AMENDMENT TO LOAN AGREEMENT
This AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and entered
into to be effective as of June 26, 2003 (the "Amendment Date"), by and between
REGIONS BANK, an Alabama banking corporation ("Lender"), and AMERICANA FOODS
LIMITED PARTNERSHIP, a Texas limited partnership ("Borrower").
RECITALS
A. Lender made a loan (the "Term Loan") to Borrower on November 19, 2002,
in the maximum principal amount of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) evidenced by a Promissory Note of even date therewith payable
to the order of Lender in the amount of the Term Loan (the "Term Note").
B. Lender made a loan (the "Revolving Loan") to Borrower on November
19, 2002, in the maximum principal amount of FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) evidenced by a Promissory Note of even date therewith, payable
to the order of Lender in the amount of the Revolving Loan (the "Revolving
Note").
C. Borrower and Lender entered into that certain Loan Agreement dated as of
November 19, 2002 (the "Loan Agreement"), governing the Term Loan and Revolving
Loan as more particularly described therein.
D. In accordance with the foregoing, Lender and Borrower desire to enter
into this Amendment in order to amend and modify certain of the terms and
provisions of the Loan Agreement as provided herein.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:
1. Capitalized Terms. Any capitalized terms not defined herein shall have
the meaning ascribed to them in the Loan Agreement, as modified hereby.
2. Modification of Loan Agreement.
a. Modification of Section 1.1 of the Loan Agreement.
i. The definition of "Fixed Charge Coverage Ratio" is deleted in
its entirety.
ii. The definition of "Debt-to-Tangible Net Worth Ratio" is
deleted in its entirety.
b. Modification of Section 8.1 of the Loan Agreement. Section 8.1 of
the Loan Agreement is deleted in its entirety.
AMENDMENT TO LOAN AGREEMENT - Page 1
c. Modification of Section 8.2 of the Loan Agreement. Section 8.2 of
the Loan Agreement is deleted in its entirety.
d. Modification of Section 8.3 of the Loan Agreement. Section 8.3 of
the Agreement is amended and restated to read in its entirety as
follows:
Tangible Net Worth. Borrower will maintain a Tangible Net Worth
at all times, tested on the periods below, of not less than the
amount set forth below:
Period Maintain Tangible Net Worth
------ ---------------------------
June 29, 2003 $6,000,000.00
September 28, 2003 $6,000,000.00
December 28, 2003 $6,000,000.00
3. Conditions Precedent. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent:
a. The partners of Borrower must contribute at least $1,000,000.00 of
capital, in the form of equipment or cash, in accordance with GAAP
guidelines, to Borrower, as required under Section 3.1(N) of the Loan
Agreement;
b. Execution and delivery of this Amendment by the Borrower and to the
Lender and execution by the Lender;
c. Resolutions of Borrower certified by its secretary or assistant
secretary which authorizes the execution, delivery and performance by
Borrower of this Amendment and the other Loan Documents executed in
connection herewith;
d. Delivery to Lender of a certificate of incumbency certified by the
secretary or the assistant secretary of Borrower certifying the names
of the officers thereof authorized to sign this Amendment and the
other Loan Documents together with specimen signatures of such
officers;
e. No Default shall have occurred and be continuing under any of the
Loan Documents; and
f. All of the representations and warranties contained in Article V of
the Loan Agreement and in the other Loan Documents shall be true and
correct on and as of the date of this Amendment with the same force
and effect as if such representations and warranties had been made on
and as of such date, except to the extent such representations and
warranties refer to a specific date.
4. Acknowledgment by Borrower. Except as otherwise specified herein, the
terms and provisions hereof shall in no manner release, impair, limit, restrict
or otherwise affect the obligations of Borrower or any third party to Lender, as
evidenced by the Loan Documents. Borrower hereby acknowledges, agrees and
represents that (i) Borrower is indebted to Lender pursuant to the terms of the
Term Note and the Revolving Note and the other Loan Documents; (ii) the liens,
security interests and assignments created and evidenced by the Deed of Trust
and the Security Agreement
AMENDMENT TO LOAN AGREEMENT - Page 2
are valid and subsisting liens, security interests and assignments of the
respective dignity and priority recited in the Deed of Trust and the Security
Agreement; (iii) Borrower has no claims or offsets against, or defenses or
counterclaims to, or with respect to, the terms or provisions of the Loan
Documents, or of any sums owed to Lender under, or of the other covenants and
obligations created or evidenced by the Loan Documents; (iv) Borrower has no
claims, offsets, defenses or counterclaims arising from any of Lender's acts or
omissions with respect to the Mortgaged Property, the Loan Documents or Lender's
performance under the Loan Documents or with respect to the Mortgaged Property;
(v) the representations and warranties of Borrower contained in the Loan
Agreement, the Deed of Trust and the other Loan Documents are and remain true
and correct as of the date hereof; (vi) Lender is not in default and no event
has occurred which, with the passage of time, giving of notice, or both, would
constitute a default by Lender of Lender's obligations under the terms and
provisions of the Loan Documents; and (vii) Lender, on and as of the date
hereof, has fully performed all obligations to Borrower which Lender may have
had or has on and as of the date hereof.
5. No Waiver of Remedies. Except as may be expressly set forth herein,
nothing contained in this Amendment shall prejudice, act as, or be deemed to be
a waiver of any right or remedy available to Lender by reason of the occurrence
or existence of any fact, circumstance or event constituting a default under the
Loan Documents.
6. Effectiveness of the Loan Documents. Except as expressly modified by the
terms and provisions of this Amendment each of the terms and provisions of the
Loan Agreement, the Term Note, the Revolving Note and the other Loan Documents
are hereby ratified and shall remain in full force and effect.
7. Costs and Expenses. Contemporaneously with the execution and delivery
hereof, Borrower shall pay, or shall cause to be paid, all costs and expenses
incident to the preparation, execution and recordation (as applicable) of this
Amendment and the consummation of the transaction contemplated hereby,
including, but not limited to, recording fees, title insurance policy or
endorsement premiums or other charges of the Title Company, if necessary, and
reasonable fees and expenses of legal counsel to Lender.
8. Severability. If any clause or provision of this Amendment is or should
ever be held to be illegal, invalid or unenforceable under any present or future
law applicable to the terms hereof, then and in that event, it is the intention
of the parties hereto that the remainder of this Amendment shall not be affected
thereby, and that in lieu of each such clause or provision of this Amendment
that is illegal, invalid or unenforceable, such clause or provision shall be
judicially construed and interpreted to be as similar in substance and content
to such illegal, invalid or unenforceable clause or provision, as the context
thereof would reasonably suggest, so as to thereafter be legal, valid and
enforceable.
9. Continuing Effect; Ratification. Except as expressly amended and
modified by this Amendment, the Loan Agreement shall remain unchanged and in
full force and effect. The Loan Agreement, as modified by this Amendment, and
all documents, assignments, transfers, liens and security rights pertaining to
it, are hereby ratified, reaffirmed and confirmed in all respects as valid,
subsisting and continuing in full force and effect. The Loan Agreement and this
Amendment shall together comprise the Loan Agreement with respect to the Term
Loan and the Revolving Loan.
AMENDMENT TO LOAN AGREEMENT - Page 3
10. No Waiver. The execution and delivery of this Amendment shall in no way
be deemed to be a waiver by Lender of any default or potential default by
Borrower under the Loan Agreement or the other Loan Documents or of any rights,
powers or remedies of Lender under the Loan Agreement or the other Loan
Documents, and shall in no way limit, impair or prejudice Lender from exercising
any past, present or future right, power or remedy available to it under the
Loan Agreement and the other Loan Documents.
11. No Novation. It is the intent of the parties that this Amendment shall
not constitute a novation and shall in no way limit, diminish, impair or
adversely affect the lien priority of the Deed of Trust or Security Agreement.
All of the liens and security interests securing the Term Loan and the Revolving
Loan, including, without limitation, the liens and security interests created by
the Deed of Trust and the Security Agreement, are hereby ratified, reinstated,
renewed, confirmed and extended to secure the Term Loan and the Revolving Loan.
12. Binding Effect. This Amendment shall be binding upon and shall inure to
the benefit of Borrower and Lender, and their respective successors and assigns.
13. Governing Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of Texas.
14. Counterpart Execution. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but together shall
constitute one and the same Document.
15. Notice of Final Agreement. This Amendment and the other Loan Documents
represent the entire agreement between the parties with respect to modifications
of documents provided for herein and therein and supersede all prior conflicting
or inconsistent agreements, consents and understandings relating to such subject
matter.
16. THIS AMENDMENT, THE LOAN AGREEMENT, THE TERM NOTE, THE REVOLVING NOTE
AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
[The Remainder of this Page Intentionally Left Blank]
AMENDMENT TO LOAN AGREEMENT - Page 4
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment to be
effective as of the Amendment Date.
BORROWER:
AMERICANA FOODS LIMITED
PARTNERSHIP, a Texas limited partnership
By: AF Sub Corp.
-----------------------------------------
a Delaware Corporation
its General Partner
By: /s/ Dudley C Mecum
-------------------------------------
Name: Dudley C Mecum
Title: President
LENDER:
REGIONS BANK,
an Alabama banking corporation
By: /s/ Riley C. Couch
-----------------------------------------
Riley C. Couch, President
STATE OF TEXAS Section
Section
COUNTY OF Dallas Section
The foregoing instrument was ACKNOWLEDGED before me this 8 day of July ,
2003, by Dudley Mecum, the President of AF Sub Corp., a Delaware Corporation,
the general partner of AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited
partnership, on behalf of said GP and limited partnership.
[SEAL] /s/ Sharon Elizabeth Warner
--------------------------------------------
My Commission Expires: Notary Public, State of Texas
10-1-2006
SHARON ELIZABETH WARNER
---------------------------------------------
Printed Name of Notary Public
AMENDMENT TO LOAN AGREEMENT - Page 5
STATE OF TEXAS Section
Section
COUNTY OF Dallas Section
The foregoing instrument was ACKNOWLEDGED before me this 8 day of July,
2003, by Riley C. Couch, the President of REGIONS BANK, an Alabama banking
corporation, on behalf corporation.
[SEAL] /s/ Sharon Elizabeth Warner
--------------------------------------------
My Commission Expires: Notary Public, State of Texas
10-1-2006
SHARON ELIZABETH WARNER
---------------------------------------------
Printed Name of Notary Public
AMENDMENT TO LOAN AGREEMENT - Page 6
MODIFICATION AGREEMENT
This MODIFICATION AGREEMENT (this "Agreement") is made and entered into to
be effective as of June 16, 2004 (the "Effective Date"), by and between REGIONS
BANK, an Alabama banking corporation ("Lender"), and AMERICANA FOODS LIMITED
PARTNERSHIP, a Texas limited partnership ("Borrower").
RECITALS
A. Lender made a loan (the "Term Loan") to Borrower on November 19, 2002,
in the maximum principal amount of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) evidenced by a Promissory Note of even date therewith payable
to the order of Lender in the amount of the Term Loan (the "Term Note").
B. Lender made a loan (the "Revolving Loan") to Borrower on November
19, 2002, in the maximum principal amount of FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) evidenced by a Promissory Note of even date therewith, payable
to the order of Lender in the amount of the Revolving Loan (the "Revolving
Note").
C. Borrower and Lender entered into that certain Loan Agreement dated as of
November 19, 2002 (the "Loan Agreement"), governing the Term Loan and Revolving
Loan as more particularly described therein.
D. Borrower and Lender entered into that certain Amendment to Loan
Agreement ("Amendment to Loan Agreement") dated as of April, 2003, which, among
other things, modified several of Borrower's financial covenants contained
therein.
E. Borrower and Lender have entered into that certain Restated and Amended
Revolving Promissory Note of even date herewith, which increases the
indebtedness evidenced by the Revolving Note to SEVEN MILLION AND NO/100 DOLLARS
($7,000,000.00).
F. In accordance with the foregoing, Lender and Borrower desire to enter
into this Amendment in order to amend and modify certain of the terms and
provisions of the Loan Documents (as defined in the Loan Agreement) as provided
herein.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:
1. Modification of Loan Agreement.
a. The parties hereto agree that the definition "Commitment" as set
forth in Section 1.1 of the Loan Agreement shall be deleted in its
entirety and replaced with the following:
i. "Commitment: The obligation of Lender to make Revolving Credit
Advances pursuant to Section 2.1A in an aggregate principal
amount at any
MODIFICATION AGREEMENT - Page 1
time outstanding up to but not exceeding SEVEN MILLION AND NO/100
DOLLARS ($7,000,000.00)."
b. The parties hereto agree that the following shall be inserted as
definitions in Section 1.1 of the Loan Agreement:
i. "Debt-to-Tangible Net Worth Ratio: The ratio of (a) the total
Debt of such Person less the total Subordinated Debt of such
Person to (b) the Tangible Net Worth of such Person."
ii. "Fixed Charge Coverage Ratio: The ratio of (a) the sum of
Cash Flow to (b) the sum of Current Maturities of Long Term
Indebtedness plus Distributions plus Capital Expenditures plus
that portion of Capitalized Lease Obligations that should be
classified as current in accordance with GAAP, to the extent not
included within the calculation of the Current Maturities of Long
Term Indebtedness, in accordance with Section 8.1 of this
Agreement."
c. The parties agree that subsection (m) under the definition of
"Eligible Accounts" under Section 1.1 of the Loan Agreement shall be
deleted in its entirety and replaced with the following:
i. Other than accounts owed by TCBY International, TCBY Systems
and TCBY Enterprises, and accounts owed by Integrated Brands,
Inc. of up to $1,000,000.00, the account is not owed by an
Affiliate, employee, officer, director or shareholder of
Borrower;"
d. The parties agree that Section 6.1(c) shall be deleted in its
entirety and replaced with the following in lieu thereof:
i. "Borrowing Base Report. Concurrently with every Advance
Request Form, and in any event, on a monthly basis, a Borrowing
Base report, in a form acceptable to Lender, certified by the
chief financial officer of Borrower."
e. The parties agree that the following provisions shall be included
as Section 8.1 and Section 8.2, respectively, of the Loan Agreement:
i. Section 8.1 Fixed Charge Coverage Ratio. Maintain a Fixed
Charge Coverage Ratio, based on a 12-month stabilized rolling
average, of at least the ratio set forth below:
Period Ratio
------ -----
June 29, 2004 2:1
September 28, 2004 2:1
December 28, 2004 2:1
ii. Section 8.2 Debt-to-Tangible Net Worth Ratio. Maintain a
MODIFICATION AGREEMENT - Page 2
minimum Debt-to-Tangible Net Worth Ratio at all times, tested on
the periods below, of not less than the ratio set forth below:
Period Ratio
------ -----
June 29, 2004 3:1
September 28, 2004 3:1
December 28, 2004 3:1
f. Modification of Section 8.3 of the Loan Agreement. Section 8.3 of
the Agreement is amended and restated to read in its entirety as
follows:
i. Tangible Net Worth. Borrower will maintain a Tangible Net
Worth at all times, tested on the periods below, of not less than
the amount set forth below:
Period Maintain Tangible Net Worth
------ ---------------------------
June 29, 2004 $17,500,000.00
September 28, 2004 $17,500,000.00
December 28, 2004 $17,500,000.00
2. Capitalized Terms. Any capitalized terms not defined herein shall have
the meaning ascribed to them in the Loan Agreement.
3. Acknowledgment by Borrower. Except as otherwise specified herein, the
terms and provisions hereof shall in no manner release, impair, limit, restrict
or otherwise affect the obligations of Borrower or any third party to Lender, as
evidenced by the Loan Documents. Borrower hereby acknowledges, agrees and
represents that (i) Borrower is indebted to Lender pursuant to the terms of the
Term Note and the Revolving Note and the other Loan Documents; (ii) the liens,
security interests and assignments created and evidenced by the Deed of Trust
and the Security Agreement are valid and subsisting liens, security interests
and assignments of the respective dignity and priority recited in the Deed of
Trust and the Security Agreement; (iii) Borrower has no claims or offsets
against, or defenses or counterclaims to, or with respect to, the terms or
provisions of the Loan Documents, or of any sums owed to Lender under, or of the
other covenants and obligations created or evidenced by the Loan Documents; (iv)
Borrower has no claims, offsets, defenses or counterclaims arising from any of
Lender's acts or omissions with respect to the Mortgaged Property, the Loan
Documents or Lender's performance under the Loan Documents or with respect to
the Mortgaged Property; (v) the representations and warranties of Borrower
contained in the Loan Agreement, the Deed of Trust and the other Loan Documents
are and remain true and correct as of the date hereof; (vi) Lender is not in
default and no event has occurred which, with the passage of time, giving of
notice, or both, would constitute a default by Lender of Lender's obligations
under the terms and provisions of the Loan Documents; and (vii) Lender, on and
as of the date hereof, has fully performed all obligations to Borrower which
Lender may have had or has on and as of the date hereof.
4. No Waiver of Remedies. Except as may be expressly set forth herein,
nothing contained in this Amendment shall prejudice, act as, or be deemed to be
a waiver of any right of
MODIFICATION AGREEMENT - Page 3
remedy available to Lender by reason of the occurrence or existence of any fact,
circumstance or event constituting a default under the Loan Documents.
5. Effectiveness of the Loan Documents. Except as expressly modified by the
terms and provisions of this Amendment each of the terms and provisions of the
Loan Agreement, the Term Note, the Revolving Note and the other Loan Documents
are hereby ratified and shall remain in full force and effect.
6. Costs and Expenses. Contemporaneously with the execution and delivery
hereof, Borrower shall pay, or shall cause to be paid, all costs and expenses
incident to the preparation, execution and recordation (as applicable) of this
Amendment and the consummation of the transaction contemplated hereby,
including, but not limited to, recording fees, title insurance policy or
endorsement premiums or other charges of the Title Company, if necessary, and
reasonable fees and expenses of legal counsel to Lender.
7. Severability. If any clause or provision of this Amendment is or should
ever be held to be illegal, invalid or unenforceable under any present or future
law applicable to the terms hereof, then and in that event, it is the intention
of the parties hereto that the remainder of this Amendment shall not be affected
thereby, and that in lieu of each such clause or provision of this Amendment
that is illegal, invalid or unenforceable, such clause or provision shall be
judicially construed and interpreted to be as similar in substance and content
to such illegal, invalid or unenforceable clause or provision, as the context
thereof would reasonably suggest, so as to thereafter be legal, valid and
enforceable.
8. Continuing Effect; Ratification. Except as expressly amended and
modified by this Amendment, the Loan Agreement shall remain unchanged and in
full force and effect. The Loan Agreement, as modified by this Amendment, and
all documents, assignments, transfers, liens and security rights pertaining to
it, are hereby ratified, reaffirmed and confirmed in all respects as valid,
subsisting and continuing in full force and effect. The Loan Agreement and this
Amendment shall together comprise the Loan Agreement with respect to the Term
Loan and the Revolving Loan.
9. No Waiver. The execution and delivery of this Amendment shall in no way
be deemed to be a waiver by Lender of any default or potential default by
Borrower under the Loan Agreement or the other Loan Documents or of any rights,
powers or remedies of Lender under the Loan Agreement or the other Loan
Documents, and shall in no way limit, impair or prejudice Lender from exercising
any past, present or future right, power or remedy available to it under the
Loan Agreement and the other Loan Documents.
10. No Novation. It is the intent of the parties that this Amendment shall
not constitute a novation and shall in no way limit, diminish, impair or
adversely affect the lien priority of the Deed of Trust or Security Agreement.
All of the liens and security interests securing the Term Loan and the Revolving
Loan, including, without limitation, the liens and security interests created by
the Deed of Trust and the Security Agreement, are hereby ratified, reinstated,
renewed, confirmed and extended to secure the Term Loan and the Revolving Loan.
11. Binding Effect. This Amendment shall be binding upon and shall inure to
the benefit of Borrower and Lender, and their respective successors and assigns.
MODIFICATION AGREEMENT - Page 4
12. Governing Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of Texas.
13. Counterpart Execution. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but together shall
constitute one and the same Document.
14. Notice of Final Agreement. This Amendment and the other Loan Documents
represent the entire agreement between the parties with respect to modifications
of documents provided for herein and therein and supersede all prior conflicting
or inconsistent agreements, consents and understandings relating to such subject
matter.
15. THIS AMENDMENT, THE LOAN AGREEMENT, THE TERM NOTE, THE REVOLVING NOTE
AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
[The Remainder of this Page Intentionally Left Blank]
MODIFICATION AGREEMENT - Page 5
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement to be
effective as of the Effective Date.
BORROWER:
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: AF SUB CORP., a Delaware Corporation
----------------------------------------,
a Delaware Corporation
its General Partner
By: /s/ Bradley E Parks
-----------------------------------------
Name: Bradley Parks
Title: General Manager
LENDER:
REGIONS BANK,
an Alabama banking corporation
By: /s/ Riley C. Couch
-----------------------------------------
Riley C. Couch, President
STATE OF TEXAS Section
Section
COUNTY OF Dallas Section
The foregoing instrument was ACKNOWLEDGED before me this 18 day of June,
2004, by Bradley Parks, the General Manager of AF SUB Corp., a Delaware
Corporation, the general partner of AMERICANA FOODS LIMITED PARTNERSHIP, a Texas
limited partnership, on behalf of said ____________ and limited partnership.
[SEAL] /s/ Teresa Lopez
---------------------------------------------
My Commission Expires: Notary Public, State of Texas
February 20, 2006 Teresa Lopez
---------------------------------------------
Printed Name of Notary Public
MODIFICATION AGREEMENT - Page 6
STATE OF TEXAS Section
Section
COUNTY OF Dallas Section
The foregoing instrument was ACKNOWLEDGED before me this 21st day of June,
2004, by Riley C. Couch, the President of REGIONS BANK, an Alabama banking
corporation, on behalf corporation.
[SEAL] /s/ Sandra Gay Stirling
---------------------------------------------
My Commission Expires: Notary Public, State of Texas
5/28/07
Sandra Gay Stirling
---------------------------------------------
Printed Name of Notary Public
[SEAL]
MODIFICATION AGREEMENT - Page 7
RESTATED AND AMENDED REVOLVING PROMISSORY NOTE
$7,000,000.00 June 16, 2004
FOR VALUE RECEIVED, AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited
partnership (whether one or more, "Borrower"), having an address at 3333 Dan
Morton Drive, Dallas, Texas 75236, hereby promises to pay to the order of
REGIONS BANK, an Alabama banking corporation (together with its successors and
assigns and any subsequent holders of this Promissory Note, the "Lender"), as
hereinafter provided, the principal sum of SEVEN MILLION AND NO/100 DOLLARS
($7,000,000.00) or so much thereof as may be advanced by Lender from time to
time hereunder to or for the benefit or account of Borrower, together with
interest thereon at the Note Rate (as hereinafter defined), and otherwise in
strict accordance with the terms and provisions hereof.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Promissory Note, the following
terms shall have the following meanings:
Base Rate: For any day, a rate of interest equal to the Prime Rate.
Borrower: As identified in the introductory paragraph of this Note.
Business Day: A weekday, Monday through Friday, except a legal holiday or a
day on which banking institutions in Dallas, Texas are authorized or required by
law to be closed. Unless otherwise provided, the term "days" when used herein
shall mean calendar days.
Change: (i) any change after the date of this Note in the risk-based
capital guidelines applicable to Lender or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Note that affects capital adequacy or the amount of
capital required or expected to be maintained by Lender or any entity
controlling Lender.
Charges: All fees, charges and/or any other things of value, if any,
contracted for, charged, taken, received or reserved by Lender in connection
with the transactions relating to this Note and the other Loan Documents, which
are treated as interest under applicable law.
Debtor Relief Laws: Title 11 of the United States Code, as now or hereafter
in effect, or any other applicable law, domestic or foreign, as now or hereafter
in effect, relating to bankruptcy, insolvency, liquidation, receivership,
reorganization, arrangement or composition, extension or adjustment of debts, or
similar laws affecting the rights of creditors.
Default Interest Rate: shall have the meaning assigned to such term in the
Loan Agreement.
Event of Default: shall have the meaning assigned to such term in the Loan
Agreement.
Lender: As identified in the introductory paragraph of this Note.
Loan Agreement: The Loan Agreement of dated November 19, 2002 by and
between Borrower and Lender governing the loan evidenced by the Note and
secured, inter alia, by the liens created by the Loan Documents.
Loan Documents: shall have the meaning assigned to such term in the Loan
Agreement.
REVOLVING PROMISSORY NOTE - Page 1
Maturity Date: November 19, 2004.
Maximum Lawful Rate: The maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that it permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law), taking
into account all Charges made in connection with the transaction evidenced by
the Note and the other Loan Documents. To the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate
payable on the Note and/or the Related Indebtedness, Lender will utilize the
weekly ceiling from time to time in effect as provided in such Chapter 303, as
amended. To the extent United States federal law permits Lender to contract for,
charge, take, receive or reserve a greater amount of interest than under Texas
law, Lender will rely on United States federal law instead of such Chapter 303
for the purpose of determining the Maximum Lawful Rate. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Lender may, at
its option and from time to time, utilize any other method of establishing the
Maximum Lawful Rate under such Chapter 303 or under other applicable law by
giving notice, if required, to Borrower as provided by applicable law now or
hereafter in effect.
Note Rate: The rate equal to the lesser of (a) the Maximum Lawful Rate or
(b) the Base Rate plus one-half of one percent (.5%).
Payment Date: The first day of each and every calendar month during the
term of this Note.
"Prime Rate": The rate of interest per annum quoted in the "Money Rates"
section of The Wall Street Journal from time to time and designated as the
"Prime Rate". If such prime rate, as so quoted, is split between two or more
different interest rates, then the Prime Rate shall be the highest of such
interest rates. If such prime rate shall cease to be published or is published
infrequently or sporadically, then the Prime Rate shall be (i) the rate of
interest per annum established from time to time by Lender and designated as its
base or prime rate, which may not necessarily be the lowest interest rate
charged by Lender and is set by Lender in its sole discretion, or (ii) if Lender
does not publish or announce a base or prime rate, or does so infrequently or
sporadically, then the Prime Rate shall be determined by reference to another
base rate, prime rate or similar lending rate index, generally accepted on a
national basis, as selected by Lender in its sole and absolute discretion.
Revolving Note: This promissory note. All references herein to the "Note"
shall refer to the Revolving Note unless otherwise indicated.
Any capitalized term used in the Note and not otherwise defined herein
shall have the meaning ascribed to such term in the Loan Agreement. All terms
used herein, whether or not defined in Section 1.1 hereof, and whether used in
singular or plural form, shall be deemed to refer to the object of such term
whether such is singular or plural in nature, as the context may suggest or
require.
ARTICLE II
PAYMENT TERMS
Section 2.1 Payment of Principal and Interest. All accrued but unpaid
interest on the principal balance of this Note outstanding from time to time
shall be payable on each Payment Date. The then outstanding principal balance of
this Note and all accrued but unpaid interest thereon shall be due and payable
on the Maturity Date. Borrower may from time to time during the term of this
Note borrow, partially or wholly repay its outstanding borrowings, and reborrow,
subject to all of the limitations, terms and conditions of this Note and of the
Loan Documents; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above. The
unpaid principal balance of this Note at any time shall be the total amounts
advanced hereunder by Lender less the amount of principal payments made hereon
by or for Borrower, which balance may be endorsed hereon from time to time by
Lender or otherwise noted in Lender's records, which notations shall be, absent
manifest error, conclusive evidence of the amounts owing hereunder from time to
time.
REVOLVING PROMISSORY NOTE - Page 2
Section 2.2 Application. Except as expressly provided herein to the
contrary, all payments on this Note shall be applied in accordance with the
provisions of the Loan Agreement or Security Agreement.
Section 2.3 Payments. All payments under this Note made to Lender shall be
made in immediately available funds at 1111 West Mockingbird, Dallas, Texas
75247 (or at such other place as Lender, in Lender's sole discretion, may have
established by delivery of written notice thereof to Borrower from time to
time), without offset, in lawful money of the United States of America, which
shall at the time of payment be legal tender in payment of all debts and dues,
public and private. Payments by check or draft shall not constitute payment in
immediately available funds until the required amount is actually received by
Lender in full. Payments in immediately available funds received by Lender in
the place designated for payment on a Business Day prior to 11:00 a.m. Central
Standard Time or Central Daylight Time, as applicable, at said place of payment
shall be credited prior to the close of business on the Business Day received,
while payments received by Lender on a day other than a Business Day or after
11:00 a.m. Central Standard Time or Central Daylight Time, as applicable, on a
Business Day shall not be credited until the next succeeding Business Day. If
any payment of principal or interest on this Note shall become due and payable
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day. Any such extension of time for payment shall be
included in computing interest which has accrued and shall be payable in
connection with such payment.
Section 2.4 Computation Period. Interest on the indebtedness evidenced by
this Note shall be computed on the basis of a three hundred sixty (360) day year
and shall accrue on the actual number of days elapsed for any whole or partial
month in which interest is being calculated. In computing the number of days
during which interest accrues, the day on which funds are initially advanced
shall be included regardless of the time of day such advance is made, and the
day on which funds are repaid shall be included unless repayment is credited
prior to the close of business on the Business Day received as provided in
Section 2.3 hereof.
Section 2.5 Prepayment. Borrower shall have the right to prepay, at any
time and from time to time, without reducing the Commitment, upon ten (10) days
prior written notice to Lender, without fee, premium or penalty (except as may
otherwise be provided in this Section 2.5), all or any Portion of the
outstanding principal balance hereof, provided, however, that such prepayment
shall also include any and all accrued but unpaid interest on the amount of
principal being so prepaid through and including the date of prepayment, plus
any other sums which have become due to Lender under the other Loan Documents on
or before the date of prepayment, but which have not been fully paid.
Section 2.6 Unconditional Payment. Borrower is and shall be obligated to
pay all principal, interest and any and all other amounts which become payable
under this Note or under any of the other Loan Documents absolutely and
unconditionally and without any abatement, postponement, diminution or deduction
whatsoever and without any reduction for counterclaim or setoff whatsoever. If
at any time any payment received by Lender hereunder shall be deemed by a court
of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under any Debtor Relief Law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Borrower and shall not be discharged or satisfied with any prior payment thereof
or cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.
Section 2.7 Partial or Incomplete Payments. Remittances in payment of any
part of this Note other than in the required amount in immediately available
funds at the place where this Note is payable shall not, regardless of any
receipt or credit issued therefor, constitute payment until the required amount
is actually received by Lender in full in accordance herewith and shall be made
and accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks.
Acceptance by Lender of any payment in an amount less than the full amount then
due shall be deemed an acceptance on account only, and the failure to pay the
entire amount then due shall be and continue to be an Event of Default in the
payment of this Note.
Section 2.8 Late Charge; Default Interest Rate. If any payment is not
received in full by Lender within ten (10) days following the date when due,
then in addition to interest accruing at the Default Interest Rate on such
overdue payment from the date due until paid, Borrower shall also pay to Lender
a late charge in an amount
REVOLVING PROMISSORY NOTE - Page 3
equal to five percent (5%) of the amount of such overdue payment, provided that
such late charge shall not become effective until thirty (30) days after such
payment was due. For so long as any Event of Default exists under this Note or
under any of the other Loan Documents, regardless of whether or not there has
been an acceleration of the indebtedness evidenced by this Note, and at all
times after the maturity of the indebtedness evidenced by this Note (whether by
acceleration or otherwise), and in addition to all other rights and remedies of
Lender hereunder, interest shall accrue on the outstanding principal balance
hereof at the Default Interest Rate, and such accrued interest shall be
immediately due and payable. Borrower acknowledges that it would be extremely
difficult or impracticable to determine Lender's actual damages resulting from
any late payment or Event of Default, and such late charges and accrued interest
are reasonable estimates of those damages and do not constitute a penalty. If
Lender determines that the amount of capital required or expected to be
maintained by Lender or any entity controlling Lender, is increased as a result
of a Change, then, within fifteen (15) days of demand by Lender, Borrower shall
pay to Lender the amount necessary to compensate for any shortfall in the rate
of return on the portion of such increased capital that Lender determines is
attributable to this Note or the principal amount outstanding hereunder (after
taking into account Lender's policies as to capital adequacy).
ARTICLE III
EVENT OF DEFAULT AND REMEDIES
Section 3.1 Event of Default. The occurrence or happening, at any time and
from time to time, of any one or more of the following shall immediately
constitute an "Event of Default" under this Note:
(a) Borrower shall fail, refuse or neglect to pay and satisfy, in full
and in the applicable method and manner required, any required payment of
principal or interest or any other portion of the indebtedness evidenced by
this Note as and when the same shall become due and payable, whether at the
stipulated due date thereof, at a date fixed for payment, or at maturity,
by acceleration or otherwise; provided, however, that a failure by Borrower
to pay a regularly scheduled monthly payment due pursuant to the Note shall
not constitute an "Event of Default" hereunder unless such failure
continues for at least ten (10) days after the due date thereof; or
(b) An Event of Default as defined in any of the Loan Documents.
Section 3.2 Remedies. Upon the occurrence of an Event of Default, Lender
shall have the immediate right, at the sole discretion of Lender and without
notice, demand, presentment, notice of nonpayment or nonperformance, protest,
notice of protest, notice of intent to accelerate, notice of acceleration, or
any other notice or any other action (ALL OF WHICH BORROWER HEREBY EXPRESSLY
WAIVES AND RELINQUISHES) (i) to declare the entire unpaid balance of the
indebtedness evidenced by this Note (including, without limitation, the
outstanding principal balance hereof, including all sums advanced or accrued
hereunder or under any other Loan Document, and all accrued but unpaid interest
thereon) at once immediately due and payable (and upon such declaration, the
same shall be at once immediately due and payable) and may be collected
forthwith, whether or not there has been a prior demand for payment and
regardless of the stipulated date of maturity, (ii) to foreclose any liens and
security interests securing payment hereof or thereof (including, without
limitation, any liens and security interests), and (iii) to exercise any of
Lender's other rights, powers, recourses and remedies under this Note, under any
other Loan Document, or at law or in equity, and the same (w) shall be
cumulative and concurrent, (x) may be pursued separately, singly, successively,
or concurrently against Borrower or others obligated for the repayment of this
Note or any part hereof, at the sole discretion of Lender, (y) may be exercised
as often as occasion therefor shall arise, it being agreed by Borrower that the
exercise, discontinuance of the exercise of or failure to exercise any of the
same shall in no event be construed as a waiver or release thereof or of any
other right, remedy, or recourse, and (z) are intended to be, and shall be,
nonexclusive. All rights and remedies of Lender hereunder and under the other
Loan Documents shall extend to any period after the initiation of foreclosure
proceedings, judicial or otherwise. Without limiting the provisions of Section
4.17 hereof, if this Note, or any part hereof, is collected by or through an
attorney-at-law, Borrower agrees to pay all costs and expenses of collection,
including, but not limited to, Lender's attorneys' fees, whether or not any
legal action shall be instituted to enforce this Note. This Note is also
subject to acceleration as provided in the Loan Agreement.
REVOLVING PROMISSORY NOTE - Page 4
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced by this Note by reason of an Event of Default hereunder, acceptance of
a partial or past due payment, or indulgences granted from time to time shall be
construed (i) as a novation of this Note or as a reinstatement of the
indebtedness evidenced by this Note or as a waiver of such right of acceleration
or of the right of Lender thereafter to insist upon strict compliance with the
terms of this Note, or (ii) to prevent the exercise of such right of
acceleration or any other right granted under this Note, under any of the other
Loan Documents or by any applicable laws. Borrower hereby expressly waives and
relinquishes the benefit of any statute or rule of law or equity now provided,
or which may hereafter be provided, which would produce a result contrary to or
in conflict with the foregoing. The failure to exercise any remedy available to
Lender shall not be deemed to be a waiver of any rights or remedies of Lender
under this Note or under any of the other Loan Documents, or at law or in
equity. No extension of the time for the payment of this Note or any installment
due hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Borrower under this Note, either in whole or in
part, unless Lender specifically, unequivocally and expressly agrees otherwise
in writing. This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change, or
modification is sought.
Section 4.2 WAIVERS. EXCEPT AS SPECIFICALLY PROVIDED IN THE LOAN DOCUMENTS
TO THE CONTRARY, BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY WAIVE
AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NONPAYMENT OR
NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE,
NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY OTHER ACTION. BORROWER WAIVES
AND RELINQUISHES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION,
STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW OR
HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA
AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO ALL OF ITS PROPERTY,
REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS
EVIDENCED BY THIS NOTE OR BY THE OTHER LOAN DOCUMENTS.
Section 4.3
(a) Savings Clause. It is expressly stipulated and agreed to be the
intent of Borrower and Lender at all times to comply strictly with the
applicable Texas law governing the maximum rate or amount of interest
payable on the indebtedness evidenced by this Note and the Related
Indebtedness (or applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law). If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted
for, charged, taken, reserved or received pursuant to this Note, any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged, taken,
reserved or received by reason of Lender's exercise of the option to
accelerate the maturity of this Note and/or the Related Indebtedness, or
(iii) Borrower will have paid or Lender will have received by reason of any
voluntary prepayment by Borrower of this Note and/or the Related
Indebtedness, then it is Borrower's and Lender's express intent that all
amounts charged in excess of the Maximum Lawful Rate shall be automatically
canceled, ab initio, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by Lender shall be credited on the principal balance
of this Note and/or the Related Indebtedness (or, if this Note and all
Related Indebtedness have been or would thereby be paid in full, refunded
to Borrower), and the provisions of this Note and the other Loan Documents
shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
any new document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder
and thereunder; provided, however, if this Note has been paid in full
before the end of the stated term of this
REVOLVING PROMISSORY NOTE - Page 5
Note, then Borrower and Lender agree that Lender shall, with reasonable
promptness after Lender discovers or is advised by Borrower that interest
was received in an amount in excess of the Maximum Lawful Rate, either
refund such excess interest to Borrower and/or credit such excess interest
against this Note and/or any Related Indebtedness then owing by Borrower to
Lender. Borrower hereby agrees that as a condition precedent to any claim
seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature and
amount of the violation, and Lender shall have sixty (60) days after
receipt of such notice in which to correct such usury violation, if any, by
either refunding such excess interest to Borrower or crediting such excess
interest against this Note and/or the Related Indebtedness then owing by
Borrower to Lender. All sums contracted for, charged, taken, reserved or
received by Lender for the use, forbearance or detention of any debt
evidenced by this Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of this Note and/or the Related
Indebtedness (including any and all renewal and extension periods) until
payment in full so that the rate or amount of interest on account of this
Note and/or the Related Indebtedness does not exceed the Maximum Lawful
Rate from time to time in effect and applicable to this Note and/or the
Related Indebtedness for so long as debt is outstanding. In no event shall
the provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts)
apply to this Note and/or any of the Related Indebtedness. Notwithstanding
anything to the contrary contained herein or in any of the other Loan
Documents, it is not the intention of Lender to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
(b) Ceiling Election. To the extent that Lender is relying on Chapter
303 of the Texas Finance Code to determine the Maximum Lawful Rate payable
on the Note and/or any other portion of the indebtedness, Lender will
utilize the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended. To the extent United States federal law permits
Lender to contract for, charge, take, receive or reserve a greater amount
of interest than under Texas law, Lender will rely on United States federal
law instead of such Chapter 303 for the purpose of determining the Maximum
Lawful Rate. Additionally, to the extent permitted by applicable law now or
hereafter in effect, Lender may, at its option and from time to time,
utilize any other method of establishing the Maximum Lawful Rate under such
Chapter 303 or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect.
Section 4.4 Use of Funds. Borrower hereby warrants, represents and
covenants that (i) the loan evidenced by this Note is made to Borrower solely
for the purpose of acquiring or carrying on a business or commercial enterprise,
(ii) all proceeds of this Note shall be used only for business and commercial
purposes, and (iii) no funds disbursed hereunder shall be used for personal,
family, agricultural or household purposes.
Section 4.5 Further Assurances and Corrections. From time to time, at the
request of Lender, Borrower will (i) promptly correct any defect, error or
omission which may be discovered in the contents of this Note or in any other
Loan Document or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver, record and/or file (or cause to be executed, acknowledged,
delivered, recorded and/or filed) such further documents and instruments
(including, without limitation, further deeds of trust, security agreements,
financing statements, continuation statements and assignments of rents) and
perform such further acts and provide such further assurances as may be
necessary, desirable, or proper, in Lender's opinion, (A) to carry out more
effectively the purposes of this Note and the Loan Documents and the
transactions contemplated hereunder and thereunder, (B) to confirm the rights
created under this Note and the other Loan Documents, (C) to protect and further
the validity, priority and enforceability of this Note and the other Loan
Documents and the liens and security interests created thereby, and (D) to
subject to the Loan Documents any property of Borrower intended by the terms of
any one or more of the Loan Documents to be encumbered by the Loan Documents;
and (iii) pay all costs in connection with any of the foregoing.
Section 4.6 Governing Law; Submission to Jurisdiction. This Note is
executed and delivered as an incident to a lending transaction negotiated and
consummated in Dallas County, Texas, and shall be governed by and construed in
accordance with the laws of the State of Texas. Borrower, for itself and its
successors and assigns, hereby irrevocably (i) submits to the nonexclusive
jurisdiction of the state and federal courts in Texas, (ii) waives, to
REVOLVING PROMISSORY NOTE - Page 6
the fullest extent permitted by law, any objection that it may now or in the
future have to the laying of venue of any litigation arising out of or in
connection with this Note or any Loan Document brought in the District Court of
Dallas County, Texas, or in the United States District Court for the Northern
District of Texas, Dallas Division, (iii) waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought in such
court or that such court is an inconvenient forum, and (iv) agrees that any
legal proceeding against any party to any of the Loan Documents arising out of
or in connection with any of the Loan Documents may be brought in one of the
foregoing courts. Borrower hereby agrees that service of process upon Borrower
may be made by certified or registered mail, return receipt requested, at its
address specified herein. Nothing herein shall affect the right of Lender to
serve process in any other manner permitted by law or shall limit the right of
Lender to bring any action or proceeding against Borrower or with respect to any
of Borrower's property in courts in other jurisdictions. The scope of each of
the foregoing waivers is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Borrower
acknowledges that these waivers are a material inducement to Lender's agreement
to enter into the agreements and obligations evidenced by the Loan Documents,
that Lender has already relied on these waivers and will continue to rely on
each of these waivers in related future dealings. The waivers in this Section
4.6 are irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions, amendments,
modifications, or replacements in respect of any and all of the applicable Loan
Documents. In connection with any litigation, this Note may be filed as a
written consent to a trial by the court.
Section 4.7 Counting of Days. If any time period referenced hereunder ends
on a day other than a Business Day, such time period shall be deemed to end on
the next succeeding Business Day.
Section 4.8 Relationship of the Parties. Notwithstanding any prior business
or personal relationship between Borrower and Lender, or any officer, director
or employee of Lender, that may exist or have existed, the relationship between
Borrower and Lender is solely that of debtor and creditor, Lender has no
fiduciary or other special relationship with Borrower, Borrower and Lender are
not partners or joint venturers, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.
Section 4.9 Successors and Assigns. The terms and provisions hereof shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties, by
operation of law or otherwise, and all other persons claiming by, through or
under them. The terms "Borrower" and "Lender" as used hereunder shall be deemed
to include their respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties, by
operation of law or otherwise, and all other persons claiming by, through or
under them.
Section 4.10 Joint and Several Liability. If Borrower consists of more man
one person or entity, each shall be jointly and severally liable to perform the
obligations of Borrower under this Note.
Section 4.11 Time is of the Essence. Time is of the essence with respect to
all provisions of this Note and the other Loan Documents.
Section 4.12 Headings. The Article, Section, and Subsection entitlements
hereof are inserted for convenience of reference only and shall in no way
alter, modify, define, limit, amplify or be used in construing the text, scope
or intent of such Articles, Sections, or Subsections or any provisions hereof.
Section 4.13 Controlling Agreement. In the event of any conflict between
the provisions of this Note and the Loan Agreement, it is the intent of the
parties hereto that the provisions of the Loan Agreement shall control. In the
event of any conflict between the provisions of this Note and any of the other
Loan Documents (other than the Loan Agreement), it is the intent of the parties
hereto that the provisions of this Note shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of this Note and the other Loan
Documents and that this Note and the other Loan Documents shall not be subject
to the principle of construing their meaning against the party which drafted
same.
REVOLVING PROMISSORY NOTE - Page 7
Section 4.14 Notices. All notices or other communications required or
permitted to be given pursuant to this Note shall be as set forth in the Loan
Agreement.
Section 4.15 Severability. If any provision of this Note or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, then neither the remainder of this Note nor the
application of such provision to other persons or circumstances nor the other
instruments referred to herein shall be affected thereby, but rather shall be
enforced to the greatest extent permitted by applicable law.
Section 4.16 Right of Setoff. In addition to all liens upon and rights of
setoff against the money, securities, or other property of Borrower given to
Lender that may exist under applicable law, Lender shall have and Borrower
hereby grants to Lender a lien upon and a right of setoff against all money,
securities, and other property of Borrower, now or hereafter in possession of or
on deposit with Lender, whether held in a general or special account or deposit,
for safe-keeping or otherwise, and every such lien and right of setoff may be
exercised without demand upon or notice to Borrower. No lien or right of setoff
shall be deemed to have been waived by any act or conduct on the part of Lender,
or by any neglect to exercise such right of setoff or to enforce such lien, or
by any delay in so doing, and every right of setoff and lien shall continue in
full force and effect until such right of setoff or lien is specifically waived
or released by an instrument in writing executed by Lender.
Section 4.17 Costs of Collection. If any holder of this Note retains an
attorney-at-law in connection with any Event of Default or at maturity or to
collect, enforce, or defend this Note or any part hereof, or any other Loan
Document in any lawsuit or in any probate, reorganization, bankruptcy or other
proceeding, or if Borrower sues any holder in connection with this Note or any
other Loan Document and does not prevail, then Borrower agrees to pay to each
such holder, in addition to the principal balance hereof and all interest
hereon, all costs and expenses of collection or incurred by such holder or in
any such suit or proceeding, including, but not limited to, reasonable
attorneys' fees.
Section 4.18 Gender. All personal pronouns used herein, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural and vice versa.
Section 4.19 Statement of Unpaid Balance. At any time and from time to
time, Borrower will furnish promptly, upon the request of Lender, a written
statement or affidavit, in form satisfactory to Lender, stating the unpaid
balance of the indebtedness evidenced by this Note and the Related Indebtedness
and that there are no offsets or defenses against full payment of the
indebtedness evidenced by this Note and the Related Indebtedness and the terms
hereof, or if there are any such offsets or defenses, specifying them.
Section 4.20 ENTIRE AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS
CONTAIN THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND ALL PRIOR AGREEMENTS, WHETHER WRITTEN OR
ORAL, RELATIVE HERETO AND THERETO WHICH ARE NOT CONTAINED HEREIN OR THEREIN ARE
SUPERSEDED AND TERMINATED HEREBY, AND THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY
NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Section 4.21 Amended and Restated Note. This Note is given in assumption,
amendment, renewal and restatement of the terms and provisions governing the
repayment of the indebtedness evidenced by that certain Revolving Promissory
Note dated November 19, 2002 in the original principal amount of $5,000,000.00
("Original Note"), executed by Borrower, payable to the order of Lender. In
accordance with such amendment, renewal and restatement, Borrower acknowledges
and agrees that the indebtedness evidenced by the Original Note shall be renewed
by and continued in full force and effect in accordance with the terms and
conditions of this Note (and shall not be extinguished) and this Note and the
indebtedness evidenced thereby shall be secured by the liens security interest
of the Loan Documents as heretofore, concurrently herewith or hereafter amended.
The Original Note is being retained by Lender with a notation placed on the face
thereof indicating that such Original Note has been amended, renewed and
restated by this Note.
[SIGNATURE PAGE FOLLOWS]
REVOLVING PROMISSORY NOTE - Page 8
IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has
duly executed this Note as of the day and year first written above.
BORROWER:
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: AF SUB CORP., a Delaware corporation,
its General Partner
By: Bradley Parks
---------------------------------
Name: Bradley Parks
Title: General Manager
Address of Lender for purposes of notice hereunder:
Regions Bank
1111 West Mockingbird
Dallas, Texas 75247
Attention: Commercial Real Estate Lending
Prepared by:
Lorin Williams Combs, Esq.
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Phone: (214)745-5103
REVOLVING PROMISSORY NOTE - Signature Page
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
THIS RENEWAL, EXTENSION AND MODIFICATION AGREEMENT (the "Agreement") is
entered into and executed effective as of the 19th day of March, 2005, by and
between AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited partnership (the
"Borrower"), and REGIONS BANK ("Lender").
WITNESSETH:
A. On November 19, 2002, Lender and Borrower entered into that certain Loan
Agreement (the "Loan Agreement"), governing a term loan (the "Term Loan") in the
amount of $10,000,000.00 and a revolving loan (the "Revolving Loan") in the
amount of $5,000,000.00;
B. On November 19, 2002, Borrower executed a Promissory Note in the
original principal sum of $5,000,000.00 payable to the order of Lender, which
represents the Revolving Loan, and Borrower executed a Promissory Note of even
date therewith in the original principal amount of $10,000,000.00 (the "Term
Note"), which represents the Term Loan;
C. The parties entered into that certain Amendment to Loan Agreement dated
June 26, 2003;
D. The parties entered into that certain Modification Agreement dated June
16, 2004, which, among other things, increased the amount available to be
borrowed under the Revolving Loan from $5,000,000.00 to $7,000,000.00. In
connection therewith, Borrower executed that certain Restated and Amended
Revolving Promissory Note dated June 16, 2004 in the amount of $7,000,000.00;
E. The obligations of Borrower under the above-referenced notes and Loan
Agreement are secured by (i) that certain Deed of Trust (the "Deed of Trust") on
real property in Dallas County, Texas, recorded in Volume ______, Page
_________, of the real property records of Dallas County, Texas, which grants a
lien against the real property described on Exhibit "A" attached hereto, and
(ii) that certain Security Agreement, dated November 19, 2002, which grants
lender a security interest on certain personal property, and (iii) certain other
security documents;
F. The parties desire to increase the Revolving Loan from $7,000,000.00 to
$9,000,000.00, and in connection therewith, concurrently herewith, Borrower will
execute and deliver to Lender that certain Restated and Amended Revolving
Promissory Note (the "Revolving Note") in the amount of $9,000,000.00 (the
Revolving Note and Term Note are referred to herein as the "Notes");
G. The Notes, the Loan Agreement, and all other documents evidencing or
securing the obligations of Borrower to Lender as modified hereby are
hereinafter referred to as the "Loan Documents"; and
LOAN MODIFICATION AGREEMENT
04/26/05
H. As a condition to the effectiveness of this Agreement, Lender must
receive from Integrated Brands, Inc. a guaranty of the Revolving Note, in a form
acceptable to Lender.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower and Lender
hereby agree as follows:
1. The parties hereby acknowledge that the outstanding principal balance of
the Revolving Note as of April 1, 2005, is $4,838,747.62.
2. The parties agree to modify the Loan Agreement as follows:
a. The parties agree that the term "Borrowing Base" as set forth in Section
1.1 of the Loan Agreement shall be deleted in its entirety and replaced with the
following:
"Borrowing Base: At any time, an amount equal to the sum of (a) 85% of the
value of Eligible Accounts, plus (b) the lesser of (i) 41% of the net book
value of Eligible Inventory or (ii) 80% of the net liquidation value of
Eligible Inventory, provided, however, in no event shall the amount in this
sub-sentence (b) exceed $2,500,000.00, less (c) the amount, as determined
by Lender in its reasonable judgment, sufficient to offset any liens which
may attach to inventory arising out the Perishable Agricultural Commodities
Act or the Food Security Act. Notwithstanding the foregoing, the Lender, in
its good faith discretion, has the right to reduce the advance rate
percentages set forth above (ie, 85%, 41%, and 80%), after reviewing the
field audit results."
b. The parties agree that the term "Commitment" as set forth in Section 1.1
of the Loan Agreement shall be deleted in its entirety and replaced with the
following:
"Commitment: The obligation of Lender to make Revolving Credit Advances
pursuant to Section 2.1A in an aggregate principal amount at any time
outstanding up to but not exceeding Nine Million and No/100 Dollars
($9,000,000.00)."
c. The parties agree that subsection (c) under the definition of "Eligible
Accounts" under Section 1.1 of the Loan agreement shall be deleted in its
entirety and replaced with the following:
"(c) The account has not been outstanding for more than ninety (90)
days past the original date of invoice or more than sixty (60) days past
due;"
d. The parties agree that subsection (m) under the definition of "Eligible
Accounts" under Section 1.1 of the Loan agreement shall be deleted in its
entirety and replaced with the following:
"(m) The account is not owed by an Affiliate, employee, officer,
director or
LOAN MODIFICATION AGREEMENT
04/26/05
shareholder of Borrower;"
e. The parties agree that paragraph (g) under the definition of "Eligible
Inventory" under Section 1.1 of the Loan agreement shall be deleted in its
entirety and replaced with the following:
"(g) inventory that Lender has determined to be unmarketable or
ineligble for any reason as determined by Lender exercising its judgment in
good faith as a result of any field audit,"
f. The parties agree that the term "Fixed Charge Coverage Ratio" as set
forth in Section 1.1 of the Loan Agreement shall be deleted in its entirety and
replaced with the following:
"Fixed Charge Coverage Ratio: The ratio of (a) EBITDA plus capital
contributions to the capital of Borrower less non-financed Capital
Expenditures, to (b) regularly scheduled obligations to pay principal
and/or interest on all Debt (excluding principal due upon the Maturity Date
of the Revolving Note) to the extent that such obligations would be
classified as current obligations on a balance sheet of such Person as of
such date in accordance with GAAP."
g. The parties agree that the term "Termination Date" as set forth in
Section 1.1 of the Loan Agreement shall be deleted in its entirety and replaced
with the following:
"Termination Date: 11:00 A.M. (CST) on November 30, 2005, or such
earlier date on which the Commitment terminates as provided in this
Agreement."
h. The parties agree that Section 6.1(c) shall be deleted in its entirety
and replaced with the following in lieu thereof:
"Borrowing Base Report. Concurrently with every Advance Request Form,
and in any event, on a weekly basis, a Borrowing Base Report, in a
form acceptable to Lender, certified by the chief financial officer of
Borrower."
i. The parties agree that Section 6.6 shall be deleted in its entirety and
replaced with the following in lieu thereof:
"Section 6.6 Inspection Rights. At any reasonable time, Borrower will
permit, and will cause each Subsidiary to permit, a representative of Lender to
examine the Mortgage Property, the Collateral and conduct audits of the same, at
Borrower's expense, to examine, copy and make extracts from its books and
records, to visit and inspect its properties, and to discuss its business
operations and financial condition with its officers, employees, and independent
certified public accountants."
j. The parties agree that Section 8.5 of the Loan agreement shall be
deleted in its entirety and replaced with the following:
LOAN MODIFICATION AGREEMENT
04/26/05
"Section 8.5 Borrowing Base. Borrower shall maintain a Borrowing Base
of at least the sum of (i) the amount of the Revolving Loan
outstanding, and (ii) the aggregate amount of Borrower trade payables
aged 90 days or more as of the date of the respective advance."
k. The parties agree that the Section 8.1 of the Loan Agreement is amended
and restated to read its entirety as follows:
Section 8.1 Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio of not less than 1.25:1, based on a 12-month stabilized rolling
average (except a nine-month stabilized rolling average shall be used for the
period ended May 28, 2005 only), tested each May, August, November, and February
on the day of such month which represents Borrower's normal end-of-the-month
accounting date for such month (for example: May 28, 2005, August 27, 2005, and
November 27, 2005).
1. The parties agree that the Section 8.2 of the Loan Agreement is amended
and restated to read its entirety as follows:
Section 8.2 Debt-to-Tangible Net Worth Ratio. Maintain at all times a
minimum Debt-to-Tangible Net Worth Ratio of not less than 2:1, tested each May,
August, November, and February on the day of such month which represents
Borrower's normal end-of-the-month accounting date for such month (for example:
May 28, 2005, August 27, 2005, and November 27, 2005).
m. The parties agree that the Section 8.3 of the Loan Agreement is amended
and restated to read its entirety as follows:
Section 8.3 Tangible Net Worth. Borrower will maintain a Tangible Net
Worth, at all times, of not less than $20,500,000.00, tested each May, August,
November, and February on the day of such month which represents Borrower's
normal end-of-the-month accounting date for such month (for example: May 28,
2005, August 27, 2005, and November 27, 2005).
n. The parties agree that the Section 9.1 A. of the Loan Agreement is
amended and restated to read its entirety as follows:
"A. If Borrower shall fail, refuse, or neglect to pay, in full, any
installment or portion of the Indebtedness as and when the same shall
become due and payable, whether at the due date thereof stipulated in the
Loan Documents, upon acceleration or otherwise."
o. The parties agree that the Section 9.1 B. of the Loan Agreement is
amended and restated to read its entirety as follows:
"B. If Borrower shall fail, refuse, or neglect, or cause others to
fail, refuse, or neglect to comply with, perform and discharge fully and
timely any of the Obligations as
LOAN MODIFICATION AGREEMENT
04/26/05
and when called for; provided, however, that a failure by Borrower to
timely satisfy an Obligation shall not constitute an "Event of Default"
hereunder if (i) such failure does not constitute an Event of Default
pursuant to any other subsection of this Section 9.1 other than this
subsection B, and (ii) such failure is fully cured by Borrower on or before
the expiration of the Cure Period (hereunder defined). As used in this
Section 9.1B., the term "Cure Period" means a ten day period commencing
upon Lender's written notice to Borrower of Borrower's failure to satisfy
the subject Obligation."
p. The Lender, upon ten days written notice to Borrower, may require that
the reports set forth in Section 6.1B. and 6.1K. be delivered to Lender more
frequently than monthly, but not more frequently than on a weekly basis.
q. After reviewing field audit results, the Lender, in good faith
discretion, has the right to reduce the percentages set forth in subsections (q)
and (s) under the definition of "Eligible Accounts" as defined in Section 1.1 of
the Loan Agreement.
3. The parties agree to modify the Security Agreement as follows:
The parties agree that Section 1.2 of the Security Agreement is amended and
restated to read its entirety as follows:
"Section 1.2. Security Interest. As collateral security for the prompt
payment and performance in full when due of the Obligations and
Indebtedness (whether at stated maturity, by acceleration, or
otherwise), Debtor hereby collaterally assigns and grants to Lender a
security interest in all assets of Debtor (including the proceeds of
such assets) and in the following property (including the proceeds of
such property), whether now owned or existing or hereafter acquired or
arising and wherever arising or located (such property being
hereinafter sometimes called the "Collateral"); provided, that
"Collateral" shall not include the American Excluded Assets (as
defined in the Intercreditor Agreement):
(a) all Accounts;
(b) all Inventory;
(c) all Equipment;
(d) all chattel paper;
(e) all instruments;
(f) all general intangibles;
(g) all supporting obligations;
(h) all deposit accounts; and
(i) all letter-of-credit rights.
Items (d) through (i) shall have the same meaning as set forth in the
Texas Business & Commerce Code."
4. Borrower promises to pay to Lender the Notes, together with interest
thereon as described below, and to perform all of the covenants and obligations
under the other Loan
LOAN MODIFICATION AGREEMENT
04/26/05
Documents.
5. Borrower hereby renews, but does not extinguish, the liens and security
interests created and evidenced by the various Loan Documents, Borrower agrees
that all such liens and security interests secure the Notes, and Borrower
promises to observe, comply with and perform each and every of the terms and
provisions of the Loan Documents as herein modified.
6. Borrower hereby extends and reaffirms the liens on all property securing
the Notes until the Notes have been fully paid, and agrees that the modification
set forth herein shall in no manner affect or impair the liens securing the
same, and that said liens shall not in any manner be waived, the purpose of this
instrument being simply to modify the Loan Agreement, and to carry forward all
liens securing the same, which are acknowledged by Borrower to be valid and
subsisting. Borrower further agrees that all terms and provisions of the
instruments creating or fixing the liens securing the Notes same shall be and
remain in full force and effect as therein written, except as otherwise
expressly provided herein. All liens are hereby carried forward from the
original inception thereof, and Borrower hereby ratifies, reaffirms and confirms
all of said liens from the original inception thereof. Except as otherwise
specified herein, the terms and provisions hereof shall in no manner impair,
limit, restrict, or otherwise affect the obligations of Borrower under the Loan
Documents. As a material inducement to Lender to execute and deliver this
Agreement, Borrower hereby acknowledges and agrees that Borrower is well and
truly indebted to Lender in the amount set forth hereinabove, and that the
liens, security interests and assignments created by the Deed of Trust and any
other Loan Documents are, respectively, valid and subsisting liens, security
interests, and assignments, and are of the validity and priority recited in the
Deed of Trust and the other Loan Documents. As further material inducement to
Lender to execute and deliver this Agreement, Borrower hereby acknowledges that
there are no claims or offsets against, or defenses or counterclaim to, the
terms or provisions or other obligations created or evidenced by the Loan
Documents, and represent that with respect to the Notes, Deed of Trust, and
other Loan Documents hereunder, no event has occurred, and no condition exists
which would constitute a default by Borrower, either with or without notice or
lapse of time, or both, under the Loan Documents.
7. Borrower reaffirms and remakes, as of the date hereof, all
representations and warranties contained in the Loan Agreement, Deed of Trust,
and other Loan Documents. Borrower further represents and warrants that, except
as disclosed in writing to Lender, it has done nothing, nor has allowed
anything, to adversely affect title to or encumber the property secured by the
Deed of Trust or any other property of Borrower in which Lender has a security
interest. Borrower further represents and warrants to Lender that it is aware of
no condition or fact, which has not been disclosed in writing to Lender, which
would materially adversely affect the repayment to Lender of all sums due under
the Loan Documents.
8. Borrower, for itself and its heirs, successors and assigns, does hereby
waive, release, and discharge Lender and its agents, employees, officers,
directors, and attorneys (collectively, the "Released Parties") from any and all
of Lender's duties, obligations, and liabilities arising under, based upon or
associated with, directly or indirectly, the Notes, Deed of Trust, Loan
Agreement, the Security Agreement, and any other Loan Documents, existing as of
the date of this Agreement, and further does hereby waive any and all claims
LOAN MODIFICATION AGREEMENT
04/26/05
and causes of action of any kind or character, arising under, based upon, or
associated with, directly or indirectly, the Loan Documents or the acts,
actions, or omissions of the Released Parties in connection therewith, existing
as of the date hereof, whether known or unknown, asserted or unasserted,
equitable or at law, arising under or pursuant to common or statutory law,
rules, or regulations.
9. Borrower hereby ratifies, reaffirms and confirms any and all covenants,
agreements, or promises heretofore made by Borrower to Lender in connection with
the Loan, Notes, Deeds of Trust, or other Loan Documents, and all renewals and
modifications thereof.
10. If any provision of this Agreement or application to any party or
circumstance shall be determined by any court of competent jurisdiction to be
invalid and unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances, other than those
as to which it is so determined invalid or unenforceable, shall not be affected
thereby, and each provision hereof shall be valid and shall be enforced to the
fullest extent permitted by law.
11. THE NOTES, THE LOAN AGREEMENT, DEED OF TRUST, THE SECURITY AGREEMENT,
AND OTHER WRITTEN LOAN DOCUMENTS, AS MODIFIED BY THIS AGREEMENT, REPRESENT THE
FINAL AGREEMENT BETWEEN BORROWER AND LENDER, AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
12. Borrower does hereby covenant, represent, and warrant to the Lender
that: (a) it has the full power to make the agreements contained in this
Agreement, without joinder or consent of any other party; and (b) the execution,
delivery and performance of this Agreement will not contravene or constitute an
event which itself or which with the passage of time or giving of notice or both
would constitute a default under any agreement to which Borrower is a party or
by which Borrower is bound.
13. This Agreement shall be binding upon and shall inure to the benefit of
the above parties, their heirs, administrators, personal representatives,
successors and assigns.
14. Borrower, upon request from Lender, agrees to execute such other and
further documents as may be reasonably necessary or appropriate to consummate
the transactions contemplated herein or to perfect the liens and security
interests intended to secure the payment of the loans evidenced by the Notes.
15. Contemporaneously with the execution and delivery hereof, Borrower
shall pay, or cause to be paid, all costs and expenses incident to the
preparation hereof and the consummation of the transactions specified herein,
including without limitation, mortgagee title policy endorsement fees, fees and
expenses of legal counsel to Lender, and recording fees.
16. This Agreement and the rights and duties of the parties hereunder shall
be governed for all purposes by the law of the State of Texas and the law of the
United States applicable to transactions within said State.
LOAN MODIFICATION AGREEMENT
04/26/05
17. The parties hereby take notice of and agree to the following:
A. PURSUANT TO SUBSECTION 26.02(b) OF THE TEXAS BUSINESS AND COMMERCE
CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN EXCEEDS $50,000
IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND SIGNED
BY THE PARTY TO BE BOUND OR BY THAT PARTY'S AUTHORIZED REPRESENTATIVE.
B. PURSUANT TO SUBSECTION 26.02(c) OF THE TEXAS BUSINESS AND COMMERCE
CODE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN DOCUMENTS SHALL
BE DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY PRIOR ORAL AGREEMENTS
BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN DOCUMENTS.
C. THE NOTES, THE LOAN AGREEMENT, THE DEED OF TRUST, THE OTHER LOAN
DOCUMENTS AND THIS AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
18. This Agreement and any amendment may be executed in any number of
counterparts with the same effect as if all parties had signed the same
document.
LOAN MODIFICATION AGREEMENT
04/26/05
IN WITNESS WHEREOF, the parties hereto have executed the agreement as of
the day and year first above written.
BORROWER:
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: CB Americana LLC,
a Delaware limited liability company,
Its General Partner
By: Integrated Brands, Inc.,
a New Jersey Corporation
its managing Member
By: Gary P. Stevens
-------------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
Address:
4175 Veterans Memorial Highway
Ronkonkoma, NY 11779
LENDER:
REGIONS BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address:
-----------------------------------------
-----------------------------------------
LOAN MODIFICATION AGREEMENT
04/14/05
STATE OF New York Section
Section
COUNTY OF Suffolk Section
This instrument was acknowledged before me on the 21 day of April, 2005
by Gary Stevens, the President of Integrated Brands, Inc., the managing Member
of CB Americana LLC, a Delaware limited liability company, in its capacity as
the general partner of American Foods Limited Partnership, a Texas limited
partnership, on behalf of said limited partnership.
GABRIEL E. MERLE Gabriel E. Merle
NOTARY PUBLIC, State of New York ---------------------------------
No. 30-4745569 - Nassau County Notary Public, State of New York
Commission Expires July 31, 2006
[SEAL]
STATE OF TEXAS Section
Section
COUNTY OF DALLAS Section
This instrument was acknowledged before me on the ______ day of April,
2005, by _____________________________, ____________________________ of Regions
Bank, on behalf of said bank.
-----------------------------------------
Notary Public, State of Texas
[SEAL]
AFTER RECORDING RETURN TO:
Regions Bank
1111 W. Mockingbird Lane
Suite 1200
Dallas, Texas 75247
Attn: Riley Couch
LOAN MODIFICATION AGREEMENT
04/14/05
EXHIBIT A
Land Description
BEING a 17,600 acre tract of land known as Lot 2B, Block B/8023, Red Bird
Industrial Park West, Revised Tenth Section an addition to the City of Dallas,
Dallas County, Texas according to the plat recorded in Volume 95059, Page 1413,
Deed Records, Dallas County, Texas, (D.R.D.C.T) and being that certain tract
described in deed to Americana Foods Limited Partnership recorded in Volume
2000-086, Page 06317 Deed Records, Dallas County, Texas and being more
particularly described by meter and bounds as follows;
BEGINNING at a 1/2 inch iron rod with a yellow cap marked HALFF ASSOC INC found
in the West right of way line of Dan Morton Drive (64 feet wide) for the
northeast corner of Lot 1, Block B/8023, Red Bird Industrial Park West, Eighth
Section recorded in Volume 80189, Page 0003, Deed Record, Dallas County, Texas;
THENCE North 89 degrees 32 minutes 10 seconds West, passing at a distance of
476.45 feet to a 1/2 inch iron rod with a yellow cap marked HALFF ASSOC INC
found and continuing a total distance of 984.93 feet to a 1/2 inch iron rod
with a yellow cap marked HALFF ASSOC INC found for the northwest corner of
said Lot 1, Block B/8023 and being in the East line of Block A/8023, Red Bird
Industrial Park West, Third Section recorded in Volume 78042, Page 1087, Deed
Records, Dallas County, Texas;
THENCE North 00 degrees 27 minutes 50 seconds East, along said East line of
Block A/8023 a distance of 752.64 feet to a 5/8 inch iron rod found for the
northeast corner of said Block A/8023 and being in the South right of way line
of Kiest Boulevard (120 feet wide);
THENCE South 89 degrees 48 minutes 50 seconds East, along said South right of
way line of Kiest Boulevard passing at a distance of 508.48 feet a 5/8 inch iron
rod found and continuing a total distance of 1073.27 feet to a 5/8 inch iron
square spike found for the northwest end of a corner clip at the intersection of
said South right of the way line of Kiest Boulevard and the West right of way
line of Dan Morton Drive;
THENCE South 44 degrees 49 minutes 00 seconds East, along said corner clip a
distance of 14.14 feet to a 1/2 inch iron rod with a yellow cap marked HALFF
ASSOC INC found for corner and being the beginning of the curve to the right
having a radius of 558.00 feet and a chord which bears South 12 degrees 18
minutes 34 seconds West 234.32 feet;
THENCE southerly along said West right of way line and through a central angle
of 24 degrees 14 minutes 25 seconds and said curve to the right, an arc distance
of 236.07 feet to a 1/2 inch iron rod with a yellow cap marked HALFF ASSOC INC
found for corner and the beginning of a reverse curve to the left with a radius
of 622.00 feet;
THENCE southerly along said West right of way line through a central angle of 24
degrees 41 minutes 35 seconds an arc distance of 268.07 feet to a 1/2 inch iron
rod found for corner;
THENCE South 00 degrees 15 minutes 50 seconds East, along said West right of way
line a distance of 257.92 to the point of beginning and containing 766,634
square feet or 17,600 acres of land;
The basis of bearing for this description is the plat of record, Lot 2B, Block
B/8023, Red Bird Industrial Park West, Revised Tenth Section as addition to the
City of Dallas, Dallas County, Texas according to the plat recorded in Volume
95059, Page 1413, Deed Records, Dallas County, Texas;
EXHIBIT A, Land Description - Solo Page
RESTATED AND AMENDED REVOLVING PROMISSORY NOTE
$9,000,000.00 March 19, 2005
FOR VALUE RECEIVED, AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited
partnership (whether one or more, "Borrower"), having an address at 3333 Dan
Morton Drive, Dallas, Texas 75236, hereby promises to pay to the order of
REGIONS BANK, an Alabama banking corporation (together with its successors and
assigns and any subsequent holders of this Promissory Note, the "Lender"), as
hereinafter provided, the principal sum of NINE MILLION AND NO/100 DOLLARS
($9,000,000.00) or so much thereof as may be advanced by Lender from time to
time hereunder to or for the benefit or account of Borrower, together with
interest thereon at the Note Rate (as hereinafter defined), and otherwise in
strict accordance with the terms and provisions hereof.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Promissory Note, the following
terms shall have the following meanings:
Base Rate: For any day, a rate of interest equal to the Prime Rate.
Borrower: As identified in the introductory paragraph of this Note.
Business Day: A weekday, Monday through Friday, except a legal holiday or a
day on which banking institutions in Dallas, Texas are authorized or required by
law to be closed. Unless otherwise provided, the term "days" when used herein
shall mean calendar days.
Change: (i) any change after the date of this Note in the risk-based
capital guidelines applicable to Lender or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Note that affects capital adequacy or the amount of
capital required or expected to be maintained by Lender or any entity
controlling Lender.
Charges: All fees, charges and/or any other things of value, if any,
contracted for, charged, taken, received or reserved by Lender in connection
with the transactions relating to this Note and the other Loan Documents, which
are treated as interest under applicable law.
Debtor Relief Laws: Title 11 of the United States Code, as now or hereafter
in effect, or any other applicable law, domestic or foreign, as now or hereafter
in effect, relating to bankruptcy, insolvency, liquidation, receivership,
reorganization, arrangement or composition, extension or adjustment of debts, or
similar laws affecting the rights of creditors.
Default Interest Rate: shall have the meaning assigned to such term in the
Loan Agreement.
Event of Default: shall have the meaning assigned to such term in the Loan
Agreement.
Lender: As identified in the introductory paragraph of this Note.
Loan Agreement: The Loan Agreement dated November 19, 2002 by and between
Borrower and Lender governing the loan evidenced by the Note and secured, inter
alia, by the liens created by the Loan Documents as modified by the Renewal,
Extension and Modification Agreement date as of the date hereof.
Loan Documents: shall have the meaning assigned to such term in the Loan
Agreement.
REVOLVING PROMISSORY NOTE - Page 1
Maturity Date: November 30, 2005.
Maximum Lawful Rate: The maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that it permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law), taking
into account all Charges made in connection with the transaction evidenced by
the Note and the other Loan Documents. To the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate
payable on the Note and/or the Related Indebtedness, Lender will utilize the
weekly ceiling from time to time in effect as provided in such Chapter 303, as
amended. To the extent United States federal law permits Lender to contract for,
charge, take, receive or reserve a greater amount of interest than under Texas
law, Lender will rely on United States federal law instead of such Chapter 303
for the purpose of determining the Maximum Lawful Rate. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Lender may, at
its option and from time to time, utilize any other method of establishing the
Maximum Lawful Rate under such Chapter 303 or under other applicable law by
giving notice, if required, to Borrower as provided by applicable law now or
hereafter in effect.
Note Rate: The rate equal to the lesser of (a) the Maximum Lawful Rate or
(b) the Base Rate plus one-half of one percent (.5%).
Payment Date: The nineteenth day of each and every calendar month during
the term of this Note.
"Prime Rate": The rate of interest per annum quoted in the "Money Rates"
section of The Wall Street Journal from time to time and designated as the
"Prime Rate". If such prime rate, as so quoted, is split between two or more
different interest rates, then the Prime Rate shall be the highest of such
interest rates. If such prime rate shall cease to be published or is published
infrequently or sporadically, then the Prime Rate shall be (i) the rate of
interest per annum established from time to time by Lender and designated as its
base or prime rate, which may not necessarily be the lowest interest rate
charged by Lender and is set by Lender in its sole discretion, or (ii) if Lender
does not publish or announce a base or prime rate, or does so infrequently or
sporadically, then the Prime Rate shall be determined by reference to another
base rate, prime rate or similar lending rate index, generally accepted on a
national basis, as selected by Lender in its sole and absolute discretion.
Revolving Note: This promissory note. All references herein to the "Note"
shall refer to the Revolving Note unless otherwise indicated.
Any capitalized term used in the Note and not otherwise defined herein
shall have the meaning ascribed to such term in the Loan Agreement. All terms
used herein, whether or not defined in Section 1.1 hereof, and whether used in
singular or plural form, shall be deemed to refer to the object of such term
whether such is singular or plural in nature, as the context may suggest or
require.
ARTICLE II
PAYMENT TERMS
Section 2.1 Payment of Principal and Interest. All accrued but unpaid
interest on the principal balance of this Note outstanding from time to time
shall be payable on each Payment Date. The then outstanding principal balance of
this Note and all accrued but unpaid interest thereon shall be due and payable
on the Maturity Date. Borrower may from time to time during the term of this
Note borrow, partially or wholly repay its outstanding borrowings, and reborrow,
subject to all of the limitations, terms and conditions of this Note and of the
Loan Documents; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above. The
unpaid principal balance of this Note at any time shall be the total amounts
advanced hereunder by Lender less the amount of principal payments made hereon
by or for Borrower, which balance may be endorsed hereon from time to time by
Lender or otherwise noted in Lender's records, which notations shall be, absent
manifest error, conclusive evidence of the amounts owing hereunder from time to
time.
REVOLVING PROMISSORY NOTE - Page 2
Section 2.2 Application. Except as expressly provided herein to the
contrary, all payments on this Note shall be applied in accordance with the
provisions of the Loan Agreement or Security Agreement.
Section 2.3 Payments. All payments under this Note made to Lender shall be
made in immediately available funds at 1111 West Mockingbird, Dallas, Texas
75247 (or at such other place as Lender, in Lender's sole discretion, may have
established by delivery of written notice thereof to Borrower from time to
time), without offset, in lawful money of the United States of America, which
shall at the time of payment be legal tender in payment of all debts and dues,
public and private. Payments by check or draft shall not constitute payment in
immediately available funds until the required amount is actually received by
Lender in full. Payments in immediately available funds received by Lender in
the place designated for payment on a Business Day prior to 11:00 a.m. Central
Standard Time or Central Daylight Time, as applicable, at said place of payment
shall be credited prior to the close of business on the Business Day received,
while payments received by Lender on a day other than a Business Day or after
11:00 a.m. Central Standard Time or Central Daylight Time, as applicable, on a
Business Day shall not be credited until the next succeeding Business Day. If
any payment of principal or interest on this Note shall become due and payable
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day. Any such extension of time for payment shall be
included in computing interest which has accrued and shall be payable in
connection with such payment.
Section 2.4 Computation Period. Interest on the indebtedness evidenced by
this Note shall be computed on the basis of a three hundred sixty (360) day year
and shall accrue on the actual number of days elapsed for any whole or partial
month in which interest is being calculated. In computing the number of days
during which interest accrues, the day on which funds are initially advanced
shall be included regardless of the time of day such advance is made, and the
day on which funds are repaid shall be included unless repayment is credited
prior to the close of business on the Business Day received as provided in
Section 2.3 hereof.
Section 2.5 Prepayment. Borrower shall have the right to prepay, at any
time and from time to time, without reducing the Commitment, upon ten (10) days
prior written notice to Lender, without fee, premium or penalty (except as may
otherwise be provided in this Section 2.5), all or any Portion of the
outstanding principal balance hereof, provided, however, that such prepayment
shall also include any and all accrued but unpaid interest on the amount of
principal being so prepaid through and including the date of prepayment, plus
any other sums which have become due to Lender under the other Loan Documents on
or before the date of prepayment, but which have not been fully paid.
Section 2.6 Unconditional Payment. Borrower is and shall be obligated to
pay all principal, interest and any and all other amounts which become payable
under this Note or under any of the other Loan Documents absolutely and
unconditionally and without any abatement, postponement, diminution or deduction
whatsoever and without any reduction for counterclaim or setoff whatsoever. If
at any time any payment received by Lender hereunder shall be deemed by a court
of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under any Debtor Relief Law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Borrower and shall not be discharged or satisfied with any prior payment thereof
or cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.
Section 2.7 Partial or Incomplete Payments. Remittances in payment of any
part of this Note other than in the required amount in immediately available
funds at the place where this Note is payable shall not, regardless of any
receipt or credit issued therefor, constitute payment until the required amount
is actually received by Lender in full in accordance herewith and shall be made
and accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks.
Acceptance by Lender of any payment in an amount less than the full amount then
due shall be deemed an acceptance on account only, and the failure to pay the
entire amount then due shall be and continue to be an Event of Default in the
payment of this Note but no interest shall accrue on the amount so paid on and
after the date of receipt by Lender.
Section 2.8 Late Charge; Default Interest Rate. If any payment is not
received in full by Lender within ten (10) days following the date when due,
then in addition to interest accruing at the Default Interest Rate on such
amounts which are overdue from the date due until paid, Borrower shall also pay
to Lender a late charge in an
REVOLVING PROMISSORY NOTE - Page 3
amount equal to five percent (5%) of the overdue payment, provided that such
late charge shall not become effective until thirty (30) days after such payment
was due. For so long as any Event of Default exists under this Note or under any
of the other Loan Documents, regardless of whether or not there has been an
acceleration of the indebtedness evidenced by this Note, and at all times after
the maturity of the indebtedness evidenced by this Note (whether by acceleration
or otherwise), and in addition to all other rights and remedies of Lender
hereunder, interest shall accrue on the outstanding principal balance hereof at
the Default Interest Rate, and such accrued interest shall be immediately due
and payable. Borrower acknowledges that it would be extremely difficult or
impracticable to determine Lender's actual damages resulting from any late
payment or Event of Default, and such late charges and accrued interest are
reasonable estimates of those damages and do not constitute a penalty. If Lender
determines that the amount of capital required or expected to be maintained by
Lender or any entity controlling Lender, is increased as a result of a Change,
then, within fifteen (15) days of demand by Lender, Borrower shall pay to Lender
the amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital that Lender determines is attributable to
this Note or the principal amount outstanding hereunder (after taking into
account Lender's policies as to capital adequacy).
ARTICLE III
EVENT OF DEFAULT AND REMEDIES
Section 3.1 Event of Default. The occurrence or happening, at any time and
from time to time, of any one or more of the following shall immediately
constitute an "Event of Default" under this Note:
(a) Borrower shall fail, refuse or neglect to pay and satisfy, in full
and in the applicable method and manner required, any required payment of
principal or interest or any other portion of the indebtedness evidenced by
this Note as and when the same shall become due and payable, whether at the
stipulated due date thereof, at a date fixed for payment, or at maturity,
by acceleration or otherwise; provided, however, that a failure by Borrower
to pay a regularly scheduled monthly payment due pursuant to the Note shall
not constitute an "Event of Default" hereunder unless such failure
continues for at least ten (10) days after the due date thereof; or
{b) An Event of Default as defined in any of the Loan Documents.
Section 3.2 Remedies. Upon the occurrence of an Event of Default, Lender
shall have the immediate right, at the sole discretion of Lender and without
notice, demand, presentment, notice of nonpayment or nonperformance, protest,
notice of protest, notice of intent to accelerate, notice of acceleration, or
any other notice or any other action (ALL OF WHICH BORROWER HEREBY EXPRESSLY
WAIVES AND RELINQUISHES) (i) to declare the entire unpaid balance of the
indebtedness evidenced by this Note (including, without limitation, the
outstanding principal balance hereof, including all sums advanced or accrued
hereunder or under any other Loan Document, and all accrued but unpaid interest
thereon) at once immediately due and payable (and upon such declaration, the
same shall be at once immediately due and payable) and may be collected
forthwith, whether or not there has been a prior demand for payment and
regardless of the stipulated date of maturity, (ii) to foreclose any liens and
security interests securing payment hereof or thereof (including, without
limitation, any liens and security interests), and (iii) to exercise any of
Lender's other rights, powers, recourses and remedies under this Note, under any
other Loan Document, or at law or in equity, and the same (w) shall be
cumulative and concurrent, (x) may be pursued separately, singly, successively,
or concurrently against Borrower or others obligated for the repayment of this
Note or any part hereof, at the sole discretion of Lender, (y) may be exercised
as often as occasion therefor shall arise, it being agreed by Borrower that the
exercise, discontinuance of the exercise of or failure to exercise any of the
same shall in no event be construed as a waiver or release thereof or of any
other right, remedy, or recourse, and (z) are intended to be, and shall be,
nonexclusive. All rights and remedies of Lender hereunder and under the other
Loan Documents shall extend to any period after the initiation of foreclosure
proceedings, judicial or otherwise. Without limiting the provisions of Section
4.17 hereof, if this Note, or any part hereof, is collected by or through an
attorney-at-law, Borrower agrees to pay all costs and expenses of collection,
including, but not limited to, Lender's attorneys' fees, whether or not any
legal action shall be instituted to enforce this Note. This Note is also
subject to acceleration as provided in the Loan Agreement.
REVOLVING PROMISSORY NOTE - Page 4
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced by this Note by reason of an Event of Default hereunder, acceptance of
a partial or past due payment, or indulgences granted from time to time shall be
construed (i) as a novation of this Note or as a reinstatement of the
indebtedness evidenced by this Note or as a waiver of such right of acceleration
or of the right of Lender thereafter to insist upon strict compliance with the
terms of this Note, or (ii) to prevent the exercise of such right of
acceleration or any other right granted under this Note, under any of the other
Loan Documents or by any applicable laws. Borrower hereby expressly waives and
relinquishes the benefit of any statute or rule of law or equity now provided,
or which may hereafter be provided, which would produce a result contrary to or
in conflict with the foregoing. The failure to exercise any remedy available to
Lender shall not be deemed to be a waiver of any rights or remedies of Lender
under this Note or under any of the other Loan Documents, or at law or in
equity. No extension of the time for the payment of this Note or any installment
due hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Borrower under this Note, either in whole or in
part, unless Lender specifically, unequivocally and expressly agrees otherwise
in writing. This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change, or
modification is sought.
Section 42. WAIVERS. EXCEPT AS SPECIFICALLY PROVIDED IN THE LOAN DOCUMENTS
TO THE CONTRARY, BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY WAIVE
AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NONPAYMENT OR
NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE,
NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY OTHER ACTION. BORROWER WAIVES
AND RELINQUISHES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION,
STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW OR
HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA
AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO ALL OF ITS PROPERTY,
REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS
EVIDENCED BY THIS NOTE OR BY THE OTHER LOAN DOCUMENTS.
Section 4.3
(a) Savings Clause. It is expressly stipulated and agreed to be the
intent of Borrower and Lender at all times to comply strictly with the
applicable Texas law governing the maximum rate or amount of interest
payable on the indebtedness evidenced by this Note and the Related
Indebtedness (or applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law). If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted
for, charged, taken, reserved or received pursuant to this Note, any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged, taken,
reserved or received by reason of Lender's exercise of the option to
accelerate the maturity of this Note and/or the Related Indebtedness, or
(iii) Borrower will have paid or Lender will have received by reason of any
voluntary prepayment by Borrower of this Note and/or the Related
Indebtedness, then it is Borrower's and Lender's express intent that all
amounts charged in excess of the Maximum Lawful Rate shall be automatically
canceled, ab initio, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by Lender shall be credited on the principal balance
of this Note and/or the Related Indebtedness (or, if this Note and all
Related Indebtedness have been or would thereby be paid in full, refunded
to Borrower), and the provisions of this Note and the other Loan Documents
shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
any new document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder
and thereunder; provided, however, if this Note has been paid in full
before the end of the stated term of this
REVOLVING PROMISSORY NOTE - Page 5
Note, then Borrower and Lender agree that Lender shall, with reasonable
promptness after Lender discovers or is advised by Borrower that interest
was received in an amount in excess of the Maximum Lawful Rate, either
refund such excess interest to Borrower and/or credit such excess interest
against this Note and/or any Related Indebtedness then owing by Borrower to
Lender. Borrower hereby agrees that as a condition precedent to any claim
seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature and
amount of the violation, and Lender shall have sixty (60) days after
receipt of such notice in which to correct such usury violation, if any, by
either refunding such excess interest to Borrower or crediting such excess
interest against this Note and/or the Related Indebtedness then owing by
Borrower to Lender. All sums contracted for, charged, taken, reserved or
received by Lender for the use, forbearance or detention of any debt
evidenced by this Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of this Note and/or the Related
Indebtedness (including any and all renewal and extension periods) until
payment in full so that the rate or amount of interest on account of this
Note and/or the Related Indebtedness does not exceed the Maximum Lawful
Rate from time to time in effect and applicable to this Note and/or the
Related Indebtedness for so long as debt is outstanding. In no event shall
the provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts)
apply to this Note and/or any of the Related Indebtedness. Notwithstanding
anything to the contrary contained herein or in any of the other Loan
Documents, it is not the intention of Lender to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
(b) Ceiling Election. To the extent that Lender is relying on Chapter
303 of the Texas Finance Code to determine the Maximum Lawful Rate payable
on the Note and/or any other portion of the indebtedness, Lender will
utilize the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended. To the extent United States federal law permits
Lender to contract for, charge, take, receive or reserve a greater amount
of interest than under Texas law, Lender will rely on United States federal
law instead of such Chapter 303 for the purpose of determining the Maximum
Lawful Rate. Additionally, to the extent permitted by applicable law now or
hereafter in effect, Lender may, at its option and from time to time,
utilize any other method of establishing the Maximum Lawful Rate under such
Chapter 303 or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect.
Section 4.4 Use of Funds. Borrower hereby warrants, represents and
covenants that (i) the loan evidenced by this Note is made to Borrower solely
for the purpose of acquiring or carrying on a business or commercial enterprise,
(ii) all proceeds of this Note shall be used only for business and commercial
purposes, and (iii) no funds disbursed hereunder shall be used for personal,
family, agricultural or household purposes.
Section 4.5 Further Assurances and Corrections. From time to time, at the
request of Lender, Borrower will (i) promptly correct any defect, error or
omission which may be discovered in the contents of this Note or in any other
Loan Document or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver, record and/or file (or cause to be executed, acknowledged,
delivered, recorded and/or filed) such further documents and instruments
(including, without limitation, further deeds of trust, security agreements,
financing statements, continuation statements and assignments of rents) and
perform such further acts and provide such further assurances as may be
necessary, desirable, or proper, in Lender's opinion, (A) to carry out more
effectively the purposes of this Note and the Loan Documents and the
transactions contemplated hereunder and thereunder, (B) to confirm the rights
created under this Note and the other Loan Documents, (C) to protect and further
the validity, priority and enforceability of this Note and the other Loan
Documents and the liens and security interests created thereby, and (D) to
subject to the Loan Documents any property of Borrower intended by the terms of
any one or more of the Loan Documents to be encumbered by the Loan Documents;
and (iii) pay all costs in connection with any of the foregoing.
Section 4.6 Governing Law; Submission to Jurisdiction. This Note is
executed and delivered as an incident to a lending transaction negotiated and
consummated in Dallas County, Texas, and shall be governed by and construed in
accordance with the laws of the State of Texas. Borrower, for itself and its
successors and assigns, hereby irrevocably (i) submits to the nonexclusive
jurisdiction of the state and federal courts in Texas, (ii) waives, to
REVOLVING PROMISSORY NOTE - Page 6
the fullest extent permitted by law, any objection that it may now or in the
future have to the laying of venue of any litigation arising out of or in
connection with this Note or any Loan Document brought in the District Court of
Dallas County, Texas, or in the United States District Court for the Northern
District of Texas, Dallas Division, (iii) waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought in such
court or that such court is an inconvenient forum, and (iv) agrees that any
legal proceeding against any party to any of the Loan Documents arising out of
or in connection with any of the Loan Documents may be brought in one of the
foregoing courts. Borrower hereby agrees that service of process upon Borrower
may be made by certified or registered mail, return receipt requested, at its
address specified herein. Nothing herein shall affect the right of Lender to
serve process in any other manner permitted by law or shall limit the right of
Lender to bring any action or proceeding against Borrower or with respect to any
of Borrower's property in courts in other jurisdictions. The scope of each of
the foregoing waivers is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Borrower
acknowledges that these waivers are a material inducement to Lender's agreement
to enter into the agreements and obligations evidenced by the Loan Documents,
that Lender has already relied on these waivers and will continue to rely on
each of these waivers in related future dealings. The waivers in this Section
4.6 are irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions, amendments,
modifications, or replacements in respect of any and all of the applicable Loan
Documents. In connection with any litigation, this Note may be filed as a
written consent to a trial by the court.
Section 4.7 Counting of Days. If any time period referenced hereunder ends
on a day other than a Business Day, such time period shall be deemed to end on
the next succeeding Business Day.
Section 4.8 Relationship of the Parties. Notwithstanding any prior business
or personal relationship between Borrower and Lender, or any officer, director
or employee of Lender, that may exist or have existed, the relationship between
Borrower and Lender is solely that of debtor and creditor, Lender has no
fiduciary or other special relationship with Borrower, Borrower and Lender are
not partners or joint venturers, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.
Section 4.9 Successors and Assigns. The terms and provisions hereof shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties, by
operation of law or otherwise, and all other persons claiming by, through or
under them. The terms "Borrower" and "Lender" as used hereunder shall be deemed
to include their respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties, by
operation of law or otherwise, and all other persons claiming by, through or
under them.
Section 4.10 Joint and Several Liability. If Borrower consists of more than
one person or entity, each shall be jointly and severally liable to perform the
obligations of Borrower under this Note.
Section 4.11 Time is of the Essence. Time is of the essence with respect to
all provisions of this Note and the other Loan Documents.
Section 4.12 Headings. The Article, Section, and Subsection entitlements
hereof are inserted for convenience of reference only and shall in no way
alter, modify, define, limit, amplify or be used in construing the text, scope
or intent of such Articles, Sections, or Subsections or any provisions hereof.
Section 4.13 Controlling Agreement. In the event of any conflict between
the provisions of this Note and the Loan Agreement, it is the intent of the
parties hereto that the provisions of the Loan Agreement shall control. In the
event of any conflict between the provisions of this Note and any of the other
Loan Documents (other than the Loan Agreement), it is the intent of the parties
hereto that the provisions of this Note shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of this Note and the other Loan
Documents and that this Note and the other Loan Documents shall not be subject
to the principle of construing their meaning against the party which drafted
same.
REVOLVING PROMISSORY NOTE - Page 7
Section 4.14 Notices. All notices or other communications required or
permitted to be given pursuant to this Note shall be as set forth in the Loan
Agreement.
Section 4.15 Severability. If any provision of this Note or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, then neither the remainder of this Note nor the
application of such provision to other persons or circumstances nor the other
instruments referred to herein shall be affected thereby, but rather shall be
enforced to the greatest extent permitted by applicable law.
Section 4.16 Right of Setoff. In addition to all liens upon and rights of
setoff against the money, securities, or other property of Borrower given to
Lender that may exist under applicable law, Lender shall have and Borrower
hereby grants to Lender a lien upon and a right of setoff against all money,
securities, and other property of Borrower, now or hereafter in possession of or
on deposit with Lender, whether held in a general or special account or deposit,
for safe-keeping or otherwise, and every such lien and right of setoff may be
exercised without demand upon or notice to Borrower. No lien or right of setoff
shall be deemed to have been waived by any act or conduct on the part of Lender,
or by any neglect to exercise such right of setoff or to enforce such lien, or
by any delay in so doing, and every right of setoff and lien shall continue in
full force and effect until such right of setoff or lien is specifically waived
or released by an instrument in writing executed by Lender.
Section 4.17 Costs of Collection. If any holder of this Note retains an
attorney-at-law in connection with any Event of Default or at maturity or to
collect, enforce, or defend this Note or any part hereof, or any other Loan
Document in any lawsuit or in any probate, reorganization, bankruptcy or other
proceeding, or if Borrower sues any holder in connection with this Note or any
other Loan Document and does not prevail, then Borrower agrees to pay to each
such holder, in addition to the principal balance hereof and all interest
hereon, all costs and expenses of collection or incurred by such holder or in
any such suit or proceeding, including, but not limited to, reasonable
attorneys' fees.
Section 4.18 Gender. All personal pronouns used herein, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural and vice versa.
Section 4.19 Statement of Unpaid Balance. At any time and from time to
time, Borrower will furnish promptly, upon the request of Lender, a written
statement or affidavit, in form satisfactory to Lender, stating the unpaid
balance of the indebtedness evidenced by this Note and the Related Indebtedness
and that there are no offsets or defenses against full payment of the
indebtedness evidenced by this Note and the Related Indebtedness and the terms
hereof, or if there are any such offsets or defenses, specifying them.
Section 4.20 ENTIRE AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS
CONTAIN THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND ALL PRIOR AGREEMENTS, WHETHER WRITTEN OR
ORAL, RELATIVE HERETO AND THERETO WHICH ARE NOT CONTAINED HEREIN OR THEREIN ARE
SUPERSEDED AND TERMINATED HEREBY, AND THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY
NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Section 4.21 Amended and Restated Note. This Note is given in assumption,
amendment, renewal and restatement of the terms and provisions governing the
repayment of the indebtedness evidenced by that certain Restated and Amended
Revolving Promissory Note dated June 16, 2004 in the original principal amount
of $7,000,00.00 ( the "First Amended Note"), which renewed, extended and
modified that certain Revolving Promissory Note dated November 19, 2002 in the
original principal amount of $5,000,000.00 ("Original Note"), executed by
Borrower, payable to the order of Lender. In accordance with such amendment,
renewal and restatement, Borrower acknowledges and agrees that the indebtedness
evidenced by the Original Note and First Amended Note shall be renewed by and
continued in full force and effect in accordance with the terms and conditions
of this Note (and shall not be extinguished) and this Note and the indebtedness
evidenced thereby shall be secured by the liens security interest of the Loan
Documents as heretofore, concurrently herewith or hereafter amended. The
Original Note and First Amended Note are being retained by Lender with a
notation placed on their face thereof indicating that the obligations evidenced
by such notes have been amended, renewed and restated by
REVOLVING PROMISSORY NOTE - Page 8
this Note and do not represent separate and continuing obligations of Borrower
having been superseded by terms hereof.
[SIGNATURE PAGE FOLLOWS]
REVOLVING PROMISSORY NOTE - Page 9
IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has
duly executed this Note as of the day and year first written above.
BORROWER:
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: CB Americana LLC, a Delaware limited
liability company,
its General Partner
By: Integrated Brands, Inc.,
its managing Member
By: Gary P. Stevens
---------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
Address of Lender for purposes of notice hereunder:
Regions Bank
1111 West Mockingbird
Dallas, Texas 75247
Attention: Commercial Real Estate Lending
Prepared by:
Fielder F. Nelms, Esq.
Hallett & Perrin, P.C.
2001 Bryan Tower
Suite 3900
Dallas, Texas 75201
Phone: (214)922-4109
REVOLVING PROMISSORY NOTE - Signature Page
PROMISSORY NOTE
$4,553,280.00 April _____, 2005
FOR VALUE RECEIVED, AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited
partnership ("Borrower," whether one or more), hereby promises to pay to the
order of REGIONS BANK (together with any and all of its successors and assigns
and/or any other holder of this Note, "Lender"), without offset, in immediately
available funds in lawful money of the United States of America, at 1111 W.
Mockingbird Lane, Dallas, Texas 75247, the principal sum of FOUR MILLION FIVE
HUNDRED FIFTY THREE THOUSAND TWO HUNDRED EIGHTY AND NO/100 DOLLARS
($4,553,280.00), together with interest on the unpaid principal balance of this
Note from day to day outstanding as hereinafter provided.
1. Payment Schedule and Maturity Date. Installments of accrued unpaid
interest shall be due and payable monthly on the 5th day of each and every
calendar month, beginning June 5, 2005, and continuing regularly and monthly
thereafter until the first anniversary of this Note (the "Maturity Date"), at
which time the entire principal balance of this Note then unpaid and all accrued
interest then unpaid shall be finally due and payable.
2. Interest Rate. The unpaid principal balance of the Note from day to day
outstanding, which is not past due, shall bear interest at a fluctuating rate of
interest equal to the lesser of (i) the 30-day London Interbank Offered Rate (as
defined below) for the applicable Interest Period (as defined below) (the
"Index"), plus two and three-quarters percent (2.75%) per annum, or (ii) the
maximum non-usurious rate of interest allowed by applicable law (the "Maximum
Rate"). Interest shall be computed for the actual number of days which have
elapsed, on the basis of a 30 day month and 360-day year. Any principal of, and
any other sum payable hereunder (excluding interest), which is not paid when due
shall bear interest, from the date due and payable until paid, payable on
demand, at a rate per annum (the "Past Due Rate") equal to the lesser of (i)
eighteen percent (18%) or (ii) the maximum rate allowable by law.
2.1 Definitions Relating to Index. As used in this Note, the following
capitalized terms will have the meanings indicated:
"Applicable Rate" means the Index plus two and three-quarters percent
(2.75%) per annum.
"Business Day" means a day on which the office of the Lender at which
payments under this Note are to be made is open for business.
"Interest Period" means, with respect to the initial Interest Period
hereunder, the period commencing on the date of the Note and, with respect to
any subsequent Interest Period hereunder, the period commencing on the last day
of the immediately preceding Interest Period, and in any case ending on the day
numerically corresponding to the date of the Note in the first month thereafter;
provided that any Interest Period which begins on a day of a calendar month for
which there is no numerically corresponding day in the appropriate subsequent
calendar month shall end on the last day of the appropriate subsequent calendar
month.
PAGE 1
"LIBOR Business Day" means a day on which the office of the Lender at which
payments under this Note are to be made is open for business and on which
dealings in U.S. dollar deposits are carried out in the London interbank market.
"30-day London Interbank Offered Rate" means, with respect to any Interest
Period, that rate for deposits in U.S. dollars for a period comparable to the
term of such Interest Period which appears on Telerate Page 3750 as of 11:00
a.m., London, England time on the day (the "Pricing Date") that is two LIBOR
Business Days preceding the first day of such Interest Period, as such rate is
published on the Business Day next following the Pricing Date in the Money
Market Section of the Wall Street Journal. If such rate cannot be so determined
for any reason, Lender will request the principal London office of at least two
banks to provide a quotation of its rate for deposits in U.S. dollars for a
period comparable to the applicable Interest Period and the rate for such
Interest Period will be the arithmetic mean of such quotations.
"Prime Lending Rate" means, on any day, the rate of interest per annum then
most recently established by Lender as its base rate. Any such rate is a general
reference rate of interest, may not be related to any other rate, and may not be
the lowest or best rate actually charged by Lender to any customer or a favored
rate and may not correspond with future increases or decreases in interest rates
charged by other lenders or market rates in general, and that Lender may make
various business or other loans at rates of interest having no relationship to
such rate. The Prime Lending Rate shall apply only in the circumstances in set
forth in Section 2.2 hereof. In the event the Prime Lending Rate does apply as
set forth in Section 2.2, the per annum rate of interest on this Note shall
change immediately and contemporaneously with such change in the Prime Lending
Rate.
2.2 London Interbank Offered Rate Yield Protection.
(a) Unforeseen London Interbank Market Conditions or Changes in Law.
Notwithstanding anything in this Note to the contrary, if Lender shall have
determined (which determination shall be final and conclusive and binding
upon Lender and Borrower) that: (i) insufficient funds are available in
London interbank market to make or continue loans at the 30-day London
Interbank Offered Rate; (ii) the making or continuation of loans at the
30-day London Interbank Offered Rate has been made impracticable by the
occurrence of a contingency which materially and adversely affects the
London interbank market; or (iii) any regulatory change shall make it
unlawful for Lender to maintain the Loan at the 30-day London Interbank
Offered Rate, Lender shall forthwith give written notice thereof to
Borrower. After such notice and until such time as Lender shall determine
that said adverse conditions no longer exist, the Prime Lending Rate plus
one-half percent (.50%) per annum, as adjusted daily due to changes to the
Prime Lending Rate or, at the election of Borrower, the Prime Lending Rate
plus one-half percent (.50%) per annum for an Interest Period, shall be
applicable to the Loan.
(b) Funding Losses. Borrower shall indemnify Lender and hold Lender
harmless against any additional cost, loss (including loss of profit or
yield) or expense incurred by Lender (including, without limitation, any
cost, loss or expense incurred by
PAGE 2
reason of the liquidation or re-employment of deposits or other funds
acquired by Lender to fund or maintain the Loan at the 30-day London
Interbank Offered Rate) as a result of: (i) the failure of Borrower to pay
principal of the Loan on the Maturity Date or any earlier date, upon
acceleration or otherwise, on which the entire principal balance of this
Note shall be finally due and payable (without regard to any grace period)
during any period when the 30-day London Interbank Offered Rate is in
effect; or (ii) the prepayment of principal of all or any portion of the
Loan on a date other than the last day of the applicable Interest Period
during any period when the 30-day London Interbank Offered Rate is in
effect. Lender shall deliver to Borrower a certificate as to the amount of,
and the basis of determination of, the loss or expense as incurred, and
such certificate shall be conclusive in the absence of arithmetical error
or misrepresentation by Lender.
(c) Survival. The obligations of Borrower under this Section 2.2 shall
survive the payment in full of principal and interest due under this Note.
3. Extension Option. Provided that no Default (hereinafter defined) shall
have occurred and be continuing, Borrower shall have the one-time right to
extend the original Maturity Date of this Note for an additional two years
beyond the original Maturity Date, upon satisfaction of the following conditions
precedent, all of which must be satisfied or waived in writing by Lender prior
to the effectiveness of such extension of the Maturity Date:
(a) Extension Request. The Borrower shall deliver written notice of such
request (the "Extension Request") to Lender not later than 35 days prior to the
original Maturity Date. Upon receipt of the Extension Request, Lender shall
provide Borrower with a quote for a fixed interest rate option which would apply
to the Note during the extended term of the Note, assuming an extended term of
two (2) years from the initial Maturity Date, which rate shall be based on
Lender's then established rate for loans of the same or similar maturity;
(b) Designation of Term and Initial Interest Option. Within 24 hours of
Lender's quote of the interest rate for a fixed rate, Borrower shall deliver a
second written notice (the "Supplemental Notice") to Lender, which Supplemental
Notice shall designate Borrower's election of either (i) the fixed rate quoted
by Lender, or (ii) the Applicable Rate. From and after the initial Maturity Date
hereunder, the Borrower will be required to make installments of principal and
accrued unpaid interest due and payable monthly on the 5th day of each and every
calendar month, beginning May 5, 2006, and continuing regularly and monthly
thereafter until the third anniversary of the original Maturity Date, at which
time the entire principal balance of this Note then unpaid and all accrued
interest then unpaid shall be finally due and payable. The amount of each
installment of principal and interest payable hereunder shall be the amount
which will fully amortize the original principal balance, together with interest
thereon, in substantially equal payments over a 25 year (300 month) time period
using the Applicable Rate (the monthly installments shall be adjusted to give
effect to each change in the Applicable Rate). Any additional prepayments of
principal which may, from time to time, be made shall, at the Borrower's option,
be credited against the principal due upon the extended maturity date and shall
not be credited against regularly scheduled amortization payments;
(c) Promptly following the delivery of the Extension Request and the
Supplemental Notice, the Borrower and the Lender shall endeavor reasonably and
in good faith to amend this
PAGE 3
Note and the other Loan Documents as and to the extent reasonably requested by
Lender to reflect the terms of any such extension;
(d) No Default. On the dates the Extension Request and the Supplemental
Notice are submitted and on the Maturity Date (as determined without regard to
such extension), there shall exist no Default; and
(e) Representations and Warranties. The representations and warranties made
or deemed made by the Borrower in the Loan Documents are and shall be true and
correct in all material respects on the date the Extension Request is made and
on the Maturity Date (as determined without regard to such Extension Request),
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations were true and accurate on
and as of such earlier date) and except for changes in factual circumstances or
transactions, in either event, not prohibited under the Loan Documents.
The delivery of the Extension Request shall constitute a representation and
warranty by the Borrower that all of the foregoing conditions have been
satisfied on the date of such Extension Request. The Borrower shall not have the
right to make the Extension Request at any time after the Maturity Date.
4. Security; Loan Documents. The security for this Note includes a Deed of
Trust, Assignment of Rents and Leases and Security Agreement (which, as it may
have been or may be amended, restated, modified or supplemented from time to
time, is herein called the "Deed of Trust") dated of even date herewith from
Borrower to Neil West, Trustee, covering certain property in Dallas County,
Texas, as described therein (the "Property"). This Note, the Deed of Trust, and
all other documents now or hereafter securing, guaranteeing or executed in
connection with the loan evidenced by this Note (the "Loan"), are, as the same
have been or may be amended, restated, modified or supplemented from time to
time, herein sometimes called individually a "Loan Document" and together the
"Loan Documents."
5. Prepayment. Borrower may prepay the principal balance of this Note, in
full at any time or in part from time to time, without premium or penalty,
except as set forth in Section 2.2(b) above.
6. Late Charges. If Borrower shall fail to make any interest payment under
the terms of this Note within fifteen (15) days after the date such payment is
due, Borrower shall pay to Lender on demand a late charge equal to five percent
(5%) of such payment. Such fifteen (15) day period shall not be construed as in
any way extending the due date of any payment. The "late charge" is imposed for
the purpose of defraying the expenses of Lender incident to handling such
delinquent payment. This charge shall be in addition to, and not in lieu of, any
other remedy Lender may have and is in addition to any fees and charges of any
agents or attorneys which Lender may employ upon the occurrence of a Default
(hereinafter defined) hereunder, whether authorized herein or by law.
7. Certain Provisions Regarding Payments. All payments made as scheduled on
this Note shall be applied, to the extent thereof, to late charges, to accrued
but unpaid interest, unpaid principal, and any other sums due and unpaid to
Lender under the Loan Documents, in such
PAGE 4
manner and order as Lender may elect in its sole discretion. All permitted
prepayments on this Note shall be applied, to the extent thereof, to accrued but
unpaid interest on the amount prepaid, to principal, and any other sums due and
unpaid to Lender under the Loan Documents, in such manner and order as Lender
may elect in its sole discretion. Except to the extent that specific provisions
are set forth in this Note or another Loan Document with respect to application
of payments, all payments received by Lender shall be applied, to the extent
thereof, to the indebtedness secured by the Deed of Trust in such manner and
order as Lender may elect in its sole discretion, any instructions from Borrower
or anyone else to the contrary notwithstanding. Remittances in payment of any
part of the indebtedness other than in the required amount in immediately
available U.S. funds shall not, regardless of any receipt or credit issued
therefor, constitute payment until the required amount is actually received by
Lender in immediately available U.S. funds and shall be made without offset,
demand, counterclaim, deduction, or recoupment (each of which is hereby waived)
and accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks.
Acceptance by the holder hereof of any payment in an amount less than the amount
then due on any indebtedness shall be deemed an acceptance on account only,
notwithstanding any notation on or accompanying such partial payment to the
contrary, and shall not in any way excuse the existence of a Default.
8. Defaults.
(a) It shall be a default ("Default") under this Note and each of the
other Loan Documents if (i) Borrower fails to pay any principal, interest
or other amount of money due under this Note when due, regardless of how
such amount may have become due, and Borrower does not cure such failure
within 10 days of Lender's written notice to Borrower of such failure
(provided, however, that Lender need not give notice of a failure to pay
the Note upon the Maturity Date); or (ii) there shall occur any default or
event of default under the Deed of Trust or any other Loan Document after
giving effect to any notice and cure period provided for in such other Loan
Document. Upon the occurrence of a Default, Lender shall have the rights to
declare the unpaid principal balance and accrued but unpaid interest on
this Note, and all other amounts due hereunder and under the other Loan
Documents, at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Loan Document, or at
law or in equity.
(b) All of the rights, remedies, powers and privileges (together,
"Rights") of Lender provided for in this Note and in any other Loan
Document are cumulative of each other and of any and all other Rights at
law or in equity. The resort to any Right shall not prevent the concurrent
or subsequent employment of any other appropriate Right. No single or
partial exercise of any Right shall exhaust it, or preclude any other or
further exercise thereof, and every Right may be exercised at any time and
from time to time. No failure by Lender to exercise, nor delay in
exercising any Right, including but not limited to the right to accelerate
the maturity of this Note, shall be construed as a waiver of any Default or
as a waiver of any Right. Without limiting the generality of the foregoing
provisions, the acceptance by Lender from time to time of any payment under
this Note
PAGE 5
which is past due or which is less than the payment in full of all amounts
due and payable at the time of such payment, shall not (i) constitute a
waiver of or impair or extinguish the right of Lender to accelerate the
maturity of this Note or to exercise any other Right at the time or at any
subsequent time, or nullify any prior exercise of any such Right, or (ii)
constitute a waiver of the requirement of punctual payment and performance
or a novation in any respect.
(c) If any holder of this Note retains an attorney in connection with
any Default or at maturity or to collect, enforce or defend this Note or
any other Loan Document in any lawsuit or in any probate, reorganization,
bankruptcy, arbitration or other proceeding, or if Borrower sues any holder
in connection with this Note or any other Loan Document and does not
prevail, then Borrower agrees to pay to each such holder, in addition to
principal, interest and any other sums owing to Lender hereunder and under
the other Loan Documents, all costs and expenses incurred by such holder in
trying to collect this Note or in any such suit or proceeding, including,
without limitation, attorneys' fees and expenses, investigation costs and
all court costs, whether or not suit is filed hereon, whether before or
after the Maturity Date, or whether in connection with bankruptcy,
insolvency or appeal, or whether collection is made against Borrower or any
guarantor or endorser or any other person primarily or secondarily liable
hereunder.
9. Commercial Purpose. Borrower warrants that the Loan is being made solely
to acquire or carry on a business or commercial enterprise, and/or Borrower is a
business or commercial organization. Borrower further warrants that all of the
proceeds of this Note shall be used for commercial purposes and stipulates that
the Loan shall be construed for all purposes as a commercial loan, and is made
for other than personal, family, household or agricultural purposes.
10. WAIVER OF JURY TRIAL. BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS NOTE, THE DEED OF TRUST OR ANY
OF THE OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER,
AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS AND WARRANTS THAT
IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
PAGE 6
11. Successors and Assigns. The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the successors and assigns of
the parties. The foregoing sentence shall not be construed to permit Borrower to
assign the Loan except as otherwise permitted under the Loan Documents. As
further provided in the Loan Agreement, Lender may, at any time, sell, transfer,
or assign this Note, the Deed of Trust and the other Loan Documents, and any or
all servicing rights with respect thereto, or grant participations therein or
issue mortgage pass-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement.
12. General Provisions. Time is of the essence with respect to Borrower's
obligations under this Note. If more than one person or entity executes this
Note as Borrower, all of said parties shall be jointly and severally liable for
payment of the indebtedness evidenced hereby. Borrower and all sureties,
endorsers, guarantors and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (a) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notices (except any notices which are specifically required by this Note or any
other Loan Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that Lender shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the Northern District of Texas, and
venue in the city or county in which payment is to be made as specified in
Section 1 of this Note, for the enforcement of any and all obligations under
this Note and the Loan Documents; (f) waive the benefit of all homestead and
similar exemptions as to this Note; (g) agree that their liability under this
Note shall not be affected or impaired by any determination that any security
interest or lien taken by Lender to secure this Note is invalid or unperfected;
and (h) hereby subordinate any and all rights against Borrower and any of the
security for the payment of this Note, whether by subrogation, agreement or
otherwise, until this Note is paid in full. A determination that any provision
of this Note is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances. This Note may not be amended
except in a writing specifically intended for such purpose and executed by the
party against whom enforcement of the amendment is sought. Lender is hereby
authorized to disseminate any information it now has or hereafter obtains
pertaining to the Loan, including, without limitation, any security for this
Note and credit or other information on Borrower, any of its principals and any
guarantor of this Note, to any actual or prospective assignee or participant
with respect to the Loan, to any of Lender's affiliates, including, without
limitation, to any regulatory body having jurisdiction over Lender, and to any
other parties as necessary or appropriate in Lender's reasonable judgment, as
further provided in the Loan Agreement. Captions and headings in this Note are
for convenience only and shall be disregarded in construing it. THIS NOTE, AND
ITS VALIDITY, ENFORCEMENT AND
PAGE 7
INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT
OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.
13. Notices. Any notice, request, or demand to or upon Borrower or Lender
shall be deemed to have been properly given or made when delivered in accordance
with Section 6.7 of the Deed of Trust.
14. No Usury. It is expressly stipulated and agreed to be the intent of
Borrower and Lender at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve, or receive a greater amount of interest
than under state law) and that this Section shall control every other covenant
and agreement in this Note and the other Loan Documents. If applicable state or
federal law should at any time be judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved, or received with respect
to the Loan, or if Lender's exercise of the option to accelerate the Maturity
Date, or if any prepayment by Borrower results in Borrower having paid any
interest in excess of that permitted by applicable law, then it is Lender's
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of this Note and all other indebtedness and
the provisions of this Note and the other Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Lender for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding.
THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
PAGE 8
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date first
above written.
BORROWER:
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: CB Americana LLC,
a Delaware limited liability company,
its General Partner
By: Integrated Brands, Inc.,
its managing Member
By: Gary P. Stevens
-------------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
PAGE 9
DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(this "Deed of Trust") is made this 29 day of April, 2005, by Grantor, in favor
of Trustee for the benefit of Lender.
Section 1.1. Principal Secured. This Deed of Trust secures (a) a promissory
note of even date herewith in the original principal amount of FOUR MILLION FIVE
HUNDRED FIFTY THREE THOUSAND TWO HUNDRED EIGHTY AND NO/100 DOLLARS
($4,553,280.00), (b) that certain Restated and Amended Revolving Promissory Note
(the "Revolving Note") dated on or about March 19, 2005, in the original
principal amount of NINE MILLION AND NO/100 DOLLARS ($9,000,000.00), (c) a
promissory note (the "Term Note") in the original principal amount of TEN
MILLION AND NO/100 DOLLARS ($10,000,000.00), and (d) such additional amounts as
Lender may from time to time advance pursuant to the terms and conditions of
this Deed of Trust, together with interest thereon.
Section 1.2. Definitions. In addition to other terms defined herein, each
of the following terms shall have the meaning assigned to it:
"Grantor": AMERICANA FOODS LIMITED PARTNERSHIP, a Texas limited
partnership, whose address is 3333 Dan Morton Drive, Dallas, Texas 95236, and
its permitted successors and assigns.
"Lender": Regions Bank, an Alabama banking corporation, and its successors
and assigns.
"Promissory Note": Promissory Note dated of even date herewith made by
Grantor and payable to the order of Lender in the principal face amount of
$4,553,280.00, bearing interest as therein provided.
"Trustee": Neil S. West, whose address is 100 East Ferguson Street, Tyler,
Texas 75702, or any successor or substitute appointed and designated as herein
provided from time to time acting hereunder, any one of whom may act alone.
Section 1.3. Granting Clause. In consideration of the provisions of this
Deed of Trust and the sum of TEN DOLLARS ($10.00) cash in hand paid and other
good and valuable consideration the receipt and sufficiency of which are
acknowledged by the Grantor, Grantor does hereby GRANT, BARGAIN, SELL, CONVEY,
TRANSFER, ASSIGN and SET OVER to Trustee, with GENERAL WARRANTY, the following:
(a) the real property described in Exhibit A attached hereto (the "Land")
together with: (i) any and all buildings, structures, improvements, alterations
or appurtenances now or hereafter situated or to be situated on the Land
(collectively the "Improvements"); and (ii) all right, title and interest of
Grantor, now owned or hereafter acquired, in and to (1) all streets, roads,
alleys, easements, rights-of-way, licenses, rights of ingress and egress,
vehicle parking rights, existing or proposed, used in connection with or
pertaining to the Land or the Improvements; (2) any strips or gores between the
Land and abutting or adjacent properties; (3) all water and water rights,
timber, crops and mineral interests on or pertaining to the Land (the Land,
Improvements and other rights, titles
and interests referred to in this clause (a) being herein sometimes collectively
called the "Premises"); (b) all fixtures, equipment, furniture, furnishings,
appliances, inventory, goods, building and construction materials, supplies, and
articles of personal property, of every kind and character, tangible and
intangible, now owned or hereafter acquired by Grantor, which are now or
hereafter attached to or situated in, on or about the Land or the Improvements,
for use or installation in or on the Land or the Improvements, and all renewals
and replacements of, substitutions for and additions to the foregoing (the
properties referred to in this clause (b) being herein sometimes collectively
called the "Accessories," all of which are hereby declared to be permanent
accessions to the Land); (c) all (i) plans and specifications for the
Improvements; (ii) Grantor's rights, but not liability for any breach by
Grantor, under all insurance policies, contracts and agreements for the design,
construction, or operation of the Improvements and other contracts and general
intangibles related to the Premises or the Accessories or the operation thereof;
(iii) Grantor's rights in tenants' security deposits, deposits with respect to
utility services to the Premises, and any deposits or reserves hereunder or
under any other Loan Documents (hereinafter defined); and (iv) oil, gas and
other hydrocarbons and other minerals produced from or allocated to the Land;
and (d) all proceeds (cash or non-cash) of or arising from the properties,
rights, titles and interests referred to above in this Section 1.3, including
but not limited to proceeds of any sale, lease or other disposition thereof,
proceeds of each policy of insurance relating thereto (including premium
refunds), proceeds of the taking thereof or of any rights appurtenant thereto,
by condemnation, eminent domain or transfer in lieu thereof for public or
quasi-public use under any law, and proceeds arising out of any damage thereto;
TO HAVE AND TO HOLD the foregoing rights, interests and properties, and all
rights, estates, powers and privileges appurtenant thereto (herein collectively
called the "Property"), unto Trustee, and his or their successors or substitutes
in this trust, and to his or their successors and assigns, in trust, in fee
simple forever, subject to the terms, provisions and conditions herein set
forth, to secure the "Secured Indebtedness" as defined in Section 1.5 of this
Deed of Trust.
Section 1.4. Security Interest. Grantor hereby grants to Holder (as
hereinafter defined) a security interest in all of the Property which
constitutes personal property or fixtures (herein sometimes collectively called
the "Collateral") to secure the Secured Indebtedness as defined in Section 1.5
of this Deed of Trust. In addition to its rights hereunder or otherwise, Holder
shall have all of the rights of a secured party under the Texas Business and
Commerce Code.
Section 1.5. Secured Indebtedness, Notes, Loan Documents, Other
Obligations. This Deed of Trust is made to secure and enforce the payment and
performance of the following promissory notes, obligations, indebtedness, duties
and liabilities and all renewals, extensions, supplements, increases, and
modifications thereof in whole or in part from time to time (collectively the
"Secured Indebtedness"): (a) the Promissory Note, the Revolving Note, the Term
Note and all other notes given in substitution therefor or in modification,
supplement, increase, renewal or extension thereof, in whole or in part (such
note or notes, being hereinafter called the "Notes", and Lender, or the
subsequent holder at the time in question of the Notes or any of the Secured
Indebtedness, as hereinafter defined, being herein collectively called
"Holder"); (b) all indebtedness, covenants, and other obligations owed by
Grantor to Holder pursuant to the Notes, this Deed of Trust, or any other
document now or hereafter evidencing, governing, guaranteeing, securing or
otherwise executed in connection with the loan evidenced by the Notes (the
Notes, this Deed of Trust and such other documents, being herein sometimes
collectively called the "Loan Documents"); and (c) all other loans and future
advances made by
Holder to Grantor and all other debts, obligations and liabilities of Grantor of
every kind and character now or hereafter existing in favor of Holder.
Section 2.1. Grantor represents, warrants, and covenants as follows:
(a) Payment and Performance. Grantor will make due and punctual payment of
the Secured Indebtedness. Grantor will timely and properly perform and comply
with all of the covenants, agreements, and conditions imposed upon it by this
Deed of Trust and the other Loan Documents. Time shall be of the essence in this
Deed of Trust.
(b) Title and Permitted Encumbrances. Grantor has and Grantor covenants to
maintain, lawful, good and indefeasible title to the Property, and has the right
to convey the same, free and clear of all liens, charges, claims, security
interests, and encumbrances except for (i) the "Permitted Encumbrances"
described in Exhibit B hereto, which are Permitted Encumbrances, (ii) the liens
and security interests evidenced by this Deed of Trust, and (iii) statutory
liens for real estate taxes and assessments on the Property which are not yet
delinquent (the matters described in the foregoing clauses (i), (ii) and (iii)
being herein called the "Permitted Encumbrances"). Grantor, and Grantor's
successors and assigns, will warrant generally and forever defend title to the
Property, subject as aforesaid, to Trustee and his successors or substitutes and
assigns, against the claims and demands of all persons claiming or to claim the
same or any part thereof. Grantor will punctually pay, perform, observe and keep
all material covenants, obligations and conditions in or pursuant to any
Permitted Encumbrance.
(c) Taxes and Other Impositions. Grantor will pay, or cause to be paid, all
taxes, assessments and other charges or levies imposed upon or against or with
respect to the Property prior to the time the same become due and delinquent,
and shall deliver promptly to Holder such evidence of the payment thereof as
Holder may require; provided that Grantor may in good faith, by appropriate
proceedings, contest the validity, applicability, or amount of any asserted tax
or assessment, and pending such contest Grantor shall not be deemed in default
hereunder if (i) Grantor shall diligently prosecute such contest in a manner not
prejudicial to the rights, liens and security interests of Lender; (ii) prior to
delinquency of the asserted tax or assessment Grantor establishes with Lender an
escrow acceptable to Lender adequate to cover the payment of such tax or
assessment with interest, costs and penalties and a reasonable additional sum to
cover possible costs, interest and penalties (which escrow shall be returned to
Grantor upon payment of all such taxes, assessments, interest, costs and
penalties or disbursed in accordance with the resolution of the contest to the
claimant) or furnishes Lender with an indemnity bond secured by a deposit in
cash or other security acceptable to Lender, or with a surety acceptable to
Lender, in the amount of the tax or assessment being contested by Grantor plus a
reasonable additional sum to pay all costs, interests and penalties which may be
imposed or incurred in connection therewith; (iii) Grantor pays to Lender
promptly after demand therefor all costs and expenses incurred by Lender in
connection with such contest; and (iv) Grantor promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all costs,
penalties and interest thereon, promptly after such judgment becomes final and
unappealable; provided, however, that in any event each such contest shall be
concluded and the tax, assessment, penalties, interest and costs shall be paid
prior to the date any writ or order is issued under which the Property may be
sold.
(d) Insurance. Grantor shall obtain and maintain at Grantor's sole expense:
(1) mortgagee title insurance issued to Holder covering the Premises as required
by Holder without exception for mechanics' liens; (2) all-risk insurance with
respect to all insurable Property, against loss or damage by fire, lightning,
windstorm, explosion, hail, tornado and such hazards as are presently included
in so-called "all-risk" coverage and against such other insurable hazards as
Holder may require, in an amount not less than 100% of the full replacement
cost, such insurance to be in builder's risk (non-reporting) form during and
with respect to any construction on the Premises; (3) if and to the extent any
portion of the Premises is in a special flood hazard area, a flood insurance
policy in an amount equal to the lesser of the principal face amount of the
Promissory Note or the maximum amount available; (4) comprehensive general
public liability insurance, on an "occurrence" basis, for the benefit of Grantor
and Holder as named insureds; (5) statutory workers' compensation insurance with
respect to any work on or about the Premises; and (6) such other insurance on
the Property as may from time to time be required by Holder (including but not
limited to business interruption insurance, boiler and machinery insurance,
earthquake insurance, and war risk insurance) and against other insurable
hazards or casualties which at the time are commonly insured against in the case
of premises similarly situated, due regard being given to the height, type,
construction, location, use and occupancy of buildings and improvements. All
insurance policies shall be issued and maintained by insurers, in amounts, with
deductibles, and in form satisfactory to Holder, and shall require not less than
thirty (30) days' prior written notice to Holder of any cancellation or change
of coverage. All insurance policies maintained, or caused to be maintained, by
Grantor with respect to the Property, except for public liability insurance,
shall provide that each such policy shall be primary without right of
contribution from any other insurance that may be carried by Grantor or Holder
and that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering each
insured. All such policies for loss of or damage to the Property shall contain a
standard mortgagee clause (without contribution) naming Holder as mortgagee with
loss proceeds payable to Holder. The originals of each initial insurance policy
(or if permitted by Holder, a copy of the original policy and a satisfactory
certificate of insurance) shall be delivered to Holder at the time of execution
of this Deed of Trust, with premiums fully paid, and each renewal or substitute
policy (or certificate) shall be delivered to Holder, with premiums fully paid,
at least ten (10) days before the termination of the policy it renews or
replaces. Grantor shall pay all premiums on policies required hereunder as they
become due and payable and promptly deliver to Holder evidence satisfactory to
Holder of the timely payment thereof. Holder shall have the right (but not the
obligation) to make proof of loss for, settle and adjust any claim under, and
receive the proceeds of, all insurance for loss of or damage to the Property.
Any such proceeds received by Holder shall, after deduction therefrom of all
reasonable expenses actually incurred by Holder, including attorneys' fees, at
Holder's option be (1) released to Grantor, or (2) applied (upon compliance with
such terms and conditions as may be reasonably and customarily required by
Holder) to repair or restoration, either partly or entirely, of the Property so
damaged, or (3) applied to the payment of the Secured Indebtedness in such order
and manner as Holder, in its sole discretion, may elect, whether or not due,
provided however, that Holder shall not be entitled to apply such proceeds to
the payment of the Secured Indebtedness and must select either option (1) or (2)
above unless Holder determines, reasonably and in good faith, that the Property
cannot be repaired or restored on or before the Maturity Date (as defined in the
Promissory Note), to the approximate value, condition and character as existed
immediately prior to the damage, loss or destruction.
(e) Condemnation. Grantor shall notify Holder immediately of any threatened
or pending proceeding for condemnation affecting the Property or arising out of
damage to the Property, and Grantor shall, at Grantor's expense, diligently
prosecute any such proceedings. Holder shall have the right (but not the
obligation) to participate in any such proceeding and to be represented by
counsel of its own choice. Holder shall be entitled to receive all sums which
may be awarded or become payable to Grantor for the condemnation of the
Property, or any part thereof, for public or quasi-public use, or by virtue of
private sale in lieu thereof, and any sums which may be awarded or become
payable to Grantor for injury or damage to the Property. Grantor shall, promptly
upon request of Holder, execute such additional assignments and other documents
as may be necessary from time to time to permit such participation and to enable
Holder to collect and receipt for any such sums. All such sums are hereby
assigned to Holder, and shall, after deduction therefrom of all reasonable
expenses actually incurred by Holder, including attorneys' fees, at Holder's
option be (1) released to Grantor, or (2) applied (upon compliance with such
terms and conditions as may be required by Holder) to repair or restoration of
the Property so affected, or (3) applied to the payment of the Secured
Indebtedness in such order and manner as Holder, in its sole discretion, may
elect, whether or not due. Holder is hereby authorized, in the name of Grantor,
to execute and deliver valid acquittances for, and to appeal from, any such
award, judgment or decree.
(f) Compliance with Legal Requirements. The Property and the use, operation
and maintenance thereof and all activities thereon do and shall at all times
comply in all material respects with all applicable Legal Requirements
(hereinafter defined). No improvement upon or use of any part of the Property
constitutes a nonconforming use under any zoning law or similar law or
ordinance. Grantor has obtained and shall preserve in force all requisite
zoning, utility, building, health, environmental and operating permits from the
governmental authorities having jurisdiction over the Property. If Grantor
receives a notice or claim from any person that the Property, or any use,
activity, operation or maintenance thereof or thereon, is not in compliance with
any Legal Requirement, Grantor will promptly furnish a copy of such notice or
claim to Holder. Grantor has received no notice and has no knowledge of any such
noncompliance. As used in this Deed of Trust: (i) the term "Legal Requirement"
means any Law (hereinafter defined), agreement, covenant, restriction, easement
or condition (including, without limitation of the foregoing, any condition or
requirement imposed by any insurance or surety company), as any of the same now
exists or may be changed or amended or come into effect in the future; and (ii)
the term "Law" means any federal, state or local law, statute, ordinance, code,
rule, regulation, license, permit, authorization, decision, order, injunction or
decree, domestic or foreign.
(g) Maintenance, Repair and Restoration. Grantor will keep the Property in
good order, repair, operating condition and appearance, causing all necessary
repairs, renewals, replacements, additions and improvements to be promptly made,
and will not allow any of the Property to waste or deteriorate. Grantor will
not, without the prior written consent of Holder, (i) remove from the Property
any fixtures or personal property covered by this Deed of Trust except such as
is replaced by Grantor by an article of equal suitability and value, owned by
Grantor, free and clear of any lien or security interest (except that created by
this Deed of Trust), or (ii) make any structural alteration to the Property or
any other alteration thereto which materially impairs the value thereof. If any
act or occurrence of any kind or nature (including any condemnation or any
casualty for which insurance was not obtained or obtainable) shall result in
damage to or loss or destruction of the Property, Grantor shall give prompt
notice thereof to Holder and Grantor
shall promptly, at Grantor's sole cost and expense but only if and to the extent
insurance or condemnation proceeds (if any) shall be available or sufficient for
the purpose, secure the Property as necessary and commence and continue
diligently to completion to restore, repair, replace and rebuild the Property as
nearly as possible to its value, condition and character immediately prior to
the damage, loss or destruction.
(h) No Other Liens. Grantor will not, without the prior written consent of
Holder, create, place or permit to be created or placed, any deed of trust,
mortgage, voluntary or involuntary lien, whether statutory, constitutional or
contractual, security interest, encumbrance or charge, against the Property, or
any part thereof, other than the Permitted Encumbrances, and should any of the
foregoing become attached hereafter in any manner to any part of the Property
without the prior written consent of Holder, Grantor will cause the same to be
promptly discharged and released.
(i) Financial Matters. Grantor is solvent after giving effect to all
borrowings contemplated by the Loan Documents and no proceeding under any Debtor
Relief Law (hereinafter defined) is pending by or against Grantor. All reports,
statements, plans, budgets, applications, agreements and other data and
information heretofore furnished or hereafter to be furnished by or on behalf of
Grantor to Holder in connection with the loan or loans evidenced by the Loan
Documents (including all financial statements) are true, correct and complete in
all material respects and do not and will not omit to state any fact or
circumstance necessary to make the statements contained therein not misleading.
No material adverse change has occurred since the dates of such reports,
statements and other data in the financial condition of Grantor. For the
purposes of this paragraph, "Grantor" shall also include any person liable
directly or indirectly for the Secured Indebtedness.
(j) Suits and Claims; Loan Documents. There is no suit, action, claim,
investigation, inquiry, proceeding or demand pending (or, to Grantor's
knowledge, threatened) against Grantor or against any other person liable
directly or indirectly for the Secured Indebtedness or which affects the
Property, except as has been disclosed in writing to Holder in connection with
the loan evidenced by the Promissory Note or as will not have a material adverse
effect on the Grantor and/or the Property. Grantor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended, Sections
1445 and 7701. The loan evidenced by the Promissory Note is solely for business
and/or investment purposes, and is not intended for personal, family, household
or agricultural purposes. Grantor further warrants that the proceeds of the
Promissory Note shall be used for commercial purposes and that the loan
evidenced by the Promissory Note shall be construed for all purposes as a
commercial loan.
(k) Certain Environmental Matters. (i) Representations. Grantor hereby
represents and warrants to, and covenants with, Lender, (a) To the best of
Grantor's knowledge, except as disclosed in the environmental report, if any,
delivered by Grantor to Lender or obtained independently by Lender, the Property
has not been used for landfill, dumping or other waste disposal activities or
operations, for generation, storage, use, sale, treatment, processing, recycling
or disposal of any Hazardous Material in material violation of applicable
Environmental Requirements, for underground or aboveground storage tanks, or for
any other use that could give rise to the release of any Hazardous Material on
the Property in material violation of applicable Environmental Requirements; (b)
To the best of Grantors' knowledge, except as disclosed in the environmental
report, if any, delivered by Grantor to Lender or
obtained independently by Lender, there is no Hazardous Material, storage tank
(or similar vessel) whether underground or otherwise, sump or well currently on
the Property in material violation of applicable Environmental Requirements; and
(c) Grantor has received no notice and has no knowledge of any Environmental
Claim or any completed, pending or proposed or threatened investigation or
inquiry concerning the presence or release of any Hazardous Material on the
Property or concerning whether any condition, use or activity on the Property is
in material violation of any Environmental Requirement.
(ii) Violations. Grantor will not cause, commit, permit or allow any
material violation of any Environmental Requirement by Grantor or by any person
or entity. Grantor will not place, install, dispose of or release, or cause,
permit, or allow the placing, installation, disposal, spilling, leaking, dumping
or release of, any Hazardous Material or storage tank on the Property and will
keep the Property free of Hazardous Materials, each in material violation of
applicable Environmental Requirements.
(iii) Notice to Lender. Grantor shall promptly deliver to Lender a copy of
each report pertaining to the Property or to Grantor prepared by or on behalf of
Grantor pursuant to any Environmental Requirement. Grantor shall immediately
advise Lender in writing of any Environmental Claim or of the discovery of any
Hazardous Material on the Property each in material violation of applicable
Environmental Requirements, as soon as Grantor first obtains knowledge thereof,
including a full description of the nature and extent of the Environmental Claim
and/or Hazardous Material and all relevant circumstances.
(iv) Remedial Actions. If any Hazardous Material is discovered on the
Property in material violation of applicable Environmental Requirements at any
time and regardless of the cause, (i) Grantor shall promptly at Grantor's sole
risk and expense remove, treat, and dispose of the Hazardous Material in
compliance with all applicable Environmental Requirements, and provide Lender
with satisfactory evidence thereof. Within fifteen (15) days after completion of
such remedial actions, Grantor shall obtain and deliver to Lender an
Environmental Assessment of the Property made after such completion and
confirming to Lender's reasonable satisfaction that all required remedial action
as stated above has been taken and successfully completed and that there is no
evidence or suspicion of any contamination or risk of contamination on the
Property, or of material violation of any Environmental Requirement, with
respect to any such Hazardous Material. Lender may, but shall never be obligated
to, remove or cause the removal of any Hazardous Material from the Property if
Grantor fails to promptly commence such remedial actions following discovery and
thereafter diligently prosecute the same to the satisfaction of Lender; and
Lender and its designees are hereby granted access to the Property at any time
or times, upon reasonable notice (which may be written or oral), and a license
which is coupled with an interest and irrevocable, to remove or cause such
removal or to take or cause the taking of any such other action.
(vi) Definitions: As used herein, "Environmental Claim" means any
investigative, enforcement, cleanup, removal, containment, remedial or other
private or governmental or regulatory action at any time threatened, instituted
or completed pursuant to any applicable Environmental Requirement (hereinafter
defined), against Grantor or against or with respect to the Property, relating
to damage, contribution, cost recovery, compensation, loss or injury resulting
from or in any way arising in connection with any Hazardous Material
(hereinafter defined) or any Environmental Requirement. "Environmental Damages"
means any and all
Environmental Claims made, incurred, suffered, brought, or imposed at any time
and from time to time, and arising in whole or in part from (1) the presence of
any Hazardous Material on the Property, or any escape, seepage, leakage,
spillage, emission, release, discharge or disposal of any Hazardous Material on
or from the Property, or the migration or release or threatened migration or
release of any Hazardous Material to, from or through the Property; or (2) any
act, omission, event or circumstance existing or occurring in connection with
the handling, treatment, containment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Material which is at any time
present on the Property; or (3) any violation of any Environmental Requirement,
regardless of whether any act, omission, event or circumstance giving rise to
the violation constituted a violation at the time of the occurrence or inception
of such act, omission, event or circumstance; or (4) any Environmental Claim, or
the filing or imposition of any environmental lien against the Property, because
of, resulting from, in connection with, or arising out of any of the matters
referred to in subparagraphs (1) through (3) preceding; and regardless of
whether any of the foregoing subparagraphs (1) through (4) was caused by Grantor
or a tenant or subtenant, or a prior owner of the Property or its tenant or
subtenant, or any third party, including but not limited to (i) injury or damage
to any person, property or natural resource occurring on or off of the Property,
including but not limited to the cost of demolition and rebuilding of any
improvements on real property; (ii) the investigation or remediation of any such
Hazardous Material or violation of Environmental Requirement, including but not
limited to the preparation of any feasibility studies or reports and the
performance of any cleanup, remediation, removal, response, abatement,
containment, closure, restoration, monitoring or similar work required by any
Environmental Requirement or necessary to have full use and benefit of the
Property as contemplated by the Loan Documents; (iii) all liability to pay or
indemnify any person or governmental authority for costs expended in connection
with any of the foregoing. "Environmental Law" means any federal, state or local
law, statute, ordinance, code, rule, regulation, license, authorization,
decision, order, injunction, decree, or rule of common law, and any judicial
interpretation of any of the foregoing, which pertains to health, safety, any
Hazardous Material, or the environment (including but not limited to ground or
air or water or noise pollution or contamination, and underground or above
ground tanks) and shall include without limitation, the Solid Waste Disposal
Act, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of
1986 ("SARA"); the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et
seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; the Texas Water Code; Texas Solid Waste Act; and
any other state or federal environmental statutes, and all rules, regulations,
orders and decrees now or hereafter promulgated under any of the foregoing, as
any of the foregoing now exist or may be changed or amended or come into effect
in the future. "Environmental Requirement" means any Environmental Law,
agreement or restriction (including but not limited to any condition or
requirement imposed by any insurance or surety company), as the same now exists
or may be changed or amended or come into effect in the future, which pertains
to health, safety, any Hazardous Material, or the environment, including but not
limited to ground or air or water or noise pollution or contamination, and
underground or aboveground tanks. "Hazardous Material" means any substance,
whether solid, liquid or gaseous: which is listed, defined or regulated as a
"hazardous substance", "hazardous waste" or "solid waste", or otherwise
classified as hazardous or toxic, in or pursuant to any Environmental
Requirement; or which is or contains asbestos, radon, any polychlorinated
biphenyl, urea formaldehyde foam insulation, explosive or
radioactive material, or motor fuel or other petroleum hydrocarbons; or which
causes or poses a threat to cause a contamination or nuisance on the Property or
any adjacent property or a hazard to the environment or to the health or safety
of persons on the Property. "On" or "on", when used with respect to the Property
or any property adjacent to the Property, means "on, in, under, above or about".
(l) Fees and Expenses. Without limitation of any other provision of this
Deed of Trust or of any other Loan Document and to the extent not prohibited by
applicable law, Grantor will pay, and will reimburse to Holder and/or Trustee on
demand to the extent paid by Holder and/or Trustee: (i) all appraisal fees,
filing, registration and recording fees, recordation, transfer and other taxes,
brokerage fees and commissions, abstract fees, title search or examination fees,
title policy and endorsement premiums and fees, uniform commercial code search
fees, judgment and tax lien search fees, escrow fees, reasonable attorneys'
fees, construction consultant fees, environmental inspection fees, survey fees,
and all other costs and expenses incurred by Grantor or Holder and/or Trustee in
connection with the preparation of the Loan Documents, the evaluation, closing
and funding of the loan evidenced by the Loan Documents, or any approval,
consent, waiver, release or other matter requested or required hereunder or
thereunder; and (ii) all costs and expenses, including reasonable attorneys'
fees and expenses, incurred or expended in connection with the exercise of any
right or remedy, or the defense of any right or remedy or the enforcement of any
obligation of Grantor, hereunder or under any other Loan Document.
(m) Indemnification. Grantor will indemnify and hold harmless Holder and
Trustee from and against, and reimburse them on demand for, any and all
Indemnified Matters (hereinafter defined). For purposes of this paragraph (m),
the terms "Holder" and "Trustee" shall include Trustee and Holder, respectively,
and the directors, officers, partners, employees, attorneys, agents and
representatives of each of them. WITHOUT LIMITATION, THE FOREGOING INDEMNITIES
SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO MATTERS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE
OUT OF, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT
LIABILITY OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PERSON. HOWEVER, SUCH
INDEMNITIES SHALL NOT APPLY TO A PARTICULAR INDEMNIFIED PERSON TO THE EXTENT
THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THAT INDEMNIFIED PERSON. Any amount to be
paid under this paragraph (m) by Grantor to Holder and/or Trustee shall be a
demand obligation owing by Grantor (which Grantor hereby promises to pay) to
Holder and/or Trustee pursuant to this Deed of Trust. Upon demand by Lender,
Grantor shall diligently defend any Indemnified Matter which affects the
Property or is made or commenced against Lender, whether alone or together with
Grantor or any other person, all at Grantor's own cost and expense and by
counsel to be approved by Lender in the exercise of its reasonable judgment. In
the alternative, at any time Lender may elect to conduct its own defense through
counsel selected by Lender and reasonably acceptable to Grantor, and at the cost
and expense of Grantor. As used herein, the term "Indemnified Matters" means any
and all claims, demands, liabilities (including strict liability), losses,
damages (including consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including without limitation, reasonable
fees and expenses of attorneys and other professional consultants and experts,
and of the investigation and defense of any claim, whether or not such claim is
ultimately defeated, and the settlement of any claim or
judgment including all value paid or given in settlement) of every kind, known
or unknown, foreseeable or unforeseeable, which may be imposed upon, asserted
against or incurred or paid by Holder and/or Trustee at any time and from time
to time, whenever imposed, asserted or incurred, because of, resulting from, in
connection with, or arising out of any transaction, act, omission, event or
circumstance in any way connected with the Property or with this Deed of Trust
or any other Loan Document, including but not limited to any bodily injury or
death or property damage occurring in or upon or in the vicinity of the Property
through any cause whatsoever at any time.
(n) Records and Financial Reports. Grantor will keep accurate books and
records in accordance with sound accounting principles with respect to the
Property and the operation thereof, and will permit all such books and records
to be inspected and copied, and the Property to be inspected and photographed,
by Holder and its representatives during normal business hours.
Section 2.2. Performance by Holder on Grantor's Behalf. Grantor agrees
that, if Grantor fails to perform any act or to take any action which under any
Loan Document Grantor is required to perform or take, or to pay any money which
under any Loan Document Grantor is required to pay, and whether or not the
failure then constitutes a default hereunder or thereunder, Holder, in Grantor's
name or its own name, may, but shall not be obligated to, perform or cause to be
performed such act or take such action or pay such money, and any expenses so
incurred by Holder and any money so paid by Holder shall be a demand obligation
owing by Grantor to Holder (which obligation Grantor hereby promises to pay),
shall be a part of the indebtedness secured hereby. Holder and its designees
shall have the right to enter upon the Property at any time and from time to
time for any such purposes. No such payment or performance by Holder shall waive
or cure any default or waive any right, remedy or recourse of Holder. Each
amount due and owing by Grantor to Holder pursuant to this Deed of Trust shall
bear interest, from the date such amount becomes due until paid, at the rate per
annum provided in the Promissory Note for interest on past due principal owed on
the Promissory Note, which interest shall be payable to Holder on demand.
Section 3.1. Assignment. As additional security for the indebtedness
secured hereby, Grantor hereby assigns to Holder all Rents (hereinafter defined)
and all of Grantor's rights in and under all Leases (hereinafter defined). Upon
the occurrence of a Default hereunder, Holder shall have the right, power and
privilege (but shall be under no duty) to demand possession of the Rents, which
demand shall to the fullest extent permitted by applicable law be sufficient
action by Holder to entitle Holder to immediate and direct payment of the Rents
(including delivery to Holder of Rents collected for the period in which the
demand occurs and for any subsequent period), for application as provided in
this Deed of Trust, all without the necessity of any further action by Holder,
including, without limitation, any action to obtain possession of the Land,
Improvements or any other portion of the Property or any action for the
appointment of a receiver. Upon a Default, Grantor hereby authorizes and directs
the tenants under the Leases to pay Rents to Holder upon written demand by
Holder, without further consent of Grantor, without any obligation of such
tenants to determine whether a Default has in fact occurred and regardless of
whether Holder has taken possession of any portion of the Property, and the
tenants may rely upon any written statement delivered by Holder to the tenants.
Any such payments to Holder shall constitute payments to Grantor under the
Leases, and Grantor hereby irrevocably appoints Holder as its attorney-in-fact
to do all things, after a Default, which Grantor might otherwise do
with respect to the Property and the Leases thereon. The curing of such Default,
unless other Defaults also then exist, shall entitle Grantor to recover its
aforesaid license to do any such things which Grantor might otherwise do with
respect to the Property and the Leases thereon and to again collect such Rents.
The powers and rights granted in this paragraph shall be in addition to the
other remedies herein provided for upon the occurrence of a Default and may be
exercised independently of or concurrently with any of said remedies. As used
herein: (i) "Lease" means each existing or future lease, sublease or other
agreement under the terms of which any person has or acquires any right to
occupy or use the Property, or any part thereof, or interest therein, and each
existing or future guaranty of payment or performance thereunder, and all
extensions, renewals, modifications and replacements of each such lease,
sublease, agreement or guaranty; and (ii) "Rents" means all of the rents,
revenue, and income arising from any Lease, including but not limited to the
proceeds from any negotiated lease termination or buyout of such Lease,
liquidated damages following default under any such Lease, all proceeds payable
under any policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Property, and all of
Grantor's rights to recover monetary amounts from any tenant in bankruptcy.
Grantor shall not enter into a Lease of the Premises without the consent of
Lender.
Section 3.2 No Liability of Holder. Holder's acceptance of this assignment
shall not be deemed to constitute Holder a "mortgagee in possession," nor
obligate Holder to appear in or defend any proceeding relating to any Lease or
to the Property, or to take any action hereunder, expend any money, incur any
expenses, or perform any obligation or liability under any Lease, or assume any
obligation for any deposit delivered to Grantor by any tenant and not as such
delivered to and accepted by Holder. Holder shall not be liable for any injury
or damage to person or property in or about the Property, or for Holder's
failure to collect or to exercise diligence in collecting Rents, but shall be
accountable only for Rents that it shall actually receive. Neither the
assignment of Leases and Rents nor enforcement of Holder's rights regarding
Leases and Rents (including collection of Rents) nor possession of the Property
by Holder nor Holder's consent to or approval of any Lease (nor all of the
same), shall render Holder liable on any obligation under or with respect to any
Lease or constitute affirmation of, or any subordination to, any Lease,
occupancy, use or option. If Holder seeks or obtains any judicial relief
regarding Rents or Leases, the same shall in no way prevent the concurrent or
subsequent employment of any other appropriate rights or remedies nor shall same
constitute an election of judicial relief for any foreclosure or any other
purpose. Holder neither has nor assumes any obligations as lessor or landlord
with respect to any Lease. The rights of Holder shall be cumulative of all other
rights of Holder under the Loan Documents or otherwise.
Section 4.1. Events of Default. The occurrence of any one of the following
shall be a default under this Deed of Trust ("default" or "Default"):
(a) Failure to Pay Indebtedness. Any of the Secured Indebtedness is not
paid when due, regardless of how such amount may have become due, and Grantor
fails to cure such non-payment within ten (10) days of written notice of such
non-payment from Lender to Grantor.
(b) Nonperformance of Covenants. Any covenant, agreement or condition
herein (other than covenants otherwise addressed in another paragraph of this
Section, such as covenants to pay the Secured Indebtedness) is not fully and
timely performed, observed or kept, and such failure is not cured within 30 days
after written notice of such failure from Lender to Grantor; provided, however,
that if such failure is not reasonably susceptible of being cured
within such 30 day period, Grantor shall have an additional period in which to
affect such cure, such period not to exceed 90 days in the aggregate.
(c) Representations. Any statement, representation or warranty in any of
the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Holder in connection with the Secured
Indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.
(d) Bankruptcy or Insolvency. The owner of the Property or any Guarantor:
(i) (A) executes an assignment for the benefit of creditors, or takes any action
in furtherance thereof; or (B) admits in writing its inability to pay, or fails
to pay, its debts generally as they become due; or (C) as a debtor, files a
petition, case, proceeding or other action pursuant to, or voluntarily seeks the
benefit or benefits of, Title 11 of the United States Code as now or hereafter
in effect (Title 11 of the United States Code being herein called "Debtor Relief
Laws"), or takes any action in furtherance thereof; or (D) seeks the appointment
of a receiver, trustee, custodian or liquidator of the Property or any part
thereof or of any significant portion of its other property; or (ii) Suffers the
filing of a petition, case, proceeding or other action against it as a debtor
under any Debtor Relief Law and fails to have the petition, case, proceeding or
other action permanently dismissed or discharged on or before the earlier of
trial thereon or sixty (60) days next following the date of its filing; or
(e) Transfer by Grantor of the Property. Any sale, lease, encumbrance, or
transfer of all or any part of the Property or any interest therein by Grantor,
voluntarily or involuntarily, whether by operation of law or otherwise, except:
(i) sales or transfers of items of the Accessories which have become obsolete or
worn beyond practical use and which have been replaced by adequate substitutes,
having a value equal to or greater than the replaced items when new; and (ii)
the grant, in the ordinary course of business, of a leasehold interest in a part
of the Improvements to a tenant for occupancy, not in contravention of any
provision of this Deed of Trust. NOTICE - THE DEBT SECURED HEREBY IS SUBJECT TO
CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE OR
CONVEYANCE OF THE PROPERTY CONVEYED.
(f) Transfer of Ownership of Grantor. The sale, pledge, encumbrance,
assignment or transfer, voluntarily or involuntarily, whether by operation of
law or otherwise, of 50% or more of the interests in Grantor (if Grantor is not
a natural person), without the prior written consent of Holder; but only if and
to the extent immediately following any such sale or transfer the sole general
partner of Grantor is not majority owned and controlled by Integrated Brands,
Inc. ("Guarantor") and/or the direct or indirect beneficial owners of Americana
Foods Corp., LLC.
(g) Grant of Easement, Etc. Without the prior written consent of Holder,
Grantor grants any easement or dedication, files any plat, condominium
declaration, or restriction, or otherwise encumbers the Property, or seeks or
permits any zoning reclassification or variance, except as and to the extent the
same would be a Permitted Encumbrance.
(h) Abandonment. The owner of the Property abandons any of the Property.
(i) Default Under Other Lien. A default or event of default occurs beyond
any applicable notice and cure period under any lien, security interest or
assignment covering the Property or any part thereof, or the holder of any such
lien, security interest or assignment declares a default or institutes
foreclosure or other proceedings for the enforcement of its remedies thereunder.
(j) Destruction. The Property is so demolished, destroyed or damaged that,
in the reasonable opinion of Holder, it cannot be restored or rebuilt with
available funds to a profitable condition within a reasonable period of time and
in any event, prior to the final maturity date of the Promissory Note.
(k) Condemnation. (i) Any governmental authority shall require, or commence
any proceeding for, the demolition of any building or structure comprising a
material part of the Premises, or (ii) there is commenced any proceeding to
condemn or otherwise take pursuant to the power of eminent domain, or a contract
for sale or a conveyance in lieu of such a taking is executed which provides for
the transfer of, a material portion of the Premises.
(l) Liquidation, Etc. The liquidation, termination, dissolution, or, unless
such person is the surviving entity, merger or consolidation, or failure to
maintain good standing in the State of Texas and/or the state of incorporation
or organization, if different (or in the case of an individual, the death or
legal incapacity) of the Grantor, any owner of the Property or any Guarantor.
Section 5.1. Certain Remedies. If a Default shall occur, Holder may (but
shall have no obligation to) exercise any one or more of the following remedies,
without notice (unless notice is required by applicable statute):
(a) Acceleration. Holder may at any time and from time to time declare any
or all of the Secured Indebtedness immediately due and payable and such Secured
Indebtedness shall thereupon be immediately due and payable, without
presentment, demand, protest, notice of protest, notice of acceleration or of
intention to accelerate or any other notice or declaration of any kind, all of
which are hereby expressly waived by Grantor. Without limitation of the
foregoing, upon the occurrence of a default described in clauses (A), (C) or (D)
of subparagraph (i) of paragraph (d) of Section 4.1, hereof, all of the Secured
Indebtedness shall thereupon be immediately due and payable, without
presentment, demand, protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or any other notice, declaration or act
of any kind, all of which are hereby expressly waived by Grantor.
(b) Enforcement of Assignment of Rents. In addition to the rights of
Holder, prior or subsequent to taking possession of any portion of the Property
or taking any action with respect to such possession, Holder may collect and/or
sue for the Rents in Holder's own name, give receipts and releases therefor, and
after deducting all expenses of collection, including attorneys' fees and
expenses, apply the net proceeds thereof to the Secured Indebtedness in such
manner and order as Holder may elect and/or to the operation and management of
the Property, including the payment of management, brokerage and attorney's fees
and expenses.
(c) Foreclosure. Upon the occurrence of a default, Trustee, or his
successor or substitute, is authorized and empowered and it shall be his special
duty at the request of Holder
to sell the Property or any part thereof situated in the State of Texas, at the
courthouse of any county (whether or not the counties in which the Property is
located are contiguous, if the Property is located in more than one county) in
the State of Texas in which any part of the Property is situated, at public
venue to the highest bidder for cash between the hours of ten o'clock a.m. and
four o'clock p.m. on the first Tuesday in any month or at such other place, time
and date as provided by the statutes of the State of Texas then in force
governing sales of real estate under powers of sale conferred by deed of trust,
after having given notice of such sale in accordance with such statutes. Any
sale made by Trustee hereunder may be as an entirety or in such parcels as
Holder may request. To the extent permitted by applicable law, any sale may be
adjourned by announcement at the time and place appointed for such sale without
further notice except as may be required by law. The sale by Trustee of less
than the whole of the Property shall not exhaust the power of sale herein
granted, and Trustee is specifically empowered to make successive sale or sales
under such power until the whole of the Property shall be sold; and, if the
proceeds of such sale of less than the whole of the Property shall be less than
the aggregate of the Secured Indebtedness and the expense of executing this
trust as provided herein, this Deed of Trust and the lien hereof shall remain in
full force and effect as to the unsold portion of the Property just as though no
sale had been made; provided, however, that Grantor shall never have any right
to require the sale of less than the whole of the Property but Holder shall have
the right, at its sole election, to request Trustee to sell less than the whole
of the Property. Trustee may, after any request or direction by Holder, sell not
only the real property but also the Collateral and other interests which are a
part of the Property, or any part thereof, as a unit and as a part of a single
sale, or may sell any part of the Property separately from the remainder of the
Property. It shall not be necessary for Trustee to have taken possession of any
part of the Property or to have present or to exhibit at any sale any of the
Collateral. After each sale, Trustee shall make to the purchaser or purchasers
at such sale good and sufficient conveyances in the name of Grantor, conveying
the property so sold to the purchaser or purchasers with general warranty of
title of Grantor, subject to the Permitted Encumbrances (and to such leases and
other matters, if any, as Trustee may elect upon request of Holder), and shall
receive the proceeds of said sale or sales and apply the same as herein
provided. Payment of the purchase price to the Trustee shall satisfy the
obligation of purchaser at such sale therefor, and such purchaser shall not be
responsible for the application thereof. The power of sale granted herein shall
not be exhausted by any sale held hereunder by Trustee or his substitute or
successor, and such power of sale may be exercised from time to time and as many
times as Holder may deem necessary until all of the Property has been duly sold
and all Secured Indebtedness has been fully paid. In the event any sale
hereunder is not completed or is defective in the opinion of Holder, such sale
shall not exhaust the power of sale hereunder and Holder shall have the right to
cause a subsequent sale or sales to be made hereunder. Any and all statements of
fact or other recitals made in any deed or deeds or other conveyances given by
Trustee or any successor or substitute appointed hereunder as to nonpayment of
the Secured Indebtedness or as to the occurrence of any default, or as to
Holder's having declared all of said indebtedness to be due and payable, or as
to the request to sell, or as to notice of time, place and terms of sale and the
properties to be sold having been duly given, or as to the refusal, failure or
inability to act of Trustee or any substitute or successor trustee, or as to the
appointment of any substitute or successor trustee, or as to any other act or
thing having been duly done by Holder or by such Trustee, substitute or
successor, shall be taken as prima facie evidence of the truth of the facts so
stated and recited. The Trustee or his successor or substitute may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Trustee, including the posting of notices and
the conduct of sale, but in the name and on behalf of Trustee, his
successor or substitute. If Trustee or his successor or substitute shall have
given notice of sale hereunder, any successor or substitute Trustee thereafter
appointed may complete the sale and the conveyance of the property pursuant
thereto as if such notice had been given by the successor or substitute Trustee
conducting the sale.
(d) Uniform Commercial Code. Without limitation of Holder's rights of
enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for foreclosure of real estate, Holder may exercise its
rights of enforcement with respect to the Collateral or any part thereof under
the Texas Business and Commerce Code as amended (or under the Uniform Commercial
Code in force in any other state to the extent the same is applicable law) and
in conjunction with, in addition to or in substitution for those rights and
remedies: (1) Holder may enter upon Grantor's premises to take possession of,
assemble and collect the Collateral or, to the extent and for those items of the
Collateral permitted under applicable law, to render it unusable; (2) Holder may
require Grantor to assemble the Collateral and make it available at a place
Holder designates which is mutually convenient to allow Holder to take
possession or dispose of the Collateral; (3) written notice mailed to Grantor as
provided herein at least ten (10) days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the Collateral will
be made shall constitute reasonable notice; (4) any sale made pursuant to the
provisions of this paragraph shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with and
upon the same notice as required for the sale of the Property under power of
sale as provided in paragraph (c) above in this Section 5.1; (5) in the event of
a foreclosure sale, whether made by Trustee under the terms hereof, or under
judgment of a court, the Collateral and the other Property may, at the option of
Holder, be sold as a whole; (6) it shall not be necessary that Holder take
possession of the Collateral or any part thereof prior to the time that any sale
pursuant to the provisions of this Section is conducted and it shall not be
necessary that the Collateral or any part thereof be present at the location of
such sale; (7) with respect to application of proceeds from disposition of the
Collateral under Section 5.2 hereof, the costs and expenses incident to
disposition shall include the reasonable expenses of retaking, holding,
preparing for sale or lease, selling, leasing and the like and the reasonable
attorneys' fees and legal expenses incurred by Holder; (8) any and all
statements of fact or other recitals made in any bill of sale or assignment or
other instrument evidencing any foreclosure sale hereunder as to nonpayment of
the Secured Indebtedness or as to the occurrence of any default, or as to Holder
having declared all of such indebtedness to be due and payable, or as to notice
of time, place and terms of sale and of the properties to be sold having been
duly given, or as to any other act or thing having been duly done by Holder,
shall be taken as prima facie evidence of the truth of the facts so stated and
recited; and (9) Holder may appoint or delegate any one or more persons as agent
to perform any act or acts necessary or incident to any sale held by Holder,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of Holder.
(e) Lawsuits. Holder may proceed by a suit or suits in equity or at law,
whether for collection of the indebtedness secured hereby, the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Property under the judgment or decree of any court or courts of
competent jurisdiction.
(f) Entry on Property. Holder is authorized, prior or subsequent to the
institution of any foreclosure proceedings, to the fullest extent permitted by
applicable law, to enter upon the
Property, or any part thereof, and to take possession of the Property and all
books and records relating thereto, and to exercise without interference from
Grantor any and all rights which Grantor has with respect to the management,
possession, operation, protection or preservation of the Property. Holder shall
not be deemed to have taken possession of the Property or any part thereof
except upon the exercise of its right to do so, and then only to the extent
evidenced by its demand and overt act specifically for such purpose. All costs,
expenses and liabilities of every character incurred by Holder in managing,
operating, maintaining, protecting or preserving the Property shall constitute a
demand obligation of Grantor (which obligation Grantor hereby promises to pay)
to Holder pursuant to this Deed of Trust. If necessary to obtain the possession
provided for above, Holder may invoke any and all legal remedies to dispossess
Grantor. In connection with any action taken by Holder pursuant to this Section,
Holder shall not be liable for any loss sustained by Grantor resulting from any
failure to let the Property or any part thereof, or from any act or omission of
Holder in managing the Property unless such loss is caused by the willful
misconduct and bad faith of Holder, nor shall Holder be obligated to perform or
discharge any obligation, duty or liability of Grantor arising under any lease
or other agreement relating to the Property or arising under any Permitted
Encumbrance or otherwise arising. Grantor hereby assents to, ratifies and
confirms any and all actions of Holder with respect to the Property taken under
this Section.
(g) Termination of Commitment to Lend. Holder may terminate any commitment
or obligation to lend or disburse funds under any Loan Document or enter into
any other credit arrangement to or for the benefit of Grantor.
(h) Other Rights and Remedies. Holder may exercise any and all other rights
and remedies which Holder may have under the Loan Documents, or at law or in
equity or otherwise.
Section 5.2. Proceeds of Foreclosure. The proceeds of any sale held by
Trustee or Holder or any receiver or public officer in foreclosure of the liens
and security interests evidenced hereby shall be applied in accordance with the
requirements of applicable laws and to the extent consistent therewith, FIRST,
to the payment of all necessary costs and expenses incident to such foreclosure
sale, including but not limited to reasonable attorneys' fees and legal
expenses, advertising costs, auctioneer's fees, costs of title rundowns and lien
searches, inspection fees, appraisal costs, fees for professional services,
environmental assessment and remediation fees, all court costs and charges of
every character, and a reasonable fee (not exceeding five percent (5%) of the
gross proceeds of such sale) to Trustee acting under the provisions of paragraph
(c) of Section 5.1 hereof if foreclosed by power of sale as provided in said
paragraph, and to the payment of the other Secured Indebtedness, including
specifically without limitation the principal, accrued interest and attorneys'
fees due and unpaid on the Notes and the amounts due and unpaid and owed to
Holder under this Deed of Trust, the order and manner of application to the
items in this clause FIRST to be in Holder's sole discretion; and SECOND, the
remainder, if any there shall be, shall be paid to Grantor, or to Grantor's
heirs, devisees, representatives, successors or assigns, or such other persons
(including the holder or beneficiary of any inferior lien) as may be entitled
thereto by law; provided, however, that if Holder is uncertain which person or
persons are so entitled, Holder may interplead such remainder in any court of
competent jurisdiction, and the amount of any attorneys' fees, court costs and
expenses incurred in such action shall be a part of the Secured Indebtedness and
shall be reimbursable (without limitation) from such remainder.
Section 5.3. Holder as Purchaser. Holder shall have the right to become the
purchaser at any sale held by Trustee or substitute or successor or by any
receiver or public officer or at any public sale, and Holder shall have the
right to credit upon the amount of Holder's successful bid, to the extent
necessary to satisfy such bid, all or any part of the Secured Indebtedness in
such manner and order as Holder may elect.
Section 5.4. Foreclosure as to Matured Debt. Upon the occurrence of a
default, Holder shall have the right to proceed with foreclosure (judicial or
nonjudicial) of the liens and security interests hereunder without declaring the
entire Secured Indebtedness due, and in such event any such foreclosure sale may
be made subject to the unmatured part of the Secured Indebtedness; and any such
sale shall not in any manner affect the unmatured part of the Secured
Indebtedness, but as to such unmatured part this Deed of Trust shall remain in
full force and effect just as though no sale had been made. The proceeds of such
sale shall be applied as provided in Section 5.2 hereof except that the amount
paid under clause FIRST thereof shall be only the matured portion of the Secured
Indebtedness and any proceeds of such sale in excess of those provided for in
clause FIRST (modified as provided above) shall be applied to the prepayment
(without penalty) of any other Secured Indebtedness in such manner and order and
to such extent as Holder deems advisable, and the remainder, if any, shall be
applied as provided in clause SECOND of Section 5.2 hereof. Several sales may be
made hereunder without exhausting the right of sale for any unmatured part of
the Secured Indebtedness.
Section 5.5. Remedies Cumulative. All rights and remedies provided for
herein and in any other Loan Document are cumulative of each other and of any
and all other rights and remedies existing at law or in equity, and Trustee and
Holder shall, in addition to the rights and remedies provided herein or in any
other Loan Document, be entitled to avail themselves of all such other rights
and remedies as may now or hereafter exist at law or in equity for the
collection of the Secured Indebtedness and the enforcement of the covenants
herein and the foreclosure of the liens and security interests evidenced hereby,
and the resort to any right or remedy provided for hereunder or under any such
other Loan Document or provided for by law or in equity shall not prevent the
concurrent or subsequent employment of any other appropriate right or rights or
remedy or remedies.
Section 5.6. Discretion as to Security. Holder may resort to any security
given by this Deed of Trust or to any other security now existing or hereafter
given to secure the payment of the Secured Indebtedness, in whole or in part,
and in such portions and in such order as may seem best to Holder in its sole
and uncontrolled discretion, and any such action shall not in anywise be
considered as a waiver of any of the rights, benefits, liens or security
interests evidenced by this Deed of Trust.
Section 6.1. Effective as a Financing Statement. This Deed of Trust shall
be effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Property.
Section 6.2. Acts Not Constituting Waiver by Holder. Holder may waive any
default without waiving any other prior or subsequent default. Holder may remedy
any default without waiving the default remedied. Neither failure by Holder to
exercise, nor delay by Holder in exercising, nor discontinuance of the exercise
of any right, power or remedy (including but not limited to the right to
accelerate the maturity of the Secured Indebtedness or any part thereof)
upon or after any default shall be construed as a waiver of such default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Holder of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or further exercise thereof,
and every such right, power or remedy hereunder may be exercised at any time and
from time to time. No modification or waiver of any provision hereof nor consent
to any departure by Grantor therefrom shall in any event be effective unless the
same shall be in writing and signed by Holder and then such waiver or consent
shall be effective only in the specific instance, for the purpose for which
given and to the extent therein specified. No notice to nor demand on Grantor in
any case shall of itself entitle Grantor to any other or further notice or
demand in similar or other circumstances. Acceptance by Holder of any payment in
an amount less than the amount then due on any Secured Indebtedness shall be
deemed an acceptance on account only and shall not in any way excuse the
existence of a default hereunder notwithstanding any notation on or accompanying
such partial payment to the contrary.
Section 6.3. Place of Payment; Forum; Waiver of Jury Trial. All Secured
Indebtedness which may be owing hereunder at any time by Grantor shall be
payable at the place designated in the Notes. Grantor hereby irrevocably submits
generally and unconditionally for itself and in respect of its property to the
non-exclusive jurisdiction of any Texas state court, or any United States
federal court, sitting in the county in which the Secured Indebtedness is
payable, and to the non-exclusive jurisdiction of any state or United States
federal court sitting in the state in which any of the Property is located, over
any suit, action or proceeding arising out of or relating to this Deed of Trust
or the Secured Indebtedness. Grantor hereby irrevocably waives, to the fullest
extent permitted by law, any objection that Grantor may now or hereafter have to
the laying of venue in any such court and any claim that any such court is an
inconvenient forum. TO THE FULLEST EXTENT PERMITTED BY LAW, GRANTOR WAIVES THE
RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION, SUIT OR OTHER PROCEEDING
ARISING OUT OF OR RELATING TO THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT.
Section 6.4. Nature of Loan; Compliance with Usury Laws. It is the intent
of Grantor and Holder and all other parties to the Loan Documents to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Holder and Grantor are hereby limited by the
provisions of this Section which shall override and control all such agreements,
whether now existing or hereafter arising. In no way, nor in any event or
contingency (including but not limited to prepayment, default, demand for
payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, chargeable, or received under this
Deed of Trust, the Promissory Note or any other Loan Document or otherwise,
exceed the maximum nonusurious amount permitted by applicable law (the "Maximum
Amount"). If, from any possible construction of any document, interest would
otherwise be payable in excess of the Maximum Amount, any such construction
shall be subject to the provisions of this Section and such document shall ipso
facto be automatically reformed and the interest payable shall be automatically
reduced to the Maximum Amount, without the necessity of execution of any
amendment or new document. If Holder shall ever receive anything of value which
is characterized as interest under applicable law and which would apart from
this provision be in excess of the Maximum Amount, an amount equal to the amount
which would have been excessive interest shall, without penalty, be applied to
the reduction of the principal amount owing on the Secured Indebtedness in the
inverse order of its maturity and not to the payment of interest, or refunded to
Grantor or the other payor thereof if
and to the extent such amount which would have been excessive exceeds such
unpaid principal. The right to accelerate maturity of the Promissory Note or any
other Secured Indebtedness does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Holder
does not intend to charge or receive any unearned interest in the event of
acceleration. All interest paid or agreed to be paid to Holder shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the Maximum Amount. As used in this Section, the term "applicable
law" shall mean the laws of the State of Texas or the federal laws of the United
States applicable to this transaction, whichever laws allow the greater
interest, as such laws now exist or may be changed or amended or come into
effect in the future.
Section 6.5. Substitute Trustee. The Trustee may resign by an instrument in
writing addressed to Holder, or Trustee may be removed at any time with or
without cause by an instrument in writing executed by Holder. In case of the
death, resignation, removal, or disqualification of Trustee, or if for any
reason Holder shall deem it desirable to appoint a substitute or successor
trustee to act instead of the herein named trustee or any substitute or
successor trustee, then Holder shall have the right and is hereby authorized and
empowered to appoint a successor trustee(s), or a substitute trustee(s), without
other formality than appointment and designation in writing executed by Holder
and the authority hereby conferred shall extend to the appointment of other
successor and substitute trustees successively until the Secured Indebtedness
has been paid in full, or until the Property is fully and finally sold
hereunder. If Holder is a corporation or association and such appointment is
executed on its behalf by an officer of such corporation or association, such
appointment shall be conclusively presumed to be executed with authority and
shall be valid and sufficient without proof of any action by the board of
directors or any superior officer of the corporation or association. Upon the
making of any such appointment and designation, all of the estate and title of
Trustee in the Property shall vest in the named successor or substitute
Trustee(s) and he shall thereupon succeed to, and shall hold, possess and
execute, all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee. All references herein to "Trustee" shall be deemed to
refer to Trustee (including any successor(s) or substitute(s) appointed and
designated as herein provided) from time to time acting hereunder.
Section 6.6. No Liability of Trustee. The Trustee shall not be liable for
any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever (including
Trustee's negligence), except for Trustee's gross negligence or willful
misconduct. The Trustee shall have the right to rely on any instrument, document
or signature authorizing or supporting any action taken or proposed to be taken
by him hereunder, believed by him in good faith to be genuine. All moneys
received by Trustee shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated
in any manner from any other moneys (except to the extent required by law), and
Trustee shall be under no liability for interest on any moneys received by him
hereunder. Grantor will reimburse Trustee for, and save him harmless against,
any and all liability and expenses which may be incurred by him in the
performance of his duties. The foregoing indemnity shall not terminate upon
discharge of the Secured Indebtedness or foreclosure, or release or other
termination, of this Deed of Trust.
Section 6.7. Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder or under
any other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage
prepaid, addressed to the party to whom directed at the addresses specified in
this Deed of Trust (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by facsimile. Any such
notice or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first
attempted delivery at the address and in the manner provided herein, or, in the
case of facsimile, upon receipt; provided that, service of a notice required by
Texas Property Code Section 51.002, as amended, shall be considered complete
when the requirements of that statute are met. Notwithstanding the foregoing, no
notice of change of address shall be effective except upon receipt.
Section 6.8. Miscellaneous. A determination that any provision of this Deed
of Trust is unenforceable, invalid or illegal shall not affect the
enforceability, validity, or legality of any other provision. The terms,
provisions, covenants and conditions hereof shall be binding upon Grantor, and
the heirs, devisees, representatives, successors and assigns of Grantor, and
shall inure to the benefit of Trustee and Holder and shall constitute covenants
running with the Land. All references in this Deed of Trust to Grantor shall be
deemed to include all such heirs, devisees, representatives, successors and
assigns of Grantor. The Loan Documents may only be modified or terminated by a
written instrument or instruments intended for that purpose and executed by the
party against which enforcement of the modification or termination is asserted.
Any alleged modification or termination which is not so documented shall not be
effective as to any party. THIS DEED OF TRUST, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD
TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.
The Loan Documents constitute the entire understanding and agreement between
Grantor and Holder with respect to the transactions arising in connection with
the Secured Indebtedness and supersede all prior written or oral understandings
and agreements between Grantor and Holder with respect to the matters addressed
in the Loan Documents.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Grantor has executed this instrument effective as of
the date first written on page 1 hereof.
The address and federal tax GRANTOR:
identification number of Grantor are:
____________________________ AMERICANA FOODS LIMITED PARTNERSHIP,
_____________________, Texas _______ a Texas limited partnership
Tax I.D. No. ________________________
By: CB AMERICANA LLC,
its General Partner
By: Integrated Brands, Inc.,
its managing Member
By: Gary P. Stevens
---------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
THE STATE OF New York Section
Section
COUNTY OF Suffolk Section
Before me, the undersigned authority, on this day personally appeared Gary
P. Stevens, the President of Integrated Brands, Inc., the managing Member of CB
Americana LLC, in its capacity as the general partner of Americana Foods Limited
Partnership, a Texas limited partnership, for and on behalf of said partnership.
Given under my hand and seal of office on the 25 day of April, 2005.
/s/ Illegible
-------------------------------------
Notary Public, State of Texas
_______________________
NOTARY ________________
No. 30-47______________
Commission Expires July 31, 2006
AFTER RECORDING RETURN TO:
Regions Bank
1111 W. Mockingbird Lane
Suite 1200
Dallas, Texas 75247
Attention: Riley Couch
Exhibit A
Tract I:
Description of a 9.5890 acre trac of land situated in the John J. Metcalf
Survey, Abstract No. 885, and being all of Lot 1, Block 1/8024 of the Seventh
Section Redbird Industrial Park West, an addition to the City of Dallas, Texas,
according to the plat recorded in Volume 79226, Page 2086 of the Deed Records of
Dallas County, Texas; said 9.5890 acre tract being more particularly described
as follows:
BEGlNNING at a 1/2 inch iron rod found in the East line of said Lot 1, Block
1/8024, said point being 438.74 feet South of the South line of Kiest Boulevard
(120 feet wide) and also being 2450 feet West of the center line of Duncanville
Road;
THENCE South 00 degrees 15 minutes 50 seconds East, along the East line of Lot
1, Block 1/8024, a distance of 1260.85 feet to a 5/8 inch iron rod with "GSES,
Inc., RPLS 4804" cap found on the East line of a 34 foot railway easement
conveyed to Atchison, Topeka & Santa Fe Railway Company; said point also being
the Southeast corner of said Lot 1, Block 1/8024; said point also being the
beginning of a curve to the left whose radius bears South 89 degrees 44 minutes
10 seconds West, a distance of 620.81 feet;
THENCE with the common line of said lot 1, Block 1/8024 and 34 foot railway
easement the following metes and bounds:
Northwesterly, with said curve to the left, through a central angle of 07
degrees 09 minutes 10 seconds, an arc distance of 77.50 feet (chord bears North
03 degrees 50 minutes 25 seconds West, 77.45 feet) to a 5/8 inch iron rod with
"GSES, INC., RPLS 4804: cap found at the end of said curve;
North 07 degrees 25 minutes West, a distance of 10.0 feet to a 1/2 inch iron rod
found at the beginning of a curve to the left with a radius of 495.34 feet;
Northwesterly, with said curve to the left, through a central angle of 82
degrees 07 minutes 10 seconds, an arc distance of 709.95 feet (chord bears North
48 degrees 28 minutes 35 seconds West, 650.72 feet) to a 5/8 inch iron rod with
"GSES, INC., RPLS 4804" cap found at the end of said curve;
North 89 degrees 32 minutes 10 seconds West, a distance of 0.69 feet to a 1/2
inch iron rod found at the Southwest corner of said Lot 1, Block 1/8024; said
point also being on the East line of Dan Morton Drive (64 feet wide);
THENCE with the common line of said Lot 1, Block 1/8024 and Dan Morton Drive,
the following metes and bounds;
North 00 degrees 15 minutes 50 seconds West, a distance of 683.76 feet to a 5.8
inch iron rod with "GSES, INC., RPLS 4804" cap found at the beginning of a curve
to the right having a radius of 558.00 feet;
Northeasterly, with said curve to the right, through a central angle of 05
degrees 47 minutes 05 seconds, an arc distance of 56.33 feet (chord bears North
02 degrees 37 minutes 42 seconds West, 56.31 feet) to a 5/8 inch iron rod with
"GSES, INC., RPLS 4804" cap found at the Northwest corner of said Lot 1, Block
1/8024;
Lawyers Title Insurance Corporation
THENCE North 89 degrees 44 minutes 10 seconds East, leaving the said East line
of Dan Morton Drive and with the North line of said Lot 1, Block 1/8024, a
distance of 489.12 feet (plat calls 489.16 feet) to PLACE OF BEGINNING.
Tract II:
Description of a 4.3416 acre tract of land situated in the John J. Metcalf
Survey, Abstract No. 885, being all of Lot 2, Block 1/8024 of the Seventh
Section Redbird Industrial Park West, an addition to the City of Dallas, Texas,
according to the plat recorded in Volume 79226, Page 2086 of the Deed Records of
Dallas County, Texas, said 4.3416 acre tract being more particularly described
as follows:
BEGINNING at a 1/2 inch iron rod found on the North end of a corner clip at the
intersection of the South line of Kiest Boulevard (State Highway 303) (120 feet
wide) and the East line of Dan Morton Drive (64 feet wide); said point also
being the Northern most Northwest corner of said Lot 2, Block 1/8024;
THENCE South 89 degrees 48 minutes 27 seconds East, with said South line of
Kiest Boulevard, a distance of 373.97 feet (plat calls 374.01 feet) to a 1/2
inch iron rod found at the Northeast corner of said Lot 2, Block 1/8024;
THENCE South 00 degrees 15 minutes 50 seconds East, leaving the said South line
of Kiest Boulevard and with the East line of said Lot 2, Block 1/8024, a
distance of 438.74 feet to a 1/2 inch iron rod found at the Southeast corner of
said Lot 2, Block 1/8024; said point also being the Northeast corner of Lot 1,
Block 1/8024 of said Seventh Section Redbird Industrial Park West;
THENCE South 89 degrees 44 minutes 10 seconds West, a distance of 489.12 feet
(plat calls 489.16 feet) to a 5/8 inch iron rod with "GSES, INC., RPLS 4804" cap
set on the said East line of Dan Morton Drive, said point also being at the
Southwest corner of said Lot 2, Block 1/8024; said point also being the
Northwest corner of said Lot 1, Block 1/8024, said point also being on a curve
to the right having a radius of 558.00 feet;
THENCE Northeasterly, with the said East line of Dan Morton Drive and curve to
the right, through a central angle of 18 degrees 54 minutes 30 seconds, an arc
distance of 184.15 feet (chord bears North 14 degrees 58 minutes 30 seconds,
183.31 feet) to a 1/2 inch iron rod found for the end of said curve to the
right; said point also being the beginning of a curve to the left having a
radius of 622.00 feet;
THENCE Northeasterly, with the said East line of Dan Morton Drive and curve to
the right, through a central angle of 24 degrees 14 minutes 25 seconds, an arc
distance of 263.15 feet (chord bears North 12 degrees 18 minutes 32 seconds,
261.19 feet) to a 5/8 inch iron rod with "GSES, INC. RPLS 4804" cap set at the
end of said curve to the left; said point also being at the South end of said
corner clip;
THENCE North 45 degrees 11 minutes 00 seconds East, with said corner clip, a
distance of 14.14 feet to the PLACE OF BEGINNING containing 189.119 square feet
or 4.3416 acres of land.
Tract III:
Being a 12.332 acre tract of land situated in the John J. Metcalf Survey,
Abstract Number 885, City
Lawyers Title Insurance Corporation
of Dallas, Dallas County, Texas, and being a portion of City Blocks 8024 and
8027 and being a portion of a 97.6192 acre tract of land described in a deed
recorded in Volume 91243, Page 1922 of the Deed Records of Dallas County, Texas,
and being more particularly described as follows:
BEGINNING at a 1/2 inch iron rod found for the Northwest corner of said 97.6192
acre tract of land and being the Northeast corner of Lot 2, Block 1/8024 of the
Seventh Section Redbird Industrial Park West, an addition to the City of Dallas,
according to the plat recorded in Volume 79226, Page 2086, Map Records, Dallas
County, Texas, and being located in the South right-of-way line of Kiest
Boulevard (State Highway 303) (120 feet wide) and being located South 89 degrees
48 minutes 27 seconds East, a distance of 373.97 feet from the North end of a
corner clip located at the point of intersection of the South right-of-way of
said Kiest Boulevard with the East right-of-way line of Dan Morton Drive (64
feet wide);
THENCE South 89 degrees 48 minutes 27 seconds East, along the said South
right-of-way line of Kiest Boulevard, a distance of 307.01 feet to a 1/2 inch
iron rod with plastic cap stamped "RPLS 5016" found for corner;
THENCE South 00 degrees 15 minutes 50 seconds East, leaving the said South
right-of-way line of Kiest Boulevard and following a line parallel to and 307.00
feet East of the West line of said 97.6192 acre tract of land, a distance of
1,749.92 feet to a 5/8 inch iron rod with "GSES, INC., RPLS 4804" cap 3foundin
the South line of said 97.6192 acre tract of land;
THENCE North 89 degrees 44 minutes 20 seconds West, along with the South line of
said 97.6192 acre tract of land, a distance of 307.01 feet to a 5/8 inch iron
rod with "GSES, INC., RPLS 4804" cap found for the Southwest corner of said
97.6192 acre tract of land and being located in the Easterly line of a 34 foot
wide railway easement conveyed to Atchison, Topeka & Santa Fe Railway Company;
THENCE North 00 degrees 15 minutes 50 seconds West, along the West line of said
97.6192 acre tract of land, a distance of 1,749.55 feet to the POINT OF
BEGINNING;
CONTAINING 537,163 square feet or 12.3316 acres of land, more or less.
Lawyers Title Insurance Corporation
EXHIBIT B
PERMITTED ENCUMBRANCES
1. Ten (10) foot Storm Sewer Easement along the entire East side of subject
property, as shown on the recorded plat thereof recorded in Volume 79226, Page
2086, Deed Records of Dallas County, Texas, and as shown on survey prepared by
Robert W. Schneeberg, Registered Professional Land Surveyor No. 4804, dated
March 7, 2005.
Affects Tracts I and II
2. Easement Agreement granted by General Merchandise Distributors, Inc. to
Dallas Power & Light Company in instrument dated April 17, 1980, filed May 16,
1980, recorded in Volume 80099, Page 1826, of the Real Property Records of
Dallas County, Texas, as shown on survey prepared by Robert W. Schneeberg,
Registered Professional Land Surveyor No. 4804, dated March 7, 2005.
Affects Tract I
3. Easement executed by Rosalie Looney, to Magnolia Gas Company, dated March 15,
1927, filed March 20, 1927, recorded in/under Volume 1394, Page 165 of the Real
Property Records of Dallas County, Texas, as partially released and defined by
instrument recorded in Volume 74159, Page 1342, Deed Records, Dallas, County,
Texas, and as shown on plat recorded in Volume 79226, Page 2086, Map Records,
Dallas County, Texas, as shown on survey prepared by Robert W. Schneeberg,
Registered Professional Land Surveyor No. 4804, dated March 7, 2005.
Affects Tracts II and III
4. Easement executed by J.D. Looney, to Magnolia Gas Company, dated March 15,
1927, filed March 20, 1927, recorded in/under Volume 1396, Page 52 of the Real
Property Records of Dallas County, Texas, as partially released and defined by
instrument recorded in Volume 74159, Page 1342, Deed Records, Dallas, County,
Texas, and as shown on plat recorded in Volume 79226, Page 2086, Map Records,
Dallas County, Texas, as shown on survey prepared by Robert W. Schneeberg,
Registered Professional Land Surveyor No. 4804, dated March 7, 2005.
Affects Tracts II and III
5. Easement executed by J.D. Looney, to United Gas Pipe Line Company, dated
April 14, 1948, filed May 6, 1948, recorded in/under Volume 2974, Page 549 of
the Real Property Records of Dallas County, Texas, as partially released and
defined by instrument recorded in Volume 74159, Page 1342, Deed Records, Dallas,
County, Texas, and as shown on plat recorded in Volume 79226, Page 2086, Map
Records, Dallas County, Texas, as shown on survey prepared by Robert W.
Schneeberg, Registered Professional Land Surveyor No. 4804, dated March 7, 2005.
Affects Tracts II and III
6. Easement executed by Fleming Companies, Inc. to the City of Dallas, dated
January 24, 1996, filed July 26, 1996, recorded in/under Volume 96147, Page 807
of the Real Property Records of Dallas County, Texas.
Affects Tract III
7. Easement executed by Robert H. Thomas, Trustee, to the City of Dallas, dated
April 7, 1980, filed April 21, 1981, recorded in/under Volume 81078, Page 2643
of the Real Property Records of Dallas, County, Texas, as shown on survey dated
March 7, 2005.
Affects Tract III
8. Twenty (20) foot Draining Easement executed by Fleming Companies, Inc., to
the City of Dallas, dated July 16, 1999, filed August 31, 1999, recorded
in/under Volume 99170, Page 1322 of the Real Property Records of Dallas County,
Texas, as shown on survey dated March 7, 2005.
Affects Tract III
AUTHORIZATION
In connection with that certain (i) Restated Amended Revolving Promissory
Note, dated March 19, 2005, in the amount of $9,000,000.00 executed by the
undersigned in favor of Regions Bank ("Lender"), (ii) Promissory Note, dated
April 29, 2005, in the amount of $4,553,280.00 executed by the undersigned in
favor of Lender, and (iii) Security Agreement dated on or about November 19,
2002, executed by the undersigned in favor of Lender, the undersigned hereby
authorizes a UCC Financing Statement Amendment in the form attached hereto to be
filed with the Texas Secretary of State.
AMERICANA FOODS LIMITED PARTNERSHIP,
a Texas limited partnership
By: CB Americana LLC,
a Delaware limited liability
company,
its General Partner
By: Integrated Brands, Inc.,
its managing Member
By: /s/ Gary P. Stevens
------------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
Date: April 25, 2005
GUARANTY AGREEMENT
For and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration in hand paid to the undersigned
("Guarantor"), the receipt and sufficiency of which consideration are hereby
acknowledged, and for the purpose of enabling AMERICANA FOODS LIMITED
PARTNERSHIP, a Texas limited partnership ("Borrower"), to borrow certain funds
from REGIONS BANK ("Holder"), and recognizing that Guarantor has benefited or
shall benefit, directly or indirectly, from the making of such loan from Holder
to Borrower, that such loan is in the best interest of Guarantor, Guarantor
hereby absolutely, unconditionally, and irrevocably guarantees to Holder the
prompt payment at maturity and the prompt performance when due of the following
(individually, an "Obligation" and collectively, the "Obligations"): (i) the
indebtedness owing by Borrower to Holder pursuant to that certain Restated and
Amended Revolving Promissory Note in the original principal amount of
$9,000,000, dated effective as of March 19, 2005 (the "Note"), including all
principal, interest, charges and reasonable attorneys' fees which may be or
become due and owing on or under or in connection with the Note, and all
renewals, rearrangements, extensions, modifications and consolidations thereof
and of any part thereof and any sums due to or to become due pursuant to any
instrument executed in connection with the Note that secures the payment of the
Note; (ii) all of the covenants, agreements and other obligations in all
instruments securing the payment of the Obligations; and (iii) all reasonable
costs, attorneys' fees and expenses incurred or expended by Holder in collecting
any of the Obligations or due to any default in the performance of the
Obligations or in enforcing any right granted hereunder. Guarantor's obligations
hereunder shall further be subject to the terms and conditions hereinafter set
forth. The Note is secured, inter alia, by that certain Deed of Trust dated on
or about November 19, 2002, recorded in the real property records of Dallas
County, Texas (the "Deed of Trust").
1. Primary Liability. Guarantor shall be liable as a primary obligor for
the payment and performance of the Obligations. The guaranty of Guarantor
hereunder is a guaranty of payment and not a guaranty of collection.
2. Payment. In each event whenever any of the Obligations shall become due
and remain unpaid (howsoever the maturity thereof may have occurred), Guarantor
will, on ten (10) days prior written demand, pay the amount due thereon to
Holder. All amounts becoming payable by Guarantor to Holder under this Guaranty
shall be payable at Holder's offices in Dallas County, Texas or such other place
as Holder may from time to time designate. The payment by Guarantor of any
amount pursuant to this Guaranty shall not in anywise entitle Guarantor to any
right, title or interest (whether by way of subrogation or otherwise) in and to
any of the Obligations or any proceeds thereof, or any security or collateral
therefor, unless and until the full amount owing to Holder on the Obligations
has been fully paid, but when the same has been fully paid, Guarantor shall be
subrogated as to any payments made by it to the rights of Holder as against
Borrower and/or any endorsers, sureties or other guarantors of the Obligations
and to Holder's security or collateral therefor.
3. Waiver of Notice. Except as may be provided herein or in any of the
other documents executed in connection with the Note, Guarantor specifically
waives any notice of acceptance of this Guaranty by Holder and of the creation,
advancement, existence, extension,
-1-
renewal, modification, consolidation, or rearrangement from time to time of the
Obligations, or increase from time to time of the rate of interest thereon, or
any indulgence from time to time with respect to the Obligations, or any part
thereof. Except as may be provided herein or in any of the other documents
executed in connection with the Note, Guarantor additionally waives grace,
demand, protest, presentment and notice of demand, protest, presentment and
dishonor with respect to the Obligations, notice of intent to accelerate, notice
of acceleration and notice of disposition of collateral and waives notice of the
amount of the Obligations outstanding at any time, and agrees that the maturity
of the Obligations, or any part thereof, may be accelerated, extended, modified,
amended or renewed from time to time, or any other indulgence may be granted
with respect thereto by Holder at its will or as may be agreed by Borrower
without notice to or further consent by Guarantor, at any time or times. Holder
shall not be required to give Guarantor any notice of any kind under any
circumstances with respect to or in connection with the Obligations, any and all
rights to notice Guarantor may have otherwise had being hereby waived by
Guarantor, and the Guarantor shall be responsible for obtaining for itself
information regarding the Borrower, including, but not limited to, any changes
in the business or financial condition of the Borrower, and the Guarantor
acknowledges and agrees that the Lender shall have no duty to notify the
Guarantor of any information which the Lender may have concerning the Borrower.
4. Rights of Holder.
a. Guarantor agrees that no release of Borrower, any co-guarantor, or
of any other person primarily or secondarily liable on the Obligations, or
any part thereof shall in any manner impair, diminish or affect the
liability of Guarantor or the rights of Holder hereunder, it being
recognized, acknowledged, and agreed by Guarantor that Guarantor may be
required to pay the Obligations in full without assistance or support of
any other party, and Guarantor has not been induced to enter into this
Guaranty Agreement on the basis of a contemplation, belief, understanding,
or agreement that other parties will be liable to perform the Obligations,
or that Holder will look to other parties to perform the Obligations.
b. Guarantor's obligations hereunder are not conditioned upon the
Holder taking efforts to foreclose upon any security or collateral now or
hereafter existing for the Obligations.
c. The taking or accepting by Holder of any other security,
collateral, guaranty, or other assurance of payment for all or any part of
the Obligations shall not affect, reduce, impair or release Guarantor's
liability under this Guaranty.
d. No delay or omission or lack of diligence or care in exercising any
right or power with respect to the Obligations or any security or
collateral therefor (including without limitation the failure of Holder to
perfect a security interest therein) or guaranty thereof or under this
Guaranty shall in any manner impair, diminish or affect the liability of
Guarantor or the rights of Holder hereunder. Guarantor expressly waives any
right to the benefit of or to require or control application of any
security or collateral or the proceeds of any security or collateral now
existing or hereafter obtained by Holder as
-2-
security for the Obligations, or any part thereof, and agrees that Holder
shall have no duty insofar as Guarantor is concerned to apply to or upon
any of the Obligations any monies, payments or other property at any time
received by or paid to or in the possession of Holder, except in accordance
with the Note and the documents securing it.
e. Guarantor's liability hereunder shall in no manner be affected,
reduced, impaired or released by reason of any renewal, extension,
modification (excluding an increase in the principal amount thereof),
consolidation, or rearrangement of or any other indulgence, forbearance or
compromise with respect to the Obligations, or any part thereof; or
increase or reduction of the rate of interest thereon.
f. Guarantor waives all defenses given to sureties or guarantors at
law or in equity other than actual payment of the indebtedness, performance
of the actions constituting the Obligations and fraud by Holder. Guarantor
waives any rights relating to the termination of any financing commitments
by Lender under the Loan Agreement between Borrower and Lender. Guarantor
waives all rights of offset which Borrower or Guarantor may have against
Lender. Guarantor absolutely and unconditionally covenants and agrees that,
except for the foregoing defenses, if all or any part of the Obligations
(or any instrument or agreement made or executed in connection therewith),
or Borrower's liability for the Obligations, is for any reason found to be
invalid, illegal, unenforceable, uncollectible or legally impossible, for
any reason whatsoever (including, without limiting the generality of the
foregoing, upon the grounds that the payment and/or performance of the
Obligations is ultra vires or otherwise without authority, may violate
applicable usury laws, is subject to valid defenses, claims or offsets of
Borrower other than the aforementioned defenses, or any instrument
evidencing any of the Obligations is forged or otherwise irregular); then
in any such case Guarantor shall pay and perform the Obligations as herein
provided and that no such occurrence shall in any way diminish or otherwise
affect Guarantor's obligations hereunder.
g. Guarantor agrees, to the full extent he may legally do so, that
suit may be brought against Guarantor with or without making Borrower a
party to such suit (as Holder may elect).
h. If the maturity of any Obligation is accelerated by bankruptcy or
otherwise, then Guarantor's liability for such Obligation under the terms
of this Guaranty Agreement shall also be deemed accelerated and immediately
due and owing without demand or notice to Guarantor. Guarantor shall,
forthwith upon written notice from Holder, pay to Holder the amount due and
unpaid and guaranteed hereby. The failure of Holder to give this notice
shall not in any way release Guarantor hereunder.
i. The fact that any collateral, security interest, or lien
contemplated or intended to be given, created, or granted as security for
the repayment of the Obligations is not properly perfected or created, or
proves to be unenforceable or subordinate to any other security interest or
lien, shall not affect, reduce, impair or release Guarantor's liability
hereunder subject to Guarantor's defenses not waived herein, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty Agreement in
-3-
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility, or value of any of the collateral for the
Obligations.
j. Guarantor waives any and all suretyship defenses with respect to
material alteration of any agreement between Borrower and Holder.
k. Guarantor's liability hereunder shall not be affected, reduced,
impaired or released by any other action taken or omitted to be taken by
Holder with respect to the Deed of Trust, the Obligations, or the security
and collateral therefor, whether or not such action or omission prejudices
Guarantor or increases the likelihood that Guarantor will be required to
pay the Obligations pursuant to the terms hereof.
l. To the full extent Guarantor may do so, Guarantor will not at any
time insist upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any stay, extension or redemption,
homestead, moratorium, reinstatement, marshaling or forbearance, and
Guarantor, for itself and its successors and assigns, hereby waives and
releases all rights to a marshaling of assets of Borrower or Guarantor, or
to a sale in inverse order of alienation in the event of foreclosure of the
liens and/or security interests created by any of the security documents
which secure the Obligations. Grantor shall not have or assert any right
under any statute or rule of law pertaining to the marshaling of assets,
sale in inverse order of alienation, the exemption of homestead, the
administration of estates of decedents, or other matters whatsoever to
defeat, reduce or affect the right of Holder under the terms of the
security documents to a sale of the collateral described therein for the
collection of the Obligations without any prior or different resort for
collection, or the right of Holder under the terms of the security
documents to the payment of the Obligations out of the proceeds of sale of
the property described therein in preference to every other claimant
whatsoever.
5. Holder's Expenses. If Guarantor fails to pay the Obligations after
notice from Holder of Borrower's failure to pay any Obligation at maturity
(whether by acceleration or otherwise), and if Holder obtains the services of an
attorney for collection of amounts owing by Guarantor hereunder, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, probate, receivership, or other judicial proceedings for the
establishment or collection of any amount owing by Guarantor hereunder, or if
any amount owing by Guarantor hereunder is collected through such proceedings,
then Guarantor shall pay to Holder all court costs and Holder's reasonable
attorneys' fees.
6. Change in Composition. Should the status, composition, structure or name
of Borrower change, including, but not limited to, by reason of a merger,
dissolution, consolidation, reorganization, or lack of power of Borrower or any
party at any time liable for payment of all or part of the Obligations, this
Guaranty shall continue and also cover the Obligations of Borrower under the new
status, composition structure or name according to the terms hereof. If Borrower
is a general or limited partnership, no termination of said partnership, nor
withdrawal therefrom by, or termination of any ownership interest therein owned
by, any general or limited partner of such partnership shall alter, limit or
modify Guarantor's obligations set forth in this Guaranty or otherwise affect
this Guaranty in any manner whatsoever, all of which obligations of Guarantor
-4-
shall remain in effect as herein written.
7. Liability in the Event of Preference. In the event any payment of
Borrower to Holder is held to constitute a preference under the bankruptcy laws,
such payment by Borrower to Holder shall not constitute a release of Guarantor
from any liability hereunder, but Guarantor agrees to pay such amount to Holder
upon demand and this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.
8. Joint and Several Liability. Unless the context clearly indicates
otherwise, "Guarantor" shall mean the guarantor hereunder, or any of them, if
more than one. The obligations of said guarantors hereunder if more than one,
shall be joint and several. Suit may be brought against said guarantors, jointly
and severally, and against any one or more of them, or less than all, without
impairing the rights of Holder against the others of said guarantors; and Holder
may compromise with any one of said guarantors for such sums or sum as it may
see fit and release such of said guarantors from all further liability to Holder
for such indebtedness without impairing the right of Holder to demand and
collect the balance of such indebtedness from others of said guarantors not so
released; but it is agreed among said guarantors themselves, however, that such
compromising and release shall not impair the rights and obligations of said
guarantors as among themselves.
9. No Special Relationship. Guarantor acknowledges that no special
relationship, such as a fiduciary or trust relationship, exists between Holder
and Guarantor.
10. Subrogation and Contribution. Until the Obligations are paid in full,
Guarantor hereby waives and releases any and all rights of subrogation that
Guarantor may have against Borrower, rights of contribution that Guarantor may
have against any other guarantor of, or other person secondarily liable for the
payment or performance of, any of the Obligations, or rights of reimbursement
that Guarantor may have as against Borrower and agrees that any monies received
by Guarantor under such rights in a bankruptcy of the Borrower shall be held in
trust for, and immediately delivered to, Holder.
11. Assignment. This Guaranty is intended for and shall inure to the
benefit of Holder and each and every other person who shall from time to time be
or become the owner of holder of any of the Obligations, and each and every
reference herein to "Holder" shall also include and refer to each and every
successor or assignee of Holder at any time holding or owning any part of or
interest in any part of the Obligations. This Guaranty shall be transferable by
Holder, it being understood and stipulated that upon the assignment or transfer
by Holder of any of the Obligations (or any part thereof or interest therein
thus transferred or assigned by Holder), such transferee shall also, unless
provided otherwise by Holder in its assignment, have and may exercise all the
rights granted to Holder under this Guaranty to the extent of the part of or
interest in the Obligations thus assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Obligations,
or any part thereof, or of the rights of Holder hereunder.
12. Notice. Any notice or demand to Guarantor hereunder or in connection
herewith
-5-
may be given and shall conclusively be deemed or considered to have been given
and received upon the deposit thereof, in writing, in the U.S. Mail, certified,
return receipt requested, duly stamped and addressed to Guarantor at the address
of Guarantor shown below; but actual notice, however given or received, shall
always be effective. The last preceding sentence shall not be construed in
anywise to affect or impair any waiver of notice or demand herein provided or to
require giving of notice or demand to or upon Guarantor in any situation for any
reason.
13. Rights of Holder Cumulative. The rights of Holder hereunder are
cumulative and shall not be exhausted by its exercise of any of its rights
hereunder, under any prior guaranty or otherwise against Guarantor or by any
number of successive actions until and unless all indebtedness constituting the
Obligations has been paid and all other Obligations have been performed. The
existence of this Guaranty shall not in any way diminish or discharge the rights
of Holder under any prior guaranty agreement executed by Guarantor.
14. Representations and Warranties by Guarantor. In order to induce Holder
to make the loan evidenced by the Note, Guarantor represents and warrants to
Holder (which representations and warranties will survive the termination and
release of the Obligations and any extension of credit thereunder) that:
a. Guarantor's guaranty pursuant to this Guaranty Agreement reasonably
has benefited or may be expected to benefit, directly or indirectly,
Guarantor.
b. Guarantor is familiar with, and has independently reviewed books
and records regarding, the financial condition of Borrower and is familiar
with the value of any and all collateral intended to be created as security
for the payment of the Note and other Obligations; however, Guarantor is
not relying on such financial condition or the collateral as an inducement
to enter into this Guaranty Agreement.
c. Neither Holder nor any other person, corporation, or entity has
made any representation, warranty, or statement to Guarantor with regard to
Borrower or its financial condition in order to induce Guarantor to execute
this Guaranty Agreement.
d. Guarantor is authorized to execute, deliver and perform this
Guaranty Agreement.
15. Governing Law. This Guaranty shall be deemed to have been made under
and shall be governed by the laws of the State of Texas in all respects.
16. Entire Agreement. Guarantor acknowledges and agrees that this Guaranty
accurately represents and contains the entire agreement between Guarantor and
Holder with respect to the subject matter hereof, that Guarantor is not relying,
in the execution of this Guaranty, on any representations (whether written or
oral) made by or on behalf of Holder except as expressly set forth in this
Guaranty, and that any and all prior statements and/or representations made by
or on behalf of Holder to Guarantor (whether written or oral) in connection with
the subject matter hereof are merged herein. This Guaranty shall not be waived,
altered, modified or amended as to any of its terms or provisions except in
writing duly signed by
-6-
Holder and Guarantor.
17. Successors or Assigns. This Guaranty shall bind the successors and
assigns of Guarantor and shall inure to the benefit of all transferees, credit
participants, assignees, and/or endorsees of Holder, notwithstanding that some
or all of the monies owed by Guarantor pursuant to this Guaranty may be actually
advanced after any bankruptcy, receivership, or reorganization of Guarantor.
18. Interpretation. Headings are provided as a matter of convenience only
and are not to be considered in interpreting the meaning of any provisions
hereunder. The use of any gender herein shall include the other gender.
19. Severability. A determination that any provision of this Guaranty is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision.
20. Waiver of Certain Laws. Guarantor hereby expressly waives the
provisions of: (a) Section 34.02 and Section 34.03 of the Texas Business and
Commerce Code, and (b) Rule 31 of the Texas Rules of Civil Procedure, to the
extent such laws (or any them) are applicable to the Guaranty.
21. Savings Provision. No provision herein, in the Note, or in any other
promissory note, instrument or other loan document executed by Borrower or
Guarantor evidencing the Obligations shall require the payment or permit the
collection of interest in excess of the maximum permitted by law. If any excess
of interest in such respect is provided in any such promissory note, instrument,
or other loan document, the provisions of this paragraph shall govern, and
neither Borrower nor Guarantor shall be obligated to pay the amount of such
interest to the extent that it is in excess of the amount permitted by law, the
intention of the parties being to conform strictly to the usury laws now in
force or as may be amended from time to time. All promissory notes, instruments
and other loan documents executed by Borrower or Guarantor evidencing the
Obligations shall be held subject to reduction to the amount allowed under such
usury laws as now or hereafter construed by the courts having jurisdiction. The
terms and conditions of this paragraph 21 shall in no manner confer upon
Guarantor any right, claim or cause of action against Holder of any nature
whatsoever.
22. Term of Guaranty. This Guaranty shall continue in effect until all the
Obligations are fully and finally paid, performed and discharged, except that,
and notwithstanding any return of this Guaranty to Guarantor, this Guaranty
shall continue in effect (i) with respect to any of the Obligations that survive
the full and final payment of the indebtedness evidenced by the Note, and (ii)
as provided in Section 7.
-7-
EXECUTED on April _____, 2005, to be effective as of March 19, 2005.
GUARANTOR:
INTEGRATED BRANDS, INC.,
a New Jersey corporation
By: /s/ Gary P. Stevens
-------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
ADDRESS:
4175 VETERANS HIGHWAY, 3RD FL
RONKONKOMA, NY 11779
-8-
GUARANTY AGREEMENT
For and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration in hand paid to the undersigned
("Guarantor"), the receipt and sufficiency of which consideration are hereby
acknowledged, and for the purpose of enabling AMERICANA FOODS LIMITED
PARTNERSHIP, a Texas limited partnership ("Borrower"), to borrow certain funds
from REGIONS BANK ("Holder"), and recognizing that Guarantor has benefited or
shall benefit, directly or indirectly, from the making of such loan from Holder
to Borrower, that such loan is in the best interest of Guarantor, Guarantor,
subject to the terms, conditions and limitations set forth herein, including
without limitation, in Section 22 hereinbelow, hereby absolutely and
unconditionally guarantees to Holder the prompt payment at maturity (whether by
acceleration or otherwise) of the following (individually, an "Obligation" and
collectively, the "Obligations"): (i) the indebtedness owing by Borrower to
Holder pursuant to that certain Promissory Note, dated on or about April 29,
2005, made by Borrower, payable to the order of Holder in the principal sum of
$4,553,280.00 (the "Note"), including all principal, interest, charges and
reasonable attorneys' fees which may be or become due and owing on or under or
in connection with the Note, and all renewals, rearrangements, extensions,
modifications and consolidations thereof and of any part thereof and any sums
due to or to become due pursuant to any instrument executed in connection with
the Note that secures the payment of the Note; and (ii) all reasonable costs,
attorneys' fees and expenses incurred or expended by Holder in collecting any of
the Obligations or due to any default in the payment of the Obligations or in
enforcing any right granted hereunder. Guarantor's obligations hereunder shall
further be subject to the terms and conditions hereinafter set forth.
1. Primary Liability. Guarantor shall be liable as a primary obligor for
the payment of the Obligations. The guaranty of Guarantor hereunder is a
guaranty of payment and not a guaranty of collection.
2. Payment. In each event whenever any of the Obligations shall become due
and remain unpaid (howsoever the maturity thereof may have occurred), Guarantor
will, on ten (10) days prior written demand, pay the amount due thereon to
Holder. All amounts becoming payable by Guarantor to Holder under this Guaranty
shall be payable at Holder's offices in Dallas County, Texas or such other place
as Holder may from time to time designate. The payment by Guarantor of any
amount pursuant to this Guaranty shall not in anywise entitle Guarantor to any
right, title or interest (whether by way of subrogation or otherwise) in and to
any of the Obligations or any proceeds thereof, or any security or collateral
therefor, unless and until the full amount owing to Holder on the Obligations
has been fully paid, but when the same has been fully paid, Guarantor shall be
subrogated as to any payments made by it to the rights of Holder as against
Borrower and/or any endorsers, sureties or other guarantors of the Obligations
and to Holder's security or collateral therefor.
3. Waiver of Notice. Except as may be provided herein or in any of the
other documents executed in connection with the Note, Guarantor specifically
waives any notice of acceptance of this Guaranty by Holder and of the creation,
advancement, existence, extension, renewal, modification, consolidation, or
rearrangement from time to time of the Obligations, or increase from time to
time of the rate of interest thereon, or any indulgence from time to time with
respect to the Obligations, or any part thereof. Except as may be provided
herein or in any
-1-
of the other documents executed in connection with the Note, Guarantor
additionally waives grace, demand, protest, presentment and notice of demand,
protest, presentment and dishonor with respect to the Obligations, notice of
intent to accelerate, notice of acceleration and notice of disposition of
collateral and waives notice of the amount of the Obligations outstanding at any
time, and agrees that the maturity of the Obligations, or any part thereof, may
be accelerated, extended, modified, amended or renewed from time to time, or
any other indulgence may be granted with respect thereto by Holder at its will
or as may be agreed by Borrower without notice to or further consent by
Guarantor, at any time or times. Holder shall not be required to give Guarantor
any notice of any kind under any circumstances with respect to or in connection
with the Obligations, any and all rights to notice Guarantor may have otherwise
had being hereby waived by Guarantor, and the Guarantor shall be responsible for
obtaining for itself information regarding the Borrower, including, but not
limited to, any changes in the business or financial condition of the Borrower,
and the Guarantor acknowledges and agrees that the Lender shall have no duty to
notify the Guarantor of any information which the Lender may have concerning the
Borrower.
4. Rights of Holder.
a. Guarantor agrees that no release of Borrower, any co-guarantor, or
of any other person primarily or secondarily liable on the Obligations, or
any part thereof shall in any manner impair, diminish or affect the
liability of Guarantor or the rights of Holder hereunder, it being
recognized, acknowledged, and agreed by Guarantor that Guarantor may be
required to pay the Obligations in full without assistance or support of
any other party, and Guarantor has not been induced to enter into this
Guaranty Agreement on the basis of a contemplation, belief, understanding,
or agreement that other parties will be liable to perform the Obligations,
or that Holder will look to other parties to perform the Obligations.
b. Guarantor's obligations hereunder are not conditioned upon the
Holder taking efforts to foreclose upon any security or collateral now or
hereafter existing for the Obligations.
c. The taking or accepting by Holder of any other security,
collateral, guaranty, or other assurance of payment for all or any part of
the Obligations shall not affect, reduce, impair or release Guarantor's
liability under this Guaranty.
d. No delay or omission or lack of diligence or care in exercising any
right or power with respect to the Obligations or any security or
collateral therefor (including without limitation the failure of Holder to
perfect a security interest therein) or guaranty thereof or under this
Guaranty shall in any manner impair, diminish or affect the liability of
Guarantor or the rights of Holder hereunder. Guarantor expressly waives any
right to the benefit of or to require or control application of any
security or collateral or the proceeds of any security or collateral now
existing or hereafter obtained by Holder as security for the Obligations,
or any part thereof, and agrees that Holder shall have no duty insofar as
Guarantor is concerned to apply to or upon any of the Obligations any
-2-
monies, payments or other property at any time received by or paid to or in
the possession of Holder, except in accordance with the Note and the
documents securing it.
e. Guarantor's liability hereunder shall in no manner be affected,
reduced, impaired or released by reason of any renewal, extension,
modification (excluding an increase in the principal amount thereof),
consolidation, or rearrangement of or any other indulgence, forbearance or
compromise with respect to the Obligations, or any part thereof; or
increase or reduction of the rate of interest thereon.
f. Guarantor waives all defenses given to sureties or guarantors at
law or in equity other than actual payment of the indebtedness and other
amounts constituting the Obligations and fraud by Holder. Guarantor waives
any rights relating to the termination of any financing commitments by
Lender under the Loan Agreement between Borrower and Lender. Guarantor
waives all rights of offset which Borrower or Guarantor may have against
Lender. Guarantor absolutely and unconditionally covenants and agrees that,
except for the foregoing defenses, if all or any part of the Obligations
(or any instrument or agreement made or executed in connection therewith),
or Borrower's liability for the Obligations, is for any reason found to be
invalid, illegal, unenforceable, uncollectible or legally impossible, for
any reason whatsoever (including, without limiting the generality of the
foregoing, upon the grounds that the payment of the Obligations is ultra
vires or otherwise without authority, may violate applicable usury laws, is
subject to valid defenses, claims or offsets of Borrower other than the
aforementioned defenses, or any instrument evidencing any of the
Obligations is forged or otherwise irregular); then in any such case
Guarantor shall pay the Obligations as herein provided and that no such
occurrence shall in any way diminish or otherwise affect Guarantor's
obligations hereunder.
g. Guarantor agrees, to the full extent he may legally do so, that
suit may be brought against Guarantor with or without making Borrower a
party to such suit (as Holder may elect).
h. If the maturity of any Obligation is accelerated by bankruptcy or
otherwise, then Guarantor's liability for such Obligation under the terms
of this Guaranty Agreement shall also be deemed accelerated and immediately
due and owing without demand or notice to Guarantor. Guarantor shall,
forthwith upon written notice from Holder, pay to Holder the amount due and
unpaid and guaranteed hereby. The failure of Holder to give this notice
shall not in any way release Guarantor hereunder;
i. The fact that any collateral, security interest, or lien
contemplated or intended to be given, created, or granted as security for
the repayment of the Obligations is not properly perfected or created, or
proves to be unenforceable or subordinate to any other security interest or
lien, shall not affect, reduce, impair or release Guarantor's liability
hereunder subject to Guarantor's defenses not waived herein, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectibility, or value of any of the
collateral for the Obligations.
-3-
j. Guarantor waives any and all suretyship defenses with respect to
material alteration of any agreement between Borrower and Holder.
k. Guarantor's liability hereunder shall not be affected, reduced,
impaired or released by any other action taken or omitted to be taken by
Holder with respect to the Deed of Trust, the Obligations, or the security
and collateral therefor, whether or not such action or omission prejudices
Guarantor or increases the likelihood that Guarantor will be required to
pay the Obligations pursuant to the terms hereof.
l. To the full extent Guarantor may do so, Guarantor will not at any
time insist upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any stay, extension or redemption,
homestead, moratorium reinstatement, marshaling or forbearance, and
Guarantor, for itself and its successors and assigns, hereby waives and
releases all rights to a marshaling of assets of Borrower or Guarantor, or
to a sale in inverse order of alienation in the event of foreclosure of the
liens and/or security interests created by any of the security documents
which secure the Obligations. Grantor shall not have or assert any right
under any statute or rule of law pertaining to the marshaling of assets,
sale in inverse order of alienation, the exemption of homestead, the
administration of estates of decedents, or other matters whatsoever to
defeat, reduce or affect the right of Holder under the terms of the
security documents to a sale of the collateral described therein for the
collection of the Obligations without any prior or different resort for
collection, or the right of Holder under the terms of the security
documents to the payment of the Obligations out of the proceeds of sale of
the property described therein in preference to every other claimant
whatsoever.
5. Holder's Expenses. If Guarantor fails to pay the Obligations after
notice from Holder of Borrower's failure to pay any Obligation at maturity
(whether by acceleration or otherwise), and if Holder obtains the services of an
attorney for collection of amounts owing by Guarantor hereunder, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, probate, receivership, or other judicial proceedings for the
establishment or collection of any amount owing by Guarantor hereunder, or if
any amount owing by Guarantor hereunder is collected through such proceedings,
then Guarantor shall pay to Holder all court costs and Holder's reasonable
attorneys' fees.
6. Change in Composition. Should the status, composition, structure or name
of Borrower change, including, but not limited to, by reason of a merger,
dissolution, consolidation, reorganization, or lack of power of Borrower or any
party at any time liable for payment of all or part of the Obligations, this
Guaranty shall continue and also cover the Obligations of Borrower under the new
status, composition structure or name according to the terms hereof. If Borrower
is a general or limited partnership, no termination of said partnership, nor
withdrawal therefrom by, or termination of any ownership interest therein owned
by, any general or limited partner of such partnership shall alter, limit or
modify Guarantor's obligations set forth in this Guaranty or otherwise affect
this Guaranty in any manner whatsoever, all of which obligations of Guarantor
shall remain in effect as herein written.
-4-
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation for any reason.
13. Rights of Holder Cumulative. The rights of Holder hereunder are
cumulative and shall not be exhausted by its exercise of any of its rights
hereunder, under any prior guaranty or otherwise against Guarantor or by any
number of successive actions until and unless all indebtedness constituting the
Obligations has been paid and all other Obligations have been performed. The
existence of this Guaranty shall not in any way diminish or discharge the rights
of Holder under any prior guaranty agreement executed by Guarantor.
14. Representations and Warranties by Guarantor. In order to induce Holder
to make the loan evidenced by the Note, Guarantor represents and warrants to
Holder (which representations and warranties will survive the termination and
release of the Obligations and any extension of credit thereunder) that:
a. Guarantor's guaranty pursuant to this Guaranty Agreement reasonably
has benefited or may be expected to benefit, directly or indirectly,
Guarantor.
b. Guarantor is familiar with, and has independently reviewed books
and records regarding, the financial condition of Borrower and is familiar
with the value of any and all collateral intended to be created as security
for the payment of the Note and other Obligations; however, Guarantor is
not relying on such financial condition or the collateral as an inducement
to enter into this Guaranty Agreement.
c. Neither Holder nor any other person, corporation, or entity has
made any representation, warranty, or statement to Guarantor with regard to
Borrower or its financial condition in order to induce Guarantor to execute
this Guaranty Agreement.
d. Guarantor is authorized to execute, deliver and perform this
Guaranty Agreement.
15. Governing Law. This Guaranty shall be deemed to have been made under
and shall be governed by the laws of the State of Texas in all respects.
16. Entire Agreement. Guarantor acknowledges and agrees that this Guaranty
accurately represents and contains the entire agreement between Guarantor and
Holder with respect to the subject matter hereof, that Guarantor is not relying,
in the execution of this Guaranty, on any representations (whether written or
oral) made by or on behalf of Holder except as expressly set forth in this
Guaranty, and that any and all prior statements and/or representations made by
or on behalf of Holder to Guarantor (whether written or oral) in connection with
the subject matter hereof are merged herein. This Guaranty shall not be waived,
altered, modified or amended as to any of its terms or provisions except in
writing duly signed by Holder and Guarantor.
17. Successors or Assigns. This Guaranty shall bind the successors and
assigns of
-6-
Guarantor and shall inure to the benefit of all transferees, credit
participants, assignees, and/or endorsees of Holder, notwithstanding that some
or all of the monies owed by Guarantor pursuant to this Guaranty may be actually
advanced after any bankruptcy, receivership or reorganization of Guarantor.
18. Interpretation. Headings are provided as a matter of convenience only
and are not to be considered in interpreting the meaning of any provisions
hereunder. The use of any gender herein shall include the other gender.
19. Severability. A determination that any provision of this Guaranty is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision.
20. Waiver of Certain Laws. Guarantor hereby expressly waives the
provisions of: (a) Section 34.02 and Section 34.03 of the Texas Business and
Commerce Code, and (b) Rule 31 of the Texas Rules of Civil Procedure, to the
extent such laws (or any them) are applicable to the Guaranty.
21. Savings Provision. No provision herein, in the Note, or in any other
promissory note, instrument or other loan document executed by Borrower or
Guarantor evidencing the Obligations shall require the payment or permit the
collection of interest in excess of the maximum permitted by law. If any excess
of interest in such respect is provided in any such promissory note, instrument,
or other loan document, the provisions of this paragraph shall govern, and
neither Borrower nor Guarantor shall be obligated to pay the amount of such
interest to the extent that it is in excess of the amount permitted by law, the
intention of the parties being to conform strictly to the usury laws now in
force or as may be amended from time to time. All promissory notes, instruments
and other loan documents executed by Borrower or Guarantor evidencing the
Obligations shall be held subject to reduction to the amount allowed under such
usury laws as now or hereafter construed by the courts having jurisdiction. The
terms and conditions of this paragraph 21 shall in no manner confer upon
Guarantor any right, claim or cause of action against Holder of any nature
whatsoever.
22. Term of Guaranty. This Guaranty shall continue in effect until all the
Obligations are fully and finally paid, performed and discharged, except that,
and notwithstanding any return of this Guaranty to Guarantor, this Guaranty
shall continue in effect (i) with respect to any of the Obligations that survive
the full and final payment of the indebtedness evidenced by the Note, and (ii)
as provided in Section 7.
23. Limitation on Note. Notwithstanding anything to the contrary contained
herein, Guarantor's liability to Holder pursuant to the Note shall be limited to
(i) fifty percent (50%) of the then outstanding amount owing under such Note,
plus (ii) all reasonable costs, attorneys' fees and expenses incurred or
expended by Holder in collecting any of the Obligations or due to any default in
the payment of the Obligations or in enforcing any right granted hereunder.
Holder may apply any and all payments upon the Note from Borrower, Guarantor or
any other person, and the proceeds of any and all collateral or security on any
of the indebtedness represented by the Note, in such order as Holder may
determine in its sole discretion, whether or not such indebtedness is covered by
this Guaranty, and Guarantor hereby waives any provision of law
-7-
regarding application of payments which specifies otherwise. Holder has no
obligation to apply any such payments or proceeds first toward any indebtedness
guaranteed by Guarantor.
EXECUTED on April 25, 2005.
GUARANTOR:
INTEGRATED BRANDS, INC.,
a New Jersey corporation
By: /s/ Gary P. Stevens
------------------------------------
Name: GARY P. STEVENS
Title: PRESIDENT
ADDRESS:
4175 VETERANS HIGHWAY
Suite 3RD FL.
RONKONKOMA, NY 11779
-8-