[FIRST UNION GRAPHIC LOGO OMITTED]
LOAN AGREEMENT
First Union National Bank
0000 Xxxxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the "Bank")
Chefs International, Inc., a Delaware corporation
00 Xxxxxxxx
Xxxxx Xxxxxxxx Xxxxx, Xxx Xxxxxx X0000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into October 30, 1998, by and
between Bank and Borrower, a Corporation (For profit) organized under the laws
of Delaware.
Borrower has applied to Bank for a loan or loans (individually and collectively,
the "Loan") evidenced by one or more promissory notes (whether one or more, the
"Note") as follows:
Term Loan - in the principal amount of $880,000.00 which is evidenced by the
Promissory Note dated October 30, 1998. The Loan proceeds are to be used by
Borrower solely for purchase real estate, land and building housing the Vero
Beach Lobster Shanty.
This Agreement applies to the Loan and all Loan Documents. The terms "Loan
Documents" and "Obligations," as used in this Agreement, are defined in the
Note. The term "Borrower" shall include its Subsidiaries and Affiliates. As used
in this Agreement as to Borrower, "Subsidiary" shall mean any corporation of
which more than 50% of the issued and outstanding voting stock is owned directly
or indirectly by Borrower. As to Borrower, "Affiliate" shall have the meaning as
defined in 11 U.S.C. Ss 101, except that the term "debtor" therein shall be
substituted by the term "Borrower" herein.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
CONDITIONS PRECEDENT TO THE LOAN CLOSING.
A. The obligation of the Bank to make the advance to the Borrower on
the loan shall be conditional upon prior compliance, at the expense of the
Borrower, with the following conditions precedent to same.
(1) The delivery to the Bank of a note in the principal amount of $880,000.00,
the Mortgage, a Uniform Commercial Code Financing Statement, and financing
filings in order to perfect a first lien on all equipment, fixtures and other
business assets of Borrower, said UCC-l's to be filed in Indian River County,
Florida and with the Secretary of State, and Assignments and other documents and
matters as called for in this Agreement evidencing to the Bank that no liens
prior to the Bank's have been filed on the security pledged.
(2) The delivery to the Bank, on the property listed in Exhibit "A", a
satisfactory ALTA Mortgagee Title Insurance Commitment in an amount equal to the
full amount of the loancontemplated by this commitment letter. The title
insurance company and the form must besatisfactory to the Bank. "FIRST UNION
NATIONAL BANK, ITS SUCCESSOR AND/OR ASSIGNS"
shall be named as the proposed insured. There are to be no "exceptions" other
than routine utility easements, routine restrictions and current year's taxes
not yet due and payable. Copies of all commitment exceptions, including but not
limited to deed restrictions and covenants and easements must be attached to
said Mortgagee Title Commitment. All exceptions are subject to the prior written
approve of the Bank and its counsel. There are to be no "reverter" provisions or
possibilities affecting title. In addition to any affirmative coverages and/or
special endorsements required by the Bank or its counsel, a Florida Endorsements
Form 9 (Restrictions, Easements, Minerals) shall be required.
The Bank may require co-insurance or re-insurance giving Bank direct access to
the reinsurers In the event reinsurance is required by the Bank, an ALTA
Facultative Form of Reinsurance Agreement with companies and in amounts
preapproved by the Bank, together with duplicate originals of the executed
agreements, shall be furnished to the Bank with the title policy.
Within thirty (30) days after the closing of the Loan or prior to the first
disbursement after closing, whichever occurs firm, Borrower, at its sole cost
and expense shall cause to be furnished to the Bank a satisfactory ALTA
Mortgagee Title Insurance Policy which conforms to the above-mentioned Title
Insurance Commitment approved by the Bank. The policy shall indicate that
Owner/Borrower possesses a good and marketable fee simple title. The policy
shall insure the Bank of a first lien or on the mortgaged premises in the
principal amount of the Loan subject only to those encumbrances interests, and
exceptions approved in advance and in writing by the Bank and its counsel. The
policy shall contain such special endorsements affirmative insurance coverages
as the Bank may require.
After the closing of the loan, Borrower, at its sole cost and expense, shall
furnish the Bank with such title endorsements or updates to said ALTA Title
Insurance Policy as the Bank may require from time to time to insure the Bank
that no other matters of record affect the condition of title or the priority of
Bank's lien.
At any time upon request by the Bank, the Borrower, at its sole cost and
expense, shall furnish the bank UCC (Financing Statement) searches and reports.
(3) The delivery to the Bank of corporate guarantees as follows:
Chef's International Palm Beach, Inc., Kev, Inc., Xxxxxxx Parkway Realty,
Inc. and Hightstown Reb, Inc.
(4) The delivery to the Bank of two (2) sealed copies of a current as-built
survey [done within sixty (60) days of closing] of the mortgaged premises,
including all adjoining allays and appurtenant easements, prepared by a Florida
registered surveyor or licensed professional civil engineer. Said survey, which
shall be subject to the approval of the Bank and Bank's attorneys, shall show
the full legal description of the mortgaged premises, disclose the location and
dimensions of all existing improvements, available water and sewer mains,
utility lines, encroachments (which shall be subject to the approval of the Bank
and the Bank's attorneys), easements, roads, and rights-of-way, if any, as well
as all lot lines, access to public streets, and total acreage or square footage
thereof. Additionally, the survey shall also show any and all setback lines
established by the applicable zoning and/or governmental ordinances, statutes,
or regulations. All surveys shall be certified to "First Union National Bank"
and the title insurance company insuring the lien of the Bank's Mortgage and
shall also be certified to comply with Rule 61G17 of the Florida Administrative
Code relating to minimum technical standards for surveys. In addition, the
survey must show whether or not the mortgaged premises, and specifically any
building improvements, is located in a U.S. Department of Housing and Urban
Development (H.U.0.) identified "special flood hazard" area. The survey must
identify the specific flood zone in which the mortgaged premises or the
improvements are located, the finished ground floor elevations of the
improvements, and the base
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flood elevation. Flood Hazard Certification must comply with the National Flood
Insurance Act Of 1968, the Flood Disaster Protection Act of 1973, and the
Housing and Community Development Act of 1977, all as amended as applicable.
(5) The delivery of the following insurance policies:
(a) Standard Fire Insurance with Extended Coverage Endorsement, including
Vandalism and Malicious Mischief, without co-insurance, in an amount equal to at
least 100% of the replacement cost of the improvements existing on the real
property described in the loan documents contemplated by this commitment.
(b) Rental Loss Insurance shall be required if any lease provides for the
abatement of rent. Business Interruption Insurance shall be required if the
mortgaged premises are or will be occupied by the Owner(s). Either type of
insurance must cover debt service, real estate taxes, and insurance premiums for
a period of at least six (6) months.
(c) If any improvements (existing and/or proposed) on the mortgaged premises
are or will be located in an area identified by the U.S. Department of Housing
and Urban Development (H.U.D.) as an area having "special flood hazards," flood
insurance must be purchased and maintained in the amount of the principal
balance of the mortgage loan or the maximum limit of coverage available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973, and the Housing and Community Development Acts of 1974 and 1977, all as
amended, whichever is less.
(d) Borrower shall also maintain single limit comprehensive general
liability insurance for not less than One Million dollars ($1,000,000.00)
against claims and liability for bodily injury or property damage to persons or
property occurring on the mortgaged premises. Evidence of such coverage shall be
provided to Bank in the form of a certified copy of the policy or an insurance
certificate.
All policies must be issued by insurance companies and agencies licensed by
the Insurance Commissioner of the State of Florida to conduct business in the
State of Florida. Bank shall have the right to approve each and every insurance
carrier and policy. All policies shall be in the amounts, form and content
(including mortgages clauses) and issued by such companies as are acceptable to
the Bank. Each company must have a rating of A-or better (Excellent or Superior)
and Class IX or better, in A.M. Best's Insurance Reports.
All policies must contain provisions obligating the insurance carrier(s) to
provide to Bank at least thirty (30) days advance written notice of the
expiration, termination or cancellation of any such policy or policies and
immediate notification of a lapse. All policies and endorsement must be manually
signed.
Policy premiums for all coverages (including personal property if given as
security) must be prepaid and Bank may require 'Paid' receipts as proof of
payment.
Except for liability insurance, the above-referenced insurance policies shall
contain a Standard Mortgagee Clause naming "FIRST UNION NATIONAL BANK, ITS
SUCCESSORS AND/OR ASSIGNS" as first mortgagee, which states that the insurance
coverage shall not be affected by any act or neglect of the mortgagor or owner
of the improvements.
The applicable policies must be maintained during the term of the Loan. All
annual policy renewals must be forwarded to:
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First Union National Bank
Commercial Insurance Support
________________________________
________________________________
The Bank reserves the right to require the escrow of insurance premiums during
the term of the loan.
(6) Satisfactory evidence that all applicable requirements under the National
Flood Insurance Program have been met and flood insurance has been obtained, if
required.
(7) Certification in letter from that the Borrower's and Guarantor's financial
standing which was relied upon in conjunction with the issuance of a Commitment
has not substantially changed since the submission of said information to the
Bank. Any material misrepresentation shall constitute a default and, at the
election of the Bank, said Loan may be accelerated in its entirety.
(8) Certification that there are no litigation proceedings which are pending or
threatened which might adversely affect the Borrower's or any Guarantor's
liability to perform under this Loan Agreement, Note, Mortgage and ancillary
documents.
(9) Satisfactory evidence that the mortgaged property complies with all
requirements of the Americans with Disabilities Act Title 111, per inspection
report ordered by Bank, or is exempt from said requirements.
CONDITIONS PRECEDENT. The obligations of Bank to make the Loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
Additional Documents. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request. Opinion of Counsel. On or prior to
the date of any borrowing hereunder, Bank shall have received a written opinion
of the counsel of Borrower acceptable to Bank that includes confirmation of the
following: (a) The accuracy of the representations set forth in this Agreement
in the Representations Subparagraphs entitled "Authorization;
Non-Contravention"; "Compliance with Laws", and "Organization and Authority".
(b) This Agreement and other Loan Documents have been duly executed and
delivered by Borrower and constitute the legal, valid and binding obligations of
Borrower, enforceable in accordance with their terms. (c) No registration with,
consent of, approval of, or other action by, any federal, state or other
governmental authority or regulatory body to the execution and delivery of this
Agreement, the borrowing under this Agreement or other Loan Documents, is
required by law, or, if so required, such registration has been made, and
consent or approval given or such other appropriate action taken. (d) The Loan
is not usurious. (e) The Loan Documents create the priority of lien on or
security interest in the Collateral (as defined in the Loan Documents) that is
contemplated by the Loan Documents.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and here after furnished to Bank is and will be true, correct
and complete. Any such information relating to Borrower's financial condition
will accurately reflect Borrower's financial condition as of the date(s)
thereof, (including all contingent liabilities of every type), and Borrower
further represents that its financial condition has not changed materially or
adversely since the date(s) of such documents. Authorization; Non-Contravention.
The execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to which it is a party
are within its power, have been duly authorized by all necessary action taken by
the duly authorized officers of Borrower and any guarantors and, if necessary,
by making appropriate filings with any governmental agency or unit and are the
legal, binding, valid and enforceable obligations of Borrower and any
guarantors; and do not (i) contravene, or constitute (with or without the giving
of
Page 4
notice or lapse of time or both) a violation of any provision of applicable law,
a violation of the organizational documents of Borrower or any guarantor, or a
default under any agreement, judgment, injunction, order, decree or other
instrument binding upon or affecting Borrower or any guarantor, (ii) result in
the creation or imposition of any lien (other than the lien(s) created by the
Loan Documents) on any of Borrower's or guarantor's assets, or (iii) give cause
for the acceleration of any obligations of Borrower or any guarantor to any
other creditor. Asset Ownership. Borrower has good and marketable title to all
of the properties and assets reflected on the balance sheets and financial
statements supplied Bank by Borrower, and all such properties and assets are
free and clear of mortgages, security deeds, pledges, liens, charges, and all
other encumbrances, except as otherwise disclosed to Bank by Borrower in writing
("Permitted Liens"). To Borrower's knowledge, no default has occurred under any
Permitted Liens and no claims or interests adverse to Borrower's present rights
in its properties and assets have arisen. Discharge of Liens and Taxes. Borrower
has duty filed, paid and/or discharged all taxes or other claims which may
become a lien on any of its property or assets, except to the extent that such
items are being appropriately contested in good faith and an adequate reserve
for the payment there of is being maintained. Sufficiency of Capital. Borrower
is not, and after consummation of this Agreement and after giving effect to all
indebtedness incurred and liens created by Borrower in connection with the Loan,
will not be, insolvent within the meaning of 11 U.S.C. ss. 101 (32). Compliance
with Laws. Borrower is in compliance in all respects with all federal, state and
local laws, rules and regulations applicable to its properties, operations,
business, and finances, including, without limitation, any federal or state laws
relating to liquor (including 18 U.S.C. ss. 3617, at seg, or narcotics
(including 21 U.S.C. ss. 801,et seg.) and/or any commercial crimes; all
applicable federal, state and local laws and regulations intended to protect the
environment; and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), if applicable. Organization and Authority. Each corporate or limited
liability company Borrower and any guarantor, as applicable, is duly created,
validly existing and in good standing under the laws of the state of its
organization, and has all powers, governmental licenses, authorizations,
consents and approvals required to operate its business as now conducted. Each
corporate or limited liability company Borrower and any guarantor, if any, is
duly qualified, licensed and in good standing in each jurisdiction where
qualification or licensing is required by the nature of its business or the
character and location of its property, business or customers, and in which the
failure to so qualify or be licensed, as the case may be, in the aggregate,
could have a material adverse effect on the business, financial position,
results of operations, properties or prospects of Borrower or any such
guarantor. No Litigation. There are no pending or threatened suits, claims or
demands against Borrower or any guarantor that have not been disclosed to Bank
by Borrower in writing. ERISA. Borrower has no employee pension benefit plans,
as defined in ERISA.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower will: Business Continuity. Conduct its business in
substantially the same manner and locations as such business is now and has
previously been conducted. Maintain Properties. Maintain, preserve and keep its
property in good repair, working order and condition, making all needed
replacements, additions and improvements thereto, to the extent allowed by this
Agreement. Access to Books & Records. Allow Bank, or its agents, during normal
business hours, access to the books, records and such other documents of
Borrower as Bank shall reasonably require, and allow Bank to make copies thereof
at Bank's expense. Insurance. Maintain adequate insurance coverage with respect
to its properties and business against loss or damage of the kinds and in the
amounts customarily insured against by companies of established reputation
engaged in the same or similar businesses including, without limitation,
commercial general liability insurance, workers compensation insurance, and
business interruption insurance; all acquired in such amounts and from such
companies as Bank may reasonably require. Notice of Default and Other Notices.
(a) Notice of Default. Furnish to Bank immediately upon becoming aware of the
existence of any condition or event which constitutes a Default (as defined in
the Loan Documents) or any event which, upon the giving of notice or lapse of
time or both, may become a Default, written notice specifying the nature and
Page 5
period of existence thereof and the action which Borrower is taking or proposes
to take with respect thereto. (b) Other Notices. Promptly notify Bank in writing
of (i) any material adverse change in its financial condition or its business;
(ii) any default under any material agreement, contract or other instrument to
which it is a party or by which any of its properties are bound, or any
acceleration of the maturity of any indebtedness owing by Borrower; (iii) any
material adverse claim against or affecting Borrower or any part of its
properties; (iv) the commencement of, and any material determination in, any
litigation with any third party or any proceeding before any governmental agency
or unit affecting Borrower; and (v) at least 30 days prior thereto, any change
in Borrower's name or address as shown above, and/or any change in Borrower's
structure. Compliance with Other Agreements. Comply with all terms and
conditions contained in this Agreement, and any other Loan Documents, and swap
agreements, if applicable, as defined in the Note. Payment of Debts. Pay and
discharge when due, and before subject to penalty or further charge, and
otherwise satisfy before maturity or delinquency, all obligations, debts, taxes,
and liabilities of whatever nature or amount, except those which Borrower in
good faith disputes. Reports and Proxies. Deliver to Bank, promptly, a copy of
all financial statements, reports, notices, and proxy statements, sent by
Borrower to stockholders, and all regular or periodic reports required to be
filed by Borrower with any governmental agency or authority. Other Financial
Information. Deliver promptly such other information regarding the operation,
business affairs, and financial condition of Borrower which Bank may reasonably
request. Non-Default Certificate From Borrower. Deliver to Bank, with the
Financial Statements required herein, a certificate signed by Borrower, if
Borrower is an individual, or by a principal financial officer of Borrower
warranting that no "Default" as specified in the Loan Documents or any event
which, upon the giving of notice or lapse of time or both, would constitute such
a Default, has occurred. Estoppel Certificate. Furnish, within 15 days after
request by Bank, a written statement duly acknowledged of the amount due under
the Loan and whether offsets or defenses exist against the Obligations.
NEGATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower will not Default on Other Contracts or Obligations.
Default on any material contract with or obligation when due to a third party or
default in the performance of any obligation to a third party incurred for money
borrowed. Judgment Entered. Permit the entry of any monetary judgment or the
assessment against, the filing of any tax lien against, or the issuance of any
writ of garnishment or attachment against any property of or debts due Borrower
in an amount in excess of $50,000.00 and that is not discharged or execution is
not stayed within Thirty (30) days of entry. Government Intervention. Permit the
assertion or making of any seizure, vesting or intervention by or under
authority of any government by which the management of Borrower or any guarantor
is displaced of its authority in the conduct of its respective business or such
business is curtailed or materially impaired. Prepayment of Other Debt. Retire
any long-term debt entered into prior to the date of this Agreement at a date in
advance of its legal obligation to do so. Retire or Repurchase Capital Stock.
Retire or otherwise acquire any of its capital stock. Payment of Dividends;
Redemption of Stock. Borrower shall not pay any dividends, make any withdrawal
from its capital, make any other distributions and/or repurchase, redeem, or
otherwise acquire, or set aside reserves to acquire, any of its outstanding
stock, partnership or other equity interests, except for such actions by any
subsidiaries in favor of the Borrower. Accounts. Borrower shall not sell,
assign, transfer or dispose of any of its accounts or notes receivable, with or
without recourse, except to the Bank. Cross-Default. Default in payment or
performance of any obligation under any other loans, contracts, or agreements of
Borrower, any subsidiary or affiliate of Borrower, any general partner of the
holder(s) of the majority ownership interests of Borrower, with Bank or its
affiliates. Investments. Borrower shall no purchase any stock, securities, or
evidence of indebtedness of any other person or entity except, investments in
direct obligations of the United States Government and certificates of deposit
of United States commercial banks having a tier 1 capital ratio of not less than
6%, and, then in an amount not exceeding 10% of the issuing bank's unimpaired
capital and surplus. Guarantees. Borrower shall not guarantee or otherwise
become responsible for
Page 6
obligations of any other person or entity except for the benefit of Bank or its
affiliates, and except as an endorser of checks or drafts negotiated in the
ordinary course of the Borrower's business. Encumbrances. Borrower shall not
create, assume, or permit to exist any mortgage, security deed, deed of trust,
pledge, lien, charge or other encumbrance on any of its assets, whether now
owned or hereafter acquire, other than: (i) security interests required by the
loan documents; (ii) liens for taxes contested in good faith; (iii) liens
accruing by law for employee benefits; or (iv) permitted liens; (v) indebtedness
not to exceed $150,000, in any fiscal year for the purpose of purchasing
machinery and equipment. Sale-Leaseback Transactions. Borrower shall not enter
into any sale-lease back transaction or any transaction however termed which
would have the same or substantially the same result or effect as a
sale-leaseback. Sale of Assets; Liquidation; Merger; Acquisition. Borrower shall
not convey, lease, sell, transfer or assign any assets except in the ordinary
course of the Borrower's business for value received; liquidate or discontinue
its normal operations with intent to liquidate; enter into any merger or
consolidation; or acquire all or substantially all of the assets, stock, or
other equity interests of any other entity. Sale or Issuance of Stock. Borrower
shall not sell, issue, or agree to sell or issue, any shares (voting,
non-voting, preferred or common) of the Borrower, or purchase any such shares.
Hazardous Substances. Borrower shall not cause or permit to exist a dumping of
hazardous substances or wastes into the atmosphere or waters or onto lands
resulting in damage to the Natural Resources unless the dumping is pursuant to
and in compliance with the conditions of a permit issued by the appropriate
federal, state, or local governmental authorities. Change of Control. Borrower
shall not make a material change of ownership that effectively changes control
of Borrower or changes the current management structure and personnel.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, and all financial covenants shall be calculated on
a consolidated basis, using the consolidated financial information for Borrower,
its subsidiaries, affiliates and its holding or parent company, as applicable:
Tangible Net Worth. Borrower shall maintain a Tangible Net Worth of at least
$11,650,000.00 at closing. Tangible Net Worth shall increase by not less than
$50,000 each fiscal year measured annually commencing January 1999. "Tangible
Net Worth" shall mean the total assets minus total liabilities. For purposes of
this computation, the aggregate amount of any intangible assets of Borrower
including, without limitation, good will, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks, and brand names, shall be
subtracted from total assets, and total liabilities shall include fully
subordinated debt. Total Liabilities to Tangible Net Worth Ratio. Borrower
shall, at all times, maintain a ratio of Total Liabilities, including fully
subordinated debt, divided by Tangi0ble Net Worth of not more than .50 to 1.00.
For purposes of this computation, "Total Liabilities" shall mean all liabilities
of Borrower, including capitalized leases and all reserves for deferred taxes
and other deferred sums appearing on the liabilities side of a balance sheet of
Borrower, in accordance with generally accepted accounting principles applied on
a consistent basis. Deposit Relationship. Borrower shall maintain its primary
depository account with -Bank. Capital Expenditures. Borrower shall not during
any fiscal year expend on gross fixed assets (including gross leases to be
capitalized under generally accepted accounting principles and leasehold
improvements) an amount exceeding $900,000.00 in the aggregate. Leases. Borrower
shall not incur, create, or assume any direct or indirect liability for the
payment of rent or otherwise, under any lease or rental arrangement (excluding
capitalized leases) if immediately there after the sum of such lease or rental
payments to be made by Borrower during any 12-month period is increased by
$50,000.00 in the aggregate. Loans and Advances. Borrower shall not, during any
fiscal year, make loans or advances, excepting ordinary course of business
travel and expense advances, to any person or entity, which total more than
$50,000.00 in the aggregate. Debt Service Coverage Ratio. Borrower shall
maintain a Debt Service Coverage Ratio not less than1.20 to 1.0, measured
annually. "Debt Service Coverage Ratio" means the ratio of net income plus
interest expense (after giving effect to the fixed interest rate payable under
the Swap Agreement) plus income tax expense plus depreciation and amortization
of the Borrower and its consolidated
Page 7
subsidiaries for any fiscal year minus Maintenance Capital Expenditures to
interest expense (after giving effect to the fixed interest rate payable under
the Swap Agreement) of the Borrower and its consolidated subsidiaries for such
period plus the current portion of long term debt and capital leases of the
Borrower and its consolidated subsidiaries (as reflected on the Borrower's
consolidated financial statements as of the end of the fiscal period immediately
preceding such current period) to be less than 1.20:1. "Maintenance Capital
Expenditures" is defined as those expenditures required on an annual basis to
maintain existing restaurant locations. Liquidity Requirement. Borrower shall,
at all times, maintain Liquid Assets of not less than $750,000."Uquid Assets"
shall mean the sum of all cash, time deposits and marketable securities.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules; all on a consolidated and consolidating basis and in reasonable
detail, prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year. All such
statements shall be examined by an independent certified public accountant
acceptable to Bank. The opinion of such independent certified public accountant
shall not be acceptable to Bank if qualified due to any limitations in scope
imposed by Borrower or its Subsidiaries, if any. Any other qualification of the
opinion by the accountant shall render the acceptability of the financial
statements subject to Bank's approval. Borrower's accountant shall provide Bank
with a written acknowledgment of Bank's reliance upon the statements in
accordance with N.J.S. SS 2A:53A-25.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank unaudited
management-prepared quarterly financial statements, including, without
limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules, as soon as available and in any event within
60 days after the close of each such period; all in reasonable detail and
prepared in conformity with generally accepted accounting principles, applied on
a basis consistent with that of the preceding year. Such statements shall be
certified as to their correctness by a principal financial officer of Borrower
and in each case, if audited statements are required, subject to audit and
year-end adjustments.
Borrower shall deliver to Bank: a) the following statements and schedules
pertaining to the Borrower's business operations, monthly or at such other times
as may be requested by Bank; accounts receivable agings, accounts payable
agings, inventory schedules and tax returns; b) not later than five (5) calendar
days after receipt there of by Borrower, a copy of any management letter or
report for Borrower prepared by a CPA; c) not later than 120 days after the end
of each fiscal year income statements by store location prepared in a format
acceptable to Bank, certified as true, correct and complete by Borrower's chief
financial officer; d) not later than 30 days prior to the and of each fiscal
year, consolidating cash flow projections for the subsequent fiscal year in a
format acceptable to Bank; and e) such other information respecting the
operations, financial or otherwise, of Borrower or any of its subsidiaries, as
Bank may from time to time reasonably request.
FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.
MISCELLANEOUS PROVISIONS.
1. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be deemed to be an original. Complete sets of
the counterparts hereto shall be provided to Borrower and Bank.
Page 8
2. GOVERNING LAW. This Agreement and all loan documentation executed
pursuant hereto shall be governed by the laws of the State of Florida.
3. SUPERSEDES PRIOR AGREEMENTS. This Agreement supersedes all previous
loan agreements between Bank and Borrower, which may relate to this loan.
4. INDIRECT MEANS. Any act which the Borrower is prohibited from doing
shall not be done indirectly through any Person controlled or owned by, or any
subsidiary of, Borrower, or by any other indirect means.
5. NON-IMPAIRMENT. If any one or more provisions contained in this
Agreement or any other document executed pursuant to this Agreement shall be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained in this Agreement and
the documentation executed pursuant hereto shall not in any way be affected or
impaired there by and this Agreement shall otherwise remain in full force and
effect.
6. NON-WAIVE. Neither the failure to exercise, nor any delay on the part
of Bank in exercising, any right, power or privilege granted pursuant to this
Agreement, the Notes, or any other documents executed pursuant to this
Agreement, shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
7. MODIFICATION. No modification, amendment, or waiver of any provision of
this Agreement, any Note or any other document executed pursuant to this
Agreement shall be effective unless in writing and signed by all parties
thereto, it being acknowledged by the parties hereto that all terms, conditions
and covenants therein and herein contained are deemed to be material and relied
upon by Bank.
8. ATTORNEY'S FEES. In the event that Borrower shall default in any of its
obligations under this Agreement, any Note or any other document executed
pursuant to this Agreement and Bank believes it reasonably necessary or proper
to employ attorneys to assist in the enforcement or collection of the
indebtedness of such Borrower to Bank or to enforce any other term or condition
of this Agreement, the Notes or any other document executed pursuant to this
Agreement, or in the event the Bank voluntarily or otherwise shall become a
party to any suit or legal proceeding with respect to any such document,
agreement, indebtedness or obligation relating to either Borrower (including a
proceeding conducted under the Federal Bankruptcy Code), Borrower agrees to pay
the reasonable attorneys' fees of Bank with respect thereto and all related
costs that may reasonably be incurred by Bank. Borrowers shall be liable for
such attorneys' fees and costs whether or not any suit or proceeding is
commenced (including costs for appellate proceedings, if any).
9. INTEREST. Notwithstanding anything to the contrary contained herein, it
is not the intention of the parties hereto to make any agreement which shall be
violative of the laws of the State of Florida or the United States of America
relating to usury, and in no event shall Borrower pay to Bank, or Bank accept or
charge any interest to Borrower which, together with any other charges upon the
principal or any portion thereof, howsoever computed, shall exceed the maximum
lawful rate of interest allowable under the laws of the State of Florida or the
United States of America, whichever is higher or unlimited. Anything contained
herein, in any Note, or in any other document executed pursuant to this
Agreement notwithstanding, if for an reason the effective rate of interest which
shall be deemed reduced to and shall be such maximum lawful rate, and any sums
of interest which have been collected in excess of such maximum lawful rate
shall be applied by Bank as a credit against the unpaid principal amount due
under the respective Note.
Page 9
10. BINDING AGREEMENT/ASSIGNMENT. This Agreement shall be binding upon the
parties and their respective permitted successor and permitted assigns. Bank's
interest in the Note, and the other Loans Documents, and its rights hereunder
and thereunder, are freely assignable, in whole or in part. the Borrower may not
assign any of its rights and interests hereunder or under the Note, except with
the prior written consent of the Bank, which consent may be withheld at bank's
sole and absolute discretion. Any said assignment shall not release such
Borrower from any responsibility hereunder or under the Note or the other Loan
Documents, notwithstanding Bank's consent to the same.
11. LIMITATIONS ON BORROWER. In the event financial statements are not
received as specified in this Paragraph 6.2 then the following provision shall
apply:
a) In the event of default for this the Borrower does not accelerate
the loan, including the failure of Borrower to provide the financial statements
as required hereunder or under the Loan Agreement, the applicable interest rate
to the loan, for a period beginning (3) days after written notice of such
default and ending upon the curing of said noticed default, shall increase one
quarter of one percent (.25%) for the first thirty (30) days of said default and
increase an additional one quarter of one percent (.255) during each thirty (30)
day period thereafter during which the notice default continues. However, under
no conditions shall the interest rate exceed the maximum amount allowed by law
under any state or federal law having jurisdiction over the promissory note.
Such default interest rate shall apply to the outstanding principal balance of
the loan. Upon the curing of the notice default, the interest rate of the Loan
shall revert to the initially agreed-upon interest rate effective on the date on
which the default is cured.
12. NOTICE. For all purposes hereof, where the giving of written notice is
required, notice will be deemed to have been properly "given" as of the date
sent by United States mail or the date delivered by third-party courier service,
if sent in accordance with the provision of this Section. (1) Said notices shall
be in writing and sent by 91) United States Express Mail, or (2) third party
independent courier service, with a receipt showing the sender and the date and
address of transmittal and delivery, or (3) United States registered or
certified mail, return receipt requested, postage prepaid; and in all such cases
addressed as follows or to the respective parties at the last addresses provided
in writing by said parties prior to the preparation of the notice in question.
IF TO BANK:
First Union National Bank
0000 Xxxxxxx 00
Xxxxxx, XX 00000
Attention:
With copy to:
Xxxxxx X. Xxxxx, Esq.
Collins, Brown, Caldwell, Barkett, Rossway,
Xxxxxxxxxx & Xxxxx Chartered
000 Xxxxxxxxx Xxxx.
Xxxx Xxxxx, XX 00000
IF TO BORROWER
Chefs International, Inc.
00 Xxxxxxxx
Xxxxx Xxxxxxxx Xxxxx, XX 00000
Page 10
With copy to
Xxxxxxxxxxxx X. Marine, Esq.
Xxxxx, Cooksey, Fennell,
X'Xxxxx & Marine
000 Xxxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, XX 00000
13. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants and agreements
made by or on behalf of the parties hereto which are contained or all
incorporated in this agreement shall bind and inure to the benefit of the
successors and/or assigns of all parties hereto.
14. CLOSING EXPENSES. On or before the closing date, Borrowers will pay all
out-of-pocket expenses incurred by Bank in connection with the negotiations, and
consummation of the loan, including those related to the preparation of all
related documentation and the closing of the transactions contemplated herein,
including but not limited to reasonable Bank counsel fees and expenses.
15. REMEDIES CUMULATIVE. Any rights or remedies of the Bank hereunder or
under the Note or any other Loan Document or under any other writing shall be
cumulative and in addition to every other right or remedy contained therein or
herein, or now or hereafter existing, a law or in equity, or by statute or
otherwise. Upon the occurrence of an Event of Default, Bank may proceed to
enforce any of its rights and remedies against either Borrower or against any
collateral given as security for the Note and Bank may enforce such rights and
remedies simultaneously, or in such order and at such time, or from time to
time, as Bank, in its sole discretion, shall determine.
16. APPLICATION OF PAYMENTS. Payments received by Bank from Borrower,
whether direct or from realizations on any collateral securing the loans and
advances made or to be made hereunder, may be applied toward payment of such
liabilities of Borrower, and in such order of application as Bank may from time
to time elect, and Borrower hereby waives any rights to designate to which of
their liabilities any such payments shall be applied.
17. CONFLICT PROVISIONS.
A. If a conflict exists or arises between a provision of this Agreement and
any note or Security Agreement, the provision in the note or Security
Agreement(s) shall prevail.
B. Nothing herein shall be construed to waive or diminish any right or
security of the Mortgagee under the Notes, Mortgage, or other Security. It is
the purpose and intent hereof to provide safeguards, protection, and rights to
the Bank in addition to those provided in the Security and to better secure the
Bank for and on account of the Loan.
18. VENUE. For any action arising out of this Loan Agreement, the Note, the
Mortgage or other security interest, same shall be in a court of competent
jurisdiction in Indian River County, Florida.
19. Nothing in this or other documents regarding the transaction herein
shall prohibit the Bank from pledging or assigning this Loan Agreement,
including collateral therefor, to any Federal Reserve Bank in accordance with
applicable law.
INTEREST SWAP AGREEMENT. The parties have entered into one or more interest rate
swap transactions and may enter into additional transactions pursuant to the
terms and conditions of a Master
Page 11
Agreement with an accompanying Schedule and confirmations (together, the "Master
Agreement") Absolute and contingent liabilities are created under the terms and
conditions of the Master Agreement.
Each of the Promissory Note, Mortgage, Security Agreement, Loan Agreement,
Assignment of Leases, Rents and Profits and Guaranties is hereby specifically
cross-defaulted with the Master Agreement, such that a default or event of
default under the Master Agreement, and a default or event of default under the
Master Agreement is considered a default or event of default under each of them.
The Mortgage, Security Agreement and Assignment of Leases, Rents and Profits is
also given as security for the payment of all present and future obligations
under the Master Agreement. The term "Secured Obligation" or similar term as set
out in the Mortgage, Security Agreement, Assignment of Leases, Rents and Profits
and Guaranties shall include the obligations under the Master Agreement.
In the event of foreclosure of the security interest following a default, the
proceeds of the sale of the collateral shall first by applied to principal.
Thereafter, proceeds shall be applied to interest under the Note and obligation
under the Master Agreement on a pari passu basis and the remainder shall be
applied to any other obligations secured thereby.
The Mortgage, Security Agreement and Assignment of Leases, Rents and Profits
shall only be satisfied and extinguished after payment in full of all principal,
interest and other obligations that are due or may become due under the Note or
are otherwise secured by the Mortgage, Security Agreement and Assignment of
Leases, Rents and Profits, and payment in full of all obligations under the
Master Agreement.
Nothing in this or other documents regarding the transaction herein shall
prohibit the Lender from pledging or assigning this mortgage, including
collateral therefor, to any Federal Reserve Bank in accordance with applicable
law.
ARBITRATION. Under demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counter claims arising from
documents executed in the future. A judgment upon the award may be entered in
any court having jurisdiction. Notwithstanding the foregoing, the arbitration
provision does not apply to disputes under or related to swap agreements.
SPECIAL RULES. All arbitration hearings shall be conducted in the city named in
the address of Bank first stated above. A hearing shall begin within 90 days of
demand for arbitration and all hearings shall conclude within 120 days of demand
for arbitration. These time limitation may not be extended unless a party shows
cause for extension and then for no more than a total of 60 days. The expedited
procedures set forth in Rule 51 ET SEQ. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000.00. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The parties do not waive applicable Federal or state substantive law
except as provided herein.
PRESERVATION AND LIMITATION OR REMEDIES. Notwithstanding the preceding binding
arbitration provisions, the parties agree to preserve, without diminution,
certain remedies that any party may exercise before or after an arbitration
proceeding is brought. The parties shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (I) all rights to foreclose against any real or
personal property or
Page 12
other security by exercising a power of sale or under applicable law by judicial
foreclosure 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 judgement by confession of
judgment. Any claim or controversy with regard to any party's entitlement to
such remedies is a Dispute.
The parties agree that they shall not have a remedy of punitive or exemplary
damages against other parties in any Dispute 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 whether the Dispute is resolved by arbitration or
judicially.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL
WITH REGARD TO A DISPUTE.
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
Chefs International, Inc., a Delaware corporation
CORPORATE By:
SEAL -----------------------------------
Xxxxxxx Xxxxxxx, President
First Union National Bank
CORPORATE By: /s/ XXXXXX X. XXXXX, VICE PRESIDENT
SEAL -----------------------------------
Xxxxxx X. Xxxxx, Vice President
Page 13
other security by exercising a power of sale or under applicable law by judicial
foreclosure 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 injuctive relief, sequestration,
garnishment, attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgement by confession of
judgment. Any claim or controversy with regard to any party's entitlement to
such remedies is a Dispute.
The parties agree that they shall not have a remedy of punitive or exemplary
damages against other parties in any Dispute 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 whether the Dispute is resolved by arbitration or
judicially.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL
WITH REGARD TO A DISPUTE.
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
Chefs International, Inc., a Delaware corporation
CORPORATE By: /s/ XXXXXXX XXXXXXX, PRESIDENT
SEAL -----------------------------------
Xxxxxxx Xxxxxxx, President
First Union National Bank
CORPORATE By:
SEAL -----------------------------------
Xxxxxx X. Xxxxx, Vice President
Page 13
EXHIBIT "A"
PARCEL 1:
XXXX 0 XXX 0, XXXXX 0, XXXX XXXXX SUBDIVISION, ACCORDING TO THE PLAT THEREOF AS
RECORDED IN PLAT BOOK 3, PAGE 18, PUBLIC RECORDS OF INDIAN RIVER COUNTY,
FLORIDA.
PARCEL 2:
THE NORTHEASIERLY ONE-HALF OF XXX 0, XXXXX 0, XXXX XXXXX XXXXXXXXXXX, XXXXXXXXX
TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 3, PAGE 18 OF THE PUBLIC RECORDS
OF INDIAN RIVER COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHERNMOST CORNER OF SAID LOT 3, RUN SOUTHWESTERLY ALONG THE
NORTHWEST BOUNDARY LINE OF SAID LOT, A DISTANCE OF 53.5 FEET TO A POINT; THENCE
RUN SOUTHEASTERLY ON A STRAIGHT LINE TO A POINT ON THE SOUTHEAST BOUNDARY LINE
OF SAID LOT 3, WHICH POINT IS LOCATED 48.5 FEET FROM THE EASTERN MOST CORNER OF
SAID LOT; THENCE NORTHEASTERLY, A DISTANCE OF 48.5 FEET TO SAID EASTERN MOST
CORNER; THENCE RUN NORTHWESTERLY ALONG THE LINE DIVIDING XXX 0 XXXX XXX 0 XX
XXXX XXXXXXXXXXX, TO THE POINT OF BEGINNING. SAID LAND LYING AND BEING IN INDIAN
RIVER COUNTY, FLORIDA.
PARCEL 3:
BEGINNING AT THE XXXXXXXXXXXXX XXXXXX XX XXX 0, XXXXX 1, VERO ISLES SUBDIVISION,
AS RECORDED IN PLAT BOOK 3, PAGE 18 OF THE PUBLIC RECORDS OF INDIAN RIVER
COUNTY, FLORIDA, SAID POINT OF BEGINNING BEING ON THE SOUTH RIGHT-OF-WAY AND
LYING 70 FEET SOUTHERLY OF, AND RADIALLY FROM, THE CENTERLINE OF STATE ROAD 502
(ROYAL PALM BOULEVARD), AS SHOWN ON THE STATE OF FLORIDA, STATE ROAD DEPARTMENT,
RIGHT-OF-WAY MAP, STATE SECTION 8803-104, AND ALSO SHOWN ON SAID PLAT OF VERO
ISLES, RUN THENCE SOUTH 29o 24 "OO" EAST ALONG THE WESTERLY LINE OF SAID LOT 1,
A DISTANCE OF 20 FEET TO THE NORTHEASTERLY CORNER OF LOT 2 OF SAID VERO ISLES
SUBDIVISION; THENCE RUN SOUTHWESTERLY ALONG THE NORTHERLY UNE OF XXX 0 XXX XXXX
XXXX XX XXX 0 OF SAID VERO ISLES SUBDIVISION ON A CURVE BEING CONCAVE TO THE
SOUTHEAST HAVING A RADIUS OF 1342.69 FEET, A CENTRAL ANGLE OF 7o 29' 2O", AN ARC
DISTANCE OF 175.50 FEET TO THE MID-POINT OF THE NORTh LINE OF SAID LOT 3; THENCE
RUN NORTH 36o 53' 20" WEST ALONG THE NORTHERLY PROJECTION OF THE WEST LINE OF
THE EAST HALF OF SAID LOT 3, A DISTANCE OF 20 FEET TO A POINT ON THE SOUTHERLY
RIGHT-OF-WAY OF STATE ROAD 502 (ROYAL PALM BOULEVARD); THENCE RUN NORTHEASTERLY
ON SAID SOUTH RIGHT-OF-WAY OF STATE ROAD 502 (ROYAL PALM BOULEVARD) ALONG A
CURVE BEING CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 1362.69 FEET, X XXXXXXX
XXXXX XX 0x 00' 00", XX XXX DISTANCE OF 178.11 FEET TO THE POINT OF BEGINNING.
FIRST UNION
[logo omitted]
PROMISSORY NOTE
$880,000.00 October 30, 1998
Chefs International, Inc., a Delaware corporation
00 Xxxxxxxx
Xxxxx Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
(Individually and collectively "Borrower")
First Union National Bank
0000 Xxxxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the "Bank")
Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Eight Hundred Eighty Thousand and no/100 Dollars
($880,000.00) or such sum as may be advanced and outstanding from time to time
with interest on the unpaid principal balance at the rate and on the terms
provided in this Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").
SECURITY. Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, real property
collateral described in that certain Deed dated October 29, 1998
INTEREST RATE DEFINITIONS.
LIBOR. 1-month LIBOR plus 2.00% (200 Basis Points) ("LIBOR-Based Rate"). "LIBOR"
is the rate for U.S. dollar deposits of that many months maturity as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before the relevant Interest Period begins (or if not so reported, then as
determined by Bank from another recognized source of interbank quotation).
INTEREST RATE TO BE APPLIED.
INTEREST RATE. The unpaid principal balance of this Note shall bear interest
from the date hereof at the LIBOR-Based Rate, as determined by Bank prior to the
commencement of each consecutive interest period of 1 month (each an "Interest
Period") provided, the first Interest Period shall commence on the date this
Note and end on the first date thereafter that interest is due. Each LIBOR-Based
Rate shall remain in effect, subject to the provisions hereof, for the entire
Interest Period until redetermined for the next successive Interest Period.
INDEMNIFICATION. Borrower indemnifies Bank against Bank's loss or expense in
employing deposits as a consequence (a) of Borrower's failure to make any
payment when due under this Note, or (b) any payment, prepayment or conversion
of any loan on a date other than the last day of the Interest Period
("Indemnified Loss or Expense"). The amount of such Indemnified Loss or Expense
shall be determined by Bank based upon the assumption that Bank funded 100% of
that portion of the loan in the London interbank market.
DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the
LIBOR-Based Rate plus 3% ("Default Rate"). The Default Rate shall also apply
from acceleration until the Obligations or any judgment thereon is paid in full.
INTEREST AND FEE (S) COMPUTATION. (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective yield by taking the stated (nominal) rate for a
years period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the applicable period. Application of the
Actual/36O Computation produces an annualized effective rate exceeding that of
the nominal rate.
REPAYMENT TERMS. This Note shall be due and payable in principal payments as set
forth in Schedule A attached hereto and made a part hereof together with accrued
interest thereon on the date each principal payment is due. All remaining
principal and interest shall be due and payable on NOVEMBER 3, 2008.
APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.
If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.
REQUIRED HEDGE. Borrower shall hedge the Loan's floating interest expense for
the full term of the Loan by maintaining either: (i) the Swap Agreement; or (ii)
a comparable interest rate swap agreement with Bank or other counterparty
acceptable to Bank in a notional amount equal to the then principal balance of
the Loan and providing for a fixed rate [sufficient to satisfy the Debt Service
Coverage Ration requirement set forth below] [satisfactory to Bank], and
containing such other terms and conditions as shall be reasonably acceptable to
Bank. "SWAP AGREEMENT" that certain ISDA Master Agreement entered into between
Borrower and Bank dated September 18, 1998, including the Schedule and all
Confirmations (as such terms are defied in the ISDA Master Agreement).
LOAN DOCUMENTS AND OBLIGATIONS. The term "Loan Documents" used in this Note and
other Loan Documents refers to all documents executed in connection with the
loan evidenced by this Note and any prior notes which evidence all or any
portion of the loan evidenced by this Note, any letters of credit issued
pursuant to any loan agreement executed in connection with this Note, any
applications for such letters of credit and any other documents executed in
connection therewith, and may include, without limitation, a commitment letter
that survives closing, a loan agreement, this Note, guaranty agreements,
security agreements, security instruments, financing statements, mortgage
instruments, any renewals or modifications, whenever any of the foregoing are
executed, but does not include swap agreements (as defined in 11 U.S.C. &101).
The term "Obligations" used in this Note refers to any and all indebtedness and
other obligations under this Note, all other obligations under any other Loan
Document (s), and all obligations under any swap agreements as defined in 11
U.S.C. &101 between Borrower and Bank whenever executed.
LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.
Page 2
Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.
If this Note is secured by owner-occupied residential real property located
outside the state in which the office of Bank first shown above is located, the
late charge laws of the state where the real property is located shall apply to
this Note and the late charge shall be the highest amount allowable under such
laws. If no amount is stated thereunder, the late charge shall be 5% of each
payment past due for 10 or more days.
ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations,
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.
USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.
DEFAULT. If any of the following occurs, a default ("Default") under this Note
shall exist: NONPAYMENT; NONPERFORMANCE. The failure of timely payment or
performance of the Obligations or Default (however denominated) under this Note
or any other Loan Documents. FALSE WARRANTY. A warranty or representation made
or deemed made in the Loan Documents or furnished Bank in connection with the
loan evidenced by this Note proves materially false, or if of a continuing
nature, becomes materially false. CROSS DEFAULT. At Bank's option, any default
in payment or performance of any obligation under any other loans, contracts or
agreements of Borrower, any Subsidiary or Affiliate of Borrower ("Affiliate"
shall have the meaning as defined in 11 U.S.C. & 101, except that the term
"debtor" therein shall be substituted by the term "Borrower"" herein;
"Subsidiary" shall mean any corporation of which more than 50% of the issued and
outstanding voting stock is owned directly or indirectly by Borrower).
CESSATION; BANKRUPTCY. The death of, appointment of guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against the Borrower, its
Subsidiaries or Affiliates, if any, or any party to the Loan Documents.
REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: BANK
LIEN. Foreclose its security interest or lien against Borrower's accounts
without notice. ACCELERATION UPON DEFAULT. Accelerate the maturity OF this Note
and all other Obligations, and all of the Obligations shall be immediately due
and payable. CUMULATIVE. Exercise any rights and remedies as provided under the
Note and other Loan Documents, or as provided by law or equity.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules; all on a consolidated and consolidating basis and in reasonable
detail, prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year. All such
statements shall be examined by an independent certified public accountant
acceptable to Bank. The opinion of such independent certified public accountant
shall not be acceptable to Bank if qualified due to any limitations in scope
imposed by Borrower or its Subsidiaries, if any. Any other qualification of the
opinion by the
Page 3
accountant shall render the acceptability of the financial statements subject to
Bank's approval. Borrower's accountant shall provide Bank with a written
acknowledgment of Bank's reliance upon the statements in accordance with N.J.S.
& 2A25.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank unaudited
management-prepared quarterly financial statements, including, without
limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules, as soon as available and in any event within
60 days after the close of each such period; all in reasonable detail and
prepared in conformity with generally accepted accounting principles, applied on
a basis consistent with that of the preceding year. Such statements shall be
certified as to their correctness by a principal financial officer of Borrower
and in each case, if audited statements are required, subject to audit and year
end adjustments.
Borrower shall deliver to Bank: a} the following statements and schedules
pertaining to the Borrower's business operations, monthly or at such other times
as may be requested by Bank; accounts receivable agings, accounts payable
agings, inventory schedules and tax returns; b) not later than five (5) calendar
days after receipt thereof by Borrower, a copy of any management letter or
report for Borrower prepared by a CPA; c) not later than 120 days after the end
of each fiscal year income statements by store location prepared In a format
acceptable to Bank, certified as true, correct and complete by Borrower's chief
financial officer; d) not later than 30 days prior to the end of each fiscal
year, consolidating cash flow projections for the subsequent fiscal year in a
format acceptable to Bank; and e) such other information respecting the
operations, financial or otherwise, of Borrower or any of its subsidiaries, as
Bank may from time to time reasonably request.
FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.
YEAR 2000 COMPATIBILITY. Borrower shall take all action necessary to assure that
Borrower's computer based systems are able to operate and effectively process
data including dates on and after January 1, 2000. At the request of Bank,
Borrower shall provide Bank assurance acceptable to Bank of Borrower's Year 2000
compatibility.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
Each Borrower or any person liable under this Note waives presentment, protest,
notice of dishonor, demand for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, notice of sale and all other
notices of any kind. Further, each agrees that Bank may extend, modify or renew
this Note or make a novation of the loan evidenced by this Note for any period
and grant any releases, compromises or indulgences with respect to any
collateral securing this Note, or with respect to any other Borrower or any
other person liable under this Note or other Loan Documents, all without notice
to or consent of each Borrower or each person who may be liable under this Note
or other Loan Documents and without affecting the liability of Borrower or any
person who may be liable under this Note or other Loan Documents.
Page 4
MISCELLANEOUS PROVISIONS. Assignment. This Note and other Loan Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns. Bank's interests in and
rights under this Note and other Loan Documents are freely assignable, in whole
or in part, by Bank. In addition, nothing in this Note or any of the Loan
Documents shall prohibit Bank from pledging or assigning this Note or any of the
Loan Documents or any interest therein to any Federal Reserve Bank. Borrower
shall not assign its rights and interest hereunder without the prior written
consent of Bank, and any attempt by Borrower to assign without Bank's prior
written consent is null and void. Any assignment shall not release Borrower from
the Obligations. Applicable Law; Conflict Between Documents. This Note and other
Loan Documents shall be governed by and construed under the laws of the state of
Florida. If the terms of this Note should conflict with the terms of the loan
agreement or any commitment letter that survives closing, the terms of this Note
shall control. Borrower's Accounts. Except as prohibited by law, Borrower grants
Bank a security interest in all of Borrower's accounts with Bank and any of its
affiliates. Jurisdiction. Borrower irrevocably agrees to non-exclusive personal
jurisdiction in the state named in Bank's address shown above. Severability. If
any provision of this Note or of the other Loan Documents shall be prohibited or
invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Note or other such
document. Notices. Any notices to Borrower shall be sufficiently given, if in
writing and mailed or delivered to the Borrower's address shown above or such
other address as provided hereunder, 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 in writing from time to time. In the event that Borrower changes
Borrower's address at any time prior to the date the Obligations are paid in
full, Borrower agrees to promptly give written notice of said change of address
by registered or certified mail, return receipt requested, all charges prepaid.
Plural; Captions. All references in the Loan Documents to Borrower, guarantor,
person, document or other nouns of reference mean both the singular and plural
form, as the case may be, and the term "person" shall mean any individual,
person or entity. The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the Loan
Documents. Binding Contract. Borrower by execution of and Bank by acceptance of
this Note agree that each party is bound to all terms and provisions of this
Note. Advances. Bank in its sole discretion may make other Advances under this
Note pursuant hereto. Posting of Payments. All payments received during normal
banking hours after 2:00 p.m. local time at the office of Bank first shown above
shall be deemed received at the opening of the next banking day. Joint and
Several Obligations. Each Borrower is jointly and severally obligated under this
Note. Fees and Taxes. Borrower shall promptly pay all documentary, intangible
recordation and/or similar taxes on this transaction whether assessed at closing
or arising from time to time.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements.
SPECIAL RULES. All arbitration hearings shall be conducted in the city named in
the address of Bank first stated above. A hearing shall begin within 90 days of
demand for arbitration and all hearings shall conclude within 120 days of demand
for arbitration. These time limitations may not be extended unless a party shows
cause for extension and then for no more than a total of 60
Page 5
days. The expedited procedures set forth in Rule 51 ET SEQ.. of the Arbitration
Rules shall be applicable to claims of less than $1 ,0O0,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein.
PRESERVATION AND LIMITATiON OF REMEDIES. Notwithstanding the preceding binding
arbitration provisions, the parties agree to preserve, without diminution,
certain remedies that any party may exercise before or after an arbitration
proceeding is brought. The parties shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale or under
applicable law by judicial foreclosure including a proceeding to confirm the
sale; (ii) all rights of self-help Including peaceful occupation of real
property and collection of rents, ET SEQ., 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. Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute.
The parties agree that they shall not have a remedy of punitive or exemplary
damages against other parties in any Dispute 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 whether the Dispute is resolved by arbitration or
judicially.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION ThEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL
WITH REGARD TO A DISPUTE.
IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.
Chefs International, Inc., a Delaware corporation
Taxpayer Identification Number: 00-0000000
CORPORATE By /s/ XXXXXXX XXXXXXX
SEAL -----------------------------------------------------
Xxxxxxx Xxxxxxx, President
STATE OF NEW JERSEY
COUNTY OF OCEAN
The foregoing instrument was acknowledged before me this 23rd day of October,
1998, by
Xxxxxxx Xxxxxxx, as President of CHEFS INTERNATIONAL, INC., a Delaware
corporation, 1998, by on behalf of the corporation. He is personally known to me
or has produced drivers license as identification.
/s/ XXXXXXX X. XXXXX NOTARY PUBLIC
----------------------------- Name of Acknowledger Typed, Printed or Stamped
Xxxxxxx X. Xxxxx
XXXXXXX X. XXXXX
Notary Public of New Jersey
My Commission Expires 4/20/2002
Page 6
S96721127364
SCHEDULE A TO PROMISSORY NOTE
The Note will be paid in the principal amounts plus accrued interest on the
dates as shown below:
Payment Due Date Principal Payment Due Remaining Principal
---------------- --------------------- -------------------
Outstanding
-----------
(following scheduled
principal payment)
Oct 28, 1998 0.00 880,000.00
Dec 1, 1999 1,819.26 878,180.74
Jan 4, 1999 1,832.70 876,348.04
Feb 1, 1999 2,988.41 873,359.63
Mar 1, 1999 3,006.58 870,353.05
Apr 1, 1999 2,457,69 867,895.36
May 3, 1999 2,285.71 865,609.65
Jun 1, 1999 2,865.69 862,743.96
Jul 1, 1999 2,696.34 860,047.62
Aug 2, 1999 2,340.26 857,707.36
Sep 1, 1999 2,729.16 854,978.20
Oct 1, 1999 2,746.94 852,231.26
Nov 1, 1999 2,579.72 849,651.54
Dec 1, 1999 2,781.65 846,869.89
Jan 4, 2000 2,063.95 844,805.94
Feb 1, 2000 3,180.25 841,625.69
Mar 1, 2000 3,016.78 838,608.91
Apr 3, 2000 2,307.12 836,301.79
May 1, 2000 3,231.98 833,069.81
Jun 1, 2000 2,708.75 830,361.06
Jul 3, 2000 2,546.62 827,814.44
Aug 1, 2000 3,103.78 824,710.66
Sep 1, 2000 2,765.04 821,945.62
Oct 2, 2000 2,783.66 819,161.96
Nov 1, 2000 2,980.34 816,181.62
Dec 1, 2000 2,999.77 813,181.85
Jan 2, 2001 2,666.03 810,515.82
Feb 1, 2001 3,036.69 807,479.13
Mar 1, 2001 3,407.28 804,071.85
Apr 2, 2001 2,729.36 801,342.49
May 1, 2001 3,270.54 798,071.95
Jun 1, 2001 2,944.42 795,127.53
Jul 2, 2001 2,964.25 792,163.28
Aug 1, 2001 3,156.29 789,006.99
Sep 4, 2001 2,491.30 786,515.69
Oct 1, 2001 3,705.64 782,810.05
Nov 1, 2001 3,047.19 779,762.86
Dec 3, 2001 2,898.33 776,864.53
Jan 2, 2002 3,255.98 773,608.55
Feb 1, 2002 3,277.20 770,331.35
Mar 1, 2002 3,633.22 766,698.13
Apr 1, 2002 3,155.69 763,542.44
May 1, 2002 3,342.80 760,199.64
Jun 3, 2002 2,869.19 757,330.45
Jul 1, 2002 3,712.30 753,618.15
Aug 1, 2002 3,243.77 750,374.38
7
Payment Due Date Principal Payment Due Remaining Principal
---------------- --------------------- -------------------
Outstanding
-----------
(following scheduled
principal payment)
Sep 3, 2002 2,939.62 747,434.76
Oct 1, 2002 3,772.49 743,662.27
Nov 1, 2002 3,310.81 740,351.46
Dec 2, 2002 3,333.11 737,018.35
Jan 2, 2003 3,355.55 733,662.80
Feb 3, 2003 3,218.78 730,444.02
Mar 3, 2003 3,875.83 726,568.19
Apr 1, 2003 3,741.57 722,826.62
May 1, 2003 3,608.13 719,218.49
Jun 2, 2003 3,319.18 715,899.31
Jul 1, 2003 3,808.78 712,090.53
Aug 1, 2003 3,523.41 708,567.12
Sep 2, 2003 3,393.22 705,173.90
Oct 1, 2003 3,876.35 701,297.55
Nov 3, 2003 3,291.42 698,006.13
Dec 1, 2003 4,073.12 693,933.01
Jan 2, 2004 3,494.94 690,438.07
Feb 2, 2004 3,669.22 686,768.85
Mar 1, 2004 4,141.47 682,627.38
Apr 1, 2004 3,721.81 678,905.57
May 3, 2004 3,599.40 675,306.17
Jun 1, 2004 4,064.50 671,241.67
Jul 1, 2004 3,944.29 667,297.38
Aug 2, 2004 3,680.09 663,617.29
Sep 1, 2004 3,993.98 659,623.31
Oct 1, 2004 4,020.00 655,603.31
Nov 1, 2004 3,903.79 651,699.52
Dec 1, 2004 4,071.64 647,627.88
Jan 4, 2005 3,535.46 644,092.42
Feb 1, 2005 4,401.04 639,691.38
Mar 1, 2005 4,427.80 635,263.58
Apr 1, 2005 4,040.76 631,222.82
May 2, 2005 4,067.97 627,154.85
Jun 1, 2005 4,231.59 622,923.26
Jul 1, 2005 4,259.17 618,664.09
Aug 1, 2005 4,152.53 614,511.56
Sep 1, 2005 4,180.50 610,331.06
Oct 3, 2005 4,076.07 606,254.99
Nov 1, 2005 4,499.48 601,755.51
Dec 1, 2005 4,397.11 597,358.40
Jan 3, 2006 4,036.49 593,321.91
Feb 1, 2006 4,580.95 588,740.96
Mar 1, 2006 4,737.70 584,003.26
Apr 3, 2006 4,132.22 579,871.04
May 1, 2006 4,791.65 575,079.39
Jun 1, 2006 4,446.03 570,633.36
Jul 3, 2006 4,352.01 566,281.35
Aug 1, 2006 4,751.29 561,530.06
Sep 1, 2006 4,537.27 556,992.79
8
Payment Due Date Principal Payment Due Remaining Principal
---------------- --------------------- -------------------
Outstanding
-----------
(following scheduled
principal payment)
Oct 2, 2006 4,567.82 552,424.97
Nov 1, 2006 4,718.58 547,706.39
Dec 1, 2006 4,749.33 542,957.06
Jan 2, 2007 4,544.40 538,412.66
Feb 1, 2007 4,809.89 533,602.77
Mar 1, 2007 5,073.06 528,529.71
Apr 2, 2007 4,644.68 523,885.03
May 1, 2007 5,018.37 518,866.66
Jun 1, 2007 4,824.56 514,042.10
Jul 2, 2007 4,857.05 509,185.05
Aug 1, 2007 5,000.36 504,184.69
Sep 4, 2007 4,594.87 499,589.82
Oct 1, 2007 5,388.46 494,201.36
Nov 1, 2007 4,990.65 489,210.71
Dec 3, 2007 4,917.99 484,292.72
Jan 2, 2008 5,162.58 479,130.14
Feb 1, 2008 5,196.22 473,933.92
Mar 3, 2008 5,127.13 468,806.79
Apr 1, 2008 5,365.33 463,441.46
May 1, 2008 5,298.46 458,143.00
Jun 2, 2008 5,133.95 453,009.05
Jul 1, 2008 5,464.84 447,544.21
Aug 1, 2008 5,304.84 442,239.37
Sep 2, 2008 5,244.50 436,994.87
Oct 1, 2008 5,565.73 431,429.14
Nov 3, 2008 431,429.14 0.00
9
