EXHIBIT 10.31
REVOLVING CREDIT AGREEMENT BETWEEN CHASE BANK OF TEXAS
NA AND TURBOCHEF TECHNOLOGIES, INC. DATED JULY 1, 1998.
CREDIT AGREEMENT
(BORROWING BASE)
THIS CREDIT AGREEMENT (as amended, restated and supplemented from time to time,
this "AGREEMENT") by and between TURBOCHEF TECHNOLOGIES, INC. ("BORROWER") and
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CHASE BANK OF TEXAS, NATIONAL ASSOCIATION ("BANK") is dated as of July 1, 1998
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(the "EFFECTIVE DATE").
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1. THE LOANS.
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REVOLVING CREDIT NOTE 1.1 Subject to the terms and conditions hereof, Bank
agrees to make loans ("LOAN" or "LOANS") to Borrower from time to time before
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the Termination Date, not to exceed at any one time outstanding the lesser of
the Borrowing Base or $3,000,000.00 (the "COMMITMENT"). Borrower has the right
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to borrow, repay and reborrow. The Loans may only be used for finance short term
working capital needs. Chapter 346 of the Texas Finance Code (which governs
certain revolving loan accounts) will not apply to this Agreement, the Note or
any Loan. The Loans will be evidenced by, and will bear interest and be payable
as provided in, the promissory note of Borrower dated the Effective Date
(together with any and all renewals, extensions, modifications and replacements
thereof and substitutions therefor, the "NOTE"). "TERMINATION DATE" means the
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earlier of: (a) July 1, 1999; or (b) the date specified by Bank pursuant to
Section 6.1 hereof.
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BORROWING BASE 1.2 The "BORROWING BASE" will be the amount shown as the
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BORROWING BASE on the most recent Borrowing Base Report, subject to verification
by Bank and determination by Bank at any time and calculated using the
eligibility criteria, borrowing base factors, dollar ceilings for various
components and any deductions specified in the attached EXHIBIT A incorporated
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herein by reference.
REQUIRED PAYMENT 1.3 If the unpaid amount of the Loans at any time exceeds the
Borrowing Base then in effect, Borrower must make a payment on the Note in an
amount sufficient to reduce the unpaid principal balance of the Note to an
amount no greater than the Borrowing Base. Such payment shall be accompanied by
any prepayment charge required by the Note and shall be due concurrently with
the Borrowing Base Report. In lieu of such mandatory prepayment, Borrower may
pledge additional Maytag Corporation common stock in an amount sufficient to
bring Borrower back into compliance with the Borrowing Base requirements set
forth herein. Such mandatory prepayment or pledge of additional Maytag stock
must be made by Borrower within five (5) business days of notice to Borrower,
which notice may be given either orally or in writing by Bank, unless the
mandatory prepayment or pledge of additional Maytag stock is necessary to comply
(in Bank's sole discretion and determination) with Regulation U or any other
legal requirement affecting the Loan in which case the mandatory prepayment or
additional stock pledge is effective immediately.
COMMITMENT FEE 1.4 Borrower will pay a commitment fee (computed on the basis of
the actual number of days elapsed in a year comprised of 360 days) of .25% per
annum on the daily average difference between the Commitment and the principal
balance of the Note, from the date hereof to the Termination Date. The
Commitment fee is due and payable calendar quarterly, in arrears.
PAST DUE AMOUNTS 1.5 Each amount due to Bank in connection with the Loan
Documents will bear interest from its due date until paid at the Highest Lawful
Rate unless the applicable Loan Document provides otherwise.
2. CONDITIONS PRECEDENT.
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ALL LOANS 2.1 Bank is not obligated to make any Loan unless: (a) Bank has
received the following, duly executed and in Proper Form: (1) a Request for
Loan, substantially in the form of Exhibit B, not later than one (1) Business
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Day before the date (which shall also be a Business Day) of the proposed Loan;
provided however, Bank may accept and act upon verbal advance requests received
from Borrower's representative reasonably believed by Bank to be authorized to
make such requests; (2) a Borrowing Base Report within the time required by this
Agreement; (3) the Collateral, free and clear of all restrictions; limitations,
legends or any other agreement that might serve to limit or restrict Bank's
ability to sell such stock in the event of an Event of Default, at least five
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days prior to the first Request for Loan; and (4) such other documents as Bank
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reasonably may require; (b) no Event of Default exists; and (c) the making of
the Loan is not prohibited by, or subjects Bank to any penalty or onerous
condition under any Legal Requirement.
FIRST LOAN 2.2 In addition to the matters described in the preceding section,
Bank will not be obligated to make the first Loan unless Bank has received all
of the Loan Documents specified on Annex I in Proper Form.
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3. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this Agreement
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and to make the Loans, Borrower represents and warrants as of the Effective Date
and the date of each request for a Loan that each of the following statements is
and shall remain true and correct throughout the term of this Agreement:
ORGANIZATION AND STATUS 3.1 Borrower and each Subsidiary of Borrower is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; has all power and authority to conduct its
business as presently conducted, and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business conducted
by it makes such qualification desirable. Borrower has no Subsidiary other than
those listed on Annex II and each Subsidiary is owned by Borrower in the
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percentage set forth on Annex II. If Borrower is subject to the Texas Revised
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Partnership Act ("TRPA"), Borrower agrees that Bank is not required to comply
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with Section 3.05(d) of TRPA and agrees that Bank may proceed directly against
one or more partners or their property without first seeking satisfaction from
partnership property.
FINANCIAL STATEMENTS 3.2 All financial statements delivered to Bank are complete
and correct and fairly present, in accordance with generally accepted accounting
principles, consistently applied ("GAAP"), the financial condition and the
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results of operations of Borrower and each Subsidiary of Borrower as at the
dates and for the periods indicated. No material adverse change has occurred in
the assets, liabilities, financial condition, business or affairs of Borrower or
any Subsidiary of Borrower since the dates of such financial statements. Neither
Borrower nor any Subsidiary of Borrower is subject to any instrument or
agreement materially and adversely affecting its financial condition, business
or affairs.
ENFORCEABILITY 3.3 The Loan Documents are legal, valid and binding obligations
of the Parties enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency and other similar laws affecting
creditors' rights generally. The execution, delivery and performance of the Loan
Documents have all been duly authorized by all necessary action; are within the
power and authority of the Parties; do not and will not violate any Legal
Requirement, the Organizational Documents of the Parties or any agreement or
instrument binding or affecting the Parties or any of their respective Property.
COMPLIANCE 3.4 Borrower and each Subsidiary of Borrower has filed all applicable
tax returns and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith
and for which adequate reserves have been established. Borrower and each
Subsidiary of Borrower is in compliance with all applicable Legal Requirements
and manages and operates (and will continue to manage and operate) its business
in accordance with good industry practices. Neither Borrower nor any Subsidiary
of Borrower is in default in the payment of any other indebtedness or under any
agreement to which it is a party. The Parties have obtained all consents of and
registered with all Governmental Authorities or other Persons required to
execute, deliver and perform the Loan Documents.
LITIGATION 3.5 Except as previously disclosed to Bank in writing, there is no
litigation or administrative proceeding pending or, to the knowledge of
Borrower, threatened against, nor any outstanding judgment, order or decree
affecting Borrower or any Subsidiary of Borrower before or by any Governmental
Authority.
TITLE AND RIGHTS 3.6 Borrower and each Subsidiary of Borrower has good and
marketable title to its Property, free and clear of any Lien except for Liens
permitted by this Agreement and the other Loan Documents. Except as otherwise
expressly stated in the Loan Documents or permitted by this Agreement, the Liens
of the Loan Documents will constitute valid and perfected first and prior Liens
on the Property described therein, subject to no other Liens whatsoever.
Borrower and each Subsidiary of Borrower possesses all permits, licenses,
patents, trademarks and copyrights required to conduct its business. All
easements, rights-of-way and other rights necessary to maintain and operate
Borrower's Property have been obtained and are in full force and effect.
Page 1 of 6 Pages
Credit Agreement (With Borrowing Base) July 1, 1998
TurboChef Technologies, Inc.
REGULATION U; BUSINESS PURPOSE 3.7 None of the proceeds of any Loan will be
used to purchase or carry, directly or indirectly, any margin stock or for any
other purpose which would make this credit a "purpose credit" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System. Bank
expressly reserves the right to change the loan advance rate and collateral-to-
loan percentage upon notice to Borrower in order to comply with the requirements
of Regulation U. All Loans will be used for business, commercial, investment or
other similar purpose and not primarily for personal, family, or household use
or primarily for agricultural purposes as such terms are used in Chapter One of
the Texas Credit Code or any successor statute.
ENVIRONMENT 3.8 Borrower and each Subsidiary of Borrower have complied with
applicable Legal Requirements in each instance in which any of them have
generated, handled, used, stored or disposed of any hazardous or toxic waste or
substance, on or off its premises (whether or not owned by any of them). Neither
Borrower nor any Subsidiary of Borrower has any material contingent liability
for non-compliance with environmental or hazardous waste laws. Neither Borrower
nor any Subsidiary of Borrower has received any notice that it or any of its
Property or operations does not comply with, or that any Governmental Authority
is investigating its compliance with, any environmental or hazardous waste laws.
INVESTMENT COMPANY ACT/PUBLIC UTILITY HOLDING COMPANY ACT 3.9 Neither Borrower
nor any Subsidiary of Borrower is an "investment company" within the meaning of
the Investment Company Act of 1940 or a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
STATEMENTS BY OTHERS 3.10 All statements made by or on behalf of Borrower, any
Subsidiary of Borrower or any other of the Parties in connection with any Loan
Document constitute the joint and several representations and warranties of
Borrower hereunder.
4. AFFIRMATIVE COVENANTS. Borrower agrees to do, and if necessary cause to be
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done, and cause its Subsidiaries to do, each of the following:
CORPORATE FUNDAMENTALS 4.1 (a) Pay when due all taxes and governmental charges
of every kind upon it or against its income, profits or Property, unless and
only to the extent that the same shall be contested in good faith and adequate
reserves have been established therefor; (b) Renew and keep in full force and
effect all of its licenses, permits and franchises; (c) Do all things necessary
to preserve its corporate existence and its qualifications and rights in all
jurisdictions where such qualification is necessary or desirable; (d) Comply
with all applicable Legal Requirements; and (e) Protect, maintain and keep in
good repair its Property and make all replacements and additions to its Property
as may be reasonably necessary to conduct its business properly and efficiently.
INSURANCE 4.2 Maintain insurance with such reputable financially sound insurers,
on such of its Property and personnel, in such amounts and against such risks as
is customary with similar Persons or as may be reasonably required by Bank, and
furnish Bank satisfactory evidence thereof promptly upon request. These
insurance provisions are cumulative of the insurance provisions of the other
Loan Documents. Bank must be named as a beneficiary, loss payee or additional
insured of such insurance as its interest may appear and Borrower must provide
Bank with copies of the policies of insurance and a certificate of the insurer
that the insurance required by this section may not be canceled, reduced or
affected in any manner without 30 days' prior written notice to Bank.
FINANCIAL INFORMATION/BORROWING BASE REPORT 4.3 Furnish to Bank in Proper Form
(i) the financial statements prepared in conformity with GAAP on consolidated
and consolidating bases and the other information described in, and within the
times required by, Exhibit C, Reporting Requirements, Financial Covenants and
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Compliance Certificate attached hereto and incorporated herein by reference;
(ii) the Borrowing Base Report substantially in the form of, and within the time
required by, Exhibit A along with the other information required by Exhibit A to
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be submitted; (iii) within the time required by Exhibit C, Exhibit C signed and
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certified by the chief financial officer or president of Borrower; (iv) promptly
after such request is submitted to the appropriate Governmental Authority, any
request for waiver of funding standards or extension of amortization periods
with respect to any employee benefit plan; (v) copies of special audits,
studies, reports and analyses prepared for the management of Borrower by outside
parties and (vi) such other information relating to the financial condition and
affairs of the Borrower and guarantors and their Subsidiaries as Bank may
request from time to time in its discretion.
MATTERS REQUIRING NOTICE 4.4 Notify Bank immediately, upon acquiring knowledge
of (a) the institution or threatened institution of any lawsuit or
administrative proceeding which, if adversely determined, might adversely affect
Borrower; (b) any material adverse change in the assets, liabilities, financial
condition, business or affairs of Borrower; (c) any Event of Default; or (d) any
reportable event or any prohibited transaction in connection with any employee
benefit plan.
INSPECTION 4.5 Permit Bank and its affiliates to inspect and photograph its
Property, to examine and copy its files, books and records, and to discuss its
affairs with its officers and accountants, at such times and intervals and to
such extent as Bank reasonably desires.
ASSURANCES 4.6 Promptly execute and deliver any and all further agreements,
documents, instruments, and other writings that Bank may request to cure any
defect in the execution and delivery of any Loan Document or more fully to
describe particular aspects of the agreements set forth or intended to be set
forth in the Loan Documents.
CERTAIN CHANGES 4.7 Notify Bank at least 30 days prior to the date that any of
the Parties changes its name or the location of its chief executive office or
principal place of business or the place where it keeps its books and records or
the location of any of the Collateral.
EXHIBIT C 4.8 Comply with each of the other affirmative covenants set forth in
Exhibit C.
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COLLATERAL MAINTENANCE AGREEMENT 4.9 The Collateral Value shall at all times be
at least the Minimum, as defined in Section 8. If the Collateral to Loan
Percentage is ever less than the Minimum, then within ten (10) days of such
event: (i) Borrower will make a payment on the Note; and/or (ii) Borrower will
deliver to Bank as Marketable Collateral additional cash and/or marketable
investment securities acceptable to Bank; or Borrower will do any combination
of(i) and (ii); so that the Collateral Value is at least the Minimum. Bank will
not be obligated to make any advance under the Note when the Collateral to Loan
Percentage is less than the Minimum. If the Collateral to Loan Percentage
continues to be less than the Minimum after the elapse of the 10 day period
described in the preceding paragraph, a default and Event of Default shall exist
with respect to the Note and Security Agreement. Bank will have the right at any
time thereafter, and without the necessity of accelerating the Note, to sell all
or any portion of the Marketable Collateral and apply the proceeds as Bank
elects to some or all of the Obligations; which right is in addition to all
other rights in the Loan Documents.
5. NEGATIVE COVENANTS. The Borrower will not, and no Subsidiary of Borrower
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will:
INDEBTEDNESS 5.1 Create, incur, or permit to exist, or assume or guarantee,
directly or indirectly, or become or remain liable with respect to, any funded
Indebtedness (defined as:(i) any borrowed money obligation from any lender
other than Bank, and (ii) capital lease obligations), contingent or otherwise
without prior written consent of Bank and unless subordinate to Bank, unless
there is a permitted amount set forth in Exhibit C, except: (a) Indebtedness to
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Bank, or secured by Liens permitted by this Agreement, or otherwise approved in
writing by Bank, and renewals and extensions (but not increases) thereof; and
(b) current accounts payable and unsecured current liabilities, not the result
of borrowing, to vendors, suppliers and Persons providing services, for
expenditures for goods and services normally required by it in the ordinary
course of business and on ordinary trade terms.
LIENS 5.2 Create or permit to exist any Lien upon any of its Property now owned
or hereafter acquired, or acquire any Property upon any conditional sale or
other title retention device or arrangement or any purchase money security
agreement; or in any manner directly or indirectly sell, assign, pledge or
otherwise transfer any of its accounts or other Property, except: (a) Liens, not
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for borrowed money, arising in the ordinary course of business; (b) Liens for
taxes not delinquent or being contested in good faith by appropriate
proceedings; (c) Liens in effect on the date hereof and disclosed to Bank in
Page 2 of 6 Pages
Credit Agreement (With Borrowing Base) July 1, 1998
TurboChef Technologies, Inc.
writing, so long as neither the indebtedness secured thereby nor the Property
covered thereby increases; and (d) Liens in favor of Bank, or otherwise approved
in writing by Bank. Notwithstanding anything to the contrary herein, Borrower
will not, and no Subsidiary of Borrower will permit any Lien on any inventory
that secures the Loans unless Bank shall provide Borrower with Bank's prior
written consent.
FINANCIAL AND OTHER COVENANTS 5.3 Fail to comply with the required financial
covenants and other covenants described, and calculated as set forth, in Exhibit
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C. Unless otherwise provided on Exhibit C all such amounts and ratios will be
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calculated: (a) on the basis of GAAP; and (b) on a consolidated basis.
Compliance with the requirements of Exhibit C will be determined as of the dates
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of the financial statements to be provided to Bank.
CORPORATE CHANGES 5.4 In any single transaction or series of transactions,
directly or indirectly: (a) liquidate or dissolve; (b) be a party to any merger
or consolidation; (c) sell or dispose of any interest in any of its
Subsidiaries, or permit any of its Subsidiaries to issue any additional equity
other than to Borrower; (d) sell, convey or lease all or any substantial part of
its assets, except for sale of inventory in the ordinary course of business; (e)
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permit any change in ownership of Borrower; or make any acquisition, without
prior written consent of Bank.
RESTRICTED PAYMENTS 5.5 Unless otherwise permitted on Exhibit C or with prior
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written consent of Bank, at any time: (a) redeem, retire or otherwise acquire,
directly or indirectly, any shares of its capital stock or other equity interest
(except for any employee stock option program); (b) declare or pay any dividend
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(except stock dividends and dividends paid to Borrower); or (c) make any other
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distribution or contribution of any Property or cash or obligation to owners of
an equity interest or to a Subsidiary in their capacity as such.
NATURE OF BUSINESS; MANAGEMENT 5.6 Without prior written consent of Bank, change
the nature of its business or enter into any business which is substantially
different from the business in which it is presently engaged, or permit any
material change in its management.
AFFILIATE TRANSACTIONS 5.7 Enter into any transaction or agreement with any
Affiliate except upon terms substantially similar to those obtainable from
wholly unrelated sources.
SUBSIDIARIES 5.8 Form, create or acquire any Subsidiary.
LOANS AND INVESTMENTS 5.9 Unless otherwise provided on Exhibit C make any
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advance, loan, extension of credit, or capital contribution to or investment in,
or purchase, any stock, bonds, notes, debentures, or other securities of, any
Person, except: (a) readily marketable direct obligations of the United States
of America or any agency thereof with maturities of one year or less from the
date of acquisition; (b) fully insured certificates of deposit with maturities
of one year or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in excess
of $50,000,000.00; and (c) commercial paper of a domestic issuer if at the time
of purchase such paper is rated in one of the two highest rating categories of
Standard and Poor's Corporation or ▇▇▇▇▇'▇ Investors Service.
6. EVENTS OF DEFAULT AND REMEDIES.
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EVENTS OF DEFAULT 6.1 Each of the following is an "EVENT OF DEFAULT":
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(a) Any Obligor fails to pay any principal of or interest on the Note or any
other obligation under any Loan Document as and when due; or
(b) Any Obligor or any Subsidiary of Borrower fails to pay at maturity, or
within any applicable period of grace, any principal of or interest on any other
borrowed money obligation or fails to observe or perform any term, covenant or
agreement contained in any agreement or obligation by which it is bound; or
(c) Any representation or warranty made in connection with any Loan Document
was incorrect, false or misleading when made; or
(d) Any Obligor violates any covenant contained in any Loan Document; or
(e) An event of default occurs under any other Loan Document; or
(f) Final judgment for the payment of money is rendered against Obligor or any
Subsidiary of Borrower and remains undischarged for a period of 30 days during
which execution is not effectively stayed; or
(g) The sale, encumbrance or abandonment (except as otherwise expressly
permitted by this Agreement) of any of the Collateral or the making of any levy,
seizure, garnishment, sequestration or attachment thereof or thereon; or the
loss, theft, substantial damage, or destruction of any material portion of such
Property; or
(h) Any order is entered in any proceeding against Borrower or any Subsidiary
of Borrower decreeing the dissolution, liquidation or split-up thereof, and such
order shall remain in effect for 30 days; or
(i) Any Obligor or any subsidiary of Borrower makes a general assignment for
the benefit of creditors or shall petition or apply to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or any
substantial part of its business, estate or assets or shall commence any
proceeding under any bankruptcy, insolvency, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect; or any such petition or
application shall be filed or any such proceeding shall be commenced against any
Obligor or any subsidiary of Borrower and the Obligor or such subsidiary by any
act or omission shall indicate approval thereof, consent thereto or acquiescence
therein, or an order shall be entered appointing a trustee, custodian, receiver
or liquidator of all or any substantial part of the assets of any Obligor or any
subsidiary of Borrower or granting relief to any Obligor or any subsidiary of
Borrower or approving the petition in any such proceeding, and such order shall
remain in effect for more than 30 days; or any Obligor or any subsidiary of
Borrower shall fail generally to pay its debts as they become due or suffer any
writ of attachment or execution or any similar process to be issued or levied
against it or any substantial part of its property which is not released,
stayed, bonded or vacated within 30 days after its issue or levy; or
(j) Any Obligor or any Subsidiary of Borrower conceals or removes any part of
its Property, with intent to hinder, delay or defraud any of its creditors,
makes or permits a transfer of any of its Property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or makes any transfer of
its Property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or
(k) A material adverse change occurs in the assets, liabilities, financial
condition, business or affairs of any Obligor or any Subsidiary of Borrower; or
(l) Any individual Obligor dies or any Obligor that is not an individual
dissolves.
IF ANY EVENT OF DEFAULT OCCURS, then Bank may do any or all of the following:
(1) declare the Obligations to be immediately due and payable without notice of
acceleration or of intention to accelerate, presentment and demand or protest,
all of which are hereby expressly waived; (2) without notice to any Obligor,
terminate the Commitment and accelerate the Termination Date; (3) set off, in
any order, against the indebtedness of Borrower under the Loan Documents any
debt owing by Bank to Borrower (whether such debt is owed individually or
jointly), including, but not limited to, any deposit account, which right is
hereby granted by Borrower to Bank; and (4) exercise any and all other rights
pursuant to the Loan Documents, at law, in equity or otherwise.
REMEDIES CUMULATIVE 6.2 No remedy, right or power of Bank is exclusive of any
other remedy, right or power now or hereafter existing by contract, at law, in
equity, or otherwise, and all remedies, rights and powers are cumulative.
7. MISCELLANEOUS.
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NO WAIVER 7.1 No waiver of any default or Event of Default will be a waiver of
any other default or Event of Default. No failure to exercise or delay in
exercising any right or power under any Loan Document will be a waiver thereof,
nor shall any single or partial exercise of any such right or power preclude any
further or other exercise thereof or the exercise of any other right or power.
The making of any Loan during either the existence of any default or Event of
Default, or subsequent to the occurrence of an Event of Default will not be a
waiver of any such default or Event of Default. No amendment, modification or
waiver of any Loan Document will be effective unless the same is in writing and
signed by the Person against whom such amendment, modification or waiver is
sought to be enforced. No notice to or demand on any Person shall entitle any
Person to any other or further notice or demand in similar or other
circumstances.
NOTICES 7.2 All notices required under the Loan Documents shall be in writing
and either delivered against receipt therefor, or mailed by registered or
certified mail, return receipt requested, in each case addressed to the address
shown on the signature page hereof or to such other address as a party may
designate. Except for the notices required by Section 2.1, which shall be given
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only upon actual receipt by Bank, notices shall be deemed to have been given
(whether actually received or not) when delivered (or, if mailed, on the next
Business Day).
Page 3 of 6 Pages
Credit Agreement (With Borrowing Base) July 1, 1998
TurboChef Technologies, Inc.
GOVERNING LAW/ARBITRATION 7.3 (a) UNLESS OTHERWISE SPECIFIED THEREIN, EACH LOAN
DOCUMENT IS GOVERNED BY TEXAS LAWS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. To the maximum extent permitted by law, any controversy or claim
arising out of or relating to the Loans or any Loan Document, including but not
limited to any claim based on or arising from an alleged tort or an alleged
breach of any agreement contained in any of the Loan Documents, shall, at the
request of any party to the Loan or Loan Documents (either before or after the
commencement of judicial proceedings), be settled by mandatory and binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules") and pursuant to Title 9 of the United
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States Code, or if Title 9 does not apply, the Texas General Arbitration Act. In
any arbitration proceeding: (i) all statutes of limitations which would
otherwise be applicable shall apply; and (ii) the proceeding shall be conducted
in the city in which the office of Bank originating the Loans is located, by a
single arbitrator if the amount in controversy is $1 million or less, or by a
panel of three arbitrators if the amount in controversy (including but not
limited to all charges, principal, interest fees and expenses) is over $1
million. Arbitrators are empowered to resolve any controversy by summary rulings
substantially similar to summary judgments and motions to dismiss. Arbitrators
may order discovery conducted in accordance with the Federal Rules of Civil
Procedures. All arbitrators will be selected by the process of appointment from
a panel, pursuant to the AAA Rules. Any award rendered in the arbitration
proceeding will be final and binding, and judgment upon any such award may be
entered in any court having jurisdiction.
(b) If any party to the Loan or Loan Documents files a proceeding in any court
to resolve any controversy or claim, such action will not constitute a waiver of
the right of such party or a bar to the right of any other party to seek
arbitration under the provisions of this Section or that of any other claim or
controversy, and the court shall, upon motion of any party to the proceeding,
direct that the controversy or claim be arbitrated in accordance with this
Section.
(c) No provision of, or the exercise of any rights under, this Section shall
limit or impair the right of any party to the Loan Documents before, during or
after any arbitration proceeding to: (i) exercise self-help remedies including
but not limited to setoff or repossession; (ii) foreclose any lien on or
security interest in any Collateral; or (iii) obtain relief from a court of
competent jurisdiction to prevent the dissipation, damage, destruction,
transfer, hypothecation, pledging or concealment of assets or Collateral
including, but not limited to attachments, garnishments, sequestrations,
appointments of receivers, injunctions or other relief to preserve the status
quo.
(d) To the maximum extent permitted by applicable law and the AAA Rules,
neither Bank nor any Obligor or any Affiliate, officer, director, employee,
attorney, or agent of either shall have any liability with respect to, and Bank
and each Obligor waives, releases, and agrees not to ▇▇▇ any of them upon, any
claim for any special, indirect, incidental and consequential damages suffered
or incurred by such Person in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Documents. Each of Bank and
each Obligor waives, releases, and agrees not to ▇▇▇ each other or any of their
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of or in any way
related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Nothing contained herein, however, shall be construed as a waiver of any
Obligor's or the Bank's right to compel arbitration of disputes pursuant to
subparagraphs (a) and (b), above.
(e) Nothing herein shall be considered a waiver of the right or protections
afforded Bank by 12 U.S.C. 91, Texas Banking Code Art. 342-609 or any similar
statute.
(f) Each party agrees that any other party may proceed against any other liable
Person, jointly or severally, or against one or more of them, less than all,
without impairing rights against any other liable Persons. A party shall not be
required to join the principal Obligor or any other liable Persons (e.g.,
sureties or guarantors) in any proceeding against any Person. A party may
release or settle with one or more liable Persons as the party deems fit without
releasing or impairing right to proceed against any Persons not so released.
SURVIVAL; PARTIES BOUND; TERM OF AGREEMENT 7.4 All representations, warranties,
covenants and agreements made by or on behalf of Borrower in connection with the
Loan Documents will survive the execution and delivery of the Loan Documents;
will not be affected by any investigation made by any Person, and will bind
Borrower and the successors, trustees, receivers and assigns of Borrower and
will benefit the successors and assigns of the Bank; provided that Bank's
--------
agreement to make Loans to Borrower will not inure to the benefit of any
successor or assign of Borrower. Except as otherwise provided herein, the term
of this Agreement will be until the later of the final maturity of the Note and
the full and final payment of all Obligations and all amounts due under the
Loan Documents.
DOCUMENTARY MATTERS 7.5 This Agreement may be executed in several identical
counterparts, on separate counterparts; each counterpart will constitute an
original instrument, and all separate counterparts will constitute but one and
the same instrument. The headings and captions in the Loan Documents have been
included solely for convenience and should not be considered in construing the
Loan Documents. If any provision of any Loan Document is invalid, illegal or
unenforceable in any respect under any applicable law, the remaining provisions
will remain effective. The Loans and all other obligations and indebtedness of
Borrower to Bank are entitled to the benefit of the Loan Documents.
EXPENSES 7.6 Any provision to the contrary notwithstanding, and whether or not
the transactions contemplated by this Agreement are consummated, Borrower agrees
to pay on demand all out-of-pocket expenses (including, without limitation, the
fees and expenses of counsel for Bank) in connection with the negotiation,
preparation, execution, filing, recording, modification, supplementing and
waiver of the Loan Documents and the making, servicing and collection of the
Loans. Borrower agrees to pay Bank's standard Documentation Preparation and
Processing Fee for preparation, negotiation and handling of this Agreement. The
obligations of the Borrower under this and the following section will survive
the termination of this Agreement.
INDEMNIFICATION 7.7 BORROWER AGREES TO INDEMNIFY, DEFEND AND HOLD BANK HARMLESS
FROM AND AGAINST ANY AND ALL LOSS, LIABILITY, OBLIGATION, DAMAGE, PENALTY,
JUDGMENT, CLAIM, DEFICIENCY AND EXPENSE (INCLUDING INTEREST, PENALTIES,
ATTORNEYS' FEES AND AMOUNTS PAID IN SETTLEMENT) TO WHICH BANK MAY BECOME SUBJECT
ARISING OUT OF OR BASED UPON THE LOAN DOCUMENTS, OR ANY LOAN, INCLUDING THAT
RESULTING FROM BANK'S OWN NEGLIGENCE, EXCEPT AND TO THE EXTENT CAUSED BY BANK'S
------
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
NATURE OF OBLIGATIONS 7.8 If more than one Borrower executes this Agreement, all
of the representations, warranties, covenants and agreements of Borrower shall
be joint and several obligations of all Borrowers.
USURY NOT INTENDED 7.9 Borrower and Bank intend to conform strictly to
applicable usury laws. Therefore, the total amount of interest (as defined under
applicable law) contracted for, charged or collected under this Agreement or any
other Loan Document will never exceed the Highest Lawful Rate. If Bank contracts
for, charges or receives any excess interest, it will be deemed a mistake. Bank
will automatically reform the Loan Document or charge to conform to applicable
law, and if excess interest has been received, Bank will either refund the
excess to Borrower or credit the excess on any unpaid principal amount of the
Note or any other Loan Document. All amounts constituting interest will be
spread throughout the full term of the Loan Document or applicable Note in
determining whether interest exceeds lawful amounts.
NO COURSE OF DEALING 7.10 NO COURSE OF DEALING BY BORROWER WITH BANK, NO COURSE
OF PERFORMANCE AND NO TRADE PRACTICES OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE
MAY BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
AGREEMENT.
8. DEFINITIONS.
-----------
Unless the context otherwise requires, capitalized terms used in Loan Documents
and not defined elsewhere shall have the meanings provided by GAAP, except as
follows:
AFFILIATE means, as to any Person, any other Person (a) that directly or
---------
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person; or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means to possess, directly or indirectly, the power
to direct the management and policies of a Person, whether through the ownership
of voting securities, by contract, or otherwise. Bank is not under any
circumstances to be deemed an Affiliate of Borrower or any of its Subsidiaries.
AGGREGATE BALANCE means the sum of the aggregate indebtedness evidenced by the
-----------------
Note, both principal and accrued and unpaid interest; plus all amounts available
----
for borrowing under the Note.
Page 4 of 6 Pages
Credit Agreement (With Borrowing Base) July 1, 1998
TurboChef Technologies, Inc.
AUTHORITY DOCUMENTS means certificates of authority to transact business,
-------------------
certificates of good standing, borrowing resolutions (with secretary's
certificate), secretary's certificates of incumbency, and other documents which
empower and enable Borrower or its representatives to enter into agreements
evidenced by Loan Documents or evidence such authority.
BUSINESS DAY means a day when the main office of Bank is open for the conduct of
------------
commercial lending business.
COLLATERAL means all Property, tangible or intangible, real, personal or mixed,
----------
now or hereafter subject to Security Documents, or intended so to be.
COLLATERAL VALUE means the market value of the Marketable Collateral in which
----------------
Bank has a first priority nod perfected security interest. Bank may determine
the market value of the Marketable Collateral by any reasonable method, which
determination shall be deemed conclusive absent manifest error. Using published
figures in The Wall Street Journal or any reporting service used by Bank is
-----------------------
agreed to be reasonable.
COLLATERAL TO LOAN PERCENTAGE means the Collateral Value divided by the
-----------------------------
Aggregate Balance.
CORPORATION means corporations, partnerships, limited liability companies, joint
-----------
ventures, joint stock associations, associations, banks, business trust and
other business entities.
GOVERNMENT ACCOUNTS means receivables owed by the U.S. government or by the
-------------------
government of any state, county, municipality, or other political subdivision as
to which Banks security interest or ability to obtain direct payment of the
proceeds is governed by any federal or state statutory requirements other than
those of the Uniform Commercial Code, including, without limitation, the Federal
Assignment of Claims Act of 1940, as amended.
GOVERNMENTAL AUTHORITY means any foreign governmental authority, the United
----------------------
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court or other tribunal having jurisdiction over Bank of any Obligor, or any
Subsidiary of Borrower or their respective Property.
HIGHEST LAWFUL RATE means the maximum nonusurious rate of interest permitted to
-------------------
be charged by applicable Federal or Texas law (whichever permits the higher
lawful rate) from time to time in effect. If Texas law determines the Highest
Lawful Rate, the Highest Lawful Rate is the weekly rate ceiling as defined in
Article 5069-1D.001 et seq., as amended, of the Texas Revised Civil Statutes.
INDEBTEDNESS means and includes (a) all items which in accordance with GAAP
------------
would be included on the liability side of a balance sheet on the date as of
which Indebtedness is to be determined (excluding capital stock, surplus,
surplus reserves and deferred credits); (b) all guaranties, endorsements and
other contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
indebtedness is being determined, in Property owned subject to such Lien,
whether or not the Indebtedness secured thereby has been assumed.
LEGAL REQUIREMENT means any law, ordinance, decree, requirement, order,
-----------------
judgment, rule, regulation (or interpretation of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental Authority.
LIEN shall mean any mortgage, pledge, charge, encumbrance, security interest,
----
collateral assignment or other lien or restriction of any kind, whether based on
common law, constitutional provision, statute or contract.
LOAN DOCUMENTS means this Agreement, the agreements, documents, instruments and
--------------
other writings contemplated by this Agreement or listed on Annex I, all other
assignments, deeds, guaranties, pledges, instruments, certificates and
agreements now or hereafter executed or delivered to the Bank pursuant to any of
the foregoing, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
MARKETABLE COLLATERAL means the financial assets listed below and all financial
---------------------
assets delivered or transferred to Bank or to Bank's control pursuant to this
Agreement: 90,000 shares common stock Maytag Corporation registered in the name
of Borrower.
MINIMUM is 125% of the Aggregate Balance.
------- ----
OBLIGATIONS means all principal, interest and other amounts which are or become
-----------
owing under this Agreement, the Note or any other Loan Document.
OBLIGOR means each Borrower and any guarantor, surety, co-signer, general
-------
partner or other person who may now or hereafter be obligated to pay all or any
part of the Obligations.
ORGANIZATIONAL DOCUMENTS means, with respect to a corporation; the certificate
------------------------
of incorporation, articles of incorporation and bylaws of such corporation; with
respect to a limited liability company, the articles of organization,
regulations and other documents establishing such entity, with respect to a
partnership, joint venture, or trust, the agreement, certificate or instrument
establishing such entity; in each case including all modifications and
supplements thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by Bank.
PARTIES means all Persons other than Bank executing any Loan Document.
-------
PERSON means any individual, Corporation, trust, unincorporated organization,
------
Governmental Authority or any other form of entity.
PROPER FORM means in form and substance satisfactory to the Bank.
-----------
PROPERTY means any interest in any kind of property or asset, whether real,
--------
personal or mixed, tangible or intangible.
SECURITY DOCUMENTS means those Security Agreements listed on Annex I and all
------------------ -------
supplements, modifications, amendment, extensions thereof and all other
agreements hereafter executed and delivered to Bank to secure the Loans.
SUBORDINATED DEBT means any Indebtedness subordinated to Indebtedness due Bank
-----------------
pursuant to a written subordination agreement in Proper Form by and among Bank,
subordinated creditor and Borrower which at a minimum must prohibit: (a) any
action by subordinated creditor which will result in an occurrence of an Event
of Default or default under this Agreement, the subordination agreement or the
subordinated Indebtedness; and (b) upon the happening of any Event of Default or
default under any Loan Document, the subordination agreement, or any instrument
evidencing the subordinated Indebtedness (i) any payment of principal and
interest on the subordinated Indebtedness; (ii) any act to compel payment of
principal or interest on subordinated Indebtedness; and (iii) any action to
realize upon any Property securing the subordinated Indebtedness.
SUBSIDIARY means, as to a particular parent Corporation, any Corporation of
----------
which 50% or more of the indicia of equity rights is at the time directly or
indirectly owned by such parent Corporation or by one or more Persons controlled
by, controlling or under common control with such parent Corporation.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN BANK AND THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF BANK AND THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BANK AND THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this agreement as of the Effective
Date.
BORROWER: TURBOCHEF TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: EVP and CEO
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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BANK: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By:
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Name:
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Title:
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Address:
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EXHIBITS: ANNEXES:
Page 5 of 6 Pages
