000.
1.16. "Loan No. 2 Maturity Date" means October 31, 2000.
1.17. "Loan No. 3 Maturity Date" means October 31, 1996.
1.18. "Loan No. 1 Note" means the note and security agreement of Borrower
of even date in favor of Lender in the amount of Loan No. 1 as set forth in
Section 2.1 (substantially in the form of Exhibit 1.18 attached hereto), as well
as any note or notes issued by Borrower in substitution, replacement, extension,
amendment, or renewal of the Loan No. 1 Note.
1.19. "Loan No. 2 Note" means the note and security agreement of Borrower
of even date in favor of Lender in the amount of Loan No. 2 as set forth in
Section 2.1 (substantially in the form of Exhibit 1.19 attached hereto), as well
as any note or notes issued by Borrower in substitution, replacement, extension,
amendment or renewal of the Loan No. 2 Note.
1.20. Loan No. 3 Note" means the note and security agreement of Borrower
of even date in favor of Lender in the amount of Loan No. 3 as set forth in
Section 2.1 (substantially in the form of Exhibit 1.20 attached hereto), as well
as any note or notes issued by Borrower in substitution, replacement, extension,
amendment or renewal of the Loan No. 3 Note.
1.21. "Loans" means Loan No. 1, Loan No. 2, and Loan No. 3, as further
described in Section 2.1.
1.22. "Loan Documents" means this Loan Agreement and any and all notes,
mortgages, guaranties, and all other documents, instruments, certificates and
agreements executed and/or delivered by Borrower or any third party in favor of
Lender in connection with the Loans or any Collateral.
1.23. "Mortgage" shall mean that certain mortgage substantially in the
form of Exhibit 1.23 attached hereto, as the same may be modified, amended or
supplemented from time-to-time, given by Mortgagor to Lender as collateral
security for the Loans.
1.24. "Mortgagor" shall mean Piemonte of Indiana.
1.25. "Notes" means, collectively, the Loan No. 1 Note, Loan No. 2 Note,
and Loan No. 3 Note.
1.26. "Obligations" means all obligations and liabilities of any nature
owed to Lender by Borrower and Guarantors, whether now or hereafter existing,
arising out of or related to the Loan Documents or the Commitment Letter or any
other financial transactions between Lender and Borrower, including all future
obligations and advances.
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1.27. "Piemonte/Sabatasso European Project" means the formation and
operation of Piemonte Pizza Crust Europe B.V. a wholly owned subsidiary of
Piemonte Beheer MIJ B.V., a private limited liability company jointly
incorporated by Piemonte Foods, Inc., a company incorporated in the State of
South Carolina, USA, and C.S.M. Van der Sprong B.V., a private limited liability
company registered in the Register of Companies of the Chamber of Commerce and
Industry for Westelijk Noord-Brabant at Breda.
1.28. "Real Property" means that certain parcel of real estate owned by
Mortgagor and located in Frankfort, Indiana, as more particularly described in
the Mortgage, and any and all improvements situate thereon.
2. The Loan and Advances.
2.1. Loans. Lender hereby agrees to make the Loans available to
Borrower as follows:
(a) Loan No. 1 - A term loan in the amount of $1,600,000.00 shall
be advanced in full at Closing. The obligation to repay Loan No. 1
shall be evidenced by the Loan No. 1 Note and shall have the
repayment terms and interest rates as set forth in the Loan No. 1
Note. All amounts outstanding under the Loan No. 1 Note shall be
due and payable on the Loan No. 1 Maturity Date; provided however,
that in its sole discretion Lender may exercise its option to
extend Loan No. 1 for an additional five (5) year period under the
same terms and conditions set forth herein. Repayment of principal
and interest following such extension, shall be based upon monthly
principal payments plus accrued interest, computed on a ten (10)
year amortization from the Closing Date with all outstanding
principal plus accrued but unpaid interest being due and payable
ten (10) years from the Closing Date. By way of clarification,
monthly principal payments following extension of Loan No. 1 shall
be in the same amount as prior to said extension. As a condition
precedent to such extension, Borrower shall execute a note
modification agreement consistent with the terms hereof.
(b) Loan No. 2 - A term loan in the amount of $2,400,000.00 shall
be advanced in full at Closing. The obligation to repay Loan No. 2
shall be evidenced by the Loan No. 2 Note and shall have the
repayment terms and interest rates as set forth in the Loan No. 2
Note. All amounts outstanding under Loan No. 2 shall be due and
payable on the Loan No. 2 Maturity Date; provided however, that in
its sole discretion Lender may exercise its option to extend Loan
No. 2 for an additional two (2) year period under the same terms
and conditions set forth herein. Repayment of principal and
interest following such extension, shall be based upon monthly
principal payments plus accrued interest, computed on a seven (7)
year amortization from the Closing Date with all outstanding
principal plus accrued but unpaid interest being due and payable
seven (7) years from the Closing Date. By way of clarification,
monthly principal payments following extension of Loan No. 2 shall
be in the same amount as prior to said extension. As a condition
precedent to such extension, Borrower shall execute a note
modification agreement consistent with the terms hereof.
(c) Loan No. 3 - Subject to Borrower's compliance with the terms
and conditions of this Loan Agreement, Lender shall make available
to Borrower advances, not exceeding $500,000.00 aggregately, from
the Closing Date through the Loan No. 3 Maturity Date. The
obligation to repay Loan No. 3 shall be evidenced by the Loan No.
3 Note and shall have the repayment terms and interest rates as
set forth in the Loan No. 3 Note. All amounts outstanding under
Loan No. 3 shall be due and payable on the Loan No. 3 Maturity
Date.
2.2. Purposes. The purposes of the Loans are as follows:
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(a) Loan No. 1 - The proceeds of Loan No. 1 shall be used to
refinance the existing indebtedness of Borrower.
(b) Loan No. 2 - The proceeds of Loan No. 2 shall be used to
provide funding for Borrower to invest in the Piemonte/Sabatasso
European Project, refinance any existing indebtedness, and upgrade
its equipment.
(c) Loan No. 3 - The proceeds of Loan No. 3 shall be used to
finance seasonal working capital needs of Borrower.
2.3. Fees. Borrower shall pay Lender at or before Closing, all
out-of-pocket costs and expenses, including, but not limited to, reasonable
attorney's fees for Lender's counsel, and all costs of mortgagee's title
insurance, environmental audits, surveys, appraisals, and recording fees.
2.4. Notice and Manner of Borrowing Under Loan No. 3. Borrower shall give
Lender at least one (1) Business Day's notice of its request for an advance
under Loan No. 3, specifying the date and amount of the requested advance. Any
such notice (including, but not limited to, telephonic notice), which Lender
believes in good faith to have been given by a duly authorized officer or
representative of Borrower shall be deemed given by Borrower. Any advance made
by Lender upon such notice shall, when wired to an account described in any
written wire transfer instructions delivered by Borrower, or deposited into
Borrower's depository account with Lender, be deemed a Loan No. 3 advance.
2.5 Existing Indebtedness. Any indebtedness from Borrower to Lender
existing prior to the Closing Date shall be paid in full by Borrower on or
before the Closing Date, including but not limited to those certain loans from
Lender to Borrower dated April 27, 1989, as amended on December 12, 1994, in the
original principal amounts of $1,600,000.00 and $2,000,000.00, and those certain
loans from Lender to Borrower dated December 12, 1994, in the original principal
amounts of $1,500,000.00, $1,145,000.00, and $1,000,000.00, each evidenced by a
promissory note and security agreement from Borrower to Lender.
2.6. Conditions Precedent. Lender shall disburse the proceeds of the Loans
to Borrower in accordance with the terms hereof, and the terms of the Notes. In
no event shall Lender be obligated to advance any sum to Borrower until all
matters, documents, papers, and certificates required hereunder have been
furnished to Lender's satisfaction or so long as any Event of Default has
occurred and is continuing. In addition to other matters set forth herein, the
following documents and matters shall be required to be executed or performed by
Borrower at or before Closing (unless otherwise noted):
(a) This Loan Agreement, duly executed and delivered;
(b) The Notes, duly executed and delivered;
(c) The Collateral documents required under Section 5.1 hereof
duly executed and delivered. The Mortgage shall be recorded in the
appropriate real estate records. Title policies required hereunder
shall be delivered to Lender within ten (10) Business Days
following the Closing Date;
(d) The Guaranties, duly executed and delivered;
(e) Borrowing Resolutions, duly certified by the corporate
secretary, and certificates of incumbency, duly executed by
corporate officers in form and substance satisfactory to Lender,
authorizing the execution, delivery, and performance of all Loan
Documents on behalf of Borrower;
(f) Resolutions of Piemonte of Indiana and Origena duly certified
by the corporate secretary, and certificates of incumbency, duly
executed by corporate officers in form and substance satisfactory
to Lender, authorizing the execution, performance, and delivery of
the Guaranties and this Loan Agreement;
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(g) Certificates of Existence of Borrower, Piemonte of Indiana,
and Origena from the Secretary of State of South Carolina,
Indiana, and Illinois, respectively, as well as Certificates of
Authority from the South Carolina Secretary of State evidencing
the authority of Piemonte of Indiana and Origena, Inc. to conduct
business in South Carolina.
(h) An opinion of Borrower's and Guarantors' counsel opining,
among other things, as to the due authorization and execution of
the Loan Documents, the enforceability of the Loan Documents in
accordance with the terms thereof, and the Lender's lien position
thereunder;
(i) Payment of all fees and closing costs required hereunder and
under the Loan Documents;
(j) The insurance policies required hereunder;
(k) Such other matters as Lender may reasonably require.
3. Representations and Warranties. To induce Lender to make the Loans, Borrower
and Guarantors make the following representations and warranties, as
appropriate, which representations and warranties shall survive the execution
and delivery of the Notes and other Loan Documents:
3.1. Good Standing. Borrower is duly organized, validly existing, and in
good standing under the laws of the State of South Carolina and has the power
and authority to own its property and to carry on its business in each
jurisdiction in which it does business. Piemonte of Indiana and Origena are duly
organized, validly existing, and in good standing under the laws of the State of
Indiana and Illinois, respectively, and each has the power and authority to own
its property and carry on its business in each jurisdiction in which it does
business, including South Carolina.
3.2. Authority and Compliance. Borrower and each Guarantor has full power
and authority to execute and deliver the Loan Documents and to incur and perform
the Obligations provided for therein, all of which have been duly authorized by
all proper and necessary action of the appropriate governing body of Borrower
and each Guarantor. No consent or approval of any public authority or other
third party is required as a condition to the validity of any of the Loan
Documents, and Borrower and each Guarantor is in compliance with all laws and
regulatory requirements to which it is subject.
3.3. Binding Agreement. This Loan Agreement and the other Loan Documents
executed by Borrower and each Guarantor constitute valid and legally binding
obligations of Borrower and each Guarantor, enforceable in accordance with their
terms.
3.4. Litigation. There is no proceeding involving Borrower or either
Guarantor pending or, to the knowledge of Borrower or either Guarantor,
threatened before any court or governmental authority, agency or arbitration
authority, except as disclosed to Lender in writing and acknowledged by Lender
prior to the date of this Loan Agreement.
3.5. No Conflicting Agreements. There is no charter, bylaw, stock
provision, or other document pertaining to the organization, power, or authority
of Borrower, or either Guarantor, and no provision of any existing agreement,
mortgage, indenture or contract binding on Borrower, or either Guarantor, or
affecting their properties, which would conflict with or in any way prevent the
execution, delivery, or carrying out of the terms of this Loan Agreement and the
other Loan Documents.
3.6. Ownership of Assets. Borrower and each Guarantor has good title to
its assets, and its assets are free and clear of all judgments, liens, and
encumbrances except those granted to Lender and as disclosed to Lender in
writing prior to the date of this Loan Agreement.
3.7. Taxes. All taxes and assessments due and payable by Borrower and each
Guarantor have been paid or are being contested in good faith by appropriate
proceedings, and Borrower and each Guarantor has filed all tax returns which it
is required to file.
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3.8. Environmental Matters. The conduct of Piemonte of Indiana's business
operations on the Real Property and the conduct of Borrower, Origena, and
Piemonte Foods on any real property otherwise leased or owned by them does not,
and will not, violate any federal laws, rules, or ordinances for environmental
protection, regulations of the Environmental Protection Agency, or any
applicable local or state law, rule, regulation, ordinance, or rule of common
law, or any judicial interpretation thereof, relating primarily to the
environment or Hazardous Materials, and Piemonte of Indiana will not use or
permit any other party to use any Hazardous Materials on the Real Property, and
Borrower, Origena, and Piemonte of Indiana will not use or permit any other
party to use any Hazardous Material on any other real property leased or owned
by them, except such materials as are incidental to their normal course of
business or any maintenance, or repairs, and which are handled in compliance
with all applicable environmental laws. Piemonte of Indiana agrees to permit
Lender, its agents, contractors, and employees to enter and inspect the Real
Property at reasonable times and for reasonable cause for the purposes of
conducting an environmental investigation and audit (including taking physical
samples) to insure that Piemonte of Indiana is complying with this covenant.
Piemonte of Indiana or Borrower shall reimburse Lender on demand for the
reasonable costs of any such environmental investigation and audit. Piemonte of
Indiana, Borrower, or Origena, as the case may be, shall provide Lender, its
agents, contractors, employees, and representatives with access to and copies of
any and all data and documents relating to or dealing with any Hazardous
Materials used, generated, manufactured, stored, or disposed of by their
business operations on the Real Property, or any other leased or owned real
property, within five (5) days of the request therefor.
3.9. Compliance with Laws. Borrower and each Guarantor to the best of
their knowledge, is in compliance with all federal, state, and local laws,
regulations and governmental requirements applicable to it or to any of its
property, business operations, employees, and transactions.
3.10. Facilities for Handicapped. To the best of their knowledge, Piemonte
of Indiana, and Borrower and Origena with regard to any property they lease, are
in compliance with all legal requirements regarding access and facilities for
handicapped or disabled persons, including the legal requirements set forth in
the Federal Architectural Barriers Act, the Fair Housing Amendments Act of 1988,
the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, and
comparable state laws.
3.11. Accurate Financial Information. The financial information furnished
to Lender in connection with the Loans is complete and accurate and neither
Borrower nor either Guarantor has any undisclosed direct or contingent
liabilities. Since the date of such financial statements, there has been no
material adverse changes in the financial position of Borrower or either
Guarantor or in the results of their operations.
3.12. Solvency. (i) Borrower and each Guarantor is solvent; (ii) the
pledges of the Collateral as contemplated herein to Lender will not render
Borrower or either Guarantor insolvent; (iii) Borrower and each Guarantor has
made adequate provision for the payment of all of its creditors other than
Lender; and (iv) neither Borrower nor either Guarantor has entered into this
transaction to provide preferential treatment to Lender or any other creditor of
Borrower or either Guarantor in anticipation of seeking relief under the
Bankruptcy Code.
3.13. ERISA. No employee benefit plan established or maintained, or to
which contributions have been made, by Borrower or either Guarantor, which is
subject to Part 3 of Subtitle 13 of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), had an "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA) as of the last day
of the most recent fiscal year of such plan ended prior to the date hereof, or
would have had such an accumulated funding deficiency on such day if such year
were the first year of such plan to which such Part 3 applied; and no material
liability to the Pension Benefit Guaranty Corporation has been incurred with
respect to any such plan by such party.
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Each such employee benefit plan complies and will comply fully
with all applicable requirements of ERISA and of the Internal Revenue Code of
1986 as amended ("Code") and with all applicable rulings and regulations issued
under the provisions of ERISA and the Code. This Loan Agreement and the
consummation of the transactions contemplated herein will not involve any
prohibited transaction within the scope of ERISA or Section 4975 of the Code.
3.14. Subsidiaries. Piemonte of Indiana and Origena are wholly-owned
subsidiaries of Borrower. Borrower has no other subsidiaries and neither
Piemonte of Indiana nor Origena have any subsidiaries.
3.15. Ownership of Equipment. Borrower, Piemonte of Indiana, and Origena
are the absolute owners of all the machinery, equipment, accounts, and inventory
pledged pursuant to this Loan Agreement.
3.16. Ownership of Real Property. Piemonte of Indiana is the absolute
owner of the Real Property.
3.17 Consideration. Guarantors hereby acknowledge that they, as the
wholly-owned subsidiaries of Borrower, will benefit both directly and indirectly
from the Loans, and such benefit hereby serves as consideration for the
Guaranties.
4. Covenants.
4.1. Affirmative Covenants. During the term of this Loan Agreement:
(a) Continuation of Preclosing Conditions, Representations and
Warranties. Borrower and each Guarantor agree that all conditions
precedent to the making of the Loans shall remain satisfied at all
times during the term of the Loans, and that the representations
and warranties made by Borrower and each Guarantor in this Loan
Agreement and in the Loan Documents shall be deemed to be made at
all times during the term of this Loan Agreement.
(b) Maintenance. Borrower and each Guarantor shall maintain their
respective property in good condition and repair and make all
necessary replacements thereof and repairs thereto, and preserve
and maintain all licenses, trademarks, privileges, permits,
franchises, certificates and the like necessary for the operation
of their businesses.
(c) Financial Statements. Borrower and each Guarantor shall
furnish to Lender, on a consolidated basis: (i) audited fiscal
year-end financial statements within ninety (90) days after the
close of each fiscal year, prepared by independent certified
public accountants satisfactory to Lender; (ii) quarterly,
internally-prepared financial statements, within sixty (60) days
after the close of each quarter, certified by an officer of the
respective company, and (ii) such other information respecting the
financial condition and operations of Borrower or either Guarantor
as Lender may from time to time reasonably request. All financial
statements shall be prepared in accordance with GAAP, shall be in
form and content satisfactory to Lender, and shall include,
without limitation, a balance sheet, profit and loss statement,
and supporting schedules.
(d) Insurance. Borrower and each Guarantor shall maintain with
financially sound and reputable insurance companies insurance of
the kinds, covering the risks, and in the amounts usually carried
by entities and individuals engaged in businesses similar to those
of Borrower and Guarantors. Borrower and each Guarantor will also
exhibit or deliver such policies of insurance to Lender upon
request by Lender and provide appropriate loss payable or
mortgagee clauses in the insurance policies in favor of Lender, as
its interest may appear, when requested by Lender. If Borrower or
either Guarantor is in default hereunder,
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Lender shall have the right to settle and compromise any and all
claims under any policy required to be maintained by Borrower and
Guarantors hereunder and Borrower and Guarantors hereby appoint
Lender as their attorney-in-fact, with power to demand, receive,
and receipt for all monies payable thereunder, to execute in the
name of Borrower, either Guarantor, Lender, or a combination of
the aforementioned any proof of loss, notice, draft, or other
instruments in connection with such policies or any loss
thereunder and generally to do and perform any and all acts as
Borrower or either Guarantor, but for this appointment, might or
could perform. Unless otherwise agreed, Lender shall be entitled
to apply the proceeds of any such policies to satisfy the
indebtedness arising under the Loans. All insurance policies
provided hereunder shall be in an amount sufficient to avoid the
application of any co-insurance provisions and must include
provisions for a minimum thirty (30) day advance written notice of
any intended policy cancellation or non-renewal. The insurance
required hereunder shall be in addition to, and not a replacement
for, the insurance required under any other Loan Documents.
(e) Access to Collateral and Financial Information. Borrower and
each Guarantor shall permit any representative or agent of Lender
to examine and audit any or all of their books and records,
wherever located, as such books and records pertain to the
Collateral upon request by Lender and permit Lender to have access
to all Collateral for purposes of inspection and evaluation, at
reasonable times and after reasonable notice to Borrower.
(f) Notification of Environmental Claims. Borrower or either
Guarantor, as the case may be, shall immediately advise Lender in
writing of (i) any and all enforcement, cleanup, remedial,
removal, or other governmental or regulatory actions instituted,
completed, or threatened pursuant to any applicable federal,
state, or local laws, ordinances, or regulations relating to any
Hazardous Materials affecting the Real Property or any other
property owned or leased by Borrower or either Guarantor, and (ii)
all claims made or threatened by any third party against Borrower
or either Guarantor relating to damages, contributions, cost
recovery, compensation, loss, or injury resulting from any
Hazardous Materials on the Real Property. Piemonte of Indiana
shall immediately notify Lender of any remedial action it takes
with respect to its Real Property or any other property owned or
leased by Borrower or either Guarantor.
(g) Purpose of Loans. Borrower shall use the proceeds of the Loans
only for the purposes represented to Lender in Section 2.2.
(h) Adverse Changes. Borrower and each Guarantor shall provide
notice to Lender, as soon as possible, and in any event within
five (5) Business Days after Borrower or either Guarantor becomes
aware of the occurrence of an adverse change in its business,
properties, operations, or condition (financial or other),
including notice of (i) any default occurring with respect to
Borrower's or either Guarantor's obligations owed to any other
creditor, (ii) acceleration of any part of or demand for payment
in full of any outstanding obligation earlier than the scheduled
date, or (iii) of the intent by any person, firm, corporation or
other entity to whom Borrower or either Guarantor is indebted to
declare any debt due or determine that any provision of any
agreement between such party and the respective Borrower or
Guarantor has been violated. Such notice shall contain a statement
setting forth details of such material adverse change and the
action that is proposed in response thereto.
(i) Notice of Litigation. Borrower and each Guarantor will
promptly notify Lender in the event that any legal action is filed
against that Borrower or Guarantor; provided however, such notice
shall not be required with respect to any matters which, if
determined adversely to the respective Borrower or Guarantor,
would result in less than $25,000.00 when aggregated with other
then-pending litigation.
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(j) Notice of Default. Borrower and either Guarantor shall
immediately notify Lender, by telephone followed by written
notice, upon the occurrence of any Event of Default or
circumstances which, if uncured or with the lapse of time, would
create an Event of Default.
(k) Environmental Indemnification. Borrower and Guarantors shall
indemnify, defend and hold Lender and its successors and assigns
harmless from and against any and all claims, demands, suits,
losses, damages, assessments, fines, penalties, costs or other
expenses (including attorney fees and court costs) arising from or
in any way related to actual or threatened damage to the
environment, agency costs of investigation, personal injury or
death or property damage, due to the release or alleged release of
Hazardous Materials on or under the Real Property or any leased
property or in the surface or ground water located on or under the
Real Property or any leased property or gaseous emissions from the
Real Property or any leased property or any other condition
existing on the Real Property or any leased property resulting
from the use or existence of Hazardous Materials, whether such
claim proves to be true or false. Borrower and Guarantors further
agree that their indemnity obligation shall include, but not be
limited to, liability for damages resulting from the personal
injury or death of an employee of Piemonte of Indiana regardless
of whether Borrower or either Guarantor has paid the employee
under workers' compensation laws of the laws of any state or
similar federal or state legislation for the protection of
employees. The term "property damage" used herein shall include,
but not be limited to, damage to any real or personal property of
Guarantors, Lender or any third party. Borrower's obligation
hereunder shall survive repayment of the Loans.
4.2. Negative Covenants. During the term of this Loan Agreement, neither
Borrower nor either Guarantor, as the case may be, will, without prior written
consent of Lender:
(a) Assign, mortgage, pledge, encumber, or grant any security
interest in or transfer any of the Collateral, except for the
interests of Lender described herein.
(b) Sell, lease, transfer, or otherwise dispose of all or any
substantial part of its assets, whether now owned or hereafter
acquired, wherever such assets may be located.
(c) Enter into any merger or consolidation, or sell, lease,
transfer, or otherwise dispose of all or any substantial part of
its assets, whether now owned or hereafter acquired.
(d) Change its name or any name in which it does business or move
its principal place of business without giving written notice
thereof to Lender at least thirty (30) days prior thereto.
(e) Change the nature of its businesses in any material way.
(f) Permit any Hazardous Materials to be stored or maintained on
the Real Property or any other real estate on which it conducts
its operations, except as provided in Section 3.8.
(g) Provide funding to the Piemonte/Sabatasso European Project
Joint Venture in excess of the $1,000,000.00 capital contribution
(whether in the form of debt or equity or both) required by the
Piemonte/Sabatasso European Project joint venture agreement dated
___________________, plus any additional funding not to exceed
$100,000.00 aggregately.
(h) Incur any additional debt for borrowed money, whether secured
or unsecured, or enter into any capitalized leases, or incur any
contingent liability (the execution of any
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guaranty agreement or letter of credit agreement constituting
the incurrence of a contingent liability).
(i) Declare or pay a dividend if there shall exist an Event of
Default or condition which, with the lapse of time and/or notice
would become an Event of Default under this Agreement or the
Notes.
(j) Make or extend any loans (other than permitted loans to the
Piemonte/Sabatasso European Project authorized under Section 4.2
(g) hereof) or advances to any person or entity in amounts greater
than $25,000.00 aggregately at any time.
(k) Allow any number of judgments for the payment of money, or the
entry of any lien, in excess of the aggregate sum of $25,000.00,
excluding amounts with respect to which an insurance carrier
admits full coverage (except for the applicable deductible), to
remain unsatisfied against it for a period of thirty (30)
consecutive days, unless execution thereof is stayed.
4.3. Financial Covenants. During the term of this Loan Agreement, Borrower
and Guarantors, on a consolidated basis, will comply with the following
financial covenants, all determined in accordance with GAAP:
(a) Debt Coverage Ratio. A Debt Coverage Ratio of not less than:
(i) 1.0 to 1.0 in the quarter ending on February 28, 1996, (ii)
1.25 to 1.0 in the quarter ending on May 31, 1996, (iii) 1.25 to
1.0 in the quarter ending August 31, 1996, and (iv) 1.50 to 1.0 in
each quarter thereafter. The measurement to determine the Debt
Coverage Ratio shall be taken at the end of each respective
quarter. For the purposes of this Section, "Debt Coverage Ratio"
shall be defined as the sum of earnings before interest, taxes,
depreciation, and amortization divided by the sum of current
maturities of principal, interest expense, and dividends.
(b) Consolidated Working Capital. A Consolidated Working Capital,
at all times, of at least $1,000,000.00. For the purposes of this
Section "Consolidated Working Capital" shall mean the excess of
the Consolidated Current Assets of Borrower and its subsidiaries,
if any, over the Consolidated Current Liabilities of Borrower and
its subsidiaries, if any. "Consolidated Current Assets" shall mean
cash and all other assets or resources of Borrower and its
subsidiaries, if any, which are expected to be realized in cash,
sold in the ordinary course of business, or consumed within one
(1) year, all determined in accordance with GAAP. "Consolidated
Current Liabilities" shall mean the amount of all liabilities of
Borrower and its subsidiaries, if any, which by their terms are
payable within one (1) year (including all indebtedness payable on
demand or maturing not more than one (1) year from the date of
computation and the current portion of funded indebtedness), all
determined in accordance with GAAP.
(c) Minimum Net Worth. A Minimum Net Worth, at all times, of at
least $6,600,000.00 through 1996 fiscal year end. Beginning on
January 1, 1997 and continuing thereafter, through the life of the
Loans, Borrower shall maintain, at all times, a Minimum Net Worth
of at least $7,000,000.00 For the purpose of this Section,
"Minimum Net Worth" shall mean the excess of all assets of
Borrower and its subsidiaries over all liabilities of Borrower and
its subsidiaries, on a consolidated basis, all determined in
accordance with GAAP.
5. Security for Loans.
5.1. Collateral. Borrower, Piemonte of Indiana, and/or Origena, as the
case may be, hereby grant the following liens and security interests to Lender
as security for the Loans and at Closing will
10
execute and deliver to Lender appropriate security documents, in form
satisfactory to Lender, as follows:
(a) Real Property and Improvements. The Loans shall be secured by
a first priority real estate mortgage lien on the Real Property
and any Improvements located thereon as evidenced by a Mortgage to
be recorded in the real estate records of Clinton County, Indiana.
In addition, Lender shall be provided with collateral assignments,
satisfactory to Lender, of any leasehold interests, rents and
profits attendant to the Real Property. The Real Property and any
improvements thereon shall also serve to secure the Guaranty of
Piemonte of Indiana.
(b) Title Insurance. In connection with the lien pledged under the
Mortgage, a title insurance policy, at Borrower's sole expense,
written by a company acceptable to Lender and containing only such
exceptions as are acceptable to Lender.
(c) Machinery and Equipment. The Loans shall also be secured by
all machinery, equipment, furnishings and fixtures of Borrower and
each Guarantor, whether now owned or hereafter acquired or
arising, wherever located, as evidenced by security agreements
from Borrower and each Guarantor, in favor of Lender, as well as
any financing statements necessary to perfect Lender's first
priority security interests.
(d) Accounts, Inventory, Documents, Instruments, Chattel Paper,
and General Intangibles. The Loans shall also be secured by a
first priority lien on all inventory, accounts, documents,
instruments, chattel paper, and general intangibles of Borrower
and each Guarantor, now owned or hereafter acquired or arising,
wherever located, as evidenced by security agreements executed by
Borrower and each Guarantor in favor of Lender, as well as any
financing statements necessary to perfect Lender's first priority
security interest.
(e) Proceeds. All products, proceeds, and substitutions of the
foregoing.
(f) Assignment of Tenants' Interest In Leases. Borrower and each
Guarantor shall assign its respective leasehold interests in any
real property to Lender, whether now owned or hereafter acquired,
wherever located, as evidenced by an assignment of tenant's
interest in leases executed by the respective Borrower or
Guarantor in a form satisfactory to Lender in its sole discretion.
(g) Guaranties of Piemonte Foods and Origena. In consideration of
Lender making the Loans, Piemonte of Indiana and Origena shall
execute and deliver the Guaranties to Lender. All security
interests pledged or to be pledged by Piemonte Foods and/or
Origena as evidenced in this Section 5 shall also serve to secure
the Guaranty of each.
5.2 After Acquired Property. In addition to the foregoing, Borrower shall
and hereby does grant as security for the Loans a first priority security
interest in any real or personal property, including any leasehold interests,
acquired by it after the date of this Loan Agreement, wherever located,
including, without limitation, any property related to the Piemonte Comissary in
Nashville, Tennessee. Borrower agrees to execute, within a reasonable period of
time and in no event later than thirty (30) days following Borrower's
acquisition of title to or interest in such property, any agreements, financing
statements, or other documents, as required by Lender in its sole discretion, to
establish Lender's first priority security interest, in a form satisfactory to
Lender.
5.3 Cross-Collateralization. In addition to the foregoing, the Loans shall
be fully cross- collateralized with any other loans from Lender to Borrower,
whether now existing or hereafter arising.
11
6. Events of Default. The occurrence of any of the following shall constitute an
event of default under this Agreement ("Event of Default"):
6.1. Payment. Failure to make any payment of principal, interest, or other
sum owed to Lender under the Loan Documents or otherwise due from Borrower to
Lender when due.
6.2. Additional Defaults. Any provision or covenant of the Loan Documents
is breached, or any warranty, representation, or statement made or furnished to
Lender by Borrower, Mortgagor, or Guarantors, in connection with the Loans and
the Loan Documents (including any warranty, representation, or statement in
Borrower's financial statements) or to induce Lender to make the Loans, is
untrue or misleading in any material respect.
6.3. Cross-Default. Any default by Borrower on any other loan from Lender,
whether now existing or hereafter arising, which default is not corrected within
the cure period provided, if any. Also, any default on any indebtedness to
Lender or any third party creditor related to the Piemonte/Sabatasso European
Project by any party involved in the Piemonte/Sabatasso European Project.
6.4. Dissolution or Bankruptcy. Dissolution, termination of existence,
liquidation, insolvency, business failure, appointment of receiver of any part
of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding under state or federal bankruptcy laws or other
insolvency laws by Borrower or the commencement of an involuntary proceeding
under state or federal bankruptcy laws which is not dismissed within ninety (90)
days after such commencement, or a merger or consolidation or sale of Borrower's
assets other than a sale of assets in the ordinary course of business, which has
not been consented to by Lender in writing.
6.5. Judgments, etc. The entry of any monetary judgment or the assessment
and/or filing of any tax lien against Borrower or any Collateral in excess, at
any time, of the aggregate sum of $25,000.00, excluding amounts with respect to
which an insurance carrier admits full coverage (except for applicable
deductibles), which remains unsatisfied against it for a period of thirty (30)
days, unless execution thereof is stayed.
7. Lender's Remedies.
7.1. Acceleration. Upon the occurrence of an Event of Default, Lender
shall have the option to declare the entire unpaid principal amount of the
Loans, accrued interest and all other Obligations immediately due and payable,
without presentment, demand, or notice of any kind.
7.2. Remedies. Upon the occurrence of an Event of Default, Lender shall be
entitled to pursue all rights and remedies available under each of the Loan
Documents, as well as all rights and remedies available at law, or in equity,
and such rights and remedies shall be cumulative. Without in any way limiting
the generality of the foregoing, Lender shall also have the following
non-exclusive rights:
(a) Immediate Possession of Collateral. To take immediate
possession of all Collateral, whether now owned or hereafter
acquired, without notice, demand, presentment, or resort to legal
process, and, for those purposes, to enter any premises where any
of the Collateral is located and remove the Collateral therefrom
or render it unusable;
(b) Assembly of Collateral. To require Borrower and/or either
Guarantor to assemble and make the Collateral available to Lender
at a place to be designated by Lender which is also reasonably
convenient to Borrower and/or either Guarantor;
12
(c) Sale of Personal Property. To retain all non-real estate
Collateral in full or partial satisfaction of any unpaid
Obligations as provided under the Relevant Uniform Commercial Code
or sell the Collateral at public or private sale after giving at
least ten (10) days' notice of the time and place of the sale,
with or without having the Collateral physically present at the
place of the sale (such notice constituting reasonable notice
under the Relevant Uniform Commercial Code). As used herein,
"Relevant Uniform Commercial Code" means the Uniform Commercial
Code adopted and in effect for the state in which the owner of
such Collateral has its principal place of business;
(d) Repair of Collateral. To make any repairs to the Collateral
which Lender deems necessary or desirable for the purposes of
sale;
(e) Set-off. To exercise any and all rights of set-off which
Lender may have against any account, fund, or property of any
kind, tangible or intangible, belonging to Borrower and/or either
Guarantor which shall be in Lender's possession or under its
control.
(f) Cure. To cure any Event of Default in such manner as deemed
appropriate by Lender;
(g) Foreclosure. To foreclose pursuant to the terms of any Loan
Documents, or at law or in equity.
7.3. Proceeds. The proceeds from any disposition of the Collateral for the
Loans shall be used to satisfy the following items in the order they are listed:
(a) The expenses of taking, removing, storing, repairing, holding,
maintaining and selling the Collateral and otherwise enforcing the
rights of Lender under the Loan Documents, including any legal
costs and attorneys' fees.
(b) The expense of liquidating or satisfying any liens, security
interests, or encumbrances on the Collateral which may be prior to
the security interest of Lender that Lender, at its option, elects
to satisfy.
(c) Any unpaid fees, accrued interest and other sums due Lender
with respect to Loan Documents, and the then unpaid principal
amount of the Loans.
(d) Any other Obligations.
7.4. Resort to Borrower or Guarantors. Lender may, at its option, pursue
any and all rights and remedies directly against Borrower or either Guarantor
without resort to any Collateral.
7.5. Deficiency. To the extent the proceeds realized from the disposition
of the Collateral shall fail to satisfy any of the foregoing items, Borrower
shall remain liable to pay any deficiency to Lender.
7.6. Advances/Reimbursements. All amounts advanced by Lender under the
Loan Documents, or due Lender as a result of expenditures made by Lender or
losses suffered by Lender, shall bear interest at the rate applicable to past
due principal as specified in the Notes from the date demanded until paid in
full. Unless otherwise specified in the Loan Documents, such advances and other
sums, together with accrued interest, shall be due and payable on demand.
7.7. Default Rate of Interest. If Borrower shall fail to pay within
fifteen (15) days following the due date therefor, whether by acceleration or
otherwise, any principal or interest owing under any of the Loans, then interest
shall accrue on the entire unpaid principal balance of the Loans from the date
thereof until and including the date on which such amount is paid in full at a
rate of interest equal to the applicable rate of interest of each Loan, as
defined in its respective Note, plus an additional three
13
percent (3%) per annum. The increase of such interest rates shall not affect or
otherwise limit or apply in lieu of any other remedy available to Lender as
provided herein or under applicable law.
8. Miscellaneous.
8.1. Notice. All notices, demands, or other communications given under the
Loan Documents shall be in writing, and shall be mailed to the address of each
party as set forth below (or as set forth in any other Loan Document), said
mailing to be by first class United States government mail, postage prepaid, to
the Mailing Address set forth hereinbelow, with notice in each case to be
effective three (3) Business Days after mailing or upon receipt, whichever is
first. Either party must provide written direction to the other in order to
change the address to which said notice shall be sent.
Lender:
First Union National Bank of South Carolina
Mailing Address: Street Address:
P.O. Box 1329 1 Insignia Financial Plaza
Greenville, South Carolina 29602 Beattie Place
Attention: Mr. William A. Litchfield Greenville, South Carolina 29601
Title: Vice President
Telephone Number: (803) 255-8399
Facsimile Number: (803) 255-8357
Borrower:
Mailing Address: Street Address:
400 Augusta Street 400 Augusta Street
Greenville, South Carolina 29604 Greenville, South Carolina 29604
Attention: Virgil L. Clark
Title: President and Chief Executive Officer
Telephone Number: (803) 242-0424
Facsimile Number: (803) 235-0239
Guarantors:
Origena, Inc.
Mailing Address: Street Address:
400 Augusta Street 400 Augusta Street
Greenville, South Carolina 29604 Greenville, South Carolina 29604
Attention: Virgil L. Clark
Title: President and Chief Executive Officer
Telephone Number: (803) 242-0424
Facsimile Number: (803) 235-0239
Piemonte Foods of Indiana, Inc.
Mailing Address: Street Address:
400 Augusta Street 400 Augusta Street
Greenville, South Carolina 29604 Greenville, South Carolina 29604
Attention: Virgil L. Clark
Title: President and Chief Executive Officer
Telephone Number: (803) 242-0424
Facsimile Number: (803) 235-0239
8.2. Waiver. No failure or delay on the part of Lender in exercising any
power or right hereunder, and no failure of Lender to give Borrower notice of an
Event of Default, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude any other
14
or further exercise thereof or the exercise of any other right or power
hereunder. No modification or waiver of any provision of any Loan Document or
consent to any departure by Borrower from any Loan Document shall in any event
be effective unless the same shall be in writing, and such waiver or consent
shall be effective only in the specific instance and for the particular purpose
for which it was given.
8.3. Benefit. The Loan Documents shall be binding upon and shall inure to
the benefit of Borrower and Lender and their respective successors and assigns.
8.4. Governing Law and Jurisdiction. The Loan Documents and this Loan
Agreement, unless otherwise specifically provided therein, and all matters
relating thereto, shall be governed by and construed and interpreted in
accordance with the laws of the State of South Carolina except to the extent
superseded by federal law.
8.5. Assignment. Neither party may assign the Loan Documents or any
interest therein without the other's prior written consent.
8.6. Severability. Invalidity of any one or more of the terms, conditions
or provisions of this Loan Agreement shall in no way affect the balance hereof,
which shall remain in full force and effect.
8.7. Construction. All parties signing any Loan Document other than Lender
shall be jointly and severally liable thereunder to the extent provided therein.
Whenever the context and construction so require, all words used in the singular
number herein shall be deemed to have been used in the plural, and vice versa,
and the masculine gender shall include the feminine and neuter and the neuter
shall include the masculine and feminine. All references to Sections shall mean
Sections of the Loan Document. The terms "herein," "hereinbelow," "hereunder,"
and similar terms are references to the particular Loan Document in its entirety
and not merely the particular Article, Section, or Exhibit in which any such
term appears. Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of the Loan Document
nor the intent of any provision thereof. All references to any Loan Document
shall include all amendments, extensions, renewals, restatements or replacements
of the same. The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without being limited to" and "Real
Estate" and "Collateral" shall be construed as if followed by the phrase "or any
part thereon". No inference in favor of any party shall be drawn from the fact
that such party has drafted any portion of the Loan Document. In the event of
any inconsistency between the terms of the Loan Agreement and any other Loan
Document, the terms of the Loan Agreement shall control, provided that any
provision of any Loan Document, other than the Loan Agreement, which imposes
additional Obligations upon Borrower or provides additional rights or remedies
to Lender shall be deemed to be supplemental to, and not inconsistent with, the
Loan Agreement.
8.8. Execution in Counterparts. All Loan Documents may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same instrument, and in making proof of
the Loan Document, it shall not be necessary to produce or account for more than
one such counterpart.
8.9. Examinations/Communications. Lender's examinations, inspections, or
receipt of information pertaining to the matters set forth in the Loan Documents
shall not in any way be deemed to reduce the full scope and protection of the
Loan Documents or the Obligations of Borrower related to the Loan Documents.
Borrower agrees that Lender shall have no duty or obligation of any nature to
(i) make any investigation, inspection or review regarding any Collateral at any
time, with any such investigation that is undertaken being solely for the
benefit of Lender; or (ii) communicate in any manner with Borrower, irrespective
of the fact that Lender's information, or lack thereof, could be material to
Borrower's actions with respect to the Obligations.
15
8.10. No Participation. Nothing in the Loan Documents, and no action or
inaction whatsoever on the part of Lender through the Closing Date, shall be
deemed to make Lender a partner or joint venturer with Borrower, and Borrower
indemnifies and holds Lender harmless from and against any and all claims,
losses, causes of action, expenses (including attorneys' fees) and damages
arising from the relationship between Lender and Borrower being construed as or
related to be anything other than that of lender and borrower. This provision
shall survive the termination of all Loan Documents.
8.11. Notice of Conduct. Upon request of Lender from time to time,
Borrower shall confirm in writing the status of the Loans, and the Obligations,
and provide other information reasonably requested by Lender.
8.12. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Lender
immediately upon demand the full amount of all out-of-pocket costs and expenses,
including reasonable attorneys' fees, costs of experts and all other expenses,
incurred by Lender in connection with (a) the negotiation, preparation,
modification, renewal, restatement and replacement of this Loan Agreement and
each of the other Loan Documents, (b) the administration of the Loans, including
the costs of additional appraisals, environmental studies, title insurance,
survey updates and legal reviews, (c) the perfection, preservation, protection
and continuation of the liens and security interest granted Lender in the
Collateral and the custody, preservation, protection, repair and operation of
any of the Collateral, (d) the pursuit by Lender of its rights and remedies
under the Loan Documents and applicable law, and (e) defending any counterclaim,
cross-claim or other action, or participating in any bankruptcy proceeding,
mediation, arbitration, litigation or dispute resolution of any other nature
involving Lender, Borrower or any Collateral, except to the extent Lender has
been adjudicated to have engaged in wrongful conduct.
8.13. Further Assurances. At any time after the Closing Date, Borrower, at
the request of Lender, shall execute and deliver such further documents and
agreements and take such further actions as Lender deems necessary or
appropriate to permit each transaction contemplated by the Loan Documents to be
consummated in accordance with the provisions thereof and to perfect, preserve,
protect and continue all liens, security interests and rights of Lender under
the Loan Documents, security agreements, financing statements, continuation
statements, new or replacement Notes, and/or mortgages and agreements
supplementing, extending or otherwise modifying the Notes, this Loan Agreement,
and/or any mortgage or security agreement, and certificates as to the amount of
the indebtedness evidenced by the Notes. Borrower herein irrevocably with full
power of substitution constitutes and appoints Lender as its attorney-in-fact,
such appointment being coupled with an interest with the right to enforce
Lender's rights with respect to the above further assurances.
8.14. Incorporation by Reference. This Loan Agreement is incorporated by
reference into the Loan Documents, and shall govern each and every Loan
Document. In executing any Loan Document, the signatories thereto other than
Lender expressly agree to be bound by all provisions of this Loan Agreement
pertaining to Borrower.
8.15. Time of the Essence. Time is of the essence to all Loan
Documents.
9. Additional Provisions. Riders attached hereto, if any, which have been
initialed by Borrower and Lender, are hereby incorporated into this Loan
Agreement as if set forth verbatim.
[See Signature Page Attached]
16
IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement
under seal as of the date first above written.
BORROWER:
PIEMONTE FOODS, INC.
By: (Signature of ????)
Its: President
(SEAL)
LENDER:
FIRST UNION NATIONAL BANK
OF SOUTH CAROLINA
By:William A. Litchfield
(Signature of William A. Litchfield)
Its: Vice President
GUARANTORS:
PIEMONTE FOODS OF INDIANA, INC.
By: (Signature of ???)
Its: President
ORIGENA, INC.
By: (Signature of ???)
Its: Vice President
17
EXHIBIT 1.23
Prepared by and after
recording return to:
Nexsen Pruet Jacobs & Pollard
1000 E. North Street
Second Floor
Greenville, South Carolina 29601
Attn: David Gossett
MORTGAGE
THIS INDENTURE WITNESSETH, that PIEMONTE FOODS OF INDIANA, INC., an Indiana
corporation (hereafter referred to as "Mortgagor") whose address is 1150 Vermont
Street, Frankfort, Indiana, MORTGAGES AND WARRANTS to FIRST UNION NATIONAL BANK
OF SOUTH CAROLINA, a national banking association, whose address is 1 Insignia
Financial Plaza, Greenville, South Carolina ("Bank")
THAT CERTAIN PROPERTY LISTED ON EXHIBIT A ATTACHED HERETO AND
INCORPORATED HEREIN BY REFERENCE
TOGETHER WITH: (i) all leasehold estate, and all right, title and interest
of Mortgagor in and to all leases or subleases covering such land now or
hereafter existing including, without limitation, all cash or security deposits
or advance rentals; (ii) all right, title and interest of Mortgagor in and to
all options to purchase or lease such land or any interest therein, and any
greater estate in such land owned or hereafter acquired by Mortgagor; (iii) all
easements, streets, alleys, rights-of-way and rights used in connection
therewith or as a means of access thereto; all tenements, hereditaments and
appurtenances thereof and thereto; and all water rights; (iv) all buildings,
structures and improvements now or hereafter erected thereon; (v) all fixtures,
appliances, machinery, equipment, furniture, furnishings and articles of
personal property now or hereafter affixed to such land, even though they may be
detached or detachable, and all building improvement and construction materials,
supplies and equipment hereafter delivered to such land contemplating affixation
thereon; (vi) all awards and proceeds of condemnation for such land and any
improvements thereon or any part thereof to which Mortgagor is entitled, and all
proceeds, including return premiums and choses in action arising under any
insurance policies maintained with respect to all or any part of the foregoing;
(vii) all rents, issues and profits of such land and improvements, and all the
estate, right, title and interest of every nature whatsoever of the Mortgagor in
and to the same; and (viii) all proceeds, products, replacements, additions,
substitutions, renewals, accessions and reversions of any of the foregoing
items. All of the real and personal property and property rights hereby conveyed
are referred to individually and collectively as the "Property."
This Mortgage secures repayment of and performance of obligations
(collectively the "Obligations") under (i) that certain $1,600,000.00 Note and
Security Agreement dated of even date by Piemonte Foods, Inc., in favor of Bank
to be paid in full by October 31, 2000, unless such maturity date is extended to
October 31, 2005, as provided in the Loan Agreement (ii) that certain
$2,400,000.00 Note and Security Agreement dated of even date by Piemonte Foods,
Inc., in favor of Bank to be paid in full by October 31, 2000, unless such
maturity date is extended to October 31, 2002, as provided in the Loan
Agreement, (iii) that certain $500,000.00 Note and Security Agreement dated of
even date by Piemonte Foods, Inc., in favor of Bank to be repaid in full by
October 31, 1996; (the $1,600,000.00 Note and Security Agreement, the
$2,400,000.00 Note and Security Agreement, and the $500,000.00 Note and Security
Agreement together the "Notes"); (iv) that certain Unconditional Guaranty of
Mortgagor, for the benefit of Bank, of even date; (v) this Mortgage, (vi) other
Loan Documents (the "Loan Documents") as defined in that certain Loan Agreement
dated of even date by and among Bank, Mortgagor, Piemonte Foods, Inc., and
Origena, Inc. (the "Loan Agreement"); (vii) all other indebtedness of Piemonte
Foods, Inc., to Bank whenever borrowed or incurred, and (viii) any renewals,
extension or modifications of the foregoing, in consideration of these premises
and to induce Bank to enter into the loans evidenced by (a) the Loan Agreement;
(b) the Notes and (c) the Loan Documents.
Mortgagor WARRANTS AND REPRESENTS that Mortgagor is lawfully seized of
the Property in fee simple absolute, that Mortgagor has the legal right to
convey and encumber the same, and that the Property is free and clear of all
liens and encumbrances except as set forth in EXHIBIT B. Mortgagor further
warrants and will forever defend all and singular the Property and title thereto
to Bank and Bank's successors and assigns, against the lawful claims of all
persons whomsoever.
PROVIDED ALWAYS that if Mortgagor shall pay and perform all Obligations
and perform, comply with and abide by each and every representation, warranty,
agreement, and condition of this Mortgage and any other Loan Documents, this
Mortgage and the estate hereby created shall cease and be null, void, and
canceled of record.
To protect the security of this Mortgage, Mortgagor further represents
and agrees with Bank as follows:
1. Payment of Obligations. Mortgagor shall timely pay and perform the
Obligations when due.
2. Future Advances. It is the parties' intent that this Mortgage is given
to secure not only the existing Obligations, but all other indebtedness or
liability of every kind, character and description of Mortgagor whether such
liability be joint or individual or as a principal, surety, or guarantor to the
bank, and regardless of whether such debt is now existing or hereafter created,
including any and all future loans, advances, or other indebtedness of any kind
of the Mortgagor to the Bank. The principal amount that may be so secured may
decrease or increase from time to time, but the total amount so secured at any
one time shall not exceed the maximum principal amount of $9,000,000.00 plus all
interest, costs, reimbursements, fees and expenses due under this Mortgage and
secured hereby. Mortgagor shall not execute any document that impairs or
-2-
otherwise impacts the priority of any future advances secured by this Mortgage
and this Mortgage shall remain binding until all indebtedness of the Mortgagor
(whether direct or by reason of its Guaranty of Piemonte Foods, Inc.) is paid in
full to the Bank.
3. Ground Leases, Leases, Subleases and Easements. Mortgagor shall
maintain, enforce and cause to be performed all of the terms and conditions
under any ground lease, lease, sublease or easement which may constitute a
portion of the Property. Mortgagor shall not, without the consent of Bank, agree
to the cancellation or surrender under any lease or sublease now or hereafter
covering the Property or any part thereof, or prepayment of rents, issues or
profits, other than rent paid at the signing of a lease or sublease, nor modify
any such lease or sublease so as to shorten the term, decrease the rent,
accelerate the payment of rent, or change the terms of any renewal option; and
any such purported cancellation, surrender, prepayment or modification made
without the consent of Bank shall be void as against Bank.
4. Required Insurance. Mortgagor shall maintain with respect to the
Property: (i) insurance against loss or damage by fire and other casualties and
hazards by insurance written on an "all risks" basis, including specifically
windstorm and/or hail damage (and flood and earthquake coverage, where
available), in an amount not less than the replacement cost thereof, naming Bank
as loss payee and mortgagee; (ii) liability insurance providing coverage in such
amount as Bank may require, naming Bank as an additional insured; and (iii) such
other insurance as Bank may require from time to time.
All casualty insurance policies shall contain an endorsement or agreement
by the insurer in form satisfactory to Bank that any loss shall be payable in
accordance with the terms of such policy notwithstanding any act or negligence
of Mortgagor and the further agreement of the insurer waiving rights of
subrogation against Bank, and rights of set-off, counterclaim or deductions
against Mortgagor.
All insurance policies shall be in form, provide coverages, be issued by
companies and be in amounts in each company, satisfactory to Bank, and Mortgagor
shall furnish Bank with an original of all policies. At least thirty (30) days
prior to the expiration of each such policy, Mortgagor shall furnish Bank with
evidence satisfactory to Bank of the payment of premium and the reissuance of a
policy continuing insurance in force as required by this Mortgage. All such
policies shall provide that the policy will not be canceled or materially
amended without at least thirty (30) days prior written notice to Bank. In the
event Mortgagor fails to provide, maintain, keep in force, and furnish to Bank
the policies of insurance required by this paragraph, Bank may procure such
insurance or single-interest insurance in such amounts, at such premium, for
such risks and by such means as Bank chooses, at Mortgagor's expense; provided,
however, that Bank shall have no responsibility to obtain any insurance, but if
Bank does obtain insurance, Bank shall have no responsibility to Mortgagor or
other persons that insurance obtained shall be adequate or provide any
protection to Mortgagor.
5. Insurance Proceeds. After occurrence of any loss to any of the
Property, Mortgagor shall give prompt written notice thereof to Bank.
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(a) In the event of such loss all insurance proceeds shall be
payable to Bank, and Mortgagor hereby authorizes and directs any affected
insurance company to make payment of such proceeds directly to Bank. Bank is
hereby authorized by Mortgagor to settle, adjust or compromise any claims for
loss or damage under any policy or policies of insurance and Mortgagor appoints
Bank as its attorney-in-fact to receive and endorse any insurance proceeds to
Bank, which appointment is coupled with an interest and shall be irrevocable as
long as any Obligations remain unsatisfied.
(b) In the event of any damage to or destruction of the Property,
Bank shall have the option of applying or paying all or part of the insurance
proceeds to (i) the Obligations, in such order as Bank may determine in its sole
discretion, (ii) restoration of the Property, or (iii) Mortgagor. Nothing herein
shall be deemed to excuse Mortgagor from restoring, repairing and maintaining
the Property as required herein.
6. Impositions. Mortgagor will pay, before they are due, all taxes,
levies, assessments and other fees and charges imposed upon, or which may become
a lien upon, the Property under any law or ordinance (all of the foregoing
collectively "Impositions").
7. Use of Property. Mortgagor shall use and operate, and require its
lessees or licensees, if any, to use and operate, the Property in compliance
with all applicable laws and ordinances, covenants, and restrictions, and with
all applicable requirements of any lease or sublease now or hereafter affecting
the Property. Mortgagor shall not permit any unlawful use of the Property or any
use that may give rise to a claim of forfeiture of any of the Property.
Mortgagor shall not allow changes in the stated use of Property from that
disclosed to Bank at the time of execution hereof. Mortgagor shall not initiate
or acquiesce to a zoning change of the Property without prior notice to, and
written consent of, Bank.
8. Maintenance, Repairs and Alterations. Mortgagor shall keep and maintain
the Property in good condition and repair and fully protected from the elements
to the satisfaction of Bank. Mortgagor will not remove, demolish or structurally
alter any of the buildings or other improvements on the Property (except such
alterations as may be required by laws, ordinances or regulations) without the
prior written consent of Bank. Mortgagor shall promptly notify Bank in writing
of any material loss, damage or adverse condition affecting the Property.
9. Eminent Domain. Should the Property, or any interest therein or
thereon, be taken or damaged by reason of any public use or improvement or
condemnation proceeding ("Condemnation"), or should Mortgagor receive any notice
or other information regarding such Condemnation, Mortgagor shall give prompt
written notice thereof to Bank. Bank shall be entitled to all compensation,
awards and other payments or relief granted in connection with such Condemnation
and, at its option, may commence, appear in and prosecute in its own name any
action or proceedings relating thereto. Bank shall be entitled to make any
compromise or settlement in connection with such taking or damage. All
compensation, awards, and damages awarded to Mortgagor related to any
Condemnation (the "Proceeds") are hereby assigned to Bank and Mortgagor agrees
to execute such further assignments of the Proceeds as Bank may require. Bank
shall have the option of applying or paying the Proceeds in the same manner as
insurance
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proceeds as provided herein. Mortgagor appoints Bank as its attorney-in-fact to
receive and endorse the Proceeds to Bank, which appointment is coupled with an
interest and shall be irrevocable as long as any Obligations remain unsatisfied.
10. Environmental Condition of Property and Indemnity. Mortgagor warrants
and represents to Bank that: (i) Mortgagor has inspected and is familiar with
the environmental condition of the Property; (ii) the Property and Mortgagor,
and any occupants of the Property, are in compliance with and shall continue to
be in compliance with all applicable federal, state and local laws and
regulations intended to protect the environment and public health and safety as
the same may be amended from time to time ("Environmental Laws"); (iii) the
Property is not and has never been used to handle, treat, store or dispose of
oil, petroleum products, hazardous substances in any quantity, hazardous waste,
toxic substances, regulated substances or hazardous air pollutants ("Hazardous
Materials") in violation of any Environmental Laws; and (iv) no Hazardous
Materials (including asbestos or lead paint in any form) are located on, in or
under the Property or emanate from the Property except as reported by Mortgagor
to Bank in writing. Further, Mortgagor represents to Bank that no portion of the
Property is a protected wetland. Mortgagor agrees to notify Bank immediately
upon receipt of any citations, warnings, orders, notices, consent agreements,
process or claims alleging or relating to violations of any Environmental Laws
or to the environmental condition of the Property.
Mortgagor shall indemnify, hold harmless, and defend Bank from and
against any and all damages, penalties, fines, claims, suits, liabilities,
costs, judgments and expenses, including attorneys', consultants' or experts'
fees of every kind and nature incurred, suffered by or asserted against Bank as
a direct or indirect result of: (i) representations made by Mortgagor in this
paragraph being or becoming untrue in any material respect; or (ii) Mortgagor's
violation of or failure to meet the requirements of any Environmental Laws; or
(iii) Hazardous Materials which, while the Property is subject to this Mortgage,
exist on the Property. Bank shall have the right to arrange for or conduct
environmental inspections of the Property from time to time (including the
taking of soil, water, air or material samples). The cost of such inspections
made after Default or which are required by laws or regulations applicable to
Bank shall be borne by Mortgagor. Mortgagor's obligations under this paragraph
shall not be limited by the term of the Notes, and shall continue, survive and
remain in full force and effect notwithstanding foreclosure, satisfaction of
this Mortgage, or full satisfaction of the Obligations. However, Mortgagor's
indemnity shall not apply to any negligent act of Bank which takes place after
foreclosure, satisfaction of the Mortgages or full satisfaction of the
Obligations.
11. Appraisals. Mortgagor agrees that Bank may obtain an appraisal of the
Property when required by the regulations of the Federal Reserve Board or the
Office of the Comptroller of the Currency or at such other times as Bank may
reasonably require. Such appraisals shall be performed by an independent third
party appraiser selected by Bank. The cost of such appraisals shall be borne by
Mortgagor. If requested by Bank, Mortgagor shall execute an engagement letter
addressed to the appraiser selected by Bank. Mortgagor's failure or refusal to
sign such an engagement letter, however, shall not impair Bank's right to obtain
such an appraisal. Mortgagor agrees to pay the cost of such appraisal within ten
(10) days after receiving an invoice for such appraisal.
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12. Inspections. Bank, or its representatives or agents, are authorized
to enter at any reasonable time upon any part of the Property for the purpose of
inspecting the Property and for the purpose of performing any of the acts it is
authorized to perform under the terms of this Mortgage.
13. Liens and Subrogation. Mortgagor shall pay and promptly discharge all
liens, claims and encumbrances upon the Property except for those described in
EXHIBIT B, which are hereby acknowledged by Bank. Mortgagor shall have the right
to contest in good faith the validity of any such lien, claim or encumbrance,
provided: (i) such contest suspends the collection thereof or there is no danger
of the Property being sold or forfeited while such contest is pending; (ii)
Mortgagor first deposits with Bank a bond or other security satisfactory to Bank
in such amounts as Bank shall reasonably require; and (iii) Mortgagor thereafter
diligently proceeds to cause such lien, claim or encumbrance to be removed and
discharged.
Bank shall be subrogated to any liens, claims and encumbrances against
Mortgagor or the Property that are paid or discharged through payment by Bank or
with loan proceeds, notwithstanding the record cancellation or satisfaction
thereof.
14. Waiver of Mortgagor's Rights. Mortgagor waives any: (i) rights of
homestead or other exemption with regard to any of the Property; (ii) rights or
claims of equitable or statutory redemption; (iii) rights of appraisal; and (iv)
rights to require marshaling of assets.
15. Payments by Bank; Indemnification. If Mortgagor or Piemonte Foods,
Inc. defaults in the timely payment or performance of any of the Obligations,
Bank, at its option and without any duty on its part to determine the validity
or necessity thereof, may pay the sums for which Piemonte Foods, Inc. or
Mortgagor is obligated. Further, Bank may pay such sums as Bank deems
appropriate for the protection and maintenance of the Property including,
without limitation, sums to pay impositions and other levies, assessments or
liens, maintain insurance, make repairs, secure the Property, maintain utility
service, intervene in any condemnation, and attorneys' fees and other fees and
costs to enforce this Mortgage or protect the lien hereof (including foreclosure
and other proceedings affecting the Mortgage) or collect the Obligations. Any
amounts so paid shall bear interest at the default rate stated in the Notes and
shall be secured by this Mortgage.
In the event Bank shall become party to any suit or legal proceeding by
reason of its status as holder of this Mortgage, Mortgagor shall indemnify and
hold harmless Bank and reimburse Bank for any amounts paid or incurred by Bank,
including all reasonable costs, charges and attorneys' fees in any such suit or
proceeding.
16. Assignment of Rents. Mortgagor hereby absolutely assigns and
transfers to Bank all the leases, rents, issues and profits of the Property.
Conditional upon, and so long as, no Event of Default (as defined in the Loan
Agreement and herein) exists, Bank gives to and confers upon Mortgagor the
license and authority to collect such rents, issues and profits (collectively
"Rents") and to demand, receive and enforce payment, give receipts, releases and
satisfactions, and sue in the name of Mortgagor for all such Rents. Mortgagor
represents there has been no
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prior assignment of leases or Rents, and agrees not to further assign such
leases or Rents. Upon any occurrence of any Event of Default as defined herein,
in the Loan Agreement, or in the Loan Documents, Bank may, without notice, by
agent or by a receiver appointed by a court, and without regard to the adequacy
of any security for the Obligations, revoke and cancel the license and authority
of Mortgagor to collect Rents, and (i) enter upon and take possession of the
Property, (ii) notify tenants, subtenants and any property manager to pay Rents
to Bank or its designee, and upon receipt of such notice such persons are
authorized and directed to make payment as specified in the notice and disregard
any contrary direction or instruction by Mortgagor, and (iii) in its own name,
sue for or otherwise collect Rents, including those past due, and apply Rents,
less costs and expenses of operation and collection, including attorneys' fees,
to the Obligations in such order and manner as Bank may determine. The
collection of Rents, the entering upon and taking possession of the Property, or
the application of Rents as aforesaid, shall not cure or waive any Event of
Default or notice of Event of Default hereunder.
17. Due on Sale or Further Encumbrance. The direct or indirect sale,
assignment, or conveyance of the Property, or any interest therein, or the
further encumbrance of the Property without Bank's written consent shall, at
Bank's option, constitute an Event of Default under this Mortgage.
18. Remedies of Bank on Default. Failure of Mortgagor or Piemonte Foods,
Inc. to timely pay or perform any of the Obligations is an event of default
("Default") under this Mortgage. Additionally, if Bank reasonably believes that
the prospect of Mortgagor's or Piemonte Foods, Inc.'s payment or performance of
any of the Obligations or Bank's realization of collateral is impaired, Bank may
declare the Obligations in default (also "Default"). Upon the occurrence of
Default the following remedies are available, without limitation, to Bank: (i)
Bank may exercise all of Bank's remedies under this Mortgage, the Loan
Agreement, or other Loan Documents including, without limitation, acceleration
of maturity of all payments and Obligations; (ii) Bank may take immediate
possession of the Property or any part thereof (which Mortgagor agrees to
surrender to Bank) and manage, control or lease the same to such persons and at
such rental as it may deem proper (the "Rents") and collect and apply Rents as
provided herein. The taking of possession shall not prevent concurrent or later
proceedings for the foreclosure sale of the Property; (iii) Bank may apply to
any court of competent jurisdiction for the appointment of a receiver for all
purposes including, without limitation, to manage and operate the Property or
any part thereof, and to apply the net Rents therefrom to the payment of any of
the Obligations. If the Rents are not sufficient to meet the costs of taking
control of and managing the Property, Bank, at its sole option, may advance
monies to meet the costs and any funds so advanced shall become additional
Obligations secured by this Mortgage and shall bear interest from the date of
payment at the rate set forth in the Notes. In event of such application,
Mortgagor consents to the appointment of a receiver, and agrees that a receiver
may be appointed without notice to Mortgagor, without regard to the adequacy of
any security for the Obligations, and without regard to the solvency of
Mortgagor or any other person, firm or corporation who or which may be liable
for the payment of the Obligations; (iv) all the remedies of a Mortgagee and a
secured party as provided by law and in equity including, without limitation,
foreclosure upon this Mortgage and sale of the Property, or any part of the
Property, at public sale conducted according to applicable law (referred to as
"Sale") and conduct additional Sales as may be
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required until all of the Property is sold or the Obligations are satisfied; (v)
Bank may bid at Sale and may accept, as successful bidder, credit of the bid
amount against the Obligations as payment of any portion of the purchase price;
and (vi) Bank shall apply the proceeds of Sale, first to any fees or attorney
fees permitted Bank by law in connection with Sale, second to expenses of
foreclosure, publication, and sale permitted Bank by law in connection with
Sale, third to the Obligations, and any remaining proceeds as required by law.
19. Miscellaneous Provisions. Mortgagor agrees to the following: (i) All
remedies available to Bank with respect to this Mortgage or available at law or
in equity shall be cumulative and may be pursued concurrently or successively.
No delay by Bank in exercising any remedy shall operate as a waiver of that
remedy or of any Event of Default. Any payment by Bank or acceptance by Bank of
any partial payment shall not constitute a waiver by Bank of any Event of
Default; (ii) the provisions hereof shall be binding upon and inure to the
benefit of Mortgagor, its successors and assigns including, without limitation,
subsequent owners of the Property or any part thereof, and shall be binding upon
and inure to the benefit of Bank, its successors and assigns and any future
holder of the Notes or other Obligations; (iii) any notices, demands or requests
shall be sufficiently given Mortgagor if in writing and mailed or delivered to
the address of Mortgagor shown above or to another address as provided herein
and to Bank if in writing and mailed or delivered to Bank's office address shown
above, or such other address as Bank may specify from time to time and in the
event that either party hereto changes address at any time prior to the date the
Obligations are paid in full, that party shall promptly give written notice of
such change of address by registered or certified mail, return receipt
requested, all charges prepaid; (iv) this Mortgage may not be changed,
terminated or modified orally or in any manner other than by an instrument in
writing signed by the parties hereto; (v) the captions or headings at the
beginning of each paragraph hereof are for the convenience of the parties and
are not a part of this Mortgage; (vii) if the lien of this Mortgage is invalid
or unenforceable as to any part of the Obligations, the unsecured portion of the
Obligations shall be completely paid (and all payments made shall be deemed to
have first been applied to payment of the unsecured portion of the Obligations)
prior to payment of the secured portion of the Obligations; (viii) this Mortgage
shall be governed by and construed under the laws of the jurisdiction where this
Mortgage is recorded; (ix) Mortgagor by execution and Bank by acceptance of this
Mortgage agree to be bound by the terms and provisions hereof.
20. Remedies. In addition to any other remedies available at law or in
equity Bank and Mortgagor shall have the following remedies: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale granted herein or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment.
Mortgagor and Bank agree that they shall not have a remedy of punitive
or exemplary damages against the other in any dispute, claim, or controversy
arising out of, connected with or
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relating to this Mortgage ("Disputes") and hereby waive any right or claim to
punitive or exemplary damages they have now or which may arise in the future in
connection with any Dispute.
IN WITNESS WHEREOF, Mortgagor has signed and sealed this instrument as of
the day and year first above written.
Mortgagor:
Piemonte Foods of Indiana, Inc.
Attest:
By: Virgil L. Clark
Secretary - David Ward Its: President/Chief Executive Officer
STATE OF SOUTH CAROLINA, COUNTY OF GREENVILLE, SS:
Before me, the undersigned, a Notary Public in and for said County and
State, this day of , 1996, personally appeared
and to me personally well known, who, being first by
me duly sworn, did say that they are the and Secretary, respectively,
of PIEMONTE FOODS OF INDIANA, INC., and that said instrument was executed,
signed and sealed on behalf of said corporation by authority of its Board of
Directors, and and as and Secretary of said
corporation, acknowledged said instrument to be the free act of said
corporation and acknowledged the execution of the said mortgage for and on
behalf of said corporation.
Witness my hand and Notarial Seal.
Notary Public
(printed)
My Commission Expires:
My County of Residence is:
This instrument prepared by Elizabeth A. Holley, Attorney, NEXSEN PRUET
JACOBS & POLLARD, LLP, 1000 East North Street, Greenville, South
Carolina.
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EXHIBIT A
The following described real estate is located in Clinton County,
Indiana, to wit:
Tract I:
Lots Numbered 1 through 20, inclusive, of Irwin Park Addition to the
City of Frankfort, as the same is recorded in Plat Record 2 (new) page
31 and all of the vacated north-south and east-west alleys adjoining
said lots.
ALSO, a part of the Northwest quarter of Section 11, Township 21 North,
Range 1 West of the 2nd Principal Meridian, more particularly described
as follows:
From the northeast corner of Lot Number 11 of Irwin Park Addition to the
City of Frankfort, proceed thence North 84 degrees 27 minutes 40 seconds
East a distance of 8.16 feet; thence North O degrees 37 minutes 11
seconds East a distance of 12.07 feet to the point of beginning; thence
(l) South 84 degrees 28 minutes 40 seconds West a distance of 481.32
feet; thence (2) North O degrees 07 minutes 39 seconds East a distance
of 68.68 feet to the southeasterly right-of-way of the Railroad; thence
(3) northeasterly along said right-of-way curve a distance of 125.33
feet, having an approximate radius of 2149 feet and whose chord bears
North 43 degrees 15 minutes 13 seconds East a distance of 125.31 feet to
an iron bar; thence (4) North 42 degrees 55 minutes 42 seconds East a
distance of 286.06 feet along said right-of-way to the approximate
centerline of an open drainage ditch in the Hannah Kessler Watershed;
thence (5) South 31 degrees 31 minutes 54 seconds East a distance of
379.05 feet along said centerline projected southeasterly to the point
of beginning, and being the tract shown on the survey of Franklin C.
Moses dated May 23, 1983, and filed in Surveyor's Record 6 pages 588 &
589 in the office of the Surveyor of Clinton County, Indiana.
Tract II:
An easement over that portion of Vermont Street described as follows:
A portion of the northern right-of-way of Vermont Street, between the
West boundary of Lot and the East boundary of Lot 12 in the Irwin Park
Addition, to the extent that buildings improvements have been previously
located thereon.
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EXHIBIT B
Those certain encumbrances as set forth in Schedule B of that certain
TICOR Title Insurance Commitment No. CN-6166-M having an effective dated of
December 1, 1995, at 4:00 P.M.
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