Document:

10-4_SecurityAgreement121613

Exhibit 10-4

City: Melbourne, FL

BB&T SECURITY AGREEMENT

This Security Agreement (“Security Agreement”) is made the 16th day of December, 2013, between The Goldfield Corporation, a Delaware corporation, Southeast Power Corporation, a Florida corporation, Power Corporation of America, a Florida corporation, Bayswater Development Corporation, a Florida corporation and Pineapple House of Brevard, Inc., a Florida corporation  (“Debtors”), and Branch Banking and Trust Company, a North Carolina banking corporation (“Secured Party”).
This Security Agreement is entered into in connection with:
		
	(i)
	a Master Loan Agreement (“Loan Agreement”) dated on or before the date of this Security Agreement under which the Secured Party has agreed to make a loan(s) and/or establish a line(s) of credit;

		
	a.
	Provisions of the Master Loan Agreement supersedes provisions of the Security Agreement;

		
	(ii)
	a Modification Promissory Note dated December  16, 2013 (including all extensions, renewals, modifications and substitutions thereof, the “Note”), of the Debtor or of (the “Borrower”), in the consolidated principal amount of $ 15,000,000.00;

		
	(iii)
	a Guaranty Agreement dated December 16, 2013 between Secured Party and  Debtors.

Secured Party and Debtor agree as follows:

I.    DEFINITIONS.

1.1    Collateral.  Unless specific items of personal property are described below, the Collateral shall consist of all now owned and hereafter acquired and wherever located personal property of Debtor identified below, each capitalized term as defined in Article 9 of the Florida Uniform Commercial Code (“UCC”):
(i)    Equipment and Machinery, including all Accessions thereto, and all manufacturers’ warranties, parts and tools therefor;
(ii) Tax refunds, company records (paper and electronic), rights under equipment leases, warranties, software licenses, and the following, if any:  None

(iii)Supporting Obligations; 

		
	(iv)
	to the extent not listed above as original collateral, all proceeds (cash and non-cash) and products of the foregoing.

    
1.2    Obligations.  This Security Agreement secures the following (collectively, the “Obligations”):

(i)    Debtor’s or Borrower’s obligations under the Note, the Loan Agreement, and this Security Agreement, and in addition to the foregoing obligations, if the Debtor is a Guarantor, its obligations under its Guaranty;

(ii)    all of Debtor's or Borrower's present and future indebtedness and obligations to Secured Party including without limitation any obligation to reimburse and repay Secured Party for paying any Standby or Commercial Letter of Credit issued on the account of Debtor or Borrower and all indebtedness and obligations of Debtor or Borrower to Secured Party (or an affiliate of Secured Party) under any interest rate swap transactions, interest rate cap and/or floor transactions, interest rate collar transactions, swap agreements (as defined in 11 U.S.C. 101) or other similar transactions or agreements, including without limitation any ISDA Master Agreement executed by Debtor or Borrower and all Schedules and Confirmations entered into in connection therewith, hereinafter collectively referred to as a Hedge Agreement.

(iii)  the repayment of (a) any amounts that Secured Party may advance or spend for the maintenance or preservation of the Collateral, and (b) any other expenditures that Secured Party may make under the provisions of this Security Agreement or for the benefit of Debtor or Borrower;

(iv)  all amounts owed under any modifications, renewals, extensions or substitutions of any of the foregoing obligations;

 (v)   all Default Costs, as defined in Paragraph VIII of this Security Agreement; and

(vi)   any of the foregoing that may arise after the filing of a petition by or against Debtor or Borrower under the Bankruptcy Code, even if the obligations do not accrue because of the automatic stay under Bankruptcy Code § 362 or otherwise.

1.3    UCC.  Any term used in the UCC and not otherwise defined in this Security Agreement has the meaning given to the term in the UCC.

II.    GRANT OF SECURITY INTEREST.

Debtor grants a security interest in the Collateral to Secured Party to secure the payment and performance of the Obligations.

III.    PERFECTION OF SECURITY INTERESTS.

3.1    Filing of Security Interests.

(i)    Debtor authorizes Secured Party to execute on the Debtor’s behalf and file any financing statement (the “Financing Statement”)         describing the Collateral in any location deemed necessary and appropriate by Secured Party.

		
	(ii)
	Debtor authorizes Secured Party to file a Financing Statement describing any statutory liens held by

 Secured Party.

		
	(iii)
	Secured Party shall receive prior to the closing an official report from the Secretary of State of each Place of Business and the Debtor State, each as defined below, collectively (the “Filing Reports”) indicating that Secured Party’s security interest is prior to all other security interests or other interests reflected in the report.

3.2    Possession.

	
		
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(i)    Debtor shall have possession of the Collateral, except where expressly otherwise provided in this Security Agreement or where Secured Party chooses to perfect its security interest by possession in addition to the filing of a Financing Statement.

(ii)    Where Collateral is in the possession of a third party, Debtor will join with Secured Party in notifying the third party of Secured Party’s  security interest and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of Secured Party.

3.3    Control Agreements.  Debtor will cooperate with Secured Party in obtaining a control agreement in form and substance satisfactory to Secured Party with respect to Collateral consisting of (check appropriate items):

o    Deposit Accounts (for deposit accounts at other financial institutions); 

o    Investment Property (for securities accounts, mutual funds and other uncertificated securities);

o    Letter-of-credit rights; and/or

o    Electronic chattel paper.

3.4    Marking of Chattel Paper.  If Chattel Paper is part of the Collateral, Debtor will not create any Chattel Paper without placing a 
legend on the Chattel Paper acceptable to Secured Party indicating that Secured Party has a security interest in the Chattel Paper.

IV.    POST-CLOSING COVENANTS AND RIGHTS CONCERNING THE COLLATERAL.

4.1    Inspection.  The parties to this Security Agreement may inspect any Collateral in the other party’s possession, at any time upon reasonable notice.

4.2    Personal Property.  Except for items specifically identified by Debtor and Secured Party as Fixtures, the Collateral shall remain personal property at all times, and Debtor shall not affix any of the Collateral to any real property in any manner which would change its nature from that of personal property to real property or to a fixture.

4.3    Secured Party’s Collection Rights.  Secured Party shall have the right at any time to enforce Debtor’s rights against any account debtors and obligors.

4.4    Limitations on Obligations Concerning Maintenance of Collateral.

(i)    Risk of Loss.  Debtor has the risk of loss of the Collateral.

(ii)    No Collection Obligation.  Secured Party has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral.

4.5    No Disposition of Collateral.  Secured Party does not authorize, and Debtor agrees not to:

(i)    make any sales or leases of any of the Collateral other than in the ordinary course of business;

(ii)    license any of the Collateral; or

(iii)    grant any other security interest in any of the Collateral.

4.6    Purchase Money Security Interests.  To the extent Debtor uses the Loan to purchase Collateral, Debtor’s repayment of the Loan shall apply on a “first-in-first-out” basis so that the portion of the Loan used to purchase a particular item of Collateral shall be paid in the chronological order the Debtor purchased the Collateral.
    
4.7    Insurance.  Debtor shall obtain and keep in force such insurance on the Collateral as is normal and customary in the Debtor's business or as the Secured Party may require, all in such amounts, under such forms of policies, upon such terms, for such periods and written by such insurance companies as the Secured Party may approve. All policies of insurance will contain the long-form Lender's Loss Payable clause in favor of the Secured Party, and the Debtor shall deliver the policies or complete copies thereof to the Secured Party. Such policies shall be noncancellable except upon thirty (30) days' prior written notice to the Secured Party. The proceeds of all such insurance, if any loss should occur, may be applied by the Secured Party to the payment of the Obligations or to the replacement of any of the Collateral damaged or destroyed, as the Secured Party may elect or direct in its sole discretion. The Debtor hereby appoints (which appointment constitutes a power coupled with an interest and is irrevocable as long as any of the Obligations remain outstanding) Secured Party as its lawful attorney-in-fact with full authority to make, adjust, settle claims under and/or cancel such insurance and to endorse the Debtor's name on any instruments or drafts issued by or upon any insurance companies.

V.    DEBTOR’S REPRESENTATIONS AND WARRANTIES.

Debtor represents and warrants to Secured Party:

5.1    Title to and transfer of Collateral.  It has rights in or the power to transfer the Collateral and its title to the Collateral is free of all adverse claims, liens, security interests and restrictions on transfer or pledge except as created by this Security Agreement.

5.2    Location of Collateral.  All collateral consisting of goods (equipment, inventory, fixtures, manufactured homes; and other tangible, movable personal property) is substantially all located in the United States.

5.3    Location, State of Incorporation and Name of Debtor.  Debtor’s:

		
	(i)
	chief executive office (if Debtor has more than one place of business), place of business (if Debtor has one place of business), is located in the following State and address (the “Place of Business”): 1684 W. Hibiscus Blvd., Melbourne, FL  32901

(ii)    state of incorporation or organization is Delaware or Florida (the “Debtor State”); 
(iii)    exact legal name is as set forth in the first paragraph of this Security Agreement.

5.4    Business or Agricultural Purpose.  None of the Obligations is a Consumer Transaction, as defined in the UCC and none of the Collateral has been or will be purchased or held primarily for personal, family or household purposes.
VI.    DEBTOR’S COVENANTS.

	
		
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Until the Obligations are paid in full, Debtor agrees that it will:

6.1    preserve its legal existence and not, in one transaction or a series of related transactions, merge into or consolidate with any other entity, or sell all or substantially all of its assets;

6.2    not change the Debtor State of its registered organization; 

6.3    not change its registered name without providing Secured Party with 30 days prior written notice; and

6.4    not change the state of its Place of Business or, if Debtor is an individual, change his state of residence without providing Secured Party with 30 days prior written notice.

VII.    EVENTS OF DEFAULT.

The occurrence of any of the following shall, at the option of Secured Party, be an Event of Default, except as provided in the Master Loan Agreement:

7.1    Any default or Event of Default by Borrower or Debtor under the Note, Loan Agreement, Hedge Agreement or any of the other loan documents, and any Guaranty or any of the other Obligations;

7.2    Debtor’s failure to comply with any of the provisions of, or the incorrectness of any representation or warranty contained in, this Security Agreement, the Note, the Loan Agreement, or in any other document relating to the Obligations;

7.3    Transfer or disposition of any of the Collateral, except as expressly permitted by this Security Agreement;

7.4    Attachment, execution or levy on any of the Collateral;

7.5    Debtor voluntarily or involuntarily becoming subject to any proceeding under (a) the Bankruptcy Code or (b) any similar remedy under state statutory or common law;

7.6    Debtor shall fail to comply with, or become subject to any administrative or judicial proceeding under any federal, state or local (a) hazardous waste or environmental law, (b) asset forfeiture or similar law which can result in the forfeiture of property, or (c) other law, where noncompliance may have any significant effect on the Collateral; or

7.7    Secured Party shall receive at any time following the closing a UCC filing report indicating that Secured Party’s security interest is not prior to all other security interests or other interests reflected in the report.

7.8    In the event of a conflict between this Security Agreement and the Master Loan Agreement, the language in the Master Loan Agreement shall prevail. 

VIII.    DEFAULT COSTS.

8.1    Should an Event of Default occur, Debtor will pay to Secured Party all costs incurred by the Secured Party for the purpose of enforcing its rights hereunder, including:

(i)    costs of foreclosure;

(ii)    costs of obtaining money damages; and

		
	(iii)
	a reasonable fee for the service of attorneys employed by Secured Party for any purpose related to this Security Agreement or the Obligations, including without limitation consultation, drafting documents, sending notices or instituting, prosecuting or defending litigation or arbitration.

IX.    REMEDIES UPON DEFAULT.

9.1    General.  Upon any Event of Default, Secured Party may pursue any remedy available at law (including those available under the provisions of the UCC), or in equity to collect, enforce or satisfy any Obligations then owing, whether by acceleration or otherwise.

9.2.    Concurrent Remedies.  Upon any Event of Default, Secured Party shall have the right to pursue any of the following remedies separately, successively or concurrently:

		
	(i)
	File suit and obtain judgment and, in conjunction with any action, Secured Party may seek any ancillary remedies provided by law or at equity, including levy of attachment and garnishment.

		
	(ii)
	Take possession of any Collateral if not already in its possession without demand and without legal process.  Upon Secured Party’s demand, Debtor will assemble and make the Collateral available to Secured Party as it directs.  Debtor grants to Secured Party the right, for this purpose, to enter into or on any premises where Collateral may be located.

(iii)    Without taking possession, sell, lease or otherwise dispose of the Collateral at public or private sale in accordance with the UCC.
X.    FORECLOSURE PROCEDURES. 
10.1    No Waiver.  No delay or omission by Secured Party to exercise any right or remedy accruing upon any Event of Default shall (a) impair any right or remedy, (b) waive any default or operate as an acquiescence to the Event of Default, or (c) affect any subsequent default of the same or of a different nature. 
10.2    Notices.  Secured Party shall give Debtor such notice of any private or public sale as may be required by the UCC.

10.3    Condition of Collateral.   Secured Party has no obligation to repair, clean-up or otherwise prepare the Collateral for sale.

10.4    No Obligation to Pursue Others.  Secured Party has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Secured Party may release, modify or waive any collateral provided by any other person to secure any of the Obligations, all without affecting Secured Party's rights against Debtor.  Debtor waives any right it may have to require Secured Party to pursue any third person for any of the Obligations.

	
		
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10.5    Compliance With Other Laws.  Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

10.6    Warranties.  Secured Party may sell the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties of title or the like.  This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

10.7    Sales on Credit.  If Secured Party sells any of the Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser, received by Secured Party and applied to the indebtedness of the purchaser.  In the event the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor shall be credited with the proceeds of the sale as and when received, less expenses.

10.8    Purchases by Secured Party.  In the event Secured Party purchases any of the Collateral being sold, Secured Party may pay for the Collateral by crediting some or all of the Obligations of the Debtor.

10.9    No Marshalling.  Secured Party has no obligation to marshal any assets in favor of Debtor, or against or in payment of:

(i)    the Note,

(ii)    any of the other Obligations, or

(iii)    any other obligation owed to Secured Party, Borrower or any other person.

XI.    MISCELLANEOUS.

11.1    Assignment.

		
	(i)
	Binds Assignees.  This Security Agreement shall bind and shall inure to the benefit of the successors and assigns of Secured Party, and shall bind all heirs, personal representatives, executors, administrators, successors and permitted assigns of Debtor.

		
	(ii)
	No Assignments by Debtor.  Secured Party does not consent to any assignment by Debtor except as expressly provided in this Security Agreement.

		
	(iii)
	Secured Party Assignments.  Secured Party may assign its rights and interests under this Security Agreement.  If an assignment is made, Debtor shall render performance under this Security Agreement to the assignee.  Debtor waives and will not assert against any assignee any claims, defenses or set-offs which Debtor could assert against Secured Party except defenses which cannot be waived.

11.2    Severability.  Should any provision of this Security Agreement be found to be void, invalid or unenforceable by a court or panel of arbitrators of competent jurisdiction, that finding shall only affect the provisions found to be void, invalid or unenforceable and shall not affect the remaining provisions of this Security Agreement.

11.3    Notices.  Any notices required by this Security Agreement shall be deemed to be delivered when a record has been (a) deposited in any United States postal box if postage is prepaid, and the notice properly addressed to the intended recipient, (b) received by telecopy, (c) received through the Internet, and (d) when personally delivered.

11.4    Headings.  Section headings used in this Security Agreement are for convenience only.  They are not a part of this Security Agreement and shall not be used in construing it.

11.5    Governing Law.  This Security Agreement is being executed and delivered and is intended to be performed in the State of Florida shall be construed and enforced in accordance with the laws of the State of Florida, except to the extent that the UCC provides for the application of the law of the Debtor State.

11.6    Rules of Construction.

		
	(i)
	No reference to “proceeds” in this Security Agreement authorizes any sale, transfer, or other disposition of the Collateral by the Debtor except in the ordinary course of business.

(ii)    “Includes” and “including” are not limiting.

(iii)    “Or” is not exclusive.

(iv)    “All” includes “any” and “any” includes “all.”

11.7    Integration and Modifications.  Any modification to this Security Agreement must be made in writing and signed by the party                  adversely affected.

    

11.8    Waiver.  Any party to this Security Agreement may waive the enforcement of any provision to the extent the provision is for its     benefit. 

		
	11.9
	Further Assurances.  Debtor agrees to execute any further documents, and to take any further actions, reasonably requested by Secured Party to evidence or perfect the security interest granted herein or to effectuate the rights granted to Secured Party herein.

		
	11.10
	WAIVER OF TRIAL BY JURY.  UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED

HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS SECURITY AGREEMENT OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND SECURED PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY TO MAKE THE LOAN TO DEBTOR OR BORROWER. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY, NOR SECURED PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION IN THE EVENT OF LITIGATION. NO 

	
		
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REPRESENTATIVE OR AGENT OF SECURED PARTY, NOR SECURED PARTY'S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

The parties have signed this Security Agreement under seal as of the day and year first above written.

	
					
	 
	 
	The Goldfield Corporation, a Delaware corporation

	WITNESS:
	 
	 

	

	 

	 
	/s/ Barry Forbes
	 
	By:
	/s/ John H. Sottile

	 
	 
	 
	 
	John H. Sottile, President

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 

	 
	 
	Southeast Power Corporation, a Florida corporation

	WITNESS:
	 
	 

	

	 

	 
	/s/ Barry Forbes
	 
	By:
	/s/ John H. Sottile

	 
	 
	 
	 
	John H. Sottile, Chairman

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 

	 
	 
	Power Corporation of America, a Florida corporation

	WITNESS:
	 
	 

	

	 

	 
	/s/ Barry Forbes
	 
	By:
	/s/ John H. Sottile

	 
	 
	 
	 
	John H. Sottile, Chairman

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 

	 
	 
	Bayswater Development Corporation, a Florida corporation

	WITNESS:
	 
	 

	

	 

	 
	/s/ Barry Forbes
	 
	By:
	/s/ John H. Sottile

	 
	 
	 
	 
	John H. Sottile, Chairman

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 

	 
	 
	Pineapple House of Brevard, Inc., a Delaware corporation

	WITNESS:
	 
	 

	

	 

	 
	/s/ Barry Forbes
	 
	By:
	/s/ John H. Sottile

	 
	 
	 
	 
	John H. Sottile, Chairman

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	Branch Banking and Trust Company

	WITNESS:
	 
	 

	

	 

	 
	/s/ Denise Diaz
	 
	By:
	/s/ Barry Forbes

	 
	 
	 
	 
	Barry Forbes, Sr. Vice President

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	/s/ Mary Manger
	 
	 
	 

	 
	 
	 
	 
	 

	
		
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Exhibit 10-5

BB&T
GUARANTY AGREEMENT

BRANCH BANKING AND TRUST COMPANY                                   Date: December 16, 2013
BB&T FINANCIAL, FSB

Dear Sirs:

As an inducement to Branch Banking and Trust Company and/or BB&T Financial, FSB  (collectively "Bank"), to extend credit to and to otherwise deal with The Goldfield Corporation, a Delaware corporation ("Borrower"), and in consideration thereof, the undersigned (and each of the undersigned jointly and severally if more than one) hereby absolutely and unconditionally guarantees to Bank and its successors and assigns the due and punctual payment prior to the expiration of any grace/notice periods provided by the notes or other agreements of any and all notes, drafts, debts, obligations and liabilities, primary or secondary (whether by way of endorsement or otherwise), of Borrower, at any time, now or hereafter, incurred with or held by Bank, together with interest, as and when the same become due and payable, whether by acceleration or otherwise, in accordance with the terms of any such notes, drafts, debts, obligations or liabilities or agreements evidencing any such indebtedness, obligation or liability including all renewals, extensions and modifications thereof. The obligation of the undersigned is a guarantee of payment and not of collection.

The undersigned is Bank's debtor for all indebtedness, obligations and liabilities for which this Guaranty is made, and Bank shall also at all times have a lien on and security interest in all stocks, bonds and other securities of the undersigned at any time in Bank's possession and the same shall at Bank's option be held, administered and disposed of as collateral to any such indebtedness, obligation or liability of the Borrower, and Bank shall also at all times have the right of set-off against any deposit account of the undersigned with Bank in the same manner and to the same extent that the right of set-off may exist against the Borrower.

It is understood that any such notes, drafts, debts, obligations and liabilities may be accepted or created by or with Bank at any time and from time to time without notice to the undersigned, and the undersigned hereby expressly waives presentment, demand, protest, and notice of dishonor of any such notes, drafts, debts, obligations and liabilities or other evidences of any such indebtedness, obligation or liability.

Bank may receive and accept from time to time any securities or other property as collateral to any such notes, drafts, debts, obligations and liabilities, and may surrender, compromise, exchange and release absolutely the same or any part thereof at any time without notice to the undersigned and without in any manner affecting the obligation and liability of the undersigned hereby created.  The undersigned agrees that Bank shall have no obligation to protect, perfect, secure or insure any security interests, liens or encumbrances now or hereafter held for the indebtedness, obligations and liabilities for which this Guaranty is made.

This obligation and liability on the part of the undersigned shall be a primary, and not a secondary, obligation and liability, payable immediately upon demand without recourse first having been had by Bank against the Borrower or any other guarantor, person, firm or corporation, and without first resorting to any property held by Bank as collateral security; and the undersigned hereby waives the benefits of all provisions of law, , for stay or delay of execution or sale of property or other satisfaction of judgment against the undersigned on account of obligation and liability hereunder until judgment be obtained therefor against the Borrower and execution thereon returned unsatisfied, or until it is shown that the Borrower has no property available for the satisfaction of the indebtedness, obligation or liability guaranteed hereby, or until any other proceedings can be had; and the undersigned hereby agrees to indemnify the Bank for all costs of collection, including but not limited to the costs of repossession, foreclosure, reasonable attorneys' fees, and court costs incurred by the Bank in the event that the Bank should first be required by the undersigned to resort to any property held by the Bank or in which the Bank has a security interest or to obtain execution or other satisfaction of a judgment against the Borrower on account of Borrower's obligation and liability for its indebtedness guaranteed hereby; and the undersigned further agrees that the undersigned is responsible for any obligation or debt, or portion thereof, of the Borrower to the Bank which has been paid by the Borrower to the Bank and which the Bank is subsequently required to return to the Borrower or a trustee for the Borrower in any bankruptcy or insolvency proceeding; and the undersigned further agrees that none of the undersigned shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for the debts and obligations of the Borrower to Bank unless and until all of the debts and obligations of the Borrower to Bank have been paid in full.  The undersigned hereby waives, to the extent avoidable under any provision of the Bankruptcy Code, any right arising upon payment by the undersigned of any obligation under this Guaranty to assert a claim against the bankruptcy estate of the Borrower.

This Guaranty is unlimited and applies to all indebtedness of Borrower to Bank, whether now existing or hereafter arising and howsoever evidenced.

To secure the payment of all obligations of the undersigned hereunder, the undersigned hereby grants a security interest and lien in the following goods and property owned by the undersigned:  All, Machinery, Equipment, and Vehicles (including all vehicles and equipment of Southeast Power Corporation and Power Corporation of America), including but not limited to, insurance proceeds together with all accessories, accessions, attachments, parts, replacements, substitutions, improvements, repairs installed in or affixed thereto with all manufacturers’ warranties, parts and tools therefore.  ("Collateral").

The undersigned hereby agrees to execute and deliver to Bank any security agreement, deed of trust, mortgage, UCC financing statement, or other document required by the Bank in order to protect or perfect its security interest or lien in the Collateral.  This document shall constitute a security agreement under the Uniform Commercial Code of Florida ("Code"), and in addition to having all other legal rights and remedies, the Bank shall have all rights and remedies of a secured party under the Code.

This agreement shall inure to the benefit of Bank, its successors and assigns, and the owners and holders of any of the indebtedness, obligations and liabilities hereby guaranteed, and shall remain in force until a written notice revoking it has been received by Bank; but such revocation shall not release the undersigned from liability to Bank, its successors and assigns, or the owners and holders of any of the indebtedness, obligations and liabilities hereby guaranteed, for any indebtedness, obligation or liability of the Borrower which is hereby guaranteed and then in existence or from any renewals, extensions or modifications thereof in whole or in part, whether such renewals, extensions or modifications are made before or after such revocation, with or without notice to the undersigned.  The undersigned waives presentment, demand, protest and notices of every kind and assents to any one or more extensions, modifications, renewals or postponements of the time or amount of payment or any other indulgences given to Borrower.  The undersigned shall be responsible for and shall reimburse the Bank for all costs and expenses (including reasonable attorneys' fees) incurred by the Bank in connection with the enforcement of this Guaranty or the protection or preservation of any right or claim of the Bank in connection herewith, including without limitation costs and expenses incurred by the Bank in connection with its attempts to collect the indebtedness, obligations, and liabilities guaranteed hereby.

/s/ JHS 

If the Borrower is a corporation, this instrument covers all indebtedness, obligations and liabilities to Bank purporting to be made or undertaken on behalf of such corporation by any such officer or agent of said corporation without regard to the actual authority of such officer or agent.  The term "corporation" shall include associations of all kinds and all purported corporations, whether correctly and legally chartered and organized.

The undersigned covenants, warrants, and represents to the Bank that: (i) this Guaranty is enforceable against the undersigned in accordance with its terms; (ii) the execution and delivery of this Guaranty does not violate or constitute a breach of any agreement to which the undersigned is a party; (iii) that there is no litigation, claim, action or proceeding pending or, to the best knowledge of the undersigned, threatened against the undersigned which would materially adversely affect the financial condition of the undersigned or his ability to fulfill his obligations hereunder; (iv) that the undersigned has knowledge of the Borrower's financial condition and affairs; and (v) unless otherwise required in a Loan Agreement, if applicable, as long as any Obligations remain outstanding or as long as Bank remains obligated to make advances, the undersigned shall furnish annually an updated financial statement in a form satisfactory to Bank, which, when delivered shall be the property of Bank.

This Guaranty is made in and shall be construed in accordance with the laws and judicial decisions of the State of Florida.  The undersigned agrees that any dispute arising out of this Guaranty shall be adjudicated in either the state or federal courts of Florida and in no other forum.  For that purpose, the undersigned hereby submits to the jurisdiction of the state and/or federal courts of Florida.  The undersigned waives any defense that venue is not proper for any action brought in any federal or state court in the State of Florida.

WAIVER OF TRIAL BY JURY.  UNLESS EXPRESSSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS GUARANTY OR THE BORROWER’S NOTE(S), AND THE RELATED LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK OR THE BORROWER AND THE BANK.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOANS TO THE BORROWER.  FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION IN THE EVENT OF LITIGATION.  NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

Witness the signature and seal of each of the undersigned.

GUARANTORS: 
                            
Southeast Power Corporation
                                                    
		
	 /s/ Barry Forbes
	By: /s/ John H. Sottile        

John H. Sottile, Chairman
                    
/s/ Mary Manger    

Pineapple House of Brevard, Inc.
                                                    
		
	 /s/ Barry Forbes
	By: /s/ John H. Sottile        

John H. Sottile, Chairman
                    
/s/ Mary Manger    

Bayswater Development Corporation
                                                    
		
	 /s/ Barry Forbes
	By: /s/ John H. Sottile        

John H. Sottile, Chairman
                    
/s/ Mary Manger    

Power Corporation of America
                                                    
		
	 /s/ Barry Forbes
	By: /s/ John H. Sottile        

John H. Sottile, Chairman
/s/ Mary Manger

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