CHANGE IN TERMS AGREEMENT
Exhibit
10.94
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Principal
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Loan
Date
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Expiration
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Loan
No
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Call
/ Coll
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Account
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Officer
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Initials
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$5,000,000.00
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05-13-2008
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08-31-2011
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400461335
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Port
#583889
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247
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References
in the boxes above are for Lender's use only and do not limit the
applicability of this document to any particular loan or
item.
Any
item above containing "***" has been omitted due to text length
limitations.
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Borrower:
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Xxxxx'x
Restaurants, Inc., a Delaware corporation
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
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Lender:
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Pacific
Western Bank
Pasadena
Xxxxxx
000
Xxxxx Xxx Xxxxxx
Xxxxx
000
Xxxxxxxx,
XX 00000
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| Principal Amount: $5,000,000.00 |
Date of
Agreement: May 4,
2010
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DESCRIPTION
OF EXISTING INDEBTEDNESS.
Promissory
Note dated May 13, 2008 in the original Principal Amount of $5,000,000.00
together with all renewals, extensions and modifications related thereto (the
“Note”).
DESCRIPTION
OF COLLATERAL
Commercial
Security Agreement dated May 13, 2008 granting Lender a security interest in all
business assets of Borrower.
Commercial
Security Agreement dated May 13, 2008 granting Lender a security interest in all
business assets of Xxxxx'x Restaurants of Nevada, Inc., a Nevada
corporation.
Commercial
Security Agreement of even date, granting Lender a security interest in all
business assets of Rubio's Incentives, LLC, an Arizona limited liability
company, is hereby executed concurrently with this Agreement.
DESCRIPTION
OF CHANGE IN TERMS.
1. The Note
is hereby modified as follows: The date on which all outstanding
principal is due and payable (together with any accrued but unpaid interest)
(the “Maturity Date”) is hereby extended from May 13, 2010 to August 31,
2011. Notwithstanding the Maturity Date, Borrower shall make regular
payments as further outlined in this Agreement.
2. Borrower
shall cause Xxxxx'x Restaurants of Nevada, Inc., a Nevada corporation and
Rubio's Incentives, LLC, an Arizona limited liability company to execute
Commercial Guaranties of the loan in favor of Lender, on Lender's forms and In
the amount and under the conditions set forth in those
guaranties.
The
Guaranty of Rubio's Promotions, Inc. an Arizona corporation Is hereby
released.
3. The
Business Loan Agreement dated May 13, 2008 is hereby modified as
follows:
The
Section titled Guaranties under "AFFIRMATIVE COVENANTS" is
hereby amended as follows:
The
Guaranty of Rubio's Promotions, Inc. an Arizona corporation is hereby released
and replaced with the Guaranty executed by Rubio's Incentives, LLC, an Arizona
limited liability company.
PROMISE
TO PAY. Xxxxx'x Restaurants, Inc., a Delaware corporation
("Borrower") promises to pay to Pacific Western Bank ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Five
Million & 00/100 Dollars ($5,000,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance
until repayment of each advance.
PAYMENT. Borrower
will pay this loan In one payment of all outstanding principal plus all accrued
unpaid interest on August 31, 2011. In addition, Borrower will pay
regular monthly payments of all accrued unpaid interest due as of each payment
date, beginning May 31, 2010, with all subsequent interest payments to be due on
the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any unpaid collection costs; and then to
any late charges. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in
writing.
VARIABLE INTEREST
RATE. The interest rate on this loan is subject to change from
time to time based on changes in an independent index which is the The Wall
Street Journal Prime Rate (the "Index"). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current
Index rate upon Borrower's request. The interest rate change will not
occur more often than each day. Borrower understands that Lender may
make loans based on other rates as well. The Index currently is 3.250% per
annum. Interest on the unpaid principal balance of this loan
will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph
using a rate of 0.250 percentage points over the Index, resulting in an initial
rate of 3.500%. NOTICE: Under no circumstances will the
interest rate on this loan be more than the maximum rate allowed by applicable
law.
INTEREST
CALCULATION METHOD. Interest on this loan is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest
payable under this loan is computed using this method.
PREPAYMENT. Borrower
agrees that all loan fees and other prepaid finance charges are earned fully as
of the date of the loan and will not be subject to refund upon early payment
(whether voluntary or as a result of default), except as otherwise required by
law. Except for the foregoing, Borrower may pay without penalty all
or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid
interest. Rather, early payments will reduce the principal balance
due. Borrower agrees not to send Lender payments marked "paid in
full", "without recourse", or similar language. If Borrower sends
such a payment, Lender may accept it without losing any of Lenders rights under
this Agreement, and Borrower will remain obligated to pay any further amount
owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the
payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: Pacific Western Bank, Pasadena
Office, 000 Xxxxx Xxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000.
LATE CHARGE. If a
payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled
payment or $10.00, whichever is greater.
INTEREST AFTER
DEFAULT. Upon default, the interest rate on this loan shall,
if permitted under applicable law, immediately increase by adding an additional
5.000 percentage point margin ("Default Rate Margin"). The Default
Rate Margin shall also apply to each succeeding interest rate change that would
have applied had there been no default.
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Loan
No: 400461335
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(Continued)
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Page
2
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DEFAULT. Each of
the following shall constitute an Event of Default under this
Agreement:
Payment
Default. Borrower fails to make any payment when due under the
Indebtedness.
Other
Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.
Default in Favor of Third
Parties. Any guarantor or Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or
person that may materially affect any of any guarantor's or Borrower's property
or ability to perform their respective obligations under this Agreement or any
of the Related Documents.
False
Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Agreement or
the Related Documents is false or misleading in any material respect, either now
or at the time made or furnished or becomes false or misleading at any time
thereafter.
Insolvency. The
dissolution or termination of Borrower's existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Indebtedness. This includes a garnishment
of any of Borrower's accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events Affecting
Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness evidenced by this Note.
Change In
Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse
Change. A material adverse change
occurs In Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
Insecurity. Lender
in good faith believes itself insecure.
Cure Provisions. If
any default, other than a default in payment is curable and if Borrower has not
been given a notice of a breach of the same provision of this Agreement within
the preceding twelve (12) months, it may be cured if Borrower, after Lender
sends written notice to Borrower demanding cure of such default: (1)
cures the default within fifteen (15) days; or (2) if the cure requires more
than fifteen (15) days, immediately initiates steps which Lender deems in
Lender's sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
LENDER'S
RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance under this Agreement and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.
ATTORNEYS' FEES;
EXPENSES. Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or not there
is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals. Borrower also will pay any court costs, in addition to all
other sums provided by law.
GOVERNING
LAW. This Agreement will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the State of
California without regard to its conflicts of law provisions. This
Agreement has been accepted by Lender in the State of
California.
CHOICE OF
VENUE. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of Los Angeles County, State of California.
RIGHT OF SETOFF. To
the extent permitted by applicable law, Lender reserves a right of setoff in all
Borrower's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the
future. However, this does not include any XXX or Xxxxx accounts, or
any trust accounts for which setoff would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
COLLATERAL. Borrower
acknowledges this Agreement is secured by the following collateral described in
the security instruments listed herein: collateral described in two
(2) Commercial Security Agreements dated May 13, 2008 and one (1) Commercial
Security Agreement dated May 4, 2010.
LINE OF
CREDIT. This Agreement evidences a revolving line of
credit. Advances under this Agreement may be requested either orally
or in writing by Borrower or as provided in this paragraph. Lender
may, but need not, require that all oral requests be confirmed in
writing. All communications, instructions, or directions by telephone
or otherwise to Lender are to be directed to Lender's office shown
above. The following person or persons are authorized to request
advances and authorize payments under the line of credit until Lender receives
from Borrower, at Lender's address shown above, written notice of revocation of
such authority: Xxxxxx X. Xxxxxxx and Xxxxx
Xxxxxxxx. Borrower agrees to be liable for all sums either:
(A) advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Agreement at any time may be evidenced by
endorsements on this Agreement or by Lender's internal records, including daily
computer print-outs.
CONTINUING
VALIDITY. Except as expressly changed by this Agreement, the
terms of the original obligation or obligations, including all agreements
evidenced or securing the obligation(s), remain unchanged and in full force and
effect. Consent by Lender to this Agreement does not waive Lender's
right to strict performance of the obligation(s) as changed, nor obligate Lender
to make any future change in terms. Nothing in this Agreement will
constitute a satisfaction of the obligation(s). It is the intention
of Lender to retain as liable parties all makers and endorsers of the original
obligation(s), including accommodation parties, unless a party is expressly
released by Lender in writing. Any maker or endorser, including
accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not
sign this Agreement below, then all persons signing below acknowledge that this
Agreement is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to
any initial extension, modification or release, but also to all such subsequent
actions.
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Loan
No: 400461335
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(Continued)
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Page
3
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INTEGRATION. The
parties agree that (a) this Agreement, the Construction Loan Agreement or
Business Loan Agreement, as applicable, which governs the Note, together with
all of the Related Documents, represents the final agreement between the
parties, and therefore incorporates all negotiations of the parties hereto (b)
there are no unwritten oral agreements between the parties, and (c) this
Agreement may not be contradicted by evidence of any prior, contemporaneous, or
subsequent oral agreements or understandings of the parties.
SUCCESSORS AND
ASSIGNS. Subject to any limitations stated in this Agreement
on transfer of Borrower's interest, this Agreement shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Collateral becomes vested in a person other than Borrower,
Lender, without notice to Borrower, may deal with Borrower's successors with
reference to this Agreement and the Indebtedness by way of forbearance or
extension without releasing Borrower from the obligations of this Agreement or
liability under the Indebtedness.
MISCELLANEOUS
PROVISIONS. If any part of this Agreement cannot be enforced,
this fact will not affect the rest of the Agreement. Lender may delay
or forgo enforcing any of its lights or remedies under this Agreement without
losing them. Borrower and any other person who signs, guarantees or
endorses this Agreement, to the extent allowed by law, waive any applicable
statute of limitations, presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Agreement, and unless
otherwise expressly stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is
made. The obligations under this Agreement are joint and
several.
PRIOR
TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE AGREEMENT.
BORROWER:
XXXXX'X
RESTAURANTS, INC., A DELAWARE CORPORATION
| By: /s/ Xxxxxx X. Xxxxxxx | By: /s/ Xxxxx Xxxxxxxx |
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Xxxxxx X. Xxxxxxx,
President/CEO of Rubio's
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Xxxxx Xxxxxxxx,
Chief Financial Officer of Xxxxx'x
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Restaurants, Inc., a
Delaware corporation
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Restaurants, Inc., a
Delaware corporation
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