Exhibit (b)(2)
Commercial Note - Crestar Bank
XXXXXXXX'X FOODS, INC. June 14, 1996
Borrower Date
One Million Seven Hundred Fifty Thousand-------------------------
--------------------Dollars Loan Amount
($1,750,000.00) Xxxxx X. Xxxx
---------------
Loan Officer _xOriginal __ Renewal Loan
For Value Received, the undersigned (whether one or more) jointly and severally
promise to pay to the order of Crestar Bank (the "Bank") at any of its offices,
or at such place as the Bank may in writing designate, without offset and in
immediately available funds, the Loan Amount shown above, including or plus
interest, and any other amounts due, upon the terms specified below.
Repayment Terms
Term--Variable Payment.
In 17 consecutive quarterly instalments of principal of $100,000 each, plus
interest, payable on the first day of each calendar quarter, beginning October
1, 1996, and a final payment of $50,000 plus interest and any other amounts
owned due on January 1, 2001.
Additional Terms And Conditions
This Note is governed by additional terms and conditions contained in an Amended
and Restated Credit Agreement between the undersigned and the Bank dated June
14, 1996, and any modifications, renewals, extensions or replacements thereof
(the "Agreement"), which is incorporated herein by reference. In the event of a
conflict between any term or condition contained in this Note and in the
Agreement, such term or condition of the Agreement shall control.
If this Note is payable on demand, the Bank shall have the right to demand
payment at any time even if an event of default (as identified herein) has not
occurred.
Interest
Accrued interest will be payable on the first day of each month,
beginning on July 1, 1996. Interest on a Term-Fixed Payment Loan with a fixed
interest rate or an Instalment-Simple Interest Loan will accrue on a 30/360
basis. On all other loan types, interest will accrue daily on an actual/360
basis (that is, on the actual number of days elapsed over a year of 360 days)
unless otherwise stated here: _________________________ Each scheduled payment
made on this Note shall be applied to accrued interest before it is applied to
principal. Interest shall accrue from the date of this Note on the unpaid
balance and shall continue to accrue after maturity, whether by acceleration or
otherwise, until this Note is paid in full. If the stated Rate (as defined
below) is based on the Prime Rate of Crestar Bank, the interest rate is subject
to increase or decrease at the sole option of the Bank.
Subject to the above, interest per annum payable on this Note (the "Rate") shall
be Prime Rate plus 1/2%.
The "Prime Rate" shall be the rate established from time to time by Crestar
Bank as a reference for fixing the lending rate for commercial loans. The Prime
Rate is a reference rate only and does not necessarily represent the lowest rate
of interest charged for commercial borrowings.
Adjustments to interest rates subject to change shall be effective as of the
date the Prime Rate changes.
*SEE ADDENDUM
Collateral
Any collateral pledged to the
Bank to secure any of the undersigned's existing or future liabilities to the
Bank shall secure this Note. To the extent permitted by law, each of the
undersigned grants to the Bank a security interest in and a lien upon all
deposits or investments maintained by the undersigned with, and all indebtedness
owed to the undersigned by, the Bank or any of its affiliates.
This Note is also secured by the following collateral and
proceeds thereof: SEE SCHEDULE A, ATTACHED.
All of the foregoing security is referred to collectively as the "Collateral".
The Collateral is security for the payment of this Note and any other liability
(including overdrafts and future advances) of the undersigned to the Bank,
however evidenced, now existing or hereafter incurred, matured or unmatured,
direct or indirect, absolute or contingent, several, joint, or joint and
several, including any extensions, modifications or renewals. The proceeds of
any Collateral may be applied against the liabilities of the undersigned to the
Bank in such order as the Bank deems proper.
Loan Purpose And Updated Financial Information Required
The undersigned warrant and represent that the loan evidenced by this Note is
being made solely for the purpose of acquiring or carrying on a business,
professional or commercial activity or acquiring real or personal property as an
investment (other than a personal investment) or for carrying on an investment
activity (other than a personal investment activity). The undersigned agree to
provide to the Bank updated financial information, including, but not limited
to, tax returns, current financial statements in form satisfactory to the Bank,
as well as additional information, reports or schedules (financial or
otherwise), all as the Bank may from time to time request.
Default, Acceleration And Setoff
*Any one of the following shall constitute an event of default under
the terms of this Note: (1) the failure to make when due any instalment or other
payment, whether of principal, interest, late charges or other authorized
charges due under this Note, or the failure to pay the amount demanded by the
Bank if this Note is payable on demand; (2) the death, dissolution, merger,
acquisition, consolidation or termination of existence of the undersigned, any
guarantor of the indebtedness of any of the undersigned to the Bank, any
endorser, or any other party to this Note (collectively called a "Party"); (3)
the insolvency or inability to pay debts as they mature of any Party, or the
application for the appointment of a receiver for any Party or the filing of a
petition under any provision of the Bankruptcy Code or other insolvency law,
statute or proceeding by or against any Party or any assignment for the benefit
of creditors by or against any Party; (4) the entry of a judgment against any
Party or the issuance or service of any attachment, levy or garnishment against
any Party or the property of any Party, or the repossession or seizure of
property of any Party; (5) a determination by the Bank that it deems itself
insecure or that a material adverse change in the financial condition of any
Party or decline or depreciation in the value or market value of any Collateral
has occurred since the date of this Note or is reasonably anticipated; (6) the
failure of any Party to perform any other obligation to the Bank under this Note
or under any other agreement with the Bank; (7) the occurrence of an event of
default with respect to any existing or future indebtedness of any Party to the
Bank or any other creditor of the Party; (8) a material change in the ownership,
control or management of any Party that is an entity, unless such change is
approved by the Bank in its sole discretion; (9) if any Party gives notice to
the Bank purporting to terminate such Party's obligations under or with respect
to this Note; (10) the sale or transfer by a Party of all or substantially all
of such Party's assets other than in the ordinary course of business; or (11)
any Party commits fraud or makes a material misrepresentation at any time in
connection with this Note. If an event of default occurs, or in the event of
non-payment of this Note in full at maturity, the entire unpaid balance of this
Note shall, at the option of the Bank, become immediately due and payable,
without notice or demand.
Upon the occurrence of an event of default, the Bank shall be entitled to
interest on the unpaid balance at the stated Rate plus 2.00% (the "Default
Rate"), unless otherwise required by law, until paid in full. To the extent
permitted by law, upon default, the Bank will have the right, in addition to all
other remedies permitted by law, to set off the amount due under this Note or
due under any other obligation to the Bank against any and all accounts, whether
checking or savings or otherwise, credits, money, stocks, bonds or other
security or property of any nature whatsoever on deposit with, held by, owed by,
or in the possession of, the Bank or any of its affiliates to the credit of or
for the account of any Party, without notice to or consent by any Party. The
remedies provided in this Note and any other agreement between the Bank and any
Party are cumulative and not exclusive of any remedies provided by law. *SEE
ADDENDUM.
Capital Adequacy
Should the Bank, after the date hereof,
determine that the adoption of any law or regulation regarding capital adequacy,
or any change in the interpretation or administration thereof, has or would have
the effect of reducing the Bank's rate of return hereunder to a level below that
which the Bank could have achieved but for such adoption or change, by an amount
which the Bank considers to be material, then, from time to time, 30 days after
written demand by the Bank, the undersigned shall pay to the Bank such
additional amounts as will compensate the Bank for such reduction. Each demand
by the Bank shall be made in good faith and shall be accompanied by a
certificate claiming compensation under this paragraph and stating the amounts
to be paid to it hereunder and the basis therefor.
Late Charges And Other Authorized Charges
*If this is an Instalment-Simple Interest loan, if any portion of a payment is
at least seven (7) days past due, the undersigned agree to pay a late charge of
5% of the amount which is past due. On all other loan types, the undersigned
agree to pay such late charge if any portion of a payment is at least ten (10)
days past due. Unless prohibited by applicable law, the undersigned agree to pay
the fee established by the Bank from time to time for returned checks if a
payment is made on this Note with a check and the check is dishonored for any
reason after the second presentment. In addition, as permitted by applicable
law, the undersigned agree to pay the following: (1) all expenses, including,
without limitation, any and all court or collection costs, and attorneys' fees
of 25% of the unpaid balance of this Note, or actual attorneys' fees if in
excess of such amount, whether suit be brought or not, incurred in collecting
this Note; (2) all costs incurred in evaluating, preserving or disposing of any
Collateral granted as security for the payment of this Note, including the cost
of any audits, appraisals, appraisal updates, reappraisals or environmental
inspections which the Bank from
time to time in its sole discretion may deem necessary; (3) any premiums for
property insurance purchased on behalf of the undersigned or on behalf of the
owner(s) of the Collateral pursuant to any security instrument relating to the
Collateral; (4) any expenses or costs incurred in defending any claim arising
out of the execution of this Note or the obligation which it evidences, or
otherwise involving the employment by the Bank of attorneys with respect to this
Note and the obligations it evidences; and (5) any other charges permitted by
applicable law. The undersigned agree to pay such authorized charges on demand
or, at the Bank's option, such charges may be added to the unpaid balance of the
Note and shall accrue interest at the stated Rate. Upon the occurrence of an
event of default, interest shall accrue at the Default Rate. *SEE ADDENDUM.
Waivers
The undersigned and each
other Party waive presentment, demand, protest, notice of protest and notice of
dishonor and waive all exemptions, whether homestead or otherwise, as to the
obligations evidenced by this Note. The undersigned and each other Party waive
any rights to require the Bank to proceed against any other Party or person or
any Collateral before proceeding against the undersigned or any of them, or any
other Party, and agree that without notice to any Party and without affecting
any Party's liability, the Bank, at any time or times, may grant extensions of
the time for payment or other indulgences to any Party or permit the renewal or
modification of this Note, or permit the substitution, exchange or release of
any Collateral for this Note and may add or release any Party primarily or
secondarily liable. The undersigned and each other Party agree that the Bank may
apply all monies made available to it from any part of the proceeds of the
disposition of any Collateral or by exercise of the right of Setoff either to
the obligations under this Note or to any other obligations of any Party to the
Bank, as the Bank may elect from time to time. The undersigned also waive any
rights afforded to them by Sections 49-25 and 49-26 of the Code of Virginia of
1950 as amended.
TO THE EXTENT LEGALLY PERMISSIBLE, THE UNDERSIGNED WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LITIGATION RELATING TO TRANSACTIONS UNDER THIS NOTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.
Severability, Amendments And No Waiver By Bank
Any provision of this Note which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Note. No amendment, modification,
termination or waiver of any provision of this Note, nor consent to any
departure by the undersigned from any term of this Note, shall in any event be
effective unless it is in writing and signed by an authorized
employee of the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. If the
interest Rate is tied to an external index and the index becomes unavailable
during the term of this loan, the Bank may designate a substitute index with
notice to the Borrower. No failure or delay on the part of the Bank to exercise
any right, power or remedy under this Note shall be construed as a waiver of the
right to exercise the same or any other right at any time.
Liability, Successors And Assigns And Governing Law
Each of the undersigned shall be jointly and severally obligated and liable on
this Note. This Note shall apply to and bind each of the undersigned's heirs,
personal representatives, successors and assigns and shall inure to the benefit
of the Bank, its successors and assigns. This Note shall be governed by the
internal laws of the Commonwealth of Virginia and applicable federal law.
By signing below, the undersigned agree to the terms of this Note and
acknowledge receipt of a loan in the Loan Amount shown above.
XXXXXXXX'X FOODS, INC.
By: Xxxxxx X. Xxxxxxxxx, Xx.
-------------------------
(Signature)
Senior Vice President
SCHEDULE A
TO COMMERCIAL NOTE
DATED JUNE 14, 1996,
MADE BY XXXXXXXX'X FOODS, INC.
1. Credit line deed of trust dated of even date, from Xxxxxxxx'x Foods, Inc.
("Borrower") to Xxxxx X. Xxxxxx and Xxxxx Xxxxxxxxx, trustees ("Trustees"),
on real estate and improvements located in Portsmouth, Virginia.
2. Guaranty of even date, from Xxxxxxxx'x of Manchester Corp. ("Xxxxxxxx").
3. Credit line deed of trust dated of even date, from Xxxxxxxx'x to Trustees,
on real estate and improvements located in Manchester, Maryland.
4. Security Agreement from Borrower dated of even date, on Accounts,
Inventory, Equipment and General Intangibles.
5. Security Agreement from Xxxxxxxx'x dated of even date, on a promissory note
dated September 3, 1995, made by Value Added Food Services, Inc., and
payable to Xxxxxxxx'x in the original principal amount of $1,038.756.
6. Borrower's Assignment dated of even date pursuant to the Assignment of
Claims Act, of its rights to receive monies due and to become due to
Borrower pursuant to its contract with the United States of America
(Defense Logistics Agency) for the supply of foods to military facilities
in southern Virginia.
XXXXXXXX'X FOODS, INC.,
a Virginia corporation
By: Xxxxxx X. Xxxxxxxxx, Xx.
--------------------------
(Signature)
Its: Senior Vice President
ADDENDUM
TO COMMERCIAL NOTE
DATED JUNE 14, 1996,
MADE BY XXXXXXXX'X FOODS, INC.
1. The maker of this Note shall have the right, upon written notice to the
Bank, so long as no Event of Default (as defined in the Agreement) shall have
occurred and be continuing, to elect to have the interest rate on this Note
converted, on a prospective basis, from the floating rate specified in this Note
to a fixed rate of interest (the "Conversion"), such fixed rate of interest to
be specified by the Bank on the effective date of the conversion.
2. Notwithstanding the provisions of this Note under the heading, "Default,
Acceleration and Setoff," the only event of default under this Note shall be an
Event of Default as defined in the Agreement.
3. Notwithstanding the provisions of this Note under the heading, "Late
Charges And Other Authorized Charges," attorneys' fees payable to the Bank shall
be limited to reasonable fees and expenses of counsel to the Bank.
XXXXXXXX'X FOODS, INC.,
a Virginia corporation
By: Xxxxxx X. Xxxxxxxxx, Xx.
------------------------
(Signature)
Its: Senior Vice President
