EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
DATED DECEMBER 12, 1995
BETWEEN
CAPITAL BANK
(THE LENDER)
AND
BAYPORT RESTAURANT GROUP, INC.
AND THE SUBSIDIARIES PARTY
HERETO FROM TIME TO TIME
(THE BORROWERS)
TABLE OF CONTENTS
SECTION PAGE
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SECTION I
DEFINITIONS..................................................................................................... 1
1.1 General.............................................................................. 1
1.2 Accounting Terms..................................................................... 6
SECTION II
DESCRIPTION OF CREDIT........................................................................................... 6
2.1 The Loans............................................................................ 6
2.2 Notice and Manner of Borrowing....................................................... 6
2.3 The Note............................................................................. 7
2.4 Use of Proceeds...................................................................... 8
2.5 Interest Rate and Payments of Interest............................................... 8
2.6 Payments and Prepayments of the Loans................................................ 9
2.7 Method of Payment.................................................................... 9
2.8 Overdue Payments..................................................................... 9
2.9 Computation of Interest. ............................................................ 9
2.10 Capital Adequacy..................................................................... 9
2.11 Taxes................................................................................ 10
2.12 Borrowers' Representative............................................................ 10
2.13 Joint and Several Liability.......................................................... 11
SECTION III
CONDITIONS OF LOANS............................................................................................. 11
3.1 Conditions Precedent to Initial Loan................................................. 11
3.2 Conditions Precedent to All Loans.................................................... 12
SECTION IV
REPRESENTATIONS AND WARRANTIES.................................................................................. 13
4.1 Organization and Qualification....................................................... 13
4.2 Corporate Authority.................................................................. 13
4.4 Consents or Approvals................................................................ 14
4.5 Title to Properties; Absence of Encumbrances......................................... 14
4.6 Financial Statements................................................................. 14
4.7 Changes.............................................................................. 14
4.8 Defaults............................................................................. 15
4.9 Taxes................................................................................ 15
4.10 Litigation........................................................................... 15
4.11 Subsidiaries/Affiliates.............................................................. 15
4.12 Investment Company Act............................................................... 15
4.13 Compliance with ERISA................................................................ 15
4.14 Security Interest.................................................................... 15
4.15 Capital Structure.................................................................... 16
4.16 Taxes and Charges Relating to the Agreement.......................................... 16
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SECTION V
AFFIRMATIVE COVENANTS........................................................................................... 16
5.1 Financial Statements and Other Reporting
Requirements......................................................................... 16
5.2 Conduct of Business.................................................................. 17
5.3 Maintenance and Insurance............................................................ 18
5.4 Taxes................................................................................ 18
5.5 Inspection and Verification.......................................................... 18
5.6 Maintenance of Books and Records..................................................... 19
5.7 Minimum Tangible Net Worth........................................................... 19
SECTION VI
NEGATIVE COVENANTS.............................................................................................. 19
6.1 Indebtedness......................................................................... 19
6.2 Contingent Liabilities............................................................... 20
6.3 Negative Pledge and Permitted Encumbrances........................................... 20
6.4 ERISA................................................................................ 21
6.5 Merger; Consolidation; Sale or Lease of Assets....................................... 21
6.6 Investments.......................................................................... 21
6.7 Change in Terms and Prepayment of Subordinated
Indebtedness......................................................................... 22
6.8 Restricted Payments and Purchases.................................................... 22
SECTION VII
SECURITY AGREEMENT.............................................................................................. 22
7.1 Creation of Security Interest........................................................ 22
7.2 Covenants Pertaining to Collateral................................................... 22
7.3 Remedies............................................................................. 24
7.4 Waivers.............................................................................. 25
SECTION VIII
DEFAULTS........................................................................................................ 25
8.1 Events of Default.................................................................... 25
8.2 Remedies............................................................................. 27
SECTION IX
MISCELLANEOUS................................................................................................... 28
9.1 Notices.............................................................................. 28
9.2 Expenses............................................................................. 29
9.3 Set-Off.............................................................................. 30
9.4 Term of Agreement.................................................................... 30
9.5 No Waivers........................................................................... 30
9.6 Governing Law........................................................................ 30
9.7 Amendments........................................................................... 30
9.8 Binding Effect of Agreement.......................................................... 31
9.9 Counterparts......................................................................... 31
9.10 Severability......................................................................... 31
9.11 Captions............................................................................. 31
9.12 Entire Agreement..................................................................... 31
9.13 JURY WAIVER.......................................................................... 31
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REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement, dated December 12, 1995, is
made and entered into by and among Capital Bank, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lender"), Bayport Restaurant
Group, Inc. ("Bayport"), Crab House, Inc., Capt. Crab's Take-Away
of 79th Street, Inc., Take-Away/King Shopping Plaza, Inc. and
Cryotech Industries of North Carolina, Inc. (each of the above
listed entities collectively referred to herein as the "Borrower"
or the "Borrowers").
SECTION I
DEFINITIONS
1.1 GENERAL.
All capitalized terms used in this Agreement or in any certificate,
report or other document made or delivered pursuant to this Agreement (unless
otherwise defined therein) shall have the meanings assigned to them below:
AFFILIATE. A Person (other than a Subsidiary)
(i) which directly or indirectly through
one or more intermediaries controls or is controlled by or is
under common control with another Person;
(ii) which beneficially owns or holds 5% or
more of any class of the voting stock of such other Person; or
(iii) 5% or more of the voting stock (or in the case
of a Person which is not a corporation, 5% or more of the
equity interest) of which is beneficially owned or held by
such other Person.
AGREEMENT. This Agreement (including all exhibits, schedules, annexes
and the like referred to herein) as originally executed, or if amended, varied
or supplemented from time to time, as so amended, varied or supplemented.
BASE RATE. The prime rate of interest as set forth from time
to time in THE WALL STREET JOURNAL.
BORROWING BASE. The amount, as of the date calculated, equal
to 80% of the Qualified Jax Inventory.
BORROWING BASE CERTIFICATE. A certificate duly executed by
the chief financial officer of Borrower, substantially in the form
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of Exhibit 1.1(a) attached hereto, with such changes as Lender may from time to
time hereafter request.
BUSINESS DAY. Any day other than a Saturday, Sunday or legal holiday on
which banks in Miami, Florida are open for the conduct of a substantial part of
their commercial lending business.
CLOSING DATE. December 15, 1995.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
COLLATERAL. See Section 7.1.
CONTROLLED GROUP. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.
DEFAULT. An event or condition that, with the passage of time
or the giving of notice, or both, would constitute an Event of
Default.
ENCUMBRANCES. See Section 6.3.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
EVENT OF DEFAULT. Any event described in Section 8.1.
FNBB AGREEMENT. The Revolving Credit and Term Loan Agreement dated as
of December 14, 1994 among Borrower, The First National Bank of Boston, as Agent
("Agent"), The First National Bank of Boston ("FNBB"), Lender and such other
financial institutions as may be parties thereto from time to time, as amended,
restated or otherwise modified from time to time.
GAAP. Means generally accepted accounting principles.
GUARANTEES. As applied to the Borrower, all guarantees, endorsements or
other contingent or surety obligations with respect to obligations of others
whether or not reflected on the balance sheet of the Borrower, including any
obligation to furnish funds, directly or indirectly (whether by virtue of
partnership arrangements, by agreement to keep-well or otherwise), through the
purchase of goods, supplies or services, or by way of stock purchase, capital
contribution, advance or loan, or to enter into a contract for any of the
foregoing, for the purpose of payment of obligations of any other Person.
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INDEBTEDNESS. As applied to the Borrower, (i) all obligations for
borrowed money or other extensions of credit, including all obligations
representing the deferred purchase price of property, other than accounts
payable arising in the ordinary course of business, (ii) all obligations
evidenced by bonds, notes, debentures or other similar instruments, (iii) all
obligations secured by any mortgage, pledge, security interest or other lien on
property owned or acquired by the Borrower whether or not the obligations
secured thereby shall have been assumed, (iv) that portion of all obligations
arising under capital leases that is required to be capitalized on the
consolidated balance sheet of the Borrower, and (v) all Guarantees.
INVESTMENTS. The purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other Person, any loan, advance or extension of credit to, or contribution to
the capital of, any other Person, any real estate held for sale or investment,
any commodities futures contracts held other than in connection with bona fide
hedging transactions, any other investment in any other Person, and the making
of any commitment or acquisition of any option to make an Investment.
JAX INVENTORY. All inventory and other property of every kind and
description owned by Borrower and located at Jax Cold Storage, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (or at other locations approved from time to time
by Lender), including, without limitation, frozen fish, crustaceans, mollusks,
cephalopods, alligator and parts and products thereof, raw and processed.
LOAN. A Loan made to the Borrower pursuant to Section II of
this Agreement.
LOAN ACCOUNT. The general ledger account in the name of the Borrower on
the books of the Lender in which will be recorded Loans and advances made by the
Lenders to the Borrower pursuant to this Agreement, payments made on such Loans,
and other appropriate debits and credits as provided by this Agreement.
LOAN DOCUMENTS. This Agreement, the Note, UCC-1 Financing Statements
and each and every agreement, instrument and document entered into and/or
delivered in connection herewith and with the transactions contemplated
hereunder.
MAXIMUM COMMITMENT. $2,000,000.00
NET INCOME. At any date as of which the amount thereof shall be
determined, all amounts that should, in accordance with generally accepted
accounting principles, be included as the net income of the Borrower.
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OBLIGATIONS. Any and all obligations of the Borrower to the Lender of
every kind and description, direct or indirect, absolute or contingent, primary
or secondary, due or to become due, now existing or hereafter arising or
acquired, in connection with this Agreement and/or the other Loan Documents, and
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
PBGC. The Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
PERMITTED ENCUMBRANCES. See Section 6.3.
PERSON. An individual, a corporation, a partnership, a joint venture,
an association, a joint stock company, a trust, an unincorporated organization
or a government or any agency or political subdivision thereof.
PLAN. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group or (ii) if such Plan is established, maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Borrower, or any member of the
Controlled Group is then making or accruing an obligation to make contributions
or has within the preceding five Plan years made contributions.
QUALIFIED JAX INVENTORY. Jax Inventory that has been located
at the warehouse for 270 days or less.
RESTRICTED PAYMENT. Means (a) any redemption or prepayment or other
retirement by the Borrower, prior to the stated maturity thereof or prior to the
due date of any regularly scheduled installment or amortization payment with
respect thereto, of any Indebtedness or of any Indebtedness that is junior and
subordinate to the Obligations, (b) the payment by the Borrower of the principal
amount of or interest on any Indebtedness (other than trade debt) owing to a
shareholder, partner or equity holder of the Borrower or to any Affiliate of any
such shareholder, partner or equity holder and (c) the payment of any
management, consulting or similar fee by the Borrower to any of its Affiliates.
RESTRICTED PURCHASE. Means any payment on account of the purchase,
redemption or other acquisition or retirement by a Person of any (a) shares of
such Person's capital stock (except shares acquired on the conversion thereof
into other shares of capital stock of such Person) or (b) a partnership interest
in such Person, if such Person is a partnership.
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REVOLVING CREDIT PERIOD. The period beginning on the date of this
Agreement and extending through and including the Termination Date or such
earlier date on which the Commitment to make Revolving Loans is terminated in
accordance with the terms hereof.
REVOLVING LOANS. The Loans made to the Borrower pursuant to
Section 2.1(a) of this Agreement.
REVOLVING NOTE. The promissory note of the Borrower payable to the
order of the Lender in substantially the form of Exhibit 2.3(a), with all blanks
properly completed, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or refinanced and
any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor.
SENIOR BANK INDEBTEDNESS. All Indebtedness under this
Agreement and under the FNBB Agreement.
SUBORDINATED INDEBTEDNESS. Indebtedness of the Borrower the payment of
principal of and interest on which is expressly subordinated in right of
payment, to the prior payment in full of the Obligations, by a written agreement
in a form and substance satisfactory to the Lender.
SUBSIDIARY. For any Person, any corporation, association, joint stock
company, business trust or other similar organization of which 50% or more of
the ordinary voting power for the election of a majority of the members of the
board of directors or other governing body of such entity is held or controlled
by such Person; or any other such organization the management of which is
directly or indirectly controlled by such Person through the exercise of voting
power or otherwise; or any joint venture, whether incorporated or not, in which
such Person has a 50% ownership interest.
TANGIBLE NET WORTH. At any date as of which the amount thereof shall be
determined, (i) the total assets of the Borrower minus (ii) the sum of any
amounts attributable to (a) goodwill; (b) intangible items such as unamortized
debt discount and expense, patents, trade and service marks and names,
copyrights and research and development expenses except prepaid expenses (which
shall be included in the definition of Tangible Net Worth); (c) all reserves not
already deducted from assets; (d) any write-up in the book value of assets
resulting from any revaluation thereof subsequent to the date of the audited
financial statements referred to in Section 4.6; (e) noncompetition agreements;
and (f) loans to shareholders, officers, directors and employees of the Borrower
minus (iii) Total Liabilities.
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TERMINATION DATE. The earlier to occur of (i) December 30, 2002 or (ii)
such earlier date on which the Loans become due and payable pursuant to the
terms hereof.
TOTAL LIABILITIES. At any date as of which the amount thereof shall be
determined, all obligations that should, in accordance with generally accepted
accounting principles, be classified as liabilities on the balance sheet of the
Borrower, including in any event all Indebtedness.
Words importing persons include firms, associations and corporations,
and the singular and plural form of words shall be deemed interchangeable
wherever appropriate.
1.2 ACCOUNTING TERMS.
All terms of an accounting character shall have the meanings assigned
thereto by generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in Section 4.6 of this
Agreement, modified to the extent, but only to the extent, that such meanings
are specifically modified herein.
SECTION II
DESCRIPTION OF CREDIT
2.1 THE LOANS. Subject to the terms and conditions hereof, and so long
as no Default or Event of Default has occurred and is continuing, Lender may
make Revolving Loans to the Borrower from time to time until the close of
business on the last Business Day preceding the Termination Date, as requested,
or deemed requested, by the Borrower in accordance with the terms of Section 2.2
hereof; provided that the aggregate principal amount of all outstanding Loans
(after giving effect to the Loans requested) shall not exceed the lesser of (i)
the Borrowing Base or (ii) the Maximum Commitment. Lender has no obligation to
make any such loan and may elect not to do so at any time, with or without good
reason. The Borrower may borrow, repay Revolving Loans pursuant to Section 2.7,
and reborrow, from the date of this Agreement until the last Business Day
preceding the Termination Date. Any Revolving Loan not repaid by the Termination
Date shall be due and payable on such date.
2.2 NOTICE AND MANNER OF BORROWING.
(a) Whenever the Borrower desires to obtain a Loan
hereunder, an officer of the Borrower, certified in writing as
authorized to request Loans hereunder, shall notify the Lender
(which notice to the Lender shall be irrevocable) by telecopy or by
delivery of written notice received no later than 11:00 a.m. (Miami
time) on the day on which the requested Loan is to be made. Notices
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received after 11:00 a.m. (Miami time) shall be deemed to have been received on
the next Business Day. Such notice shall specify the effective date and amount
of each Loan subject to the limitations set forth in Section 2.1. Each such
notice shall be accompanied by the delivery to Lender of all documents
reasonably requested by Lender, including, without limitation, a duly executed
Borrowing Base Certificate.
(b) In addition to the foregoing, unless payment is otherwise
made by the Borrower, (i) the becoming due of any amount required to be paid
under this Agreement as interest shall be deemed to be a request for a Loan on
the due date in the amount required to pay such interest and (ii) the becoming
due of any other Obligation, shall be deemed to be a request for a Loan on the
due date in the amount so due, and such requests shall be irrevocable.
(c) The Borrower hereby irrevocably authorizes the Lender to
disburse the proceeds of each borrowing requested, or deemed to be requested,
pursuant to this Section 2.2 as follows:
(i) the proceeds or each borrowing requested under
Section 2.2(a) shall be disbursed by the Lender in dollars in
immediately available funds to an account maintained by the
Borrower with the Lender or to such other account the Borrower
may direct the Lender from time to time; and
(ii) the proceeds of each borrowing deemed requested
under Section 2.2(b) shall either be disbursed by the Lender
by way of direct payment of the relevant interest or
Obligation.
2.3 THE NOTE.
(a) The Loans and the obligation of the Borrower to repay such
Loans shall be evidenced by a Revolving Note in the form of Exhibit 2.3(a). The
Revolving Note shall be dated the date hereof and be duly and validly executed
and delivered by the Borrower.
(b) The Lender shall, and is hereby irrevocably authorized by
the Borrower to, enter on the schedule forming a part of the Revolving Note, or
otherwise in its records, appropriate notations evidencing the date and the
amount of each Loan and the date and amount of each payment of principal made by
a Borrower with respect thereto; and in the absence of manifest error, such
notations shall constitute conclusive evidence thereof. The Lender is hereby
irrevocably authorized by a Borrower to attach to and make a part of the
Revolving Note a continuation of any such schedule as and when required. No
failure on the part of a Lender to make any notation as provided in this
subsection (b) shall in
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any way affect any Loan or the rights or obligations of a Lender or
a Borrower with respect thereto.
2.4 USE OF PROCEEDS. The proceeds of the loans made hereunder shall be
used by Borrower for working capital purposes only. No portion of any Loan is to
be used for the "purpose of purchasing or carrying" any "margin stock" as such
terms are used in Regulations G, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. 221 and 224, as amended.
2.5 INTEREST RATE AND PAYMENTS OF INTEREST.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to the Base Rate plus one percent (1%),
which rate shall change on the first day of each calendar month to reflect any
change in the Base Rate. Such interest shall be payable on the first day of each
month and when such Loan is due (whether on demand, by reason of acceleration or
otherwise).
(b) At the option of the Lender, and no sooner than thirty
(30) days after the occurrence of an Event of Default hereunder which is
continuing and has not been waived, the interest rate applicable to each Loan
shall increase to four percent (4%) above the rate of interest otherwise
applicable to the Loans. The interest rate provided for in the preceding
sentence shall, to the extent permitted by applicable law, apply to and accrue
on the amount of any judgment entered with respect to any Obligation and shall
continue to accrue at such rate during any proceeding described in Sections
8.1(h) and (i).
(c) All provisions of this Agreement and the other Loan
Documents are expressly subject to the condition that in no event, whether by
reason of acceleration of maturity of the Obligations or otherwise, shall the
amount paid or agreed to be paid to the Lender which is deemed interest under
applicable law exceed the maximum permitted rate of interest under applicable
law (the "Maximum Rate"), which shall mean the law in effect on the date of this
Agreement, except that if there is a change in such law which results in a
higher Maximum Rate, then this Agreement shall be governed by such amended law
from and after its effective date. In the event that fulfillment of any
provision of this Agreement, or the other Loan Documents results in the rate of
interest charged hereunder being in excess of the Maximum Rate, the obligation
to be fulfilled shall automatically be reduced to eliminate such excess. If,
notwithstanding the foregoing, the Lender receive an amount which under
applicable law would cause the interest rate hereunder to exceed the Maximum
Rate, the portion thereof which would be excessive shall automatically be deemed
a prepayment of and be applied to the unpaid principal balance of the
Obligations.
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(d) The Borrower will, to the extent permitted by applicable
law, pay interest on the unpaid principal amount of any Obligation that is due
and payable other than the Loans in accordance with Sections 2.5(a) or (b), as
applicable, as if such Obligation were a Loan.
2.6 PAYMENTS AND PREPAYMENTS OF THE LOANS. Loans may be
prepaid at any time, without premium or penalty.
2.7 METHOD OF PAYMENT. All payments and prepayments of principal and
any and all other amounts due hereunder shall be made by the Borrower to the
Lender, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, in immediately available
funds and in United States Dollars, on or before 1:00 p.m. (Miami time) on the
due date thereof, free and clear of, and without any deduction or withholding
for, any taxes or other payments. Any payment received after such time but
before 3:00 p.m (Miami time) on such day shall be deemed a payment on such date
for the purposes of Section 8.1, but for all other purposes shall be deemed to
have been made on the next succeeding Business Day.
2.8 OVERDUE PAYMENTS. At the option of the Lender, if a payment of
principal or interest hereunder is not made within 10 days of demand or its due
date, the Borrower will also pay on demand a late payment charge equal to 3% of
the amount of such payment. Nothing in the preceding sentence shall affect the
Lender's right to exercise any of its rights or remedies, including those
provided in Section VII, if any Event of Default has occurred.
2.9 COMPUTATION OF INTEREST. Interest payable hereunder shall be
computed daily on the basis of a year of 360 days and paid for the actual number
of days for which due. If the due date for any payment of principal is extended
by operation of law, interest shall be payable for such extended time. If any
payment required by this Agreement becomes due on a day that is not a Business
Day such payment shall be made on the next succeeding Business Day, and such
extension shall be included in computing interest in connection with such
payment.
2.10 CAPITAL ADEQUACY. If Lender shall have determined that the
adoption of any applicable law, rule, regulation, guideline, directive or
request (whether or not having the force of law) regarding capital requirements
for banks or bank holding companies, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Lender with any of the foregoing imposes or
increases a requirement by such Lender to allocate capital resources to the
Lender's commitment to make Loans hereunder which has or would have the effect
of reducing the return on the Lender's capital to a level below that which the
Lender could have achieved
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(taking into consideration the Lender's then existing policies with respect to
capital adequacy and assuming full utilization of such Lender's capital) but for
such adoption, change or compliance by any amount reasonably deemed by the
Lender to be material, then the Lender may, at its option and by notice to the
Borrower terminate its obligation to make any further loans hereunder.
Any such notice by any the Lender to the Borrower shall be accompanied
by a certificate, shall set forth the nature of the occurrence giving rise to
such compensation, the additional amount or amounts to be paid to the Lender
hereunder and the method by which such amounts were determined. In determining
such amount, a Lender may use any reasonable averaging and attribution methods.
Such certificate and the determinations set forth therein shall be conclusive in
the absence of manifest error.
2.11 TAXES.
(a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.7, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on the net income of the Lender.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
2.12 BORROWERS' REPRESENTATIVE. The Borrowers are and shall be jointly
and severally liable for all Obligations. Each of the Borrowers other than
Bayport, hereby appoints Bayport Restaurant Group, Inc., as, and Bayport, shall
act under this Agreement as, the representative of such Borrower for all
purposes, including, without being limited to, requesting borrowings and
receiving account statements and other notices and communications to the
Borrower (or any of them) from the Lender. The Lender may rely, and shall be
fully protected in relying, on any request for borrowing, disbursement
instruction, report, information or any other notice or communication made or
given by Bayport, whether in its own name, on behalf of any other Borrower and
the Lender shall have any obligation to make any inquiry or request any
confirmation from or on behalf of any other Borrower as to the binding effect on
it of any such request, instruction, report, information, notice or
communication, nor shall the joint and several character of the Borrower's
liability for the Obligations be affected. The Lender intends to maintain a
single Revolving Loan account for any Loan in the name of "Bayport Restaurant
Group, Inc." hereunder and each Borrower expressly agrees to such arrangement
and confirms that
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such arrangement shall have no effect on the joint and several character of its
liability for the Obligations.
2.13 JOINT AND SEVERAL LIABILITY.
(a) The Obligations shall constitute one joint and several
direct and general obligation of all of the Borrowers. Notwithstanding anything
to the contrary contained herein, each of the Borrowers shall be jointly and
severally, with each other Borrower, directly and unconditionally liable to the
Lender for all Obligations and shall have the obligations of co-makers with
respect to the Loans, the Note and the Obligations, it being agreed that the
advances to each Borrower inure to the benefit of all Borrowers, and that the
Lender is relying on the joint and several liability of the Borrowers as
co-makers in extending the Loans to any Borrower without the undertakings of all
of the Borrowers set forth in this Section 2.13. Each Borrower hereby
unconditionally and irrevocably agrees that upon default in the payment when due
(whether at stated maturity, by acceleration or otherwise) of any principal of,
or interest on, any Loan or other Obligation payable to the Lender or any
Lender, it will forthwith pay the same, without notice or demand.
(b) No payment or payments made by any of the Borrowers or any
other Person or received or collected by the Lender from any of the Borrowers or
any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of each Borrower under this Agreement, which
shall remain liable for the Obligations until the Obligations are paid in full
and this Agreement is terminated.
SECTION III
CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of Lender to
make its initial Loan is subject to the condition precedent that the Lender
shall have received, in form and substance reasonably satisfactory to the Lender
and its counsel, the following:
(a) this Agreement duly executed by each Borrower and
the Lender;
(b) as to each Borrower, a Certificate signed by the Secretary
of the Borrower as to the truth, correctness and completeness of copies of (i)
Articles of Incorporation, together with any amendments thereto; (ii) Bylaws,
together with any amendments thereto; (iii) Certificates of Legal Existence;
(iv) Certificates of Qualification as a Foreign Corporation, (v) the
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borrowing resolutions; and (vi) the names and signatures of each officer of the
Borrower authorized to execute and deliver this Agreement, the Note and the
other Loan Documents on behalf of the Borrower;
(c) receipt of evidence, in form and substance satisfactory to
the Lender, of the filing of appropriate Uniform Commercial Code Financing
Statements in favor of the Lender, for filing in all offices necessary to
perfect the Lender's security interest in the Collateral;
(d) a certificate issued by the Borrower's insurance
agent evidencing compliance with the insurance provisions of
Section 5.3;
(e) such other documents, and completion of such other
matters, as counsel for the Lender may reasonably deem necessary or
appropriate;
(f) the Note duly executed by each Borrower payable to
the Lender; and
(g) The Intercreditor Agreement in the form attached hereto as
Exhibit 3.1(i), duly executed by Agent, Lender and Borrower.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the
Lender to make each Loan, including the initial Loan, is further
subject to the following conditions:
(a) the representations and warranties contained in Section IV
shall be true and accurate in all material respects on and as of the effective
date of each Loan as though made at and as of each such date (except to the
extent that such representations and warranties expressly relate to an earlier
date), and no Default shall have occurred and be continuing (or have not been
waived) or would result from such Loan;
(b) the resolutions referred to in Section 3.1(b) shall
remain in full force and effect; and
(c) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Lender, would
make it illegal or against the policy of any governmental agency or authority
for the Lender to make Loans hereunder.
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of such Loan as to the accuracy of the
facts referred to in subsection (a) of this Section 3.2.
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SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make
Loans hereunder, each Borrower hereby represents and warrants to the Lender
that:
4.1 ORGANIZATION AND QUALIFICATION. Each Borrower (a) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, (c) is duly qualified and in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where the
nature of its properties or business requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on the
business, financial condition, assets or properties of the Borrower on a
consolidated basis, (d) has its chief executive office located at the addresses
specified in Exhibit 4.1 hereof, and (e) has an office, manufacturing facility,
warehouse, existing property or occupies space in the states and at the
locations specified in Exhibit 4.1 hereto.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance of
this Agreement and the transactions contemplated hereby are within the corporate
power and authority of each Borrower and have been authorized by all necessary
corporate proceedings, and do not and will not:
(a) require any consent or approval of the stockholders
of the Borrower other than those consents and approvals, if any,
previously obtained;
(b) contravene any provision of the charter documents or
bylaws of the Borrower or any law, rule or regulation applicable to
the Borrower; or
(c) contravene any provision of, or constitute an event of
default or event that, but for the requirement that time elapse or notice be
given, or both, would constitute an event of default under, any other agreement,
instrument, order or undertaking binding on the Borrower; or
(d) result in or require the imposition to any Encumbrance on
any of the properties, assets or rights of either Borrower, except Encumbrances
permitted hereunder.
4.3 VALID OBLIGATIONS. This Agreement, the Note and the
other Loan Documents to which the Borrower is a party and all of
terms and provisions of such documents are the legal, valid and
binding obligations of each Borrower, enforceable in accordance
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with their respective terms except as limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally, and except as the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
4.4 CONSENTS OR APPROVALS. The execution, delivery and performance of
this Agreement, the Note and the other Loan Documents to which the Borrower is a
party and the transactions contemplated herein do not require any approval or
consent of, or filing or registration with, any governmental or other agency or
authority, or any other party.
4.5 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each Borrower has
good and marketable title to all of the properties, assets and rights of every
name and nature now purported to be owned by it, including, without limitation,
such properties, assets and rights as are reflected in the financial statements
referred to in Section 4.6 (except such properties, assets or rights as have
been disposed of in the ordinary course of business since the date thereof),
free from all Encumbrances except Permitted Encumbrances or those Encumbrances
disclosed in Exhibit 4.5 thereto, and, except as so disclosed, free from all
defects of title that might materially adversely affect such properties, assets
or rights, taken as a whole.
4.6 FINANCIAL STATEMENTS. The Borrowers have furnished the Lender with
their consolidated balance sheet as of December 26, 1994 and with their
consolidated statements of income, changes in stockholders' equity and related
footnotes, audited and unqualified by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The Borrowers have also
furnished the Lender their unaudited consolidated balance sheets and its
unaudited consolidated statements of income as of September 25, 1995 and
unaudited consolidated cash flow projections for the three year period ending
December 31, 1997. All financial statements (except for the financial
projections described above) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
specified and present fairly the financial position of each of the Borrowers as
of such dates and the results of the operations of the Borrowers. The
assumptions on which the cash flows were projected remain reasonable as of the
Closing Date.
4.7 CHANGES. Since the date of the most recent financial statements
referred to in Section 4.6, there have been no changes in the assets,
liabilities, financial condition, business or prospects of the Borrower other
than changes in the ordinary course of business, the effect of which has not, in
the aggregate, been materiallY adverse.
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4.8 DEFAULTS. As of the date of this Agreement, with respect
to each Borrower, no Default exists.
4.9 TAXES. Each Borrower has filed, subject to the election to seek a
filing extension, all federal, state and other tax returns which were due prior
to the date of this Agreement, and all taxes, assessments and other governmental
charges due from each Borrower prior to or as of the date hereof has been fully
paid or reserved for payment. Each Borrower has established and will maintain on
its books reserves adequate for the payment of all federal, state and other tax
liabilities.
4.10 LITIGATION. Except as set forth on Exhibit 4.10 hereto, there is
no litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the officers of each Borrower threatened, which, if adversely
determined, would result in a material judgment not fully covered by insurance
or would otherwise have a material adverse effect on the assets, business or
prospects of the Borrowers.
4.11 SUBSIDIARIES/AFFILIATES. Each Subsidiary and Affiliate of the
Borrower is a partnership or corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own and operate its properties,
to carry on its business as now conducted and now proposed to be conducted. All
of the outstanding capital stock of each Subsidiary is validly issued fully-paid
and non-assessable, and is owned by the Borrower or its Subsidiaries, in each
case free of any charge, option or other lien.
4.12 INVESTMENT COMPANY ACT. No Borrower is subject to
regulation under the Investment Company Act of 1940, as amended.
4.13 COMPLIANCE WITH ERISA. Each Borrower and each member of the
related Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or a Plan under Title
IV of ERISA; and no "prohibited transaction" or "reportable event" (as such
terms are defined in ERISA) has occurred with respect to any Plan.
4.14 SECURITY INTEREST. This Agreement creates and continues in favor
of the Lender a security interest in the Collateral identified in Section 7.1
hereof. All financing statements with respect to the Collateral have been
executed and will be filed on or before the date of the initial loan hereunder
in all offices necessary to perfect a security interest in the Collateral, and
such security interest constitutes a first priority perfected security interest
in the Collateral, except in Collateral (if any)
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in which a security interest cannot be perfected by filing under the Uniform
Commercial Code.
4.15 CAPITAL STRUCTURE. As of the date of this Agreement, the
Borrower has stockholder equity of not less than $21,700,000.
4.16 TAXES AND CHARGES RELATING TO THE AGREEMENT. All state and local
recording, franchise, stamp, documentary and other governmental charges and
assessments required to be paid in connection with the execution, delivery,
filing or recordation of, or as a condition to, the enforcement of this
Agreement, or the Lender's Lien on the Collateral, have been duly paid.
SECTION V
AFFIRMATIVE COVENANTS
So long as the Lender has any commitment to lend hereunder or any Loan
or other Obligation remains outstanding, the Borrower covenant with the Lender
as follows:
5.1 FINANCIAL STATEMENTS AND OTHER REPORTING REQUIREMENTS.
Each Borrower shall furnish to the Lender:
(a) within 5 days after the end of each month, a duly
executed Borrowing Base Certificate;
(b) each week, an Inventory Report in the form of Exhibit
5.1(b) hereto, executed by a representative of Jax Cold Storage and delivered
directly by Jax Cold Storage to Lender;
(c) each week, an Inventory Value Report, Physical Inventory
Variance Report and Detail Product Cost Report, executed by an officer of
Borrower and in the forms of Exhibits 5.1(c)(i), 5.1(c)(ii) and 5.1(c)(iii)
attached hereto;
(d) as soon as available to the Borrower, but in any event
within 120 days after the end of each of its fiscal years, a consolidated
balance sheet as of the end of, and a related consolidated statement of income,
changes in stockholders' equity and consolidated statement of cash flow for,
such year, audited and unqualified by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or other independent
certified public accountants acceptable to the Lenders); and, within six months
after the end of each of its fiscal years, if issued, a copy of said certified
public accountants' management report and a written statement by such
accountants that, in the making of the audit necessary for their report and
opinion upon such financial statements they have obtained no knowledge of any
Default or, if in the opinion of such accountants any such Default exists, they
shall disclose in such written statement the nature and status thereof;
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(e) as soon as available, but in any event within 60 days
after the end of each fiscal quarter and more frequently as the Bank may
request, a balance sheet as of the end of, and a related statement of income for
the month then ended;
(f) promptly after the receipt thereof copies of any reports
submitted to the Borrower by independent public accountants in connection with
any interim review of the accounts of the Borrower made by such accountants;
(g) if and when the Borrower gives or is required to give
notice to the PBGC of any "Reportable Event" (as defined in Section 4043 of
ERISA) with respect to any Plan that might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that any member of the Controlled
Group or the plan administrator of any Plan has given or is required to give
notice of any such Reportable Event, a copy of the notice of such Reportable
Event given or required to be given to the PBGC;
(h) promptly upon becoming aware of the existence of any
condition or event that constitutes a Default, written notice thereof specifying
the nature and duration thereof and the action being or proposed to be taken
with respect thereto;
(i) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
overtly threatened, the outcome of which would or might have a materially
adverse effect on the assets, business, prospects or financial condition of the
Borrower, written notice thereof and the action being or proposed to be taken
with respect thereto; and
(j) from time to time, such other information about the
Borrower as any Lender or the Lender may reasonably request.
5.2 CONDUCT OF BUSINESS. Each Borrower shall:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets, and shall maintain and keep in full
force and effect all licenses and permits necessary in any material respect to
the proper conduct of its business;
(b) maintain its corporate existence;
(c) remain engaged substantially in the restaurant
business and operation of a seafood processing plant; and
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(d) maintain its chief executive office at the addresses
specified in Section 4.1 hereof, unless the Lender shall have first been
notified in writing of any change.
5.3 MAINTENANCE AND INSURANCE. Each Borrower shall maintain its
properties in good repair, working order and condition as required for the
normal conduct of its business. Each Borrower shall at all times maintain with
financially sound and reputable insurers, liability and casualty insurance
customary for companies engaged in businesses similar to that of the Borrower
including in any event fire and extended coverage and theft, and, with respect
to the Borrower's casualty insurance covering the Collateral, shall, in addition
be in amounts, containing such terms, in such form, and for such periods as may
be reasonably satisfactory to the Lender, such insurance to be payable to the
Lender (as loss payee and additional insured) and the Borrower as their
interests may appear. All such policies of insurance shall provide for no less
than thirty (30) days written minimum cancellation notice to the Lender. In the
event each Borrower fails to provide and maintain insurance as herein required,
the Lender may, at its option, provide such insurance and charge the amount
thereof to the Loan Account which amount shall bear interest at the rate
specified in, and in accordance with, Section 2.5 of this Agreement. Each
Borrower shall furnish to the Lender certificates or other evidence reasonably
satisfactory to the Lender of compliance with the foregoing insurance
provisions.
5.4 TAXES. Each Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or its properties on or
prior to the time when they become due, accounting for applicable filing
extensions, unless any such tax, assessment or charge is being contested in good
faith by appropriate proceedings and with adequate reserves established and
maintained in accordance with generally accepted accounting principles provided
no lien shall have been filed to secure any such tax, assessment or charge.
5.5 INSPECTION AND VERIFICATION. Borrower shall cause Jax Cold Storage
to permit Lender or its designees, at any reasonable time and upon reasonable
notice (or if a Default shall have occurred and is continuing, at any time and
without prior notice), to visit and inspect the Collateral. Borrower shall
permit the Lender or its designees, at any reasonable time and upon reasonable
notice (or if a Default shall have occurred and is continuing, at any time and
without prior notice), to (i) visit and inspect, (ii) examine and make copies of
and take abstracts from the books and records of Borrower, and (iii) discuss the
affairs, finances and accounts of Borrower and its appropriate officers,
employees and accountants. Lender agrees to use its best efforts to ensure that
any such inspection, examination or discussion does not unreasonably impede the
operation of the Borrowers' business.
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5.6 MAINTENANCE OF BOOKS AND RECORDS. Each Borrower shall keep adequate
books and records of account, in which true and complete entries will be made
reflecting all of its business and financial transactions, and such entries will
be made in accordance with generally accepted accounting principles consistently
applied and applicable law.
5.7 MINIMUM TANGIBLE NET WORTH. As of the last day of each of the
Borrower's fiscal quarters shown below, the Borrower shall have Tangible Net
Worth of not less than the amounts set forth for each such fiscal quarter:
PERIOD AMOUNT
------ ------
December 25, 1995 $21,700,000
March 25, 1996 $22,700,000
June 24, 1996 $23,700,000
September 23, 1996 $24,700,000
December 30, 1996 $25,700,000
March 31, 1997 $27,200.000
June 30, 1997 $28,700,000
September 29, 1997 $30,200,000
December 29, 1997 $31,700,000
and thereafter
5.8 FURTHER ASSURANCES. At any time and from time to time the Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Lender to effect the purposes of this Agreement.
SECTION VI
NEGATIVE COVENANTS
So long as the Lender has any commitment to lend hereunder or any Loan
or other Obligation remains outstanding, each Borrower covenants with the Lender
as follows:
6.1 INDEBTEDNESS. The Borrower will not create, incur,
assume, guarantee or be or remain liable with respect to any
Indebtedness other than the following:
(a) The Indebtedness evidenced by this Agreement, the
Note or any of the other Loan Documents, or the FNBB Agreement;
(b) Indebtedness existing as of the date of this
Agreement and disclosed on Exhibit 6.1(b) hereto or in the
financial statements referred to in Section 4.6;
(c) Subordinated Indebtedness;
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(d) Normal trade Indebtedness relating to the acquisition of
goods and supplies not more than sixty (60) days past due or any such
Indebtedness being contested in good faith and for which adequate reserves have
been established but which amount outstanding by more than sixty (60) days or
being contested shall not exceed, in the aggregate at any time, $250,000;
(e) Indebtedness secured by Permitted Encumbrances;
(f) Transactions in which Borrower sells and leases back
existing properties; and
(g) Other unsecured Indebtedness not to exceed $200,000
in the aggregate at any time.
6.2 CONTINGENT LIABILITIES. The Borrower shall not create,
incur, assume, guarantee or remain liable with respect to any
Guarantees other than the following:
(a) Guarantees disclosed on Exhibit 6.1(b) hereto or in
the financial statements referred to in Section 4.6;
(b) Guarantees resulting from the endorsement of
negotiable instruments for collection in the ordinary course of
business;
(c) Guarantees with respect to surety, appeal performance and
return-of-money and other similar obligations incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); and
(d) Guarantees of normal trade debt relating to the
acquisition of goods and supplies.
6.3 NEGATIVE PLEDGE AND PERMITTED ENCUMBRANCES. With respect to both
its Existing Properties and any Additional Properties, the Borrower shall not
create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance, including the lien or retained
security title of a conditional vendor upon or with respect to any of its
property or assets ("Encumbrances"), or assign or otherwise convey any right to
receive income, including the sale or discount of accounts receivable with or
without recourse, except the following ("Permitted Encumbrances"):
(a) Encumbrances in favor of Lender;
(b) Encumbrances in favor of Agent in connection with
the FNBB Agreement;
(c) Encumbrances in the form of mortgages, leasehold
mortgages and other instruments of record as of the date hereof and
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relating to the Borrower's Existing Properties including purchase money security
interests relating to equipment acquired by the Borrower before the date of this
Agreement in an aggregate amount of approximately $2,800,000;
(d) Liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(e) Landlords, non-consensual liens in respect of rent not in
default or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business:
(f) Judgment liens for which a stay of execution shall have
been obtained, for a period longer than 60 days after the expiration of such
stay;
(g) Rights of lessors under capital leases; and
(h) Encumbrances in respect of any purchase money obligations
for any equipment used in the business of the Borrower which at any time shall
not exceed $500,000 in the aggregate for each Additional Property, provided that
any such Encumbrance shall not extend to property and assets not financed by
such a purchase money obligation.
6.4 ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (i) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code, (ii) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (iii) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of the Borrower pursuant to
Section 4068 of ERISA.
6.5 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. The Borrower shall
not sell, lease or otherwise dispose of assets or properties (valued at the
lower of cost or market), or liquidate, merge or consolidate into or with any
other Person.
6.6 INVESTMENTS. Without the prior written consent of the
Lender, the Borrower shall not (a) make or maintain any Investments
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other than (i) Qualified Investments; or (ii) Investments in any one entity for
which the aggregate purchase price does not exceed $100,000, (b) have
outstanding at any time loans to shareholders, officers, directors and employees
in excess of $300,000 in the aggregate except loans to officers of Bayport
relating to the purchase of shares of Bayport's common stock.
6.7 CHANGE IN TERMS AND PREPAYMENT OF SUBORDINATED
INDEBTEDNESS. The Borrower shall not:
(a) effect or permit any change in or amendment to (i) the
terms by which any Subordinated Indebtedness purports to be subordinated to the
payment or performance of the Obligations, or (ii) the terms relating to the
repayment of any Subordinated Indebtedness; or
(b) directly or indirectly, make any prepayment or payment of
any principal of or in redemption, retirement or repurchase of Subordinated
Indebtedness, other than as may be permitted under the applicable subordination
provisions governing the same.
6.8 RESTRICTED PAYMENTS AND PURCHASES. The Borrower shall not declare
or make any Restricted Payment or Restricted Purchase; provided however, that
with respect to amounts outstanding and payable (i) to Fast-Food Properties
relating to the Borrower's restaurant in Miami, Florida, and (ii) in connection
with the Borrower's acquisition of the ground lease and restaurant facilities in
Orlando, Florida from Select Properties, regularly scheduled periodic payments
made by the Borrower shall be permitted under this Section 6.8.
SECTION VII
SECURITY AGREEMENT
7.1 CREATION OF SECURITY INTEREST. As collateral security for the
payment and performance in full of the Obligations, the Borrower hereby assigns
to the Lender, for the benefit of itself as Lender hereunder and the ratable
benefit of the Lenders, all of its rights, title and interest in, and grants to
the Lender, for the benefit of itself as Lender hereunder and the ratable
benefit of the Lenders, a continuing security interest in, the following
personal property: the Jax Inventory, whether now owned or existing or is owned,
acquired, or arises hereafter, together with all instruments, documents of title
and policies and certificates of insurance relating thereto (the "Collateral").
7.2 COVENANTS PERTAINING TO COLLATERAL. The Borrower
covenants that:
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(a) Other than sales in the ordinary course of the Borrower's
business for cash or an open account and on terms of payment ordinarily extended
to its customers, the Borrower will not grant, assign or transfer any interest
in, or otherwise encumber, any of the Collateral other than in favor of the
Lender. The Borrower shall defend the Collateral against, and take any action
reasonably necessary to remove any liens or encumbrances other than those
permitted hereunder and defend the right, title and interest of the Lender in
and to any of the Borrower's rights in the Collateral.
(b) It will keep the Collateral in good condition, and will
not use the same in violation of law and will pay promptly when due all taxes
and assessments upon the Collateral or for its use or operation.
(c) All of the Collateral is located at Jax Cold Storage, 1429
West 16th Street, Jacksonville, Florida, or such other locations as Lender shall
approve. The Borrower will not remove any tangible Collateral from such
locations (except in connection with dispositions permitted under Section
7.2(a)) unless and until such time as written consent to a change of location is
obtained from the Lender and appropriate UCC filings covering the relocated
tangible Collateral have been delivered to the Lender and duly filed. The
Borrower's chief executive office and the place where its records concerning the
Collateral are kept is shown on Exhibit 4.1 hereof, and the Borrower will not
change such chief executive office or remove such records without the express
prior written consent of the Lender, which consent shall not be unreasonably
withheld.
(d) At any time and from time to time, upon the written
request of the Lender, and at the sole expense of the Borrower, the Borrower
will promptly and duly execute and deliver any and all such further instruments
and documents and take such further actions as the Lender may reasonably deem
desirable in obtaining the full benefits of this Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statement under the Uniform Commercial Code in effect.
The Borrower also hereby authorizes the Lender to file any such financing or
continuation statement without the signature of the Borrower to the extent
permitted by applicable law.
(e) The Borrower will not change its name, identity or
corporate structure in any manner which might make any financing or continuation
statement filed hereunder seriously misleading within the meaning of Section
9-402(7) of the Uniform Commercial Code (or any other then applicable provision
of the Code unless the Borrower shall have given the Lender at least 30 days
prior written notice thereof or shall have delivered to the Lender
acknowledgement copies of UCC-3 financing statements reflecting such change duly
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executed and duly filed in each jurisdiction in which UCC-1 filings were
required in order to perfect the security interest granted by this Agreement in
the Collateral and shall have taken all action (or made arrangements to take
such action concurrently with such change if it is impossible to take such
action in advance) necessary or reasonably requested by the Lender to amend such
financial statement or continuation statement so that it is not seriously
misleading.
7.3 REMEDIES.
(a) The Lender shall have, in addition to all other rights and
remedies provided herein, the rights and remedies of a secured party under the
applicable Uniform Commercial Code. Upon the occurrence of an Event of Default
or at any time thereafter (such defaults not having been previously cured or
waived to the reasonable satisfaction of the Lender) and so long as any part of
the Obligations remains unpaid or unperformed, the Lender may, at its option,
without notice or demand, declare all of the Obligations to be immediately due
and payable and take immediate possession of the Collateral, and for that
purpose enter upon any premises on which any of the Collateral is situated and
remove the same therefrom or remain on such premises and in possession of such
Collateral for purposes of conducting a sale or enforcing the rights of the
Lender under this Agreement. The Borrower will, upon demand, make the Collateral
available to the Lender at a place and time designated by the Lender which is
reasonably convenient. After the occurrence of an Event of Default which is
continuing and has not been waived the Lender may collect and receive all income
and proceeds in respect of the Collateral, exercise all rights of the Borrower
with respect thereto, and apply the Collateral and any and all income and
proceeds received by it hereunder to the payment of all Obligations to the
Lender. The Lender may sell, lease or otherwise dispose of the Collateral at a
public or private sale, with or without having the Collateral at the place of
sale, and upon terms and in such manner as the Lender may determine, and the
Lender may purchase any Collateral at any such sale. Unless the Collateral
threatens to decline rapidly in value or is of the type customarily sold on a
recognized market, the Lender shall give to the Borrower at least ten business
days' prior written notice of the time and place of any public sale of the
Collateral or of the time after which any private sales or any other intended
disposition thereof is to be made.
(b) The Lender shall be entitled to retain and to apply the
proceeds of such sale to: (i) all sums secured hereby; and (ii) its reasonable
expenses of retaking, holding, protecting and maintaining, and preparing for
sale and selling the Collateral, together with interest on such expenses at the
rate specified in, and in accordance with, Section 2.5 of this Agreement,
including reasonable attorney's fees and other legal expenses incurred by it in
connection therewith. If a sufficient sum is not realized from
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any such disposition of Collateral to pay all Obligations secured by this
Agreement, the Borrower hereby promises and agrees to pay any deficiency to the
Lender.
(c) The Lender shall have the right to enforce one or
more remedies hereunder successively or concurrently, and any
further remedy which it may have hereunder or by law.
7.4 WAIVERS. Except as otherwise provided herein, the Borrower waives
demand, notice, protest, notice of acceptance of this Agreement, notice of loans
made, credit extended, Collateral received or delivered or other action taken in
reliance hereon and all other demands and notice of any description. With
respect to both the Obligations and the Collateral, the Borrower assents to any
extension or postponement of the time of payment or any other forgiveness or
indulgence, to any substitution, exchange or release of Collateral, to the
addition or release of any party or Person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Lender may deem advisable. The Lender may exercise any rights with respect to
the Collateral without resorting, or regard, to other collateral or sources of
reimbursement for the Obligations.
SECTION VIII
DEFAULTS
8.1 EVENTS OF DEFAULT. There shall be an Event of Default
hereunder if any of the following events occurs:
(a) The Borrower shall fail to pay when due (i) any amount of
principal of or interest on any Loans, or (ii) any fees or expenses payable
hereunder within five Business Days of the due date therefor; or
(b) The Borrower shall fail to perform any term, covenant or
agreement contained in Sections 5.1(h), 5.5, 5.7 through 5.8, 6.1 through 6.4;
or
(c) The Borrower shall fail to perform any covenant contained
in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(g), 5.1(i) or 5.2, and such failure
shall continue for 30 days; or
(d) The Borrower shall fail to perform any term, covenant or
agreement (other than in respect of subsections 8.1(a) through (c) hereof)
contained in this Agreement and such default shall continue for 30 days after
written notice thereof has been received by the Borrower from the Lender; or
(e) Any representation or warranty of the Borrower made
in this Agreement or any other documents or agreements executed in
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connection with the transactions contemplated by this Agreement or in any
certificate delivered hereunder shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
(f) There shall occur any material adverse change in the
assets, liabilities, financial condition or business of the Borrower, as
determined by the Lender acting in good faith which shall be in existence for
thirty (30) days after notification by the Lender to the Borrower of such
material adverse change; or
(g) The Borrower shall fail to pay at maturity, or within any
applicable period of grace, any Indebtedness under the FNBB Agreement or any
other Indebtedness in excess of $250,000 or fail to observe or perform in a
material manner any term, covenant or agreement evidencing or securing such
Indebtedness; or
(h) The Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar official of itself or of all or a substantial part of its
property, (ii) be generally not paying its debts as such debts become due, (iii)
make a general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), (v) take any action or commence any case or proceeding under any law
relating to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts, or any other law providing for the relief of debtors, (vi)
fail to contest in a timely or appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under such Bankruptcy Code
or other law, (vii) take any action under the laws of its jurisdiction of
incorporation or organization similar to any of the foregoing, or (viii) take
any corporate action for the purpose of effecting any of the foregoing; or
(i) A proceeding or case shall be commenced, without the
application or consent of the Borrower in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, dissolution, winding-up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or of all or any substantial
part of its assets, or (iii) similar relief in respect of it, under any law
relating to bankruptcy, insolvency, reorganization, winding- up or composition
or adjustment of debts or any other law providing for the relief of debtors, and
such proceeding or case shall continue undismissed, or unstayed and in effect,
for a period of thirty (30) days; or an order for relief shall be entered in an
involuntary case under such Bankruptcy Code, against the Borrower or action
under the laws of the jurisdiction of incorporation or organization of the
Borrower similar to any of the foregoing shall be taken with respect to the
Borrower and shall continue unstayed and in effect for any period of 60 days; or
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(j) A judgment or order for the payment of money not covered
by insurance shall be entered against the Borrower by any court, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower, which in the aggregate exceeds $200,000 in value and
such judgment, order, warrant or process shall continue undischarged or unstayed
for 60 days; or
(k) The Borrower or any member of the Controlled Group shall
fail to pay when due any amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a
Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any member
of the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans against the Borrower and such proceedings shall not have been dismissed
within 60 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated.
8.2 REMEDIES. Upon the occurrence of an Event of Default specified in
Sections 8.1(h) or (i), (i) the principal of and the interest on the Loans at
the time outstanding, and all other amounts owed to the Lender under this
Agreement or any of the Loan Documents and all other Obligations, shall
thereupon become due and payable without presentment, demand, protest, or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or any of the Loan Documents to the contrary notwithstanding, and (ii)
the right of the Borrower to request borrowings under this Agreement shall
immediately terminate. If any other Event of Default shall have occurred and be
continuing and not waived, and during the continuance of any such Event of
Default, the Lender may do any of the following:
(a) declare the principal of and interest on the Notes at the
time outstanding, and all other amounts owed to the Lender or the Lenders under
this Agreement, the Notes or any of the other Loan Documents and all other
Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement, the Notes or the other Loan Documents to the contrary
notwithstanding;
(b) terminate each Lender's commitment to make any
further Loans hereunder;
(c) enter upon any premises in which Collateral may be
located and, without resistance or interference by the Borrower,
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take physical possession of any or all thereof and maintain such possession on
such premises or move the same or any part thereof to such other place or places
as the Lender shall choose, without being liable to the Borrower on account of
any loss, damage or depreciation that may occur as a result thereof, so long as
the Lender shall act reasonably and in good faith;
(d) require the Borrower to and the Borrower shall, without
charge to the Lender or any Lender, assemble the Collateral and maintain or
deliver it into the possession of the Lender or representative of the Lender at
such place or places as the Lender may designate and as are reasonably
convenient to both the Lender and the Borrower;
(e) at the expense of the Borrower, cause any of the
Collateral to be placed in public or field warehouse, and the Lender shall not
be liable to the Borrower on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Lender shall act reasonably and in
good faith; and
(f) exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and under any other applicable law, including,
without limitation, the right, without notice except as specified below and with
or without taking possession thereof, to sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any location chosen by the
Lender, for cash, on prices and upon such other terms as the Lender may deem
commercially reasonable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Lender shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it is was so adjourned.
SECTION IX
MISCELLANEOUS
9.1 NOTICES. All notices, requests and demands to or upon the Borrower
or the Lender shall be deemed to have been duly given or made: if by telecopy or
by hand, immediately upon sending or delivery; if by any overnight delivery
service, one (1) day after dispatch; and if mailed by certified mail, return
receipt requested, five (5) days after mailing. All notices, requests and
demands are to be given or made to the respective parties at the following
addresses (or to such other address as any party may designate by notice in
accordance with this Section):
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If to the Borrower:
Bayport Restaurant Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Executive Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
If to the Lender:
Capital Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
5300 First Union Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
9.2 EXPENSES. The Borrower shall, on demand, pay or reimburse the
Lender for all reasonable expenses (including attorneys' fees of outside
counsel, incurred or paid by the Lender in connection with the closing of this
Agreement, and such additional reasonable fees and expenses in connection with
any amendments thereof and the Lender's administration of this Agreement
(including without limitation any waivers, approvals and consents relating
thereto). The Borrower shall, on demand, pay or reimburse the Lender for all
reasonable expenses (including attorney's fees of outside counsel or allocation
costs of internal counsel) incurred or paid by the Lender in connection with the
Lender's enforcement of any Obligation, and the exercise of any rights of the
Lender hereunder. The Borrower shall, on demand, also pay or reimburse the
Lender for all expenses (including without limitation the allocation costs of
the Lender's employees) incurred in connection with any examinations of the
Borrower's operations conducted by the Lender in accordance with provisions of
Section 5.5, the expectations of the Lender in this regard being that the
frequency of such financial examinations will not exceed one inspection visit
per year in the absence of a Default or an Event of Default.
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9.3 SET-OFF. Regardless of the adequacy of the Collateral, any deposits
or other sums, the Borrower hereby irrevocably authorizes the Lender and each
Affiliate or Subsidiary of the Lender to charge any account of the Borrower
maintained with such Lender or such Affiliate or Subsidiary with such amounts as
may be necessary from time to time to pay Obligations (whether or not owed to
such Lender, Affiliate or Subsidiary) which are not paid when due.
9.4 TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as the Lender has any commitment to make Loans hereunder or any
Loan or any Obligation hereunder shall be outstanding.
9.5 NO WAIVERS. No failure or delay by the Lender in exercising any
right, power or privilege hereunder or under any other documents or agreements
executed in connection herewith shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies otherwise provided by law.
9.6 GOVERNING LAW. This Agreement shall be deemed to be a contract made
under seal and shall be construed in accordance with and governed by the laws of
The State of Florida (without giving effect to any conflicts of laws provisions
contained therein).
9.7 AMENDMENTS.
Any term, covenant, agreement or condition of this Agreement
or any of the Loan Documents may be amended or waived if, but only if, such
amendment, waiver or consent is in writing signed by the Lender and by the
Borrower, and in any such event, the failure to observe, perform or discharge
any such term, covenant, agreement or condition (whether such amendment is
executed or such waiver or consent is given before or after such failure) shall
not be construed as a breach of such term, covenant, agreement or condition or
as a Default or an Event of Default. Unless otherwise specified in such waiver
or consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given. In the event
that any such waiver or amendment is requested by the Borrower, the Lender may
require and charge a reasonable fee in connection therewith and consideration
thereof in such amount as shall be determined by the Lender in its discretion.
The making of Loans hereunder by the Lenders during the
existence of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default.
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9.8 BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns; provided that the Borrower may not assign or transfer
its rights hereunder.
9.9 COUNTERPARTS. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures hereto
and thereto were upon the same instrument.
9.10 SEVERABILITY. The invalidity or unenforceability of any one or
more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.11 CAPTIONS. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
9.12 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
constitute the final agreement of the parties hereto and supersede any prior
agreement or understanding, written or oral, with respect to the matters
contained herein and therein.
9.13 JURY WAIVER. EACH OF THE BORROWER AND THE LENDER AGREE THAT NONE
OF THEM, NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER ACTION BASED UPON, OR ARISING
OUT OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS
OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BORROWER AND THE LENDER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NONE OF THE BORROWER NOR THE LENDER HAS AGREED WITH OR REPRESENTED TO THE OTHER
THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as an instrument under seal as of the
day and year first above written.
BORROWER:
BAYPORT RESTAURANT GROUP, INC.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Print Name Print Name
Title: PRESIDENT
---------------
CRAB HOUSE, INC.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Print Name Print Name
Title: PRESIDENT
---------------
CAPT. CRAB'S TAKE-AWAY OF 79TH
STREET, INC.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Print Name Print Name
Title: PRESIDENT
---------------
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CRYOTECH INDUSTRIES OF N.C.,
INC.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Print Name Print Name
Title: PRESIDENT
---------------
TAKE-AWAY/KING SHOPPING PLAZA,
INC.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Print Name Print Name
Title: PRESIDENT
---------------
LENDER:
CAPITAL BANK
Attest:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------- ---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------- -------------------------
Print Name Print Name
Title: SENIOR VICE PRESIDENT
---------------------
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