1
- Page 1 - Exhibit 99(a)
BUSINESS LOAN AGREEMENT
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$800,000.00 09-28-1999 10-01-2004 0192775970 0010 116
References In the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
BORROWER: 19035 YUKON INC; ET. AL. LENDER: FIRST-▇▇▇▇ NATIONAL BANK
SUITE 200 ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THIS BUSINESS LOAN AGREEMENT BETWEEN 19035 YUKON INC ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC AND
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'S FOOD TECHNIQUE LIMITED (REFERRED TO IN THIS AGREEMENT
INDIVIDUALLY AND COLLECTIVELY AS "BORROWER") AND FIRST-▇▇▇▇ NATIONAL BANK
(REFERRED TO IN THIS AGREEMENT AS "LENDER") IS MADE AND EXECUTED ON THE
FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS
FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT
OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS." ▇▇▇▇▇▇▇▇ UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS SHALL
BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.
TERM. This Agreement shall be effective as of September 28, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined In this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement from time to time.
BORROWER. The word "Borrower moans Individually and collectively 19035
YUKON INC, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'S FOOD TECHNIQUE
LIMITED and all other persons and entities signing Borrowers' Note.
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
CASH FLOW. The words "Cash Flow" mean net income after taxes, and exclusive
of extraordinary gains and income, plus depreciation and amortization.
COLLATERAL. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real
or personal property, whether granted directly or indirectly, whether
granted now or In the future, and whether granted in the form of a security
interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
DEBT. The word "Debt" means all of Borrower's liabilities excluding
Subordinated Debt.
2
- 2 - Exhibit 99(a)
ERISA. The word "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor means and includes without limitation each and
all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all Borrowers
granting such a Security interest.
GUARANTOR. The word "Guarantor means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with any indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by
Lender against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary, due or not due, absolute or
contingent, liquidated or unliquidated; whether Borrower may be liable
individually or jointly with others; whether Borrower may be obligated as a
guarantor, surety, or otherwise; whether recovery upon such Indebtedness
may be or hereafter may become barred by any statute of limitations; and
whether such Indebtedness may be or hereafter may become otherwise
unenforceable.
LENDER. The word tender means First-▇▇▇▇ National Bank, its successors and
assigns.
LIQUID ASSETS. The words liquid Assets" mean Borrower's cash on hand plus
Borrower's readily marketable securities.
LOAN. The word loan" or loans" means and includes without limitation any
and all commercial loans and financial accommodations from Lender to
Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to this
Agreement from time to time.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations In
favor of Lender, as well as any substitute, replacement or refinancing note
or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising In the ordinary course of business
and securing obligations which are not yet delinquent; (d) purchase money
liens or purchase money security interests upon or in any property acquired
or held by Borrower In the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled indebtedness and
Liens"; (e) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender In writing;
and (f) those liens and security Interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to
the net value of ▇▇▇▇▇▇▇▇'s assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
3
- 3 - Exhibit 99(a)
SECURITY INTEREST. The words "Security Interest" mean and Include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended as
a security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
▇▇▇▇. The word "▇▇▇▇" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
SUBORDINATED DEBT. The words "Subordinated Debt" mean indebtedness and
liabilities of Borrower which have been subordinated by written agreement
to indebtedness owed by Borrower to Lender in form and substance acceptable
to Lender.
TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrowers total
assets excluding all Intangible assets (i.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar Intangible items,
but including leaseholds and leasehold improvements) less total Debt.
WORKING CAPITAL. The words 'Working Capital" mean Borrowers current assets,
excluding prepaid expenses, less Borrowers current liabilities.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lenders obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lenders satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security Interests in the Collateral, (c)
Financing Statements perfecting Lenders Security Interests; (d) evidence of
insurance as required below; and (e) any other documents required under
this Agreement or by Lender or its counsel.
▇▇▇▇▇▇▇▇'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Restated Documents, and such other authorizations and other documents and
instruments as Lender or its counsel, in their sole discretion, may
require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who
are referred to herein individually, collectively and interchangeably as
"Borrower." Unless specifically stated to the contrary, the word "Borrower" as
used in this Agreement, including without limitation all representations,
warranties and covenants, shall include all Borrowers. Borrower understands and
agrees that, with or without notice to ▇▇▇▇▇▇▇▇, Lender may with respect to any
other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) release, substitute, agree not to sue, or
deal with any one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may choose; (e) determine how, when and
what application of payments and credits shalt be made on any indebtedness; (f)
apply such security and direct the order or manner of sate thereof, including
without limitation, any nonjudicial sate permitted
4
- 4 - Exhibit 99(a)
by the terms of the controlling security agreement or deed of trust, as Lender
in its discretion may determine; (g) sell, transfer, assign, or grant
participations in all or any part of the indebtedness; (h) exercise or refrain
from exercising any rights against Borrower or others, or otherwise act or
refrain from acting; (i) settle or compromise any indebtedness; and (j)
subordinate the payment of alt or any pad of any indebtedness of Borrower to
Lender to the payment of any liabilities which may be due Lender or others.
REPRESENTATIONS AND WARRANTIES. The reference to 'Borrower in this
"REPRESENTATIONS AND WARRANTIES" section of this Agreement means 19035 YUKON INC
only and does not apply to any other co-borrower. Borrower represents and
warrants to Lender, as of the date of this Agreement, as of the date of each
disbursement of Loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at alt times any Indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duty organized, validly
existing, and in good standing under the laws of the state of Borrower's
incorporation and is validly existing and in good standing in alt states in
which Borrower is doing business. Borrower has the full power and authority
to own its properties and to transact the businesses in which it is
presently engaged or presently proposes to engage. Borrower also is duty
qualified as a foreign corporation and is in good standing in alt states in
which the failure to so qualify would have a material adverse effect on its
businesses or financial condition.
AUTHORIZATION. The execution, delivery, and performance of this Agreement
and all Related Documents by Borrower, to the extent to be executed,
delivered or performed by Borrower, have been duly authorized by alt
necessary action by Borrower; do not require the consent or approval of any
other person, regulatory authority or governmental body; and do not
conflict with, result in a violation of, or constitute a default under (a)
any provision of its articles of incorporation or organization, or bylaws
or code of regulations, or any agreement or other instrument binding upon
Borrower or (b) any law, governmental regulation, court decree, or order
applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of ▇▇▇▇▇▇▇▇ supplied to
Lender truly and completely disclosed ▇▇▇▇▇▇▇▇'s financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by ▇▇▇▇▇▇▇▇ when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in ▇▇▇▇▇▇▇▇'s financial statements or in writing to Lender and as
accepted by ▇▇▇▇▇▇, and except for property tax liens for taxes not
presently due and payable, Borrower owns and has good title to alt of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties. All of ▇▇▇▇▇▇▇▇'s properties are titled in Borrower's legal
name, and ▇▇▇▇▇▇▇▇ has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "▇▇▇▇," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. Except as disclosed to and
acknowledged by ▇▇▇▇▇▇ In writing, ▇▇▇▇▇▇▇▇ represents and warrants that:
(a) During the period of Borrower's ownership of the properties, there has
been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any person on,
under, about or from any of the properties. (b) Borrower has no knowledge
of, or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened release
of any hazardous waste or substance on, under, about or from the properties
by any prior owners or occupants of any of the properties, or (ii) any
actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the properties shall use,
generate, manufacture, store, treat, dispose
5
- 5 - Exhibit 99(a)
of, or release any hazardous waste or substance on, under, about or from
any of the properties; and any such activity shalt be conducted in
compliance with alt applicable federal, state, and local laws, regulations,
and ordinances, including without limitation those laws, regulations and
ordinances described above. Borrower authorizes Lender and its agents to
enter upon the properties to make such inspections and tests as Lender may
deem appropriate to determine compliance of the properties with this
section of the Agreement. Any inspections or tests made by Lender shall be
at Borrower's expense and for Lender's purposes only and shalt not be
construed to create any responsibility or liability on the part of Lender
to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating the
properties for hazardous waste and hazardous substances. Borrower hereby
(a) releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes viable for cleanup or other
costs under any such laws, and (b) agrees to indemnify and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties,
and expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release
or threatened release of a hazardous waste or substance on the properties.
The provisions of this section of the Agreement, including the obligation
to indemnify, shalt survive the payment of the Indebtedness and the
termination or expiration of this Agreement and shall not be affected by
Lender's acquisition of any interest in any of the properties, whether by
foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or
properties, other than litigation, claims, or other events, if any, that
have been disclosed to and acknowledged by ▇▇▇▇▇▇ in writing.
TAXES. To the best of ▇▇▇▇▇▇▇▇'s knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate reserves have
been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
▇▇▇▇▇▇▇▇ has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be
superior to ▇▇▇▇▇▇'s Security Interests and rights in and to such
Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements directly
or indirectly securing repayment of ▇▇▇▇▇▇▇▇'s Loan and Note and all of the
Related Documents are binding upon Borrower as well as upon ▇▇▇▇▇▇▇▇'s
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to
any such plan, (ii) Borrower has not withdrawn from any such plan or
initiated steps to do so, (iii) no steps have been taken to terminate any
such plan, and (iv) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
or ▇▇▇▇▇▇▇▇'s Chief executive office, if Borrower has more than one place
of business, is located at SUITE ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇
▇▇▇. Unless Borrower has designated otherwise in writing this location is
also the office or offices where Borrower keeps its records concerning the
Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such
6
- 6 - Exhibit 99(a)
information is dated or certified; and none of such information is or will
be incomplete by omitting to state any material fact necessary to make such
information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. ▇▇▇▇▇▇▇▇ understands and agrees
that ▇▇▇▇▇▇, without independent investigation, is relying upon the above
representations and warranties in making the above referenced Loan to
Borrower. ▇▇▇▇▇▇▇▇ further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force and
effect until such time as Borrower's Indebtedness shall be paid in full, or
until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
AFFIRMATIVE COVENANTS. The reference to "Borrower" In this "AFFIRMATIVE
COVENANTS" section of this Agreement means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc. only and does
not apply to any other co-borrower. Borrower covenants and agrees with ▇▇▇▇▇▇
that, while this Agreement is In effect, Borrower will:
LITIGATION. Promptly Inform Lender In writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all existing and all
threatened litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial
condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records In accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit ▇▇▇▇▇▇ to examine and audit ▇▇▇▇▇▇▇▇'s books and records at all
reasonable times.
ADDITIONAL INFORMATION. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax returns, and other reports
with respect to ▇▇▇▇▇▇▇▇'s financial condition and business operations as
Lender may request from time to time.
FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
ratios:
TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of not less
than $3,500,000.00.
WORKING CAPITAL. Maintain Working Capital in excess of $500,000.00.
CURRENT RATIO. Maintain a ratio of Current Assets to Current
Liabilities in excess of 1.45 to 1.00.
QUICK RATIO. Maintain a ratio of Liquid Assets to Current Liabilities
in excess of 0.60 to I .00. Except as provided above, all computations
made to determine compliance with the requirements contained in this
paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified by
Borrower as being true and correct.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages
and with insurance companies reasonably acceptable to Lender. Borrower,
upon request of ▇▇▇▇▇▇, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender,
Including stipulations that coverages will not be canceled or
diminished without at least ten (10) days' prior written notice to
Lender. Each Insurance policy also shall Include an endorsement
providing that coverage in favor of ▇▇▇▇▇▇ ▇▇▇▇ not be impaired In any
way by any act, omission or default of Borrower or any other person. In
connection with all policies covering assets in which Lender holds or
is offered a security Interest for the Loans, Borrower will provide
Lender with such loss payable or other endorsements as Lender may
require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent
7
- 7 - Exhibit 99(a)
appraiser satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral. The cost of such appraisal
shall be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender Immediately In writing of any default in
connection with any other such agreements.
LOAN FEES AND CHARGES. In addition to all other agreed upon fees and
charges, pay the following: 100.00.
LOAN PROCEEDS. Use all Loan proceeds solely for ▇▇▇▇▇▇▇▇'s business
operations, unless specifically consented to the contrary by ▇▇▇▇▇▇ in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, Income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits. Provided however, ▇▇▇▇▇▇▇▇ will not be required to pay
and discharge any such assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim so long
as (a) the legality of the same shall be contested In good faith by
appropriate proceedings, and (b) Borrower shall have established on its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting practices. ▇▇▇▇▇▇▇▇, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against ▇▇▇▇▇▇▇▇'s properties,
income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and In the Related Documents In a timely
manner, and promptly notify Lender if ▇▇▇▇▇▇▇▇ learns of the occurrence of
any event which constitutes an Event of Default under this Agreement or
under any of the Related Documents.
OPERATIONS. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner and in compliance with all applicable
federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, Including
without limitation, compliance with the Americans With Disabilities Act and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and ▇▇▇▇▇▇▇▇'s other
properties and to examine or audit ▇▇▇▇▇▇▇▇'s books, accounts, and records
and to make copies and memoranda of ▇▇▇▇▇▇▇▇'s books, accounts, and
records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer
software programs for the generation of such records) in the possession of
a third party, Borrower, upon request of ▇▇▇▇▇▇, shall notify such party to
permit Lender free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at Borrower's
expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by ▇▇▇▇▇▇, provide Lender
at least annually and at the time of each disbursement of Loan proceeds
with a certificate executed by ▇▇▇▇▇▇▇▇'s chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations
and warranties set forth In this Agreement are true and correct as of the
date of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply In all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part
of any third party, on property owned and/or occupied by
8
- 8 - Exhibit 99(a)
Borrower, any environmental activity where damage may result to the
environment, unless such environmental activity is pursuant to and in
compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities; shall furnish to Lender
promptly and in any event within thirty (30) days after receipt thereof a
copy of any notice, summons, lien, citation, directive, letter or other
communication from any governmental agency or Instrumentality concerning
any intentional or unintentional action or omission on Borrower's part in
connection with any environmental activity whether or not there is damage
to the environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing
statements, Instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the Interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local Income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements or
other obligations which would (a) Increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (b) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(c) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation In reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.
NEGATIVE COVENANTS. The reference to "Borrower" in this "NEGATIVE COVENANTS"
section of this Agreement means 19035 YUKON INC only and does not apply to any
other co-borrower. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume Indebtedness for borrowed money,
including capital leases, (b) except as allowed as a Permitted Lien, sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets, or (c) sell with recourse any of
Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged,
(b) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change ownership, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, (c) pay
any dividends on Borrower's stock (other than dividends payable in its
stock), provided, however that notwithstanding the foregoing, but only so
long as no Event of Default has occurred and is continuing or would result
from the payment of dividends, if Borrower is a "Subchapter S Corporation"
(as defined in the Internal Revenue Code of 1986, as amended), Borrower may
pay cash dividends on its stock to its shareholders from time to time in
amounts necessary to enable the shareholders to pay income taxes and make
estimated income tax payments to satisfy their liabilities under federal
and state law which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of stock of
Borrower, or (d) purchase or retire any of Borrower's outstanding shares or
alter or amend Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other
enterprise or entity, or (c) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in
9
- 9 - Exhibit 99(a)
Borrower's financial condition, in the financial condition of any Guarantor, or
in the value of any Collateral securing any Loan; (d) any Guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such Guarantor's
guaranty of the Loan or any other loan with Lender; or (e) Lender in good ▇▇▇▇▇
▇▇▇▇▇ itself insecure, even though no Event of Default shall have occurred.
SPECIAL PROVISIONS. 1). This Note will not create any liability or obligation on
the part of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'s Food Technique Limited until October 1, 1999. 2).
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Inc. is listed as a co-borrower for the purpose of defining
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Inc. as a guarantor to this loan.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, ▇▇▇▇▇▇▇▇'s accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
In the future, excluding however all IRA and ▇▇▇▇▇ accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
▇▇▇▇▇▇▇▇ authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts,
and, at Lenders option, to administratively freeze all such accounts to allow
Lender to protect Lenders charge and setoff rights provided on this paragraph.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
on the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or failure
of Borrower to comply with or to perform any other term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sates
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect at the time made or furnished, or becomes false or misleading at
any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security interest) at any time
and for any reason.
INSOLVENCY. The dissolution or termination of ▇▇▇▇▇▇▇▇'s existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrowers property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the indebtedness, or by any
governmental agency. This includes a garnishment, attachment, or levy on or
of any of Borrower's deposit accounts with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower or
Grantor, as the case may be, as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding, and if
Borrower or Grantor gives ▇▇▇▇▇▇ written notice of the creditor or
forfeiture proceeding and furnishes reserves or a surety bond for the
creditor or forfeiture proceeding satisfactory to Lender.
10
- 10 - Exhibit 99(a)
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
EVENTS AFFECTING CO-BORROWERS. Any of the preceding events occurs with
respect to any co-borrower of any of the Indebtedness or any co-borrower
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the co-borrower's estate to assume
unconditionally the obligations on the Indebtedness in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower.
ADVERSE CHANGE. A material adverse change occurs in Borrowers financial
condition, or ▇▇▇▇▇▇ believes the prospect of payment or performance of the
Indebtedness is impaired.
YEAR 2000 COMPLIANCE FAILURE. Failure to meet the deadlines required in the
Year 2000 Compliance Agreement to be Year 2000 Compliant or a reasonable
Iikelihood that Borrower cannot be Year 2000 Compliant on or before
December 31, 1999.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been given
a notice of a similar default within the preceding twelve (12) months, it
may be cured (and no Event of Default will have occurred) if Borrower or
Grantor, as the case may be, after receiving written notice from Lender
demanding cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps which ▇▇▇▇▇▇ deems in ▇▇▇▇▇▇'s sole discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by ▇▇▇▇▇▇ to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect ▇▇▇▇▇▇'s
right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pad of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY
LENDER IN THE STATE OF OHIO. IF THERE IS A LAWSUIT, ▇▇▇▇▇▇▇▇ AGREES UPON
▇▇▇▇▇▇'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF ▇▇▇▇
COUNTY, THE STATE OF OHIO. ▇▇▇▇▇▇ AND BORROWER HEREBY WAIVE THE RIGHT TO
ANY JURY TRIAL IN ANY ACTION, PROCEEDING,
11
- 11 - Exhibit 99(a)
OR COUNTERCLAIM BROUGHT BY EITHER ▇▇▇▇▇▇ OR BORROWER AGAINST THE OTHER.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF OHIO.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
CONSENT TO LOAN PARTICIPATION. ▇▇▇▇▇▇▇▇ agrees and consents to ▇▇▇▇▇▇'s
sate or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy It may have
with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. ▇▇▇▇▇▇▇▇ also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the sale
of such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loans irrespective of the failure or Insolvency of any
holder of any interest in the Loans. ▇▇▇▇▇▇▇▇ further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against ▇▇▇▇▇▇.
COSTS AND EXPENSES. ▇▇▇▇▇▇▇▇ agrees to pay upon demand all of ▇▇▇▇▇▇'s
expenses, including without limitation attorneys' fees, incurred in
connection with the preparation, execution, enforcement, modification and
collection of this Agreement or in connection with the Loans made pursuant
to this Agreement. ▇▇▇▇▇▇ may pay someone else to help collect the Loans
and to enforce this Agreement, and Borrower will pay that amount. This
includes, subject to any limits under applicable law, ▇▇▇▇▇▇'s attorneys'
fees and ▇▇▇▇▇▇'s legal expenses, whether or not there is a lawsuit,
including attorneys' fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any
anticipated post--judgment collection services. Borrower also will pay any
court costs, In addition to all other sums provided by law.
NOTICES. All notices required to be given under this Agreement shalt be
given In writing, may be sent by telefacsimite (unless otherwise required
by law), and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States mail, first class, postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above. Any party may change
its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. To the extent permitted by applicable law,
if there is more than one Borrower, notice to any Borrower ▇▇▇▇ constitute
notice to all Borrowers. For notice purposes, Borrower will keep Lender
informed at all times of ▇▇▇▇▇▇▇▇'s current address(es).
SEVERABILITY. if a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shalt not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shalt remain valid and enforceable.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shalt Inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
SURVIVAL. All warranties, representations, and covenants made by Borrower
In this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shalt be considered to have been
relied upon by ▇▇▇▇▇▇ and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any investigation made by
▇▇▇▇▇▇ or on ▇▇▇▇▇▇'s behalf.
TIME IS OF THE ESSENCE. Time is of the essence In the performance of this
Agreement.
12
- 12 - Exhibit 99(a)
WAIVER. Lender shalt not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by ▇▇▇▇▇▇. No
delay or omission on the part of Lender in exercising any right shalt
operate as a waiver of such right or any other right. A waiver by ▇▇▇▇▇▇ of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by ▇▇▇▇▇▇, nor any
course of dealing between ▇▇▇▇▇▇ and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lenders rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute
continuing consent in subsequent instances where such consent is required,
and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
EACH BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND EACH BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
SEPTEMBER 28, 1999.
BORROWER:
19035 YUKON INC
By:
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, SECRETARY
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC, CO-BORROWER
By:
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CFO
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'S FOOD TECHNIQUE LIMITED, CO-BORROWER
By:
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, SECRETARY
LENDER:
FIRST-▇▇▇▇ NATIONAL BANK
By:
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Authorized Officer
13
- 13 - Exhibit 99(a)
PROMISSORY NOTE
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$800,000.00 09-28-1999 10-01-2004 0192775970 0010 116
References In the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
BORROWER: 19035 YUKON INC; ET. AL. LENDER: FIRST-▇▇▇▇ NATIONAL BANK
SUITE 200 ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PRINCIPAL AMOUNT: $800,000.00 INITIAL RATE: 8.250% DATE OF NOTE: SEPTEMBER 28, 1999
PROMISE TO PAY. 19035 YUKON INC, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC AND ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'S
FOOD TECHNIQUE LIMITED (REFERRED TO IN THIS NOTE INDIVIDUALLY AND COLLECTIVELY
AS "BORROWER") JOINTLY AND SEVERALLY PROMISE TO PAY TO FIRST-▇▇▇▇ NATIONAL BANK
("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE
PRINCIPAL AMOUNT OF EIGHT HUNDRED THOUSAND & 00/100 DOLLARS ($800,000.00),
TOGETHER WITH INTEREST ON THE UNPAID PRINCIPAL BALANCE FROM SEPTEMBER 28, 1999,
UNTIL PAID IN FULL.
PAYMENT. SUBJECT TO ANY PAYMENT CHANGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN ACCORDANCE WITH THE FOLLOWING PAYMENT SCHEDULE:
SUBJECT TO ANY PAYMENTS CHARGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN 60 INTEREST PAYMENTS AND ONE PRINCIPAL
PAYMENT. BORROWERS FIRST INTEREST PAYMENT IS DUE NOVEMBER 1, 1999, AND ALL
SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE SAME DAY OF EACH MONTH AFTER
THAT. EXCEPT IN THE CASE OF ▇▇▇▇▇▇▇▇'S DEFAULT, ALL PRINCIPAL OWED UNDER
THIS NOTE WILL NOT BE PAYABLE UNTIL OCTOBER 1, 2004. ON THAT DATE ALL
PRINCIPAL AND ACCRUED INTEREST NOT YET PAID WILL BE DUE.
The annual Interest rate for this Note is computed on a 365/360 basis; that Is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
▇▇▇▇▇▇'s address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Prime Rate as
published In the Wall Street Journal (the "Index"). The Index is not necessarily
the lowest rate charged by Lender on Its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current index rate upon
▇▇▇▇▇▇▇▇'s request. Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not occur more often than
each 12 months. THE INDEX CURRENTLY IS 8.250% PER ANNUM. THE INTEREST RATE TO BE
APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE EQUAL TO
THE INDEX, RESULTING IN AN INITIAL RATE OF 8.250% PER ANNUM. NOTICE: Under no
circumstances will the Interest rate on this Note be more than the maximum rate
allowed by applicable law. Whenever increases occur in the interest rate,
Lender, at its option, may do one or more of the following: (a) Increase
Borrower's payments to ensure Borrower's loan will pay off by its original final
maturity date, (b) increase Borrower's payments to cover accruing interest, (c)
increase the number of Borrower's payments, and (d) continue Borrower's payments
at the same amount and Increase Borrower's final payment.
PREPAYMENT. ▇▇▇▇▇▇▇▇ agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by ▇▇▇▇▇▇ In writing, relieve Borrower of
▇▇▇▇▇▇▇▇'s obligation to continue to make payments under the payment schedule.
Rather, they will reduce the principal balance due.
14
- 14 - Exhibit 99(a)
▇▇▇▇▇▇▇▇ agrees that all loan fees and other prepaid finance charges are earned
fully as of the date of the loan and will not be subject to refund upon early
payment (whether voluntary or as a result of default), except as otherwise
required by law. Except for the forgoing, Borrower may pay without penalty all
or a portion of the amount owed earlier that it is due. Early payments will not,
unless agreed to by ▇▇▇▇▇▇ in writing, relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation
to continue to make payments under the payment schedule. Rather, they will
reduce the principal balance due. The Borrower will be entitled to prepay all or
any part of the principal amounts outstanding under this Note provided that: any
partial prepayment is in an amount equal to or greater that $11,000 plus
integral multiples of $100; the Borrower pay concurrently with such prepayment
all accrued unpaid interest on the amount thereof; the principal amount of the
Note is permanently reduced by such amount on the date of payment by the amount
thereof; the Bank receives written notice of such prepayment at lest five (5)
Banking days prior to the proposed day of the prepayment and any notice of
prepayment given by the Borrower pursuant hereto will be irrevocable and the
Borrower will be bound to prepay in accordance with such notice.
LATE CHARGE. if a payment Is 5 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $50.00, WHICHEVER IS LESS.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrowers property or Borrower's ability to repay this Note or perform Borrowers
obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrowers behalf is false or misleading in any material respect either now or at
the time made or furnished. (e) ▇▇▇▇▇▇▇▇ becomes insolvent, a receiver is
appointed for any pad of ▇▇▇▇▇▇▇▇'s property, ▇▇▇▇▇▇▇▇ makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of ▇▇▇▇▇▇▇▇'s property on or in which ▇▇▇▇▇▇ has a lien or security
interest. This includes a garnishment of any of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or ▇▇▇▇▇▇ believes the
prospect of payment or performance of the Indebtedness is impaired. (i) Failure
to meet the deadlines required in the Year 2000 Compliance Agreement to be Year
2000 Compliant or a reasonable likelihood that Borrower cannot be Year 2000
Compliant on or before December 31, 1999. (j) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself
insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in ▇▇▇▇▇▇'s sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 2.000
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. ▇▇▇▇▇▇▇▇ also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lenders
attorneys' fees and ▇▇▇▇▇▇'s legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or Injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, In
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY ▇▇▇▇▇▇ IN THE STATE OF OHIO. IF THERE IS A LAWSUIT,
▇▇▇▇▇▇▇▇ AGREES UPON ▇▇▇▇▇▇'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF ▇▇▇▇ COUNTY, THE STATE OF OHIO. ▇▇▇▇▇▇ AND BORROWER HEREBY WAIVE THE
RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY
EITHER ▇▇▇▇▇▇ OR BORROWER AGAINST THE OTHER. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO.
15
- 15 - Exhibit 99(a)
CONFESSION OF JUDGMENT. ▇▇▇▇▇▇▇▇ hereby irrevocably authorizes and empowers any
attorney-at-law, including an attorney hired by ▇▇▇▇▇▇, to appear In any court
of record and to confess judgment against ▇▇▇▇▇▇▇▇ for the unpaid amount of this
Note as evidenced by an affidavit signed by an officer of Lender setting forth
the amount then due, plus attorneys' fees as provided in this Note, plus costs
of suit, and to release all errors, and waive all rights of appeal. if a copy of
this Note, verified by an affidavit, shall have been filed in the proceeding, it
will not be necessary to file the original as a warrant of attorney. Borrower
waives the right to any stay of execution and the benefit of all exemption laws
now or hereafter in effect. No single exercise of the foregoing warrant and
power to confess judgment will be deemed to exhaust the power, whether or not
any such exercise shall be held by any court to be invalid, voidable, or void;
but the power will continue undiminished and may be exercised from time to time
as Lender may elect until all amounts owing on this Note have been paid In full.
▇▇▇▇▇▇▇▇ waives any conflict of interest that an attorney hired by ▇▇▇▇▇▇ may
have in acting on behalf of ▇▇▇▇▇▇▇▇ in confessing judgment against ▇▇▇▇▇▇▇▇
while such attorney is retained by ▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ expressly consents to such
attorney acting for Borrower In confessing judgment.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if ▇▇▇▇▇▇▇▇
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays Is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrowers accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however au IRA and ▇▇▇▇▇ accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Note against any and all such accounts, and, at
Lenders option, to administratively freeze all such accounts to allow Lender to
protect Lenders charge and setoff rights provided on this paragraph.
COLLATERAL. This Note Is secured by a mortgage on real estate located at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as further described in mortgage of even
date.
YEAR 2000. Borrower warrants and represents that all software utilized In the
conduct of its business will have appropriate capabilities and compatibility for
operation to handle calendar dates falling on or after January 1, 2000, and all
information pertaining to such calendar dates, in the same manner and with the
same functionality as the software does respecting calendar dates falling on or
before December 31, 1999. Further, the Borrower warrants and represents that the
data-related user interface functions, data-fields, and data-related programs
Instructions and functions of the Software include the indication of the
century.
FINANCIAL STATEMENTS. At the option of the Bank, the following shall be
considered an item of default and all obligations shall become immediately due
and payable without notice or demand upon failure of the undersigned or any
endorser or guarantor to: (a) furnish the Bank within 90 days after year end
current financial statements; or (b) furnish the Bank with financial statements
as provided In any loan agreement(s) executed with this note by borrower.
SPECIAL PROVISIONS. 1) This Note will not create any liability or obligation on
the part of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'s Food Technique Limited until October 1, 1999. 2)
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Inc. is listed as a co-borrower for the purpose of defining
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Inc. as a guarantor to this loan.
SINKING FUND. ▇▇▇▇▇▇▇▇ agrees to establish a separate sinking fund account at a
Canadian Bank. The balance in the account will be equal to $13,333 U.S.
multiplied by the number of cumulative months since October 1, 1999 less any
voluntary prepayments made by the Borrower. The Borrower shall provide evidence
on a monthly basis as to the balance of this sinking fund account.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. In particular, this section means (among other
things) that Borrower does not agree or intend to pay, and ▇▇▇▇▇▇ does not agree
or intend to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any amount in the
nature of interest or In the nature of a fee for this loan, which would in any
way or event (including demand, prepayment, or acceleration) cause Lender to
charge or collect more for this loan than the maximum Lender would be permitted
to charge
16
- 16 - Exhibit 99(a)
or collect by federal law or the law of the State of Ohio (as applicable). Any
such excess interest or unauthorized fee shall, instead of anything stated to
the contrary, be applied first to reduce the principal balance of this loan, and
when the principal has been paid in full, be refunded to Borrower. Lender may
delay or forgo enforcing any of its rights or remedies under this Note without
losing them. Each Borrower understands and agrees that, with or without notice
to Borrower, Lender may with respect to any other Borrower (a) make one or more
additional secured or unsecured loans or otherwise extend additional credit; (b)
alter, compromise, renew, extend, accelerate, or otherwise change one or more
times the time for payment or other terms any indebtedness, including increases
and decreases of the rate of interest on the indebtedness; (c) exchange,
enforce, waive, subordinate, fail or decide not to perfect, and release any
security, with or without the substitution of new collateral; (d) apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreements, as Lender in its discretion may determine; (e) release,
substitute, agree not to sue, or deal with any one or more of Borrower's
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; and (f) determine how, when and what application of payments and
credits shall be made on any other indebtedness owing by such other borrower.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shalt be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect ▇▇▇▇▇▇'s security
interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that
▇▇▇▇▇▇ may modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made. The obligations under this
Note are joint and several.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS AND THE NOTICE TO
COSIGNER SET FORTH BELOW. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
NOTICE: FOR THIS NOTICE "YOU MEANS THE BORROWER AND "HIS" MEANS THE LENDER.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGEMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FORM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
BORROWER:
19035 YUKON INC
By:
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, SECRETARY
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC, CO-BORROWER
By:
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CFO
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'S FOOD TECHNIQUE LIMITED, CO-BORROWER
By:
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, SECRETARY
17
- 17 - Exhibit 99(a)
NOTICE TO COSIGNER
YOU ARE BEING ASKED TO GUARANTEE THIS DEBT. THINK CAREFULLY BEFORE YOU DO. IF
THE BORROWER DOESN'T PAY THE DEBT, YOU WILL HAVE TO. BE SURE YOU CAN AFFORD TO
PAY IF YOU HAVE TO, AND THAT YOU WANT TO ACCEPT THIS RESPONSIBILITY.
YOU MAY HAVE TO PAY UP TO THE FULL AMOUNT OF THE DEBT IF THE BORROWER DOES NOT
PAY. YOU MAY ALSO HAVE TO PAY LATE FEES OR COLLECTION COSTS, WHICH INCREASE THIS
AMOUNT.
THE LENDER CAN COLLECT THIS DEBT FROM YOU WITHOUT FIRST TRYING TO COLLECT FROM
THE BORROWER. THE LENDER CAN USE THE SAME COLLECTION METHODS AGAINST YOU THAT
CAN BE USED AGAINST THE BORROWER, SUCH AS SUING YOU, GARNISHING YOUR WAGES, ETC.
IF THIS DEBT IS EVER IN DEFAULT, THAT FACT MAY BECOME A PART OF YOUR CREDIT
RECORD.
THIS NOTICE IS NOT THE CONTRACT THAT MAKES YOU LIABLE FOR THE DEBT.