EXHIBIT 10.85
SENIOR SUBORDINATED LOAN AGREEMENT
THIS SENIOR SUBORDINATED LOAN AGREEMENT (the "AGREEMENT") is entered into as of
the 23rd day of January, 2003, by and among California Beach Restaurants, Inc.,
a California corporation (the "COMPANY") and the party listed on the signature
page hereto (the "LENDER").
In consideration of the covenants and agreements contained herein, the
Company and the Lender agree as follows:
1. LOAN.
1.1 Subject to the terms and conditions contained herein, and in
reliance upon the representations, warranties and agreements
contained herein, on the date hereof the Lender shall advance
amounts (the "LOAN") to the Company in an amount equal to
$500,000. The Loan made by the Lender shall be evidenced by a
Promissory Note made by the Company to the Lender,
substantially in the form of EXHIBIT A (the "NOTE").
1.2 It is the intent of the parties hereto that the Loan be senior
to the rights and claims of the Company's 5% Convertible
Subordinated Notes Due October 1, 2003 (the "JUNIOR NOTES").
1.3 INTEREST. Interest on the Loan shall be payable on the
outstanding daily unpaid principal amount until payment in
full at the rates set forth herein, to the extent permitted by
applicable laws, before and after default, before and after
maturity, before and after any judgment and before and after
the commencement of any proceeding under any Debtor Relief Law
(as hereinafter defined), with interest on overdue interest to
bear interest at the Default Rate (as hereinafter defined).
Interest shall accrue on the Loan at the rate of fifteen
percent (15%) per annum, and shall be due and payable in cash
on March 5, 2003. Notwithstanding the foregoing, if any
installment of principal or interest under the Note or any
other amount payable to the Lender hereunder is not paid when
due, or upon and during the continuance of an Event of
Default, the outstanding principal amount of the Loan shall
bear interest at seventeen percent (17%) per annum (the
"DEFAULT RATE") to the extent permitted by applicable law,
until paid in full.
1.4 MATURITY; PREPAYMENT. If not sooner paid, the principal amount
of the Loan shall be paid in immediately available funds in
cash on March 5, 2003 (the "MATURITY DATE"). The Note may be
voluntarily prepaid at any time at the election of the
Company; PROVIDED, that (i) any partial prepayment shall be in
an amount not less than $25,000 in the aggregate and (ii) each
prepayment shall be accompanied by a prepayment of interest
accrued to the date of payment on the amount of principal
paid. The Company shall provide the Lender a notice setting
forth (a) the effective date of such prepayment, (b) the
amount of principal to be prepaid, (c) the amount of principal
outstanding following such prepayment, and (d) the amount of
interest payable with respect to the prepaid principal.
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1.5 COMPUTATIONS; OTHER PAYMENT PROVISIONS. All computations of
interest and fees shall be calculated on the basis of a year
of 360 days and paid for the actual number of days elapsed. If
any payment to be made by the Company shall come due on a day
other than a Business Day, payment shall be made on the next
succeeding Business Day and the extension of time shall be
reflected in computing interest. The amount of each payment
hereunder and under the Note shall be made to the Lender in
lawful money of the United States, without deduction, offset
or counterclaim and in immediately available funds on the day
of payment (which much be a Business Day). All payments of
principal received after 1:00 p.m., California time, on any
Business Day, shall be deemed received on the next succeeding
Business Day for purposes of calculating interest thereon. All
payments made under this Agreement and the Note shall be made
free and clear of, and without reduction by reason of, any
tax, assessment or other charge imposed by any governmental
entity or authority. The Lender shall keep a record of
advances made by it hereunder and payments of principal with
respect to the Note, and such record shall be presumptive
evidence of the principal amount owing under the Note;
PROVIDED, that failure to keep such record shall in no way
affect the obligation of the Company to pay all principal
amounts advanced hereunder, and interest thereon, as set forth
herein.
1.6 SUBORDINATION. The payment of the principal of, and interest
on, the Loan or the Note and any amendments or replacements
thereof and any other security interest, lien, claim or right
now or hereafter asserted by the Lender with respect to the
indebtedness of the Company to the Lender created hereunder,
shall be subject, junior and subordinate, in all respects, to
the prior payment in full of Senior Debt (as hereinafter
defined) of the Company, and to any security interest, lien,
claim or right now or hereafter asserted by Senior Debtholders
(as hereinafter defined) or their successors and assigns with
respect to such Senior Debt or with respect to any collateral
therefor. The Lender further agrees that upon the occurrence
of a default or event of default (as such terms are defined in
the Senior Debt Documents (a "SENIOR DEBT DEFAULT") and
without notice of such Senior Debt Default to the Lender, (x)
the Senior Debtholders, or their respective successors or
assigns, are entitled to be paid all Senior Debt before the
Lender is entitled to receive any payments in respect of this
Agreement or the Note, (y) the Company may not make any
payments to the Lender or with respect to this Agreement or
the Note until such payment of all outstanding Senior Debt to
the Senior Debtholders has been made in full in cash and (z)
for a period not to exceed one hundred eighty (180) days
following such Senior Debt Default the Lender may not pursue
any enforcement action against the Company. Any payments made
to the Lender in violation of this Section 1.7 shall be held
in trust for the benefit of the Senior Debtholders (or their
respective successors or assigns) and turned over upon the
demand of the Senior Debtholders. Notwithstanding the
foregoing, in the absence of a Senior Debt Default, the
Company shall be permitted to pay interest on and principal of
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the Loan and the Note in accordance with the terms hereof and
thereof. "SENIOR DEBT" shall mean all indebtedness of the
Company to (i) Lyon Credit Corporation ("LCC") pursuant to a
Promissory Note dated as of April 27, 1999 made by the Company
to LCC, a Security Agreement dated as of March 15, 1999 by and
between the Company and LCC, and a Security Agreement dated as
of April 27, 1999 by and between Sea View Restaurants, Inc.
("SEA VIEW") and LCC, as such documents may be amended,
modified, supplemented or restated (the "LCC LOAN DOCUMENTS")
and (ii) U.S. Bank National Association ("U. S. BANK" and,
together with LCC, the "SENIOR DEBTHOLDERS") pursuant to a
Business Loan Agreement dated as of June 22, 2001 by and
between the Company and U. S. Bank, a Promissory Note dated as
of June 22, 2001 made by the Company to U.S. Bank, a
Commercial Security Agreement dated as of June 22, 2001 by and
among the Company, U.S. Bank and Sea View and a Commercial
Pledge Agreement dated as of June 22, 2001 by and among the
Company, U.S. Bank and Sea View, as such documents may be
amended, modified, supplemented or restated (the "U.S. BANK
LOAN DOCUMENTS" and, together with the LCC Loan Documents, the
"SENIOR DEBT DOCUMENTS"), and shall include, but shall not be
limited to, all principal, unpaid interest, penalties, costs,
fees, premiums and other amounts due Senior Debtholders, or
their successors or assigns, pursuant to their respective
security loan, security, financing and other agreement,
documents or loan instruments and any amendments to or
replacements of any of the foregoing. Notwithstanding the
foregoing, in the absence of a Senior Debt Default, the
Company shall be permitted to pay interest on and principal of
the Loan in accordance with their terms. The Senior
Debtholders are intended third party beneficiaries of this
Section 1.6.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Lender that:
2.1 ORGANIZATION AND QUALIFICATION. The Company and each of its
Subsidiaries (as hereinafter defined) is a corporation duly
organized, validly existing and in good standing under the
laws of the state of its incorporation and has the requisite
corporate power to carry on its business as it is now being
conducted, and to own the properties and assets it now owns.
The Company and each of its subsidiaries is duly qualified,
licensed or domesticated, and in good standing as a foreign
corporation authorized to do business in each state or
jurisdiction wherein the nature of its activities or its
properties owned or leased makes such qualification, licensing
or domestication necessary, except where the failure to so
qualify, be licensed, domesticated or in good standing would
not have a material adverse effect on the Company and its
Subsidiaries, considered as a whole. The Company has delivered
to the Lender, if it has requested, complete and accurate
copies of its Articles of Incorporation and Bylaws and those
of each Subsidiary which owns assets constituting in excess of
5% of the total assets of the Company and its Subsidiaries on
a consolidated basis, together with all amendments thereto.
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2.2 AUTHORIZATION. All corporate action on the part of the
Company, its directors and shareholders necessary for the
authorization, execution, delivery and performance by the
Company of this Agreement and the Note and for the
consummation of the transactions contemplated herein and in
Exhibit B, and otherwise for the authorization, issuance and
delivery of the Note, has been taken and all actions by the
board of directors have been unanimous by all members of the
board of directors, except for one director who abstained from
the vote. This Agreement and the Note upon execution and
delivery by the Company, will be valid and binding obligations
of the Company, enforceable against the Company in accordance
with their terms.
2.2 ABSENCE OF CERTAIN CHANGES. Since October 31, 2002, the
Company and each of its Subsidiaries has conducted its
business only in the ordinary course and has not, except as
fairly described on SCHEDULE 2.3 hereto, or the Company's Form
10-Q for the quarter period ended October 31, 2002 (the
"Company's 10-Q"), or pursuant to this Agreement:
(a) suffered any material adverse change in its
operations, properties or financial condition or
prospects;
(b) incurred any increase in indebtedness for borrowed
money over the level thereof reflected on its audited
consolidated balance sheet as of April 30, 2002 (the
"COMPANY BALANCE SHEET"), except for borrowings made
in the ordinary course of business;
(c) discharged or paid any obligation or liability
material to it, other than current liabilities shown
on the Company Balance Sheet and current liabilities
incurred since the date of the Company Balance Sheet
discharged or paid in the ordinary course of business
or consistent with past practice;
(d) permitted any of its assets to be subject to any
material security interest, restriction or charge of
any kind other than purchase money security
interests;
(e) received any notice of termination of, or default
under, any contract, lease or other agreement, or
suffered any material damage, destruction or loss
(whether or not covered by insurance);
(f) issued or sold any of its securities, or issued or
sold any options, rights or warrants with respect
thereto, or acquired any capital stock or other
securities of any corporation or any interest in any
business enterprise, or otherwise made any loan or
advance to or investment in any person, firm or
corporation, except for normal business advances to
employees consistent with past practice;
(g) written off as uncollectible any accounts receivable,
except for write-offs in the ordinary course of
business or consistent with past practice, or in any
event in excess of an aggregate of $25,000;
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(h) canceled or compromised any debts or waived or
permitted to lapse any claims or rights of
substantial value, or sold, leased, transferred or
otherwise disposed of any of its properties or assets
(real, personal or mixed, tangible or intangible)
except in the ordinary course of business or
consistent with past practice;
(i) granted any general increase in the compensation of
officers or employees (including any such increase
pursuant to any bonus, pension, profit sharing or
other plan or commitment) or any increase in the
compensation payable or to become payable to any
officer or employee, except for increases in the
ordinary course of business or consistent with past
practice;
(j) made any material capital expenditure or commitment
for any addition to property, plant or equipment not
in the ordinary course of business, or in any event
in excess of an aggregate of $50,000;
(k) declared, paid or set aside for payment any dividend
or other distribution in respect of its capital
stock, or directly or indirectly, redeemed, purchased
or otherwise acquired any shares of its capital stock
or other securities of the Company or any of its
Subsidiaries;
(l) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets to, or
entered into any agreement or arrangement with, any
of its officers, directors or "affiliates," as such
term is defined in the rules and regulations of the
Securities and Exchange Commission (the "SEC"),
except for normal business advances to employees
consistent with past practice, directors' fees,
compensation to officers and compensation increases
permitted by clause (i) of this Section 2.3;
(m) settled any claim, action or proceeding pending or
threatened against or relating to the Company or any
of its Subsidiaries before any court or governmental
or regulatory authority or body for an amount in
excess of an aggregate of $25,000; or
(n) agreed, whether in writing or otherwise, to take any
action described in this Section 2.3.
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2.3 FINANCIAL STATEMENTS AND REPORTS.
(a) The Company has timely filed all required forms,
reports, statements and documents with the SEC, all
of which have complied in all material respects with
all applicable requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), and the
Securities Exchange Act of 1934 (the "EXCHANGE ACT").
The Company has delivered to the Lender true and
complete copies of the Company's (i) Annual Report on
Form 10-K for the fiscal years ended April 30, 2000,
2001 and 2002, (ii) Proxy Statements relating to all
meetings of the Company's shareholders (whether
annual or special) held since April 30, 2000, (iii)
all other forms, reports, statements and documents
filed by the Company with the SEC since April 30,
2000, and (iv) all reports, statements, documents and
other information provided by the Company to public
security holders since April 30, 2000 (collectively,
the items referred to in clauses (i) through (iv) are
hereinafter referred to as the "COMPANY Reports"). As
of their respective dates, the Company Reports did
not contain any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading. The financial
statements of the Company and its Subsidiaries
included or incorporated by reference in the Company
Reports were prepared in accordance with generally
accepted accounting principles applied on a
consistent basis and present fairly the financial
position, results of operations and changes in
financial position of the Company and its
Subsidiaries as of the dates and for the periods
indicated, except that the unaudited interim
financial statements may not contain all of the
footnotes required by generally accepted accounting
principles and may be subject to year-end adjustment.
(b) The Company has delivered to the Lender true and
complete copies of the Company's balance sheet as of
October 31, 2002 (the "INTERIM BALANCE Sheet"). The
Interim Balance Sheet was prepared in accordance with
(i) generally accepted accounting principles applied
on a consistent basis and (ii) the rules and
requirements of the SEC. The Interim Balance Sheet
presents fairly the consolidated financial position
of the Company and its Subsidiaries as of July 31,
2002. The total assets of the Company, as set forth
on the Interim Balance Sheet, equals or exceeds
$2,000,000. The Lender agrees to keep the Interim
Balance Sheet confidential.
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2.4 NO UNDISCLOSED LIABILITIES. Except as and to the extent
reflected on the Company Balance Sheet and the footnotes
thereto, as of October 31, 2002, neither the Company nor any
of its Subsidiaries had any liabilities or obligations
(absolute, accrued, contingent or otherwise) material to the
Company and its Subsidiaries taken as a whole of a nature
required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of the Company and
its Subsidiaries ("LIABILITIES"). Since October 31, 2002,
neither the Company nor any of its Subsidiaries has incurred
any Liabilities material to the Company and its Subsidiaries
taken as a whole, except Liabilities incurred in the ordinary
course of business.
2.5 CONSENTS AND APPROVALS.
(a) No notice to or filing with, and no authorization,
consent or approval of, any domestic or foreign court
or any public or governmental body or authority is
necessary for the execution and delivery of this
Agreement and the Note by the Company and the
performance of its obligations hereunder, except for
notices or filings the failure to give or make, and
authorizations, consents and approvals the failure to
obtain, would not, individually or in the aggregate,
have a material adverse effect on the financial
condition, business or results of operations of the
Company and its Subsidiaries taken as a whole or
adversely affect the ability of the Company perform
its obligations under this Agreement or the Note (a
"MATERIAL ADVERSE EFFECT").
(b) No authorization, consent or approval of any person
or entity is necessary for the execution and delivery
by the Company of this Agreement and the Note, and
the performance of its obligations hereunder, other
than (i) pursuant to Section 2.6(a) and (ii) the
consent of U.S. Bank, which has either been obtained
by the Company or which the Company will use its best
efforts to obtain.
(c) Upon execution and delivery of a Junior Note Consent
by the holder thereof, such Junior Note will be
subordinated to, and junior in the right of payment
of, the Loan and the Note. True and correct copies of
the Junior Note Consents will be provided to the
Lender promptly (but in any case within 5 Business
Days) after execution and delivery thereof by the
parties thereto.
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2.6 NO VIOLATIONS. Except as set forth on SCHEDULE 2.7 hereto, the
execution and delivery of this Agreement does not, and the
documents and agreements required to be executed in connection
herewith and the performance by the Company and its
Subsidiaries of their obligations hereunder and the
consummation of the transactions contemplated hereby will not,
violate, conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance
required by, or result in a right of termination or
acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of the Company or any of the Subsidiaries
under any of the terms, conditions or provisions of (i) the
respective charters or bylaws of the Company or the
Subsidiaries, (ii) subject to compliance with the statutes and
regulations referred to in Section 2.6 above, any statute,
law, ordinance, rule, regulation, judgment, decree, order,
injunction or writ applicable to the Company or any of the
Subsidiaries or any properties or assets of the Company or any
of the Subsidiaries, or (iii) any note, bond, mortgage,
indenture, license, franchise, permit, concession, contract,
agreement, lease or other instrument or agreement of any kind
to which the Company or any of the Subsidiaries is now a party
or by which the Company or any of the Subsidiaries or any of
their respective properties or assets may be bound, excluding
from the foregoing clauses (ii) and (iii) violations,
conflicts, breaches, defaults, terminations, accelerations or
creations of liens, security interests, charges or
encumbrances which would not, individually or in the
aggregate, have a Material Adverse Effect. The businesses of
the Company and its Subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any
governmental entity ("VIOLATIONS"), except for Violations
which either individually or in the aggregate will not have a
Material Adverse Effect. Set forth on SCHEDULE 2.7 hereto is a
list of all Violations of which the Company has knowledge
which could, individually or in the aggregate, have a Material
Adverse Effect.
2.7 LITIGATION, ETC. Except as described on SCHEDULE 2.8 hereto,
there is no claim, action or proceeding pending or, to the
best knowledge of the Company, threatened against or relating
to the Company or any of its Subsidiaries before any court or
governmental or regulatory authority or body acting in an
adjudicative capacity which individually or in the aggregate,
if adversely determined, would have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is subject to
any outstanding order, writ, injunction or decree which
individually or in the aggregate could have a Material Adverse
Effect.
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2.8 LEASE/CONCESSION AGREEMENTS. All leases and concession
agreements pursuant to which the Company and each of its
Subsidiaries leases real property and improvements material to
the conduct of its business and operations (collectively, the
"LEASES") are in full force and effect and constitute legal,
valid and binding obligations of the parties thereto,
enforceable in accordance with their respective terms, except
as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to or limiting creditors' rights or by legal
principles of general applicability governing the availability
of equitable remedies. Neither the Company nor any of its
Subsidiaries has assigned its rights and interests under the
Leases. Except as set forth in the Company's 10-Q, nothing has
come to the attention of the Company which (whether with or
without notice, lapse of time or both) would constitute a
material breach or default by any party under the Leases.
2.9 TAXES. All tax returns required to be filed by the Company and
its Subsidiaries have been duly and timely filed, and all
taxes, interest, penalties, assessments and/or deficiencies
shown to be due on such tax returns or for which the Company
has received tax notices have in all respects been paid or
adequate provision for the payment thereof has been made. The
Company and its Subsidiaries have no material tax deficiency
or claim outstanding, assessed or, to the best of knowledge of
the Company, proposed against the Company and its
Subsidiaries.
2.10 LICENSES, PERMITS AND AUTHORIZATIONS. The Company and its
Subsidiaries have all approvals, licenses or other permits of
all governmental or regulatory agencies, whether federal,
state or local, the absence of which would materially impair
the operations of their businesses taken as a whole as they
are presently being conducted. Set forth on SCHEDULE 2.11
hereto is a list of all California Department of Alcoholic
Beverage Control licenses and permits issued to the Company
and its Subsidiaries and in effect on the date hereof or which
will be in effect on the Closing Date.
3. COVENANTS OF THE COMPANY. The Company hereby covenants and agrees as
follows:
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3.1 ANNUAL AND QUARTERLY FINANCIAL INFORMATION. The Company will
furnish the following reports to the Lender for so long as the
Loan is outstanding pursuant to this Agreement:
(a) As soon as practicable after the end of each fiscal
year, and in any event within 120 days after the end
of each fiscal year, consolidated balance sheets of
the Company and its Subsidiaries, as of the end of
such fiscal year, and consolidated statements of
income and consolidated statements of changes in
financial position of the Company and its
Subsidiaries for such year, prepared in accordance
with generally accepted accounting principles and
setting forth in each case in comparative form the
figures for the previous fiscal year, all in
reasonable detail and certified by independent public
accountants of reputable standing selected by the
Company. Notwithstanding the foregoing, at any time
the Company is required to file reports pursuant to
the Exchange Act, the obligation contained in this
clause (a) shall be satisfied by delivery of a copy
of the Company's annual report on Form 10-K for each
fiscal year within fifteen Business Days of filing
thereof with the SEC.
(b) As soon as practicable after the end of the first,
second and third quarterly accounting periods in each
fiscal year of the Company, and in any event within
45 days thereafter, a consolidated balance sheet of
the Company and its Subsidiaries as of the end of
each such quarterly period, and consolidated
statements of income and consolidated cash flow
statements of the Company and its Subsidiaries for
such period and for the current fiscal year to date,
prepared in accordance with generally accepted
accounting principles (subject to normal audit
adjustment and except that no supporting statements,
schedules, footnotes or other such disclosure
required by generally accepted accounting principles
need be included), all in reasonable detail and
signed, subject to changes resulting from year-end
audit adjustments, by the Chief Financial Officer of
the Company. Notwithstanding the foregoing, at any
time the Company is required to file reports pursuant
to the Exchange Act, the obligation contained in this
clause (b) shall be satisfied by delivery of a copy
of the Company's quarterly report on Form 10-Q for
each quarterly accounting period within fifteen
Business Days of filing thereof with the SEC.
(c) The Company will furnish to the Lender promptly (but
in any event within fifteen Business Days) after the
mailing to its stockholders generally of each annual
report, proxy statement or other report or
communication, a copy of each such report, proxy
statement or other report or communication and
promptly (but in any event within fifteen business
days) after any filing by the Company with the SEC or
any governmental agency or agencies substituted for
such commission, or with any national securities
exchanges of any annual or periodic or special report
or registration statement, a copy of such report or
statement and copies of all press releases and other
statements made available generally by the Company to
the public concerning material developments in the
Company's business.
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3.2 REIMBURSEMENT OF EXPENSES. The Company shall pay all expenses
of the Lender included in connection with this Agreement, the
Note and the enforcement thereof, including the reasonable
fees and expenses of counsel.
3.3 LIMITATION ON INDEBTEDNESS. The Company will not incur
Indebtedness without the prior written consent of the Lender,
other than Indebtedness to the Senior Debtholders in
accordance with the terms of the Senior Debt Documents.
"INDEBTEDNESS" shall mean obligations for money borrowed,
obligations evidenced by bonds, debentures, notes or other
similar instruments, reimbursement obligations with respect to
letters of credit, bankers' acceptances or similar facilities,
the purchase price of property or services (excluding trade
accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are
being contested in good faith), obligations under capitalized
leases, and guarantees and other similar obligations.
3.4 SUBSEQUENT TRANSACTION. The Company agrees to use its
reasonable commercial efforts to effectuate the transactions
set forth in the Term Sheet attached hereto as Exhibit B on or
prior to February 21, 2003.
4. EVENTS OF DEFAULT; REMEDIES.
4.1 DEFAULTS AND REMEDIES. The occurrence of any one or more of
the following shall constitute an event of default hereunder
("EVENT OF DEFAULT"), whatever the reason therefor:
(a) the Company fails to pay any installment of principal
on any of the Notes on the date when due;
(b) the Company fails to pay any installment of interest
on any of the Notes within (30) days after the date
when due;
(c) the Company fails to perform, observe or comply with
any term, covenant or agreement contained in this
Agreement or the Note;
(d) any representation or warranty in this Agreement or
any document delivered by the Company pursuant to
this Agreement, shall fail to be true and correct in
all material respects; or
(e) proceedings for relief under any bankruptcy law or
any law for the relief of debtors ("DEBTOR RELIEF
LAW") shall be instituted by or against the Company,
or any order, judgment or dissolution or division;
PROVIDED, HOWEVER, with respect to an involuntary
petition in bankruptcy, such petition shall not have
been dismissed within sixty (60) days after the
filing of such petition;
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then, and in any such event, so long as the same may be continuing, the Lender
may, by notice in writing to the Company declare all amounts owing with respect
to this Agreement or the Note to be, and it shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Company; PROVIDED
that in the event of any Event of Default specified in Section 5.1(e) all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Lender.
4.2 REMEDIES. Upon the occurrence and continuance of any Event of
Default, the Lender may proceed to protect, exercise, and
enforce its respective rights and remedies under this
Agreement and the Note and all rights available at law or in
equity.
4.3 WAIVER OF DEFAULT. Any Event of Default waived in accordance
with Section 6.1 shall be deemed to have been cured and not to
be continuing; but no such waiver shall be deemed a continuing
waiver or shall extend to or affect any subsequent like
default or impair any rights arising therefrom.
5. MISCELLANEOUS.
5.1 AMENDMENT; WAIVERS. Any consent or approval required or
permitted by this Agreement to be given by the Lender may be
given, and any term of this Agreement may be amended, and the
performance or observance by the Company of any terms of this
Loan Agreement, or the continuance of any Event of Default may
be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with,
the written consent of the Company and the Lender.
Notwithstanding the foregoing, no amendment, modification or
waiver shall, without the written consent of the Lender (i)
reduce or forgive the principal amount of the Loan, or reduce
the rate or rates of interest on the Note; (ii) postpone or
extend the Maturity Date or any other regularly scheduled
dates for payments of principal of, or interest on, the Loan,
or modify any of the provisions relating to amounts, timing or
application of payments or prepayments of the Loan (it being
understood that any vote to rescind any acceleration made
pursuant to Section 4.1 of amounts owing with respect to the
Loan shall require the approval of the Lender); (iii) amend or
waive any provision relating to the subordination of the
claims of the holders of the Junior Notes or any other
obligations subordinated to the Note; or (iv) amend or modify
the terms of the subordination of the Note to the claims of
the Senior Debtholders or agree to subordinate the Note to any
other obligations of the Company.
5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as provided
hereinafter, all of the warranties and representations made by
the Company and the Lender in this Agreement or any document,
certificate, schedule or instrument delivered in connection
herewith shall survive the Closing and shall continue in
effect, notwithstanding any investigation by or on behalf of
the Lender.
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5.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the Note (a)
constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject
matter hereof and (b) may be assigned, in whole or in part, by
the Lender or by operation of law.
5.4 ENFORCEMENT OF THE AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any federal or state court located in the State of
California (as to which the parties agree to submit to
jurisdiction for the purposes of such action), this being in
addition to any other remedy to which they are entitled at law
or in equity.
5.5 FURTHER ASSURANCES. The Company shall, at its expense and
without expense to the Lender, do, execute and deliver such
further acts and documents as the Lender may from time to time
reasonably request for the assurance and confirming unto the
Lender the rights hereby created or intended now or hereafter
so to be, or for carrying out the intention or facilitating
the performance of the terms of this Agreement and the Note.
5.6 VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
5.7 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in
person, when confirmation is received, if sent by telecopier,
on the next Business Day, if accepted for overnight delivery
by a nationally-known courier guaranteeing overnight delivery
service (charges prepaid), or three Business Days after being
deposited in the U.S. mail if sent by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the address or telecopier number set
forth opposite each such party's name on the signature page or
to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the
manner set forth above.
5.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California regardless of the laws that might otherwise govern
under principles of conflicts of laws applicable thereto.
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5.9 DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not
interpreted to be a part of or to affect the meaning or
interpretation of this Agreement.
5.10 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and except
as expressly set forth in Section 1.6, nothing in this
Agreement, express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
5.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
CALIFORNIA BEACH RESTAURANTS, INC.
By: /S/ Richard Powell
------------------------------
Richard Powell
President
17383 Sunset Boulevard, Suite 140
Pacific Palisades, CA 90272
Attention: President
Address: Telecopier Number: (310) 459-9356
THE LENDER:
RLH SURF, a California General Partnership
By: /S/ J. Christopher Lewis
--------------------------------
J. Christopher Lewis
General Partner
RLH Surf
300 S. Grand Avenue, 29th Floor
Los Angeles, California 90071
Attention: J. Christopher Lewis
Address for Notices: Telecopier Number: (213) 229-8597
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