1
EXHIBIT 10.79
[US BANK LOGO]
BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$500,000.00 06-22-2001 09-15-2002 2789-34 070 1105622447 R-B83 /s/[illegible]
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:
CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. Bank National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THIS
BUSINESS LOAN AGREEMENT BETWEEN
CALIFORNIA BEACH RESTAURANTS, INC.
("BORROWER") AND U.S. BANK NATIONAL ASSOCIATION ("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 ▇▇▇▇▇▇'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 June 22, 2001, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate the 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" means
CALIFORNIA BEACH RESTAURANTS, INC. The
word "Borrower" also includes, as applicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
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.
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 "Lender" means U.S. Bank National Association, 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.
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BUSINESS LOAN AGREEMENT PAGE 2
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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.
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 Borrower's 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 Borrower's current
assets, excluding prepaid expenses, less Borrower's current liabilities.
CONDITIONS PRECEDENT TO EACH ADVANCE. ▇▇▇▇▇▇'s obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to ▇▇▇▇▇▇'s 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 Lender's Security Interests; (d) evidence
of insurance as required below; and (e) any other documents required
under this Agreement or by Lender or its counsel, including without
limitation any guaranties described below.
▇▇▇▇▇▇▇▇'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 Related 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.
REPRESENTATIONS AND WARRANTIES. 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 all times any indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duly 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 all 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
duly qualified as a foreign corporation and is in good standing in all
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 all
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 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 all 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., Chapters 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, 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 of, or release any
hazardous waste or substance on, under, about or from any of the
properties; and any such activity shall be conducted in compliance with
all 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 shall 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 ▇▇▇▇▇▇ for
indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify
and hold harmless Lender against any and
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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,
shall 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 ▇▇▇▇▇▇▇▇ has more than one place
of business, is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. 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 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 extending Loan Advances 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 ▇▇▇▇▇▇▇▇'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. Borrower covenants and agrees with ▇▇▇▇▇▇ that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform ▇▇▇▇▇▇ 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.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
event later than one hundred five (105) days after the end of each fiscal
year, ▇▇▇▇▇▇▇▇'s balance sheet and income statement for the year ended,
audited by a certified public accountant satisfactory to Lender. All
financial reports required to be provided under this Agreement shall be
prepared in accordance with generally accepted accounting principles,
applied on a consistent basis, and certified by Borrower as being true and
correct.
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:
OTHER RATIO. Maintain a ratio of (Debt Before Interest, Taxes,
Depreciation and Amortization) divided by (Current Portion Long Term
Debt plus Interest) of 1.25 to 1.00.
The following provisions shall apply for purposes of determining
compliance with the foregoing financial covenants and ratios: Compliance
with all covenants and ratios shall be determined by calculating the
ratios/amounts as of the end of each fiscal quarter. 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 cancelled 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 Lender will 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 as 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
reasonable 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 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.
GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of ▇▇▇▇▇▇, executed by the guarantor
named below, on ▇▇▇▇▇▇'s forms, and in the amount and under the conditions
spelled out in those guaranties.
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GUARANTOR AMOUNT
--------- ------
SEA VIEW RESTAURANTS, INC. UNLIMITED
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 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 ▇▇▇▇▇▇ 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
not required 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 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. 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
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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 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.
ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules, and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.
LETTERS OF CREDIT.
Subject to the terms of this agreement, lender will issue Standby Letters of
Credit (each a "letter of credit") on behalf of borrower to support ▇▇▇▇▇▇▇▇'s
purchase of inventory or for other business purposes agreed to by lender. At no
time, however, shall the total face amount of all letters credit outstanding,
less any partial draws paid under the letters of credit will exceed the sum of
$450,000.00. There will be a 2.00% per annum fee for the issuance of Letters of
Credit.
(a) Upon lender's request, borrower promptly shall pay to lender issuance fees
and such other fees, commissions, costs and any out-of-pocket expenses charged
or incurred by lender with respect to any letter of credit.
(b) The commitment by lender to issue letters of credit shall, unless earlier
terminated in accordance with the terms of this agreement, automatically
terminate on the maturity date.
(c) Each letter of credit shall be in form and substance satisfactory to lender
and in favor of beneficiaries satisfactory to lender, provided that lender may
refuse to issue a letter of credit due to the nature of the transaction or its
terms or in connection with any transaction where lender, due to beneficiary or
the nationality or residence of the beneficiary, would be prohibited by any
applicable law, regulation, or order from issuing such letter of credit.
(d) Prior to the issuance of each letter of credit and in all events prior to
any daily cutoff time lender may have established for purposes thereof, borrower
shall deliver to lender a duly executed form lender's standard form of
application for issuance of letter of credit with proper insertions.
OUT OF DEBT PERIOD. ▇▇▇▇▇▇▇▇ agrees with ▇▇▇▇▇▇ that ▇▇▇▇▇▇▇▇ shall rest the
Line of Credit Facility with no outstanding principal balance for a minimum of
sixty (60) consecutive days during the term of the loan.
ADDITIONAL PROVISIONS.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, hereby agree, that while this Agreement is in effect:
1) Borrower will furnish Lender with, no later than one hundred five (105) days
after Fiscal Year End, a copy of Borrower's 10-K report.
2) Borrower will furnish Lender with, no later than sixty (60) days after
quarter end, a copy of ▇▇▇▇▇▇▇▇'s 10-Q report.
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.
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness against any and all such accounts.
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 sales
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
anytime thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure or any Security
Agreement to create a valid and perfected Security Investment) at any time
and for any reason.
INSOLVENCY. The dissolution or termination of ▇▇▇▇▇▇▇▇'s existence as a
going business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a receiver
for any part of ▇▇▇▇▇▇▇▇'s 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.
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.
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 Borrower's financial
condition, or ▇▇▇▇▇▇ believes the prospect of payment or performance of the
Indebtedness is impaired.
INSECURITY. Lender, in good faith, deems itself insecure.
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 (including any obligation to make
Loan Advances or disbursements), 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
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BUSINESS LOAN AGREEMENT PAGE 6
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remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not effect ▇▇▇▇▇▇'s right to
declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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
California. If there is a lawsuit, ▇▇▇▇▇▇▇▇
agrees upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the courts
of Sacramento County, the State of
California. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ hereby
waive the right to any jury trial in any action, proceeding, 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
California.
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
sale 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 ▇▇▇▇▇▇▇▇'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. ▇▇▇▇▇▇▇▇ 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 shall be
given in writing, may be sent by telefacsimile (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 will 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 shall 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 shall remain valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower"
as used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other
financial accommodation to any subsidiary or affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall 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 shall 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.
WAIVER. Lender shall 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 shall
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 Lender's
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.
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BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND ▇▇▇▇▇▇▇▇ AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
JUNE 22, 2001.
BORROWER:
CALIFORNIA BEACH RESTAURANTS, INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
LENDER:
U.S. BANK NATIONAL ASSOCIATION
BY: /s/ [SIGNATURE ILLEGIBLE]
---------------------------------
AUTHORIZED OFFICER
================================================================================
8
[USBANK LOGO]
PROMISSORY NOTE
[Table Illegible]
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:
CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
================================================================================
PRINCIPAL AMOUNT: $500,000.00 DATE OF NOTE: JUNE 22, 2001
PROMISE TO PAY.
CALIFORNIA BEACH RESTAURANTS, INC. ("Borrower") promises to pay
to U.S. Bank National Association ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Five Hundred Thousand &
00/100 Dollars ($500,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on September 15, 2002. In addition,
▇▇▇▇▇▇▇▇ will pay regular monthly payments of accrued unpaid interest beginning
July 6, 2001, and all subsequent interest payments are due on the same day of
each month after that. 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.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the prime rate (the
"Index"). The unpaid principal balance will bear interest at an annual rate
equal to the percentage point described below plus the prime rate announced by
the Lender. 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 time that
the prime rate changes. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 1,000 percentage point over the
Index. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
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 ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation to continue
to make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
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 Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents, (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's 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 part 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) Borrower is in
default under any other note, security agreement, lease agreement or lease
schedule, loan agreement or other agreement, whether now existing or hereafter
made, between Borrower and U.S. Bancorp or any direct or indirect subsidiary of
U.S. Bancorp. (g) Any creditor tries to take any of Borrower's property on or
in which Lender has a lien or security interest. This includes a garnishment of
any of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇. (h) Any guarantor dies or any of the
other events described in this default section occurs with respect to any
guarantor of this Note. (i) A material adverse change occurs in Borrower's
financial condition, or ▇▇▇▇▇▇ believes the prospect of payment or performance
of the Indebtedness is impaired. (j) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure.
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 ▇▇▇▇▇▇▇▇'s failure to pay
all amounts declared due pursuant to this section, 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 6.000
percentage points over the Index. 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, ▇▇▇▇▇▇'s
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. ▇▇▇▇▇▇▇▇ 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 Lender in the State of
California. If there is a lawsuit, ▇▇▇▇▇▇▇▇ agrees upon ▇▇▇▇▇▇'s request to
submit to the jurisdiction of the courts of Sacramento County, the State of
California. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ 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 California.
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. 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.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to ▇▇▇▇▇▇'s office shown
above. ▇▇▇▇▇▇▇▇ agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to any
of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by ▇▇▇▇▇▇'s
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any guarantor
is in default under the terms of this Note or any agreement that Borrower or
any guarantor has with Lender, including any agreement made in connection with
the signing of this Note; (b) Borrower or any guarantor ceases doing business
or is insolvent; (e) any guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such guarantor's guarantee of this Note or any other
loan with Lender; (d) Borrower has applied funds provided pursuant to this Note
for purposes other than those authorized by Lender; or (e) Lender in good ▇▇▇▇▇
▇▇▇▇▇ itself insecure under this Note or any other agreement between Lender and
9
06-22-2001 PROMISSORY NOTE PAGE 2
LOAN NO 2789-34 (CONTINUED)
===============================================================================
Borrower.
LATE CHARGE. If a payment is 15 days or more past due, borrower will be charged
a late charge of 5% of the delinquent payment.
PAYMENT BY AUTOMATIC DEDUCTION. Borrower hereby authorizes Lender to
automatically deduct the amount of all principal and/or interest payments on
this Note from Borrowers's account number 1-643-0112-0709 with Lender or such
other account as Borrower may designate in writing. If there are insufficient
funds in the account to pay the automatic deduction in full, Lender may allow
the account to become overdrawn, or Lender may reverse the automatic deduction.
Borrower will pay all fees on the account which result from the automatic
deductions, including any overdraft/NSF charges. If for any reason ▇▇▇▇▇▇ does
not charge the account for a payment, or if an automatic payment is reversed,
the payment is still due according to this Note. Of the account is a Money
Market Account, the number of withdrawals from that account is limited as set
out in the account agreement. Lender may cancel the automatic deduction at any
time in its discretion.
TEMPORARY BULGE. THE PRINCIPAL AMOUNT OF THE NOTE WILL BE INCREASED FROM
$500,000.00 EFFECTIVE JANUARY 1, 2001 THROUGH APRIL 30, 2001, AT WHICH TIME THE
MAXIMUM PRINCIPAL AMOUNT OUTSTANDING UNDER THE NOTE SHALL REVERT BACK TO THE
PRINCIPAL AMOUNT OF $500,000.00, WITH A $450,000.00 SUB-LIMIT FOR LETTERS OF
CREDIT.
PRIOR NOTE. This Note is given in renewal and extension and not in novation of
the following described indebtedness: That certain Promissory Note dated June
16, 2000, in the amount of $500,000.00 executed by Borrower payable to Lender.
It is further agreed that all liens and security interest securing said
indebtedness are hereby renewed and extended to secure the Note and all
renewals, extensions and modifications thereof.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of the rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorse this Note, to the extent allowed by law, waive any
applicable statute of limitations, 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, shall 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.
PRIOR TO SIGNING THIS NOTE, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTICE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. ▇▇▇▇▇▇▇▇ AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
BORROWER:
CALIFORNIA BEACH RESTAURANTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
LENDER:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ [Signature Illegible]
--------------------------------------------
AUTHORIZED OFFICER
===============================================================================
10
[USBANK LOGO]
DISBURSEMENT REQUEST AND AUTHORIZATION
----------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
500,000.00 06-22-2001 09-15-2002 2789-34 070 1705522447 R-B83 /s/[ILLEGIBLE}
----------------------------------------------------------------------------------------------------------
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: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
==========================================================================================================
LOAN TYPE. This is a Variable Rate (1.000% over prime rate), Revolving Line of
Credit Loan to a Corporation for $500,000.00 due on September 15, 2002. This is
a secured renewal of the following described indebtedness: This Note is given in
renewal and extension and not innovation of the following described
indebtedness: That certain Promissory Note dated June 16, 2000, in the amount of
$500,000.00 executed by Borrower payable to Lender. It is further agreed that
all liens and security interest securing said indebtedness are hereby renewed
and extended to secure the Note and all renewals, extensions and modifications
thereof.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
[ ] PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.
[X] BUSINESS (INCLUDING REAL ESTATE INVESTMENT).
SPECIFIC PURPOSE. The specific purpose of this loan is: RENEWAL OF REVOLVING
LINE OF CREDIT FOR WORKING CAPITAL AND LETTERS OF CREDIT.
DISBURSEMENT INSTRUCTIONS. ▇▇▇▇▇▇▇▇ understands that no loan proceeds will be
disbursed until all of ▇▇▇▇▇▇'s conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000 as follows:
UNDISBURSED FUNDS: $ 62,500.00
AMOUNT PAID ON BORROWER'S ACCOUNT:
$437,500.00 Payment on Loan #67/75 L/C $437,500.00
-----------
NOTE PRINCIPAL: $500,000.00
CHARGES PAID IN CASH. ▇▇▇▇▇▇▇▇ has paid or will pay in cash as agreed the
following charges:
PREPAID FINANCE CHARGES PAID IN CASH: $1,300.00
$1,300.00 LOAN FEES
---------
TOTAL CHARGES PAID IN CASH: $1,300.00
PAYMENT BY AUTOMATIC DEDUCTION. Borrower hereby authorizes Lender to
automatically deduct the amount of all principal and/or interest payments on
this Note from Borrower's account number 1-643-0112-0709 with Lender or such
other account as Borrower may designate in writing. If there are insufficient
funds in the account to pay the automatic deduction in full, Lender may allow
the account to become overdrawn, or Lender may reverse the automatic deduction.
Borrower will pay all fees on the account which result from the automatic
deductions, including any overdraft/NSF charges. If for any reason ▇▇▇▇▇▇ does
not charge the account for a payment, or if an automatic payment is reversed,
the payment is still due according to this Note. If the account is a Money
Market Account, the number of withdrawals from that account is limited as set
out in the account agreement. Lender may cancel the automatic deduction at any
time in its discretion.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, ▇▇▇▇▇▇▇▇ REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL
CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO ▇▇▇▇▇▇.
THIS AUTHORIZATION IS DATED JUNE 22, 2001.
BORROWER
CALIFORNIA BEACH RESTAURANTS, INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
===============================================================================
11
AGREEMENT TO PROVIDE INSURANCE
---------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
700,000.00 06-22-2001 09-15-2002 2789-34 070 1705522447 R-B83 /s/ [ILLEGIBLE]
---------------------------------------------------------------------------------------------------------
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: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GRANTOR: CALIFORNIA BEACH RESTAURANTS, INC. AND SEA VIEW RESTAURANTS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ PALISADES, CA 90272
=========================================================================================================
INSURANCE REQUIREMENTS. We, CALIFORNIA BEACH RESTAURANTS, INC. and SEA VIEW
RESTAURANTS, INC. ("Grantor), understand that insurance coverage is required in
connection with the extending of a loan or the providing of other financial
accommodations to CALIFORNIA BEACH RESTAURANTS, INC. ("Borrower") by ▇▇▇▇▇▇.
These requirements are set forth in the security documents. The following
minimum insurance coverages must be provided on the following described
collateral (the "Collateral"):
COLLATERAL: ALL INVENTORY AND EQUIPMENT.
TYPE. All risks, including fire, theft and liability.
AMOUNT. Full insurable value.
BASIS. Replacement value.
ENDORSEMENTS. ▇▇▇▇▇▇'s loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum of
ten (10) days' prior written notice to Lender.
INSURANCE COMPANY. We may obtain insurance from any insurance company we may
choose that is reasonably acceptable to Lender. We understand that credit may
not be denied solely because insurance was not purchased through Lender.
FAILURE TO PROVIDE INSURANCE. We agree to deliver to Lender, ten (10) days from
the date of this Agreement, evidence of the required insurance as provided
above, with an effective date of June 22, 2001, or earlier. We acknowledge and
agree that if we fail to provide any required insurance or fail to continue
such insurance in force, Lender may do so at our expense as provided in the
applicable security document. The cost of any such insurance, at the option of
Lender, shall be payable on demand or shall be added to the indebtedness as
provided in the security document. WE ACKNOWLEDGE THAT IF LENDER SO PURCHASES
ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST
PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, OUR
EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT
PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT
MEET THE REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, we
authorize Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
WE ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 22, 2001.
GRANTOR:
X /S/ ▇▇▇▇ ▇▇▇▇▇▇▇ X /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------- ----------------------------------
CALIFORNIA BEACH RESTAURANTS, INC. SEA VIEW RESTAURANTS, INC.
FOR LENDER USE ONLY
INSURANCE VERIFICATION
DATE: 6-28-01 PHONE: ▇▇▇-▇▇▇-▇▇▇▇
AGENT NAME: ▇▇▇▇▇ ▇▇▇▇▇
INSURANCE COMPANY: U.S.I. OF SO. CALIFORNIA INS. SERVICES, INC.
POLICY NUMBER: DZX80760980
EFFECTIVE DATE: 6-1-01 TO 6-1-02
COMMENTS:______________________________________________________________________
================================================================================
12
[US BANK LOGO]
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$700,000.00 06-22-2001 09-15-2002 2789-34 070 1705522447 R-B83 /s/ [ILLEGIBLE]
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: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GRANTOR: CALIFORNIA BEACH RESTAURANTS, INC. and SEA VIEW RESTAURANTS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
================================================================================================
THIS COMMERCIAL SECURITY AGREEMENT is entered into among CALIFORNIA BEACH
RESTAURANTS, INC. (referred to below as "Borrower"); CALIFORNIA BEACH
RESTAURANTS, INC. and SEA VIEW RESTAURANTS, INC. (referred to below as
"Grantor"); and U.S. Bank National Association (referred to below as "Lender").
For valuable consideration, Grantor grants to Lender a security interest in the
Collateral to secure the Indebtedness and agrees that ▇▇▇▇▇▇ shall have the
rights stated in this Agreement with respect to the Collateral, in addition to
all rights which Lender may have by law.
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 Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
BORROWER. The word "Borrower" means each and every person or entity signing
the Note, including without limitation CALIFORNIA BEACH RESTAURANTS, INC.
COLLATERAL. The word "Collateral" means the following described property of
Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL
INTANGIBLES
In addition, the word "Collateral" includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions
for any property described above.
(b) All products and produce of any of the property described in this
Collateral section.
(c) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral
section.
(d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section.
(e) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
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 CALIFORNIA BEACH RESTAURANTS, INC. and
SEA VIEW RESTAURANTS, INC. Any Grantor who signs this Agreement, but does
not sign the Note, is signing this Agreement only to grant a security
interest in Grantor's interest in the Collateral to Lender and is not
personally liable under the Note except as otherwise provided by contract
or law (e.g., personal liability under a guaranty or as a surety).
GUARANTOR. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor or Borrower is
responsible under this Agreement or under any of the Related Documents. In
addition, the word "Indebtedness" includes all other obligations, debts
and liabilities, plus interest thereon, of Borrower, or any one or more of
them, to Lender, as well as all claims by Lender against Borrower, or any
one or more of them, whether existing now or later, whether they are
voluntary or involuntary, due or not due, direct or indirect, absolute or
contingent, liquidated or unliquidated; whether Borrower may be liable
individually or jointly with others; whether Borrower may be obligated as
guarantor, surety, accommodation party 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 "Lender" means U.S. Bank National Association, its
successors and assigns.
NOTE. The word "Note" means the Note dated June 22, 2001 in the principal
amount of $600,000.00 from California Beach Restaurants, Inc. to Lender,
together with a provision for a temporary bulge for $700,000.00 from
January 1, 2001 through April 30, 2001 and the Standby Letters of Credit
or Commercial Letters of Credit issued by ▇▇▇▇▇▇ on Borrower's behalf
either severally or in accordance with a Continuing Agreement, together
with any and all renewals, modifications, extensions, substitutions,
refinancings and consolidations thereof.
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.
13
06-22-2001 COMMERCIAL SECURITY AGREEMENT PAGE 2
LOAN NO 2789-34 (CONTINUED)
================================================================================
▇▇▇▇▇▇▇▇'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this
Agreement or by applicable law, (a) Borrower agrees that Lender need not tell
Borrower about any action or inaction Lender takes in connection with this
Agreement; (b) Borrower assumes the responsibility for being and keeping
informed about the Collateral; and (c) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without limitation
any failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral; and ▇▇▇▇▇▇▇▇ agrees to remain liable under the
Note no matter what action Lender takes or fails to take under this Agreement.
▇▇▇▇▇▇▇'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Agreement is executed at Borrower's request and not at the request of ▇▇▇▇▇▇;
(b) Grantor has the full right, power and authority to enter into this Agreement
and to pledge the Collateral to Lender; (c) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (d) ▇▇▇▇▇▇ has made no representation to
Grantor about Borrower or ▇▇▇▇▇▇▇▇'s creditworthiness.
GRANTOR'S WAIVERS. Except as prohibited by applicable law, Grantor waives any
right to require Lender to (a) make any presentment, protest, demand, or notice
of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional Indebtedness; (b) proceed against
any person, including Borrower, before proceeding against Grantor; (c) proceed
against any collateral for the Indebtedness, including ▇▇▇▇▇▇▇▇'s collateral,
before proceeding against Grantor; (d) apply any payments or proceeds received
against the Indebtedness in any order; (e) give notice of the terms, time, and
place of any sale of any collateral pursuant to the Uniform Commercial Code or
any other law governing such sale; (f) disclose any information about the
Indebtedness, the Borrower, any collateral, or any other guarantor or surety, or
about any action or nonaction of Lender; or (g) pursue any remedy or course of
action in ▇▇▇▇▇▇'s power whatsoever.
Grantor also waives any and all rights or defenses arising by reason of (h) any
disability or other defense of Borrower, any other guarantor or surety of any
other person; (i) the cessation from any cause whatsoever, other than payment in
full, of the Indebtedness; (j) the application of proceeds of the Indebtedness
by Borrower for purposes other than the purposes understood and intended by
▇▇▇▇▇▇▇ and Lender; (k) any act of omission or commission by Lender which
directly or indirectly results in or contributes to the discharge of Borrower or
any other guarantor or surety, or the Indebtedness, or the loss or release of
any collateral by operation of law or otherwise; (l) any statute of limitations
in any action under this Agreement or on the Indebtedness; or (m) any
modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate.
Grantor waives all rights and defenses arising out of an election of remedies by
▇▇▇▇▇▇, even though that election of remedies, such as nonjudicial foreclosure
with respect to security for a guaranteed obligation, has destroyed ▇▇▇▇▇▇▇'s
rights of subrogation and reimbursement against Borrower by the operation of
Section 580d of the California Code of Civil Procedure, or otherwise.
This waiver includes, without limitation, any loss of rights Grantor may suffer
by reason of any rights or protections of Borrower in connection with any
anti-deficiency laws, or other laws limiting or discharging the Indebtedness or
Borrower's obligations (including without limitation, Section 726, 580a, 580b,
and 580d of the California Code of Civil Procedure). Grantor waives all rights
and protections of any kind which Grantor may have for any reason, which would
affect or limit the amount of any recovery by Lender from Grantor following a
nonjudicial sale or judicial foreclosure of any real or personal property
security for the Indebtedness including, but not limited to, the right to any
fair market value hearing pursuant to California Code of Civil Procedure Section
580a.
▇▇▇▇▇▇▇ understands and agrees that the foregoing waivers are waivers of
substantive rights and defenses to which Grantor might otherwise be entitled
under state and federal law. The rights and defenses waived include, without
limitation, those provided by California laws of suretyship and guaranty,
anti-deficiency laws, and the Uniform Commercial Code. Grantor acknowledges that
Grantor has provided these waivers of rights and defenses with the intention
that they be fully relied upon by ▇▇▇▇▇▇. Until the Indebtedness is paid in
full, Grantor waives any right to enforce any remedy Lender may have against
Borrower or any other guarantor, surety, or other person, and further, Grantor
waives any right to participate in any collateral for the Indebtedness now or
hereafter held by ▇▇▇▇▇▇.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid by fully secured collateral
pledged by ▇▇▇▇▇▇▇▇, Grantor hereby forever waives and relinquishes in favor of
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, and their respective successors, any claim or right to
payment Grantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Grantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
RIGHT OF SETOFF. Grantor hereby grants ▇▇▇▇▇▇ a contractual security interest in
and hereby assigns, conveys, delivers, pledges, and transfers all of Grantor's
right, title and interest in and to Grantor's accounts with ▇▇▇▇▇▇ (whether
checking, savings, or some other account), including all accounts held jointly
with someone else and all accounts Grantor 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. Grantor authorizes ▇▇▇▇▇▇, to
the extent permitted by applicable law, to charge or setoff all Indebtedness
against any and all such accounts.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:
PERFECTION OF SECURITY INTEREST. ▇▇▇▇▇▇▇ agrees to execute such financing
statements and to take whatever other actions are requested by ▇▇▇▇▇▇ to
perfect and continue ▇▇▇▇▇▇'s security interest in the Collateral. Upon
request of ▇▇▇▇▇▇, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
▇▇▇▇▇▇'s interest upon any and all chattel paper if not delivered to Lender
for possession by ▇▇▇▇▇▇. Grantor hereby appoints ▇▇▇▇▇▇ as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of ▇▇▇▇▇▇'s security interest in the
Collateral. Grantor promptly will notify Lender before any change in
Grantor's name including any change to the assumed business names of
Grantor. This is a continuing Security Agreement and will continue in
effect event though all or any part of the Indebtedness is paid in full and
even though for a period of time Borrower may not be indebted to Lender.
NO VIOLATION. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, an all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear
to be on the Collateral. At the time any account becomes subject to a
security interest in favor of ▇▇▇▇▇▇, the account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery, instructions or
theretofore shipped or delivered pursuant to a contract of sale, or for
services theretofore performed by Grantor with or for the account debtor;
there shall be no setoffs or counterclaims against any such account; and no
agreement under which any deductions or discounts may be claimed shall have
been made with the account debtor except those disclosed to Lender in
writing.
LOCATION OF THE COLLATERAL. Grantor, upon request of ▇▇▇▇▇▇, will deliver
to Lender in form satisfactory to Lender a schedule of real properties and
Collateral locations relating to Grantor's operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor: (c) all
storage facilities owned, rented, leased, or being used by Grantor; and
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(d) all other properties where Collateral is or may be located. Except in
the ordinary course of its business, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts, the
records concerning the Collateral) at Grantor's address shown above, or at
such other locations as are acceptable to Lender. Except in the ordinary
course of its business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing locations without the prior written
consent of Lender. To the extent that the Collateral consists of vehicles,
or other titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the State of California, without the prior written consent of
Lender.
TRANSACTION INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A sale in
the ordinary course of ▇▇▇▇▇▇▇'s business does not include a transfer in
partial or total satisfaction of a debt or any bulk sale. Grantor shall not
pledge, mortgage, encumber or otherwise permit the Collateral to be subject
to any lien, security interest, encumbrance, or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right
to the security interests granted under this Agreement. Unless waived by
▇▇▇▇▇▇, all proceeds from any disposition of the Collateral (for whatever
reason) shall be held in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than
those which reflect the security interest created by this Agreement or to
which Lender has specifically consented. Grantor shall defend ▇▇▇▇▇▇'s
rights in the Collateral against the claims and demands of all other
persons.
COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require, and
insofar as the Collateral consists of accounts and general intangibles,
Grantor shall deliver to Lender schedules of such Collateral, including
such information as Lender may require, including without limitation names
and addresses of account debtors and agings of accounts and general
intangibles. Insofar as the Collateral consists of inventory and equipment,
Grantor shall deliver to Lender, as often as Lender shall require, such
lists, descriptions, and designations of such Collateral as Lender may
require to identify the nature, extent and location of such Collateral.
Such information shall be submitted for Grantor and each of its
subsidiaries or related companies.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not commit
or permit damage to or destruction of the Collateral or any part of the
Collateral. Lender and its designated representatives and agents shall have
the right at all reasonable times to examine, inspect, and audit the
Collateral wherever located. Grantor shall immediately notify Lender of all
cases involving the return, rejection, repossession, loss or damage of or
to any Collateral; of any request for credit or adjustment or of any other
dispute arising with respect to the Collateral; and generally of all
happenings and events affecting the Collateral or the value or the amount
of the Collateral.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon this
Agreement, upon any promissory note or notes evidencing the Indebtedness,
or upon any of the other Related Documents. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and
so long as ▇▇▇▇▇▇'s interest in the Collateral is not jeopardized in
▇▇▇▇▇▇'s sole opinion. If the Collateral is subjected to a lien which is
not discharged within fifteen (15) days, Grantor shall deposit with Lender
cash, a sufficient corporate surety bond or other security satisfactory to
Lender in an amount adequate to provide for the discharge of the lien plus
any interest, costs, attorneys' fees or other charges that could accrue as
a result of foreclosure or sale of the Collateral. In any contest Grantor
shall defend itself and ▇▇▇▇▇▇ and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name ▇▇▇▇▇▇ as an
additional obligee under any surety bond furnished in the contest
proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as ▇▇▇▇▇▇'s
interest in the Collateral, in ▇▇▇▇▇▇'s opinion, is not jeopardized.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien
on the Collateral, used for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of any
hazardous waste or substance as those terms are defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("▇▇▇▇"),
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., Chapters 6.5 through 7.7 of Division 20 of the California Health
and Safety Code, Section 25100, et seq., or other applicable state or
Federal laws, rules, or regulations adopted pursuant to any of the
foregoing. The terms "hazardous waste" and "hazardous substance" shall also
include, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the Collateral
for hazardous wastes and substances. Grantor hereby (a) releases and waives
any future claims against ▇▇▇▇▇▇ for indemnity or contribution in the event
Grantor becomes liable for cleanup or other costs under any such laws, and
(b) agrees to indemnify and hold harmless Lender against any and all claims
and losses resulting from a breach of this provision of this Agreement.
This obligation to indemnify shall survive the payment of the Indebtedness
and the satisfaction of this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
risks insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with
respect to the Collateral, in form, amounts, coverages and basis reasonably
acceptable to Lender and issued by a company or companies reasonably
acceptable to Lender. Grantor, 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
cancelled or diminished without at least ten (10) days' prior written
notice to Lender and not including any disclaimer of the insurer's
liability for failure to give such a notice. Each insurance policy also
shall include an endorsement providing that coverage in favor of Lender
will not be impaired in any way by any act, omission or default of Grantor
or any other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require.
If Grantor at any time fails to obtain or maintain any insurance as
required under this Agreement, Lender may (but shall not be obligated to)
obtain such insurance as Lender deems appropriate, including if it so
chooses "single interest insurance," which will cover only ▇▇▇▇▇▇'s
interest in the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
any loss or damage to the Collateral. Lender may make proof of loss if
Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral,
Lender shall, upon satisfactory proof of expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration.
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If Lender does not consent to repair or replacement of the Collateral,
Lender shall retain a sufficient amount of the proceeds to pay all of the
Indebtedness, and shall pay the balance to Grantor. Any proceeds which
have not been disbursed within six (6) months after their receipt and
which Grantor has not committed to the repair or restoration of the
Collateral shall be used to prepay the Indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender to
be sufficient to produce, at least fifteen (15) days before the premium
due date, amounts at least equal to the insurance premiums to be paid. If
fifteen (15) days before payment is due, the reserve funds are
insufficient, Grantor shall upon demand pay any deficiency to Lender. The
reserve funds shall be held by Lender as a general deposit and shall
constitute a non-interest-bearing account which Lender may satisfy by
payment of the insurance premiums required to be paid by Grantor as they
become due. Lender does not hold the reserve funds in trust for Grantor,
and ▇▇▇▇▇▇ is not the agent of Grantor for payment of the insurance
premiums required to be paid by Grantor. The responsibility for the
payment of premiums shall remain Grantor's sole responsibility.
INSURANCE REPORTS. Grantor, upon request of ▇▇▇▇▇▇, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following: (a)
the name of the insurer; (b) the risks insured; (c) the amount of the
policy; (d) the property insured; (e) the then current value on the basis
of which insurance has been obtained and the manner of determining that
value; and (f) the expiration date of the policy. In addition, Grantor
shall upon request by Lender (however not more often than annually) have
an independent appraiser satisfactory to Lender determine, as applicable,
the cash value or replacement cost of the Collateral.
▇▇▇▇▇▇▇'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by ▇▇▇▇▇▇, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in ▇▇▇▇▇▇'s sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.
EXPENDITURES BY ▇▇▇▇▇▇. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date of repayment by Grantor. All
such expenses shall become a part of the Indebtedness and, at ▇▇▇▇▇▇'s option,
will (a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which ▇▇▇▇▇▇ may be entitled upon the occurrence of an Event of
Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT OF INDEBTEDNESS. Failure of Borrower to make any payment when due
on the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or in any other note, security agreement,
lease agreement or lease schedule, loan agreement or other agreement,
whether now existing or hereafter made, between Grantor and U.S. Bancorp or
any direct or indirect subsidiary of U.S. Bancorp.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
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 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 Grantor or Borrower under this
Agreement, the Note or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral documents to create a valid and perfected security interest or
lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Grantor or ▇▇▇▇▇▇▇▇'s
existence as a going business, the insolvency of Grantor or Borrower,
the appointment of a receiver for any part of Grantor or ▇▇▇▇▇▇▇▇'s
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 Grantor or 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 Grantor or Borrower or
by any governmental agency against the Collateral or any other collateral
securing the Indebtedness. This includes a garnishment of any of Grantor or
▇▇▇▇▇▇▇▇'s deposit accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor dies
or becomes incompetent.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHT AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, ▇▇▇▇▇▇ shall have all the rights of a
secured party under the California Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following rights
and remedies:
ACCELERATE INDEBTEDNESS. ▇▇▇▇▇▇ may declare the entire Indebtedness,
including any prepayment penalty which ▇▇▇▇▇▇▇▇ would be required to pay,
immediately due and payable, without notice.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all
or any portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. ▇▇▇▇▇▇ also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If
the Collateral contains other goods not covered by this Agreement at the
time of repossession, Grantor agrees Lender may take such other goods,
provided that ▇▇▇▇▇▇ makes reasonable efforts to return them to Grantor
after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in its
own name or that of Grantor. Lender may sell the Collateral at public
auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Lender will give Grantor reasonable notice of the time after which any
private sale or any
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other intended disposition of the Collateral is to be made. The
requirements of reasonable notice shall be met if such notice is given at
least ten (10) days, or such lesser time as required by state law, before
the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses
of retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid.
APPOINT RECEIVER. To the extent permitted by applicable law, ▇▇▇▇▇▇ shall
have the following rights and remedies regarding the appointment of a
receiver: (a) Lender may have a receiver appointed as a matter of right,
(b) the receiver may be an employee of ▇▇▇▇▇▇ and may serve without bond,
and (c) all fees of the receiver and his or her attorney shall become
part of the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until
repaid.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may at any time in its discretion transfer any
Collateral into its own name or that of its nominee and receive the
payments, rents, income, and revenues therefrom and hold the same as
security for the Indebtedness or apply it to payment of the Indebtedness
in such order of preference as Lender may determine. Insofar as the
Collateral consists of accounts, general intangibles, insurance policies,
instruments, chattel paper, choses in action, or similar property, Lender
may demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Collateral as Lender may determine, whether
or not Indebtedness or Collateral is then due. For these purposes, ▇▇▇▇▇▇
may, on behalf of and in the name of Grantor, receive, open and dispose of
mail addressed to Grantor; change any address to which mail and payments
are to be sent; and endorse notes, checks, drafts, money orders, documents
of title, instruments and items pertaining to payment, shipment, or
storage of any Collateral. To facilitate collection, ▇▇▇▇▇▇ may notify
account debtors and obligors on any Collateral to make payments directly
to Lender.
OBTAIN DEFICIENCY. If ▇▇▇▇▇▇ chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Borrower for any deficiency
remaining on the Indebtedness due to Lender after application of all
amounts received from the exercise of the rights provided in this
Agreement. Borrower shall be liable for a deficiency even if the
transaction described in this subsection is a sale of accounts or chattel
paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies
of a secured creditor under the provisions of the Uniform Commercial Code,
as may be amended from time to time. In addition, Lender shall have and
may exercise any or all other rights and remedies it may have available at
law, in equity, or otherwise.
CUMULATIVE REMEDIES. All of ▇▇▇▇▇▇'s rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, 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 Grantor or Borrower under this
Agreement, after Grantor or Borrower's failure to perform, shall not
affect ▇▇▇▇▇▇'s right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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 California. If there is a lawsuit, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ agree upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the
courts of Sacramento County, the State of California. ▇▇▇▇▇▇, Grantor and
▇▇▇▇▇▇▇▇ hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either ▇▇▇▇▇▇, Grantor or Borrower
against the other. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
ATTORNEYS' FEES; EXPENSES. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ agree to pay upon
demand all of ▇▇▇▇▇▇'s costs and expenses, including attorneys' fees and
▇▇▇▇▇▇'s legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may pay someone else to help enforce this
Agreement, and Grantor and Borrower shall pay the costs and expenses of
such enforcement. Costs and expenses include ▇▇▇▇▇▇'s attorneys' fees and
legal expenses whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (and including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Grantor and ▇▇▇▇▇▇▇▇ also
shall pay all court costs and such additional fees as may be directed by
the court.
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.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor and
Borrower under this Agreement shall be joint and several, and all
references to Borrower shall mean each and every Borrower, and all
references to Grantor shall mean each and every Grantor. This means that
each of the persons signing below is responsible for all obligations in
this Agreement.
NOTICE. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (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, address 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 Grantor or Borrower, notice to any Grantor or
Borrower will constitute notice to all Grantor and Borrowers. For notice
purposes, Grantor and Borrower will keep Lender informed at all times of
Grantor and ▇▇▇▇▇▇▇▇'s current address(es).
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover
all sums of money or other property which may now or hereafter become due,
owing or payable from the Collateral; (b) to execute, sign and endorse any
and all claims, instruments, receipts, checks, drafts or warrants issued
in payment for the Collateral; (c) to settle or compromise any and all
claims arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement for the claim;
and (d) to file any claim or claims or to take any action or institute or
take part in any proceedings, either in its own name or in the name of
Grantor, or otherwise, which in the discretion of Lender may seem to be
necessary or advisable. This power is given as security for the
Indebtedness, and the authority hereby conferred is and shall be
irrevocable and shall remain in full force and effect until renounced by
▇▇▇▇▇▇.
PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
preference claim in ▇▇▇▇▇▇▇▇'s bankruptcy will become a part of the
Indebtedness and, at ▇▇▇▇▇▇'s option, shall be payable by Borrower as
provided above in the "EXPENDITURES BY ▇▇▇▇▇▇" paragraph.
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 shall 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 shall remain valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns.
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================================================================================
WAIVER. Lender shall 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 shall
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 Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations 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 to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
the indebtedness, Borrower irrevocably waives, disclaims and relinquishes
all claims against such other person which Borrower has or would
otherwise have by virtue of payment of the indebtedness or any part
thereof, specifically including but not limited to all rights of indemnity,
contribution or exoneration.
ADDENDUM TO COMMERCIAL SECURITY AGREEMENT. An exhibit, titled "ADDENDUM TO
COMMERCIAL SECURITY AGREEMENT," is attached to this Agreement and by this
reference is made a part of this Agreement just as if all the provisions, terms
and conditions of the Exhibit had been fully set forth in this Agreement.
BORROWER AND EACH GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND BORROWER AND EACH GRANTOR AGREE TO ITS
TERMS. THIS AGREEMENT IS DATED JUNE 22, 2001.
BORROWER:
CALIFORNIA BEACH RESTAURANTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
GRANTOR:
X /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ X /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------- ---------------------------------
CALIFORNIA BEACH RESTAURANTS, INC. SEA VIEW RESTAURANTS, INC.
18
[US BANK LOGO]
COMMERCIAL PLEDGE AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
700,000.00 06-22-2001 09-15-2002 2789-34 070 1105622447 R-B83 /s/[illegible]
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: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. Bank National
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GRANTOR: SEA VIEW RESTAURANTS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
================================================================================
THIS COMMERCIAL PLEDGE AGREEMENT is entered into among CALIFORNIA BEACH
RESTAURANTS, INC. (referred to below as "Borrower"); SEA VIEW RESTAURANTS, INC.
(referred to below as "Grantor"); and U.S. Bank National Association (referred
to below as "Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to
Lender a security interest in the Collateral to secure the indebtedness and
agrees that Lender shall have the rights stated in this Agreement with respect
to the Collateral, in addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement.
AGREEMENT. The word "Agreement" means this Commercial Pledge Agreement,
as this Commercial Pledge Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Pledge Agreement from time to time.
BORROWER. The word "Borrower" means each and every person or entity
signing the Note, including without limitation CALIFORNIA BEACH
RESTAURANTS, INC.
COLLATERAL. The word "Collateral" means the following specifically
described property, which ▇▇▇▇▇▇▇ has delivered or agrees to deliver (or
cause to be delivered) immediately to Lender, together with all income
and Proceeds as described below:
LICENSE AGREEMENT ENTERED INTO AS OF APRIL 21, 1992 BY AND BETWEEN
SEA VIEW RESTAURANTS, INC. ("LICENSOR") AND MCA DEVELOPMENT VENTURE
TWO ("LICENSEE").
In addition, the word "Collateral" includes all property of Grantor, in
the possession of Lender (or in the possession of a third party subject
to the control of Lender), whether now or hereafter existing and whether
tangible or intangible in character, including without limitation each of
the following:
(a) All property to which ▇▇▇▇▇▇ acquires title or documents of
title.
(b) All property assigned to Lender.
(c) All promissory notes, bills of exchange, stock certificates,
bonds, savings passbooks, time certificates of deposit, insurance
policies, and all other instruments and evidence of an obligation.
(d) All records relating to any of the property described in this
Collateral section, whether in the form of a writing, microfilm,
microfiche, or electronic media.
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 SEA VIEW RESTAURANTS, INC. Any Grantor
who signs this Agreement, but does not sign the Note, is signing this
Agreement only to grant a security interest in Grantor's interest in the
Collateral to Lender and is not personally liable under the Note except
as otherwise provided by contract or law (e.g., personal liability under
a guaranty or as a surety).
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
INCOME AND PROCEEDS. The words "Income and Proceeds" mean all present and
future income, proceeds, earnings, increases, and substitutions from or
for the Collateral of every kind and nature, including without limitation
all payments, interest, profits, distributions, benefits, rights,
options, warrants, dividends, stock dividends, stock splits, stock
rights, regulatory dividends, distributions, subscriptions, monies,
claims for money due and to become due, proceeds of any insurance on the
Collateral, shares of stock of different par value or no par value issued
in substitution or exchange for shares included in the Collateral, and
all other property Grantor is entitled to receive on account of such
Collateral, including accounts, documents, instruments, chattel paper,
and general intangibles.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Borrower or Grantor is
responsible under this Agreement or under any of the Related Documents. In
addition, the word "Indebtedness" includes all other obligations, debts
and liabilities, plus interest thereon, of Borrower, or any one or more of
them, to Lender, as well as all claims by Lender against Borrower, or any
one or more of them, whether existing now or later; whether they are
voluntary or involuntary, due or not due, direct or indirect, absolute of
contingent, liquidated or unliquidated; whether Borrower may be liable
individually or jointly with others; whether Borrower may be obligated as
guarantor, surety, accommodation party 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 "Lender" means U.S. Bank National Association, its
successors and assigns.
Note. The word "Note" means the Note dated June 22, 2001 in the principal
amount of $500,000.00 from California Beach Restaurants, Inc., together
with a provision for a temporary bulge for $700,000.00 from January 1,
2001 through April 30, 2001, and the Standby Letters of Credit or
Commercial Letters of Credit issued by ▇▇▇▇▇▇ on Borrower's behalf either
severally or in accordance with a Continuing Agreement, together with any
and all renewals, modifications, extensions, substitutions, refinancings
and consolidations thereof.
OBLIGOR. The word "Obligor" means and includes without limitation any and
all persons or entities obligated to pay money or to perform some other
act under the Collateral.
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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, agreement and documents,
whether now or hereafter existing, executed in connection with the
Indebtedness.
▇▇▇▇▇▇▇▇'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under
this Agreement or by applicable law, (a) Borrower agrees that Lender need not
tell Borrower about any action or inaction Lender takes in connection with this
Agreement; (b) Borrower assumes the responsibility for being and keeping
informed about the Collateral; and (c) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without limitation
any failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral; and ▇▇▇▇▇▇▇▇ agrees to remain liable under the
Note no matter what action ▇▇▇▇▇▇ takes to fails to take under this Agreement.
▇▇▇▇▇▇▇'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Agreement is executed at Borrower's request and not at the request of ▇▇▇▇▇▇;
(b) Grantor has the full right, power and authority to enter into this
Agreement and to pledge the Collateral to Lender; (c) Grantor has established
adequate means of obtaining from Borrower on a continuing basis information
about Borrower's financial condition; and (d) ▇▇▇▇▇▇ has made no representation
to Grantor about Borrower or ▇▇▇▇▇▇▇▇'s creditworthiness.
GRANTOR'S WAIVERS. Except as prohibited by applicable law, Grantor waives any
right to require Lender to (a) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional Indebtedness; (b) proceed
against any person, including Borrower, before proceeding against Grantor;
(c) proceed against any collateral for the Indebtedness, including ▇▇▇▇▇▇▇▇'s
collateral, before proceeding against Grantor; (d) apply any payments or
proceeds received against the Indebtedness in any order; (e) give notice of the
terms, time, and place of any sale of any collateral pursuant to the Uniform
Commercial Code or any other law governing such sale; (f) disclose any
information about the Indebtedness, the Borrower, any collateral, or any other
guarantor or surety, or about any action or nonaction of Lender; or (g) pursue
any remedy or course of action in ▇▇▇▇▇▇'s power whatsoever.
Grantor also waives any and all rights or defenses arising by reason of (h) any
disability or other defense of Borrower, any other guarantor or surety or any
other person: (i) the cessation from any cause whatsoever, other than payment
in full, of the Indebtedness; (j) the application of proceeds of the
Indebtedness by Borrower for purposes other than the purposes understood and
intended by Grantor and Lender; (k) any act or omission or commission by Lender
which directly or indirectly results in or contributes to the discharge of
Borrower or any other guarantor or surety, or the Indebtedness, or the loss or
release of any collateral by operation of law or otherwise; (l) any statute of
limitations in any action under this Agreement or on the Indebtedness; or (m)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate.
Grantor waives all rights and defenses arising out of an election of remedies
by ▇▇▇▇▇▇, even though that election of remedies, such as nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
▇▇▇▇▇▇▇'s rights of subrogation and reimbursement against Borrower by the
operation of Section 580d of the California Code of Civil Procedure, or
otherwise.
This waiver includes, without limitation, any loss of rights Grantor may suffer
by reason of any rights or protection of Borrower in connection with any
anti-deficiency laws, other laws limiting or discharging the Indebtedness of
Borrower's obligations (including, without limitation, Section 726, 580a, 580b,
and 580d of the California Code of Civil Procedure). Grantor waives all rights
and protections of any kind which Grantor may have for any reason, which would
affect or limit the amount of any recovery by Lender from Grantor following a
nonjudicial sale or judicial foreclosure of any real or personal property
security for the Indebtedness including, but not limited to, the right to any
fair market value hearing pursuant to California Code of Civil Procedure
Section 580a.
▇▇▇▇▇▇▇ understands and agrees that the foregoing waivers are waivers of
substantive rights and defenses to which Grantor might otherwise be entitled
under state and federal law. The rights and defenses waived include, without
limitation, those provided by California laws of suretyship and guaranty,
anti-deficiency laws, and the Uniform Commercial Code. Grantor acknowledges
that Grantor has provided these waivers of rights and defenses with the
intention that they be fully relied upon by ▇▇▇▇▇▇. Until all Indebtedness is
paid in full, Grantor waives any right to enforce any remedy Lender may have
against Borrower or any other guarantor, surety, or other person, and further,
Grantor waives any right to participate in any collateral for the Indebtedness
now or hereafter held by ▇▇▇▇▇▇.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by ▇▇▇▇▇▇▇▇, Grantor hereby forever waives and relinquishes in favor of
▇▇▇▇▇▇ and Borrower, and their respective successors, any claim or right to
payment Grantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Grantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual security interest in
any hereby assigns, conveys, delivers, pledges, and transfers all of Grantor's
right, title and interest in and to Grantor's accounts with ▇▇▇▇▇▇ (whether
checking, savings, or some other account), including all accounts held jointly
with someone else and all accounts Grantor 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. Grantor authorizes ▇▇▇▇▇▇, to
the extent permitted by applicable law, to charge or setoff all Indebtedness
against any and all such accounts.
▇▇▇▇▇▇▇'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
Grantor represents and warrants to Lender that:
OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear of
all security interests, liens, encumbrances and claims of others except as
disclosed to and accepted by ▇▇▇▇▇▇ in writing prior to execution of this
Agreement.
RIGHT TO PLEDGE. Grantor has the full right, power and authority to enter
into this Agreement and to pledge the Collateral.
BINDING EFFECT. This Agreement is binding upon Grantor, as well as
▇▇▇▇▇▇▇'s heirs, successors, representatives and assigns, and is legally
enforceable in accordance with its terms.
NO FURTHER ASSIGNMENT. Grantor has not, and will not, sell, assign,
transfer, encumber or otherwise dispose of any of Grantor's rights in the
Collateral except as provided in this Agreement.
NO DEFAULTS. There are no defaults existing under the Collateral, and
there are no offsets or counterclaims to the same. Grantor will strictly
and promptly perform each of the terms, conditions, covenants and
agreements contained in the Collateral which are to be performed by
Grantor, if any.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party, and its certificate or articles of incorporation and bylaws do not
prohibit any term or condition of this Agreement.
▇▇▇▇▇▇'S RIGHTS AND OBLIGATIONS WITH RESPECT TO COLLATERAL. Lender may hold the
Collateral until all the Indebtedness has been paid and satisfied and thereafter
may deliver the Collateral to any Grantor. Lender shall have the following
rights in addition to all other rights it may have by law:
MAINTENANCE AND PROTECTION OF COLLATERAL. Lender may, but shall not be
obligated to, take such steps as it deems necessary or desirable to
protect, maintain, insure, store, or care for the Collateral, including
payment of any liens or claims against the Collateral. ▇▇▇▇▇▇ may charge
any cost incurred in so doing to Grantor.
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================================================================================
INCOME AND PROCEEDS FROM THE COLLATERAL. Lender may receive all Income and
Proceeds and add it to the Collateral. ▇▇▇▇▇▇▇ agrees to deliver to ▇▇▇▇▇▇
immediately upon receipt, in the exact form received and without
commingling with other property, all Income and Proceeds from the
Collateral which may be received by, paid, or delivered to Grantor or for
Grantor's account, whether as an addition to, in discharge of, in
substitution of, or in exchange for any of the Collateral.
APPLICATION OF CASH. At Lender's option, Lender may apply any cash, whether
included in the Collateral or received as Income and Proceeds or through
liquidation, sale, or retirement, of the Collateral, to the satisfaction of
the Indebtedness or such portion thereof as Lender shall choose whether or
not matured.
TRANSACTIONS WITH OTHERS. Lender may (a) extend time for payment or other
performance, (b) grant a renewal or change in terms or conditions, or (c)
compromise, compound or release any obligation, with any one or more
Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems
advisable, without obtaining the prior written consent of Grantor, and no
such act or failure to act shall affect Lender's rights against Grantor or
the Collateral.
ALL COLLATERAL SECURES INDEBTEDNESS. All Collateral shall be security for
the Indebtedness, whether the Collateral is located at one or more offices
or branches of Lender and whether or not the office or branch where the
Indebtedness is created is aware of or relies upon the Collateral.
COLLECTION OF COLLATERAL. Lender, at ▇▇▇▇▇▇'s option may, but need not,
collect directly from the Obligors on any of the Collateral all Income and
Proceeds or other sums of money and other property due and to become due
under the Collateral, and Grantor authorizes and directs the Obligors, if
Lender exercises such option, to pay and deliver to Lender all Income and
Proceeds and other sums of money and other property payable by the terms of
the Collateral and to accept ▇▇▇▇▇▇'s receipt for the payments.
POWER OF ATTORNEY. Grantor irrevocably appoints Lender as Grantor's
attorney-in-fact, with full power of substitution, (a) to demand, collect,
receive, receipt for, sue and recover all Income and Proceeds and other
sums of money and other property which may now or hereafter become due,
owing or payable from the Obligors in accordance with the terms of the
Collateral; (b) to execute, sign and endorse any and all instruments,
receipts, checks, drafts and warrants issued in payment for the Collateral;
(c) to settle or compromise any and all claims arising under the
Collateral, and in the place and stead of Grantor, execute and deliver
▇▇▇▇▇▇▇'s release and acquitance for Grantor; (d) to file any claim or
claims or to take any action or institute or take part in any proceedings,
either in ▇▇▇▇▇▇'s own name or in the name of Grantor, or otherwise, which
in the discretion of Lender may seem to be necessary or advisable; and (e)
to execute in Grantor's name and to deliver to the Obligors on Grantor's
behalf, at the time and in the manner specified by the Collateral, any
necessary Instruments or documents.
PERFECTION OF SECURITY INTEREST. Upon request of ▇▇▇▇▇▇, Grantor will
deliver to Lender any and all of the documents evidencing or constituting
the Collateral. When applicable law provides more than one method of
perfection of ▇▇▇▇▇▇'s security interest, ▇▇▇▇▇▇ may choose the method(s)
to be used. Upon request of ▇▇▇▇▇▇, Grantor will sign and deliver any
writings necessary to perfect ▇▇▇▇▇▇'s security interest. Grantor hereby
appoints ▇▇▇▇▇▇ as ▇▇▇▇▇▇▇'s irrevocable attorney-in-fact for the purpose
of executing any documents necessary to perfect or to continue the security
interest granted in this Agreement. This is a continuing Security Agreement
and will continue in effect even though all or any part of the Indebtedness
is paid in full and even though for a period of time Borrower may not be
indebted to Lender.
EXPENDITURES BY ▇▇▇▇▇▇. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date of repayment by Grantor. All
such expenses shall become a part of the Indebtedness and, at ▇▇▇▇▇▇'s option,
will (a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which ▇▇▇▇▇▇ may be entitled upon the occurrence of an Event of
Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of the Collateral in ▇▇▇▇▇▇'s
possession, but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation. Lender shall have no
responsibility for (a) any depreciation in value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (b)
preservation of rights against parties to the Collateral or against third
persons, (c) ascertaining any maturities, calls, conversions, exchange, offers,
tenders, or similar matters relating to any of the Collateral, or (d) informing
Grantor about any of the above, whether or not Lender has or is deemed to have
knowledge of such matters. Except as provided above, Lender shall have no
liability for depreciation or deterioration of the Collateral.
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 Indebtedness.
OTHER DEFAULTS. Failure of Borrower or Grantor to comply with or to perform
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 term, obligation, covenant or condition
contained in any other agreements between Lender and Borrower.
INSOLVENCY. The dissolution or termination of Borrower or Grantor's
existence as a going business, the insolvency of Borrower or Grantor, the
appointment of a receiver for any part of Borrower or Grantor's 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 or Grantor.
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 or Grantor or
by any governmental agency against the Collateral or any other collateral
securing the Indebtedness. This includes a garnishment of any of Borrower
or Grantor's deposit accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or such Guarantor dies or
becomes incompetent.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender may exercise any one or more of the
following rights and remedies:
ACCELERATE INDEBTEDNESS. Declare all Indebtedness, including any prepayment
penalty which Borrower would be required to pay, immediately due and
payable, without notice of any kind to Borrower or Grantor.
COLLECT THE COLLATERAL. Collect any of the Collateral and, at ▇▇▇▇▇▇'s
option and to the extent permitted by applicable law, retain possession of
the Collateral while suing on the Indebtedness.
SELL THE COLLATERAL. Sell the Collateral, at ▇▇▇▇▇▇'s discretion, as a unit
or in parcels, at one or more public or private sales. Unless the
Collateral is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market, Lender shall give or mail
to Grantor, or any of them, notice at least ten (10) days in advance of the
time and place of any public sale, or of the date after which any private
sale may be
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made. Grantor agrees that any requirement of reasonable notice is satisfied
if Lender mails notice by ordinary mail addressed to Grantor, or any of
them, at the last address Grantor has given Lender in writing. If a public
sale is held, there shall be sufficient compliance with all requirements of
notice to the public by a single publication in any newspaper of general
circulation in the county where the Collateral is located, setting forth
the time and place of sale and a brief description of the property to be
sold. Lender may be a purchaser at any public sale.
REGISTER SECURITIES. Register any securities included in the Collateral in
Lender's name and exercise any rights normally incident to the ownership of
securities.
SELF SECURITIES. Sell any securities included in the Collateral in a manner
consistent with applicable federal and state securities laws,
notwithstanding any other provision of this or any other agreement. If,
because of restrictions under such laws, Lender is or believes it is unable
to sell the securities in an open market transaction, Grantor agrees that
Lender shall have no obligation to delay sale until the securities can be
registered, and may make a private sale to one or more persons or to a
restricted group of persons, even though such sale may result in a price
that is less favorable than might be obtained in an open market
transaction, and such a sale shall be considered commercially reasonable.
If any securities held as Collateral are "restricted securities" as defined
in the Rules of the Securities and Exchange Commission (such as Regulation
D or Rule 144) or state securities departments under state "Blue Sky" laws,
or if Borrower or Grantor is an affiliate of the issuer of the securities,
Borrower and Grantor agree that neither Grantor nor any agent of Grantor
will sell or dispose of any securities of such issuer without obtaining
▇▇▇▇▇▇'s prior written consent.
FORECLOSURE. Maintain a judicial suit for foreclosure and sale of the
Collateral.
TRANSFER TITLE. Effect transfer of title upon sale of all or part of the
Collateral. For this purpose, ▇▇▇▇▇▇▇ irrevocably appoints Lender as its
attorney-in-fact to execute endorsements, assignments and instruments in
the name of Grantor and each of them (if more than one) as shall be
necessary or reasonable.
OTHER RIGHTS AND REMEDIES. Have and exercise any or all of the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, at law, in equity, or otherwise.
APPLICATION OF PROCEEDS. Apply any cash which is part of the Collateral, or
which is received from the collection or sale of the Collateral, to
reimbursement of any expenses, including any costs for registration of
securities, commissions incurred in connection with a sale, attorney fees
as provided below, and court costs, whether or not there is a lawsuit and
including any fees on appeal, incurred by Lender in connection with the
collection and sale of such Collateral and to the payment of the
Indebtedness of Borrower to Lender, with any excess funds to be paid to
Grantor as the interests of Grantor may appear. ▇▇▇▇▇▇▇▇ agrees, to the
extent permitted by law, to pay any deficiency after application of the
proceeds of the Collateral to the Indebtedness.
CUMULATIVE REMEDIES. All of ▇▇▇▇▇▇'s rights and remedies, whether evidenced
by this Agreement or by any other writing, 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 Grantor
under this Agreement, after ▇▇▇▇▇▇▇'s failure to perform, shall not affect
▇▇▇▇▇▇'s right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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 California. If there is a lawsuit, ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ agree upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the
courts of Sacramento County, the State of California. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and
Grantor hereby waive the right to any jury trial in any action, proceeding,
or counterclaim brought by either ▇▇▇▇▇▇, Borrower or Grantor against the
other. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
ATTORNEYS' FEES; EXPENSES. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ agree to pay upon demand
all of ▇▇▇▇▇▇'s costs and expenses, including attorneys' fees and ▇▇▇▇▇▇'s
legal expenses, incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement, and
Borrower and Grantor shall pay the costs and expenses of such enforcement.
Costs and expenses include ▇▇▇▇▇▇'s attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (and including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower and Grantor also shall pay all
court costs and such additional fees as may be directed by the court.
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.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (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 or Grantor, notice to any Borrower or
Grantor will constitute notice to all Borrower and Grantors. For notice
purposes, ▇▇▇▇▇▇▇▇ and Grantor will keep Lender informed at all times of
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇'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 shall 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 shall remain valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
of the Collateral, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.
WAIVER. Lender shall 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 shall
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 Grantor, shall constitute a waiver of
any of Lender's rights or of any of Grantor's obligations 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 to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT. An exhibit, titled "ADDENDUM TO
COMMERCIAL PLEDGE AGREEMENT," is attached to this Agreement and by this
reference is made a part of this Agreement just as if all the provisions, terms
and conditions of the Exhibit had been fully set
22
06-22-2001 COMMERCIAL PLEDGE AGREEMENT PAGE 5
LOAN NO 2789-34 (CONTINUED)
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forth in this Agreement.
▇▇▇▇▇▇▇▇ AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS PLEDGE
AGREEMENT, AND BORROWER AND GRANTOR AGREE TO ITS TERMS. THIS AGREEMENT IS DATED
JUNE 22, 2001.
BORROWER:
CALIFORNIA BEACH RESTAURANTS, INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
GRANTOR:
SEA VIEW RESTAURANTS, INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
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23
ADDENDUM TO COMMERCIAL SECURITY AGREEMENT
================================================================
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
================================================================
This ADDENDUM TO COMMERCIAL SECURITY AGREEMENT is attached to and by this
reference is made a part of each Security Agreement, dated June 22, 2001, and
executed in connection with a loan or other financial accommodations between
U.S. Bank National Association and CALIFORNIA BEACH RESTAURANTS, INC.
Capitalized terms used in this Addendum and not defined herein but defined in
the Security Agreement shall have the meanings ascribed to such terms under the
Security Agreement.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantor and the Lender agree as follows with respect to the
Security Agreement, notwithstanding any language to the contrary contained in
the Security Agreement:
1. References in the Security Agreement to the term "Uniform Commercial Code"
shall be deemed to refer to Revised Article 9 of the Uniform Commercial Code,
as adopted in the State whose laws govern the Security Agreement, or, if
Revised Article 9 has not been so adopted, as promulgated by the National
Commissioners on Uniform State Laws.
2. ▇▇▇▇▇▇▇ agrees that Lender may file financing statements containing a
description of the Collateral broader than that set forth in the Security
Agreement. ▇▇▇▇▇▇▇ also agrees to execute and cooperate with ▇▇▇▇▇▇ in
obtaining from third parties control agreements in form satisfactory to Lender
with respect to Collateral consisting of, or including, investment property,
deposit accounts, letter-of-credit rights, and electronic chattel paper. If any
Collateral is in the possession of a bailee, Grantor will join with Lender in
notifying the bailee of ▇▇▇▇▇▇'s interest and in obtaining from the bailee an
acknowledgment that the bailee holds the Collateral for ▇▇▇▇▇▇'s benefit.
3. Grantor represents that the information set forth in the Security Agreement
with respect to Grantor's name, location and organizational structure is
correct. Grantor will not change its name, its location, its jurisdiction of
organization, or its organizational structure without giving Lender at least
thirty (30) days' prior written notice and will periodically provide Lender
with evidence that no change has occurred.
4. To the extent that Grantor uses any amounts loaned to purchase Collateral,
Grantor's repayment of the loan amounts shall apply on a "first-in-first-out"
basis so that the portion of the loan amounts used to purchase a particular item
of Collateral shall be paid in the chronological order in which the Grantor
purchased the Collateral.
5. To the extent that Collateral includes chattel paper, at the time Grantor
creates any chattel paper, Grantor shall place a legend on the chattel paper
indicating that ▇▇▇▇▇▇ has a security interest in the chattel paper.
6. Grantor will not license any Collateral.
7. ▇▇▇▇▇▇'s rights described in the paragraph of the Security Agreement titled
"Grantor's Right to Possession and to Collect Accounts" apply to Collateral
consisting of accounts and/or any other rights to payment.
8. In addition to the events described in the "Events of Default" section of the
Security Agreement, it shall also constitute an Event of Default under the
Security Agreement. If ▇▇▇▇▇▇ receives at any time following execution of the
Security Agreement any information indicating that ▇▇▇▇▇▇'s security interest is
not prior to all other security interests or other interests in the Collateral,
except as otherwise agreed by ▇▇▇▇▇▇.
9. In addition to the Lender's rights and remedies as described in the section
of the Security Agreement headed "Sell the Collateral," if an Event of Default
occurs under the Security Agreement Lender may dispose of any of the Collateral
at public auction or private sale in its then present condition or following
such preparation and processing as Lender deems commercially reasonable. Lender
has no duty to prepare or process the Collateral prior to sale. Lender may
disclaim warranties of title, possession, quiet enjoyment and the like. Such
actions by Lender shall not affect the commercial reasonableness of the sale.
Further, Lender may comply with any applicable state or federal law requirements
in connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.
10. To the extent that the Collateral listed in the Security Agreement includes
general intangibles, it also includes without limitation all software and
payment intangibles; to the extent such Collateral includes accounts. It also
includes without limitation all health-care insurance receivables; In the event
such Collateral includes Inventory, chattel paper, accounts, equipment and
general intangibles, it also includes without limitation all of the property
described above in this paragraph plus all instruments, deposit accounts,
letter of credit rights, investment property, money, documents, as-extracted
collateral and fixtures. In any event, the Collateral listed in the Security
Agreement includes all supporting obligations as to any such Collateral and all
products of such collateral.
In the event of any direct conflict between the terms of the Security Agreement
and this Addendum, the terms of this Addendum shall control.
THIS ADDENDUM TO COMMERCIAL SECURITY AGREEMENT IS EXECUTED ON JUNE 22, 2001.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ X
--------------------------------- -----------------------------
LENDER:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ [Signature Illegible]
------------------------------
Authorized Officer
24
ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT
=======================================
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC. LENDER: U.S. BANK NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
=======================================
This ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT is attached to and by this
reference is made a part of each Pledge Agreement, dated June 22, 2001, and
executed in connection with a loan or other financial accommodations between
U.S. Bank National Association and CALIFORNIA BEACH RESTAURANTS, INC.
Capitalized terms used in this Addendum and not defined herein but defined in
the Pledge Agreement shall have the meanings ascribed to such terms under the
Pledge Agreement.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantor and the Lender agree as follows with respect to the
Pledge Agreement, notwithstanding any language to the contrary contained in the
Pledge Agreement:
1. References in the Pledge Agreement to the term "Uniform Commercial Code"
shall be deemed to refer to Revised Article 9 of the Uniform Commercial Code,
as adopted in the state whose laws govern the Pledge Agreement or, if Revised
Article 9 has not been so adopted, as promulgated by the National Commissioners
on Uniform State Laws. Terms used in the Pledge Agreement not otherwise defined
in the Pledge Agreement will have the meanings given such terms under such
Uniform Commercial Code.
2. ▇▇▇▇▇▇▇ agrees that Lender may file financing statements containing a
description of the Collateral broader than that set forth in the Pledge
Agreement. ▇▇▇▇▇▇▇ also agrees to execute and cooperate with ▇▇▇▇▇▇ in
obtaining from third parties control agreements in form satisfactory to Lender
with respect to Collateral consisting of, or including, investment property,
deposit accounts, letter-of-credit rights, and electronic chattel paper. If any
Collateral is in the possession of a bailee, Grantor will join with Lender in
notifying the bailee of ▇▇▇▇▇▇'s interest and in obtaining from the bailee an
acknowledgment that the bailee holds the Collateral for ▇▇▇▇▇▇'s benefit.
3. Grantor represents that the information set forth in the Pledge Agreement
with respect to Grantor's name, location and organizational structure is
correct. Grantor will not change its name, its location, its jurisdiction of
organization, or its organizational structure without giving Lender at least
thirty (30) days prior written notice and will periodically provide Lender with
evidence that no change has occurred.
4. The paragraph of the Pledge Agreement headed "Applicable Law" is modified by
adding onto the end of that paragraph the phrase "except to the extent that the
Uniform Commercial Code provides for the application of the laws of any other
state."
5. If more than one person is liable for the Indebtedness, Grantor irrevocably
waives, disclaims and relinquishes all claims against such other person which
Grantor has or would otherwise have by virtue of payment of the Indebtedness or
any part thereof, specifically including but not limited to all rights of
indemnity, contribution or exoneration.
THIS ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT IS EXECUTED ON JUNE 22, 2001.
X /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ X
-------------------------------- --------------------------------
LENDER:
U.S. Bank National Association
By: /s/ [Signature Illegible]
------------------------------
Authorized Officer
================================================================================