EXHIBIT (b)(1)
Commercial Note - Crestar Bank CRESTAR XXXXXXXX'X FOODS, INC.
June 14, 1996 Borrower
Date
Seven Million Five Hundred Thousand------------------------------
----------------------------Dollars Loan Amount
($7,500,000.00) Xxxxx X. Xxxx
---------------
Officer
__ Original _x_ 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.
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
Repayment Terms
Master Borrowing Note
This is an open and revolving line of credit; you may borrow an aggregate
principal amount up to the Loan Amount outstanding at any one time.
* Principal on demand, plus interest, but the undersigned shall be liable
for only so much of the Loan Amount shown above as shall be equal to the total
advanced to or for the undersigned, or any of them, by the Bank from time to
time, less all payments made by or for the undersigned and applied by the Bank
to principal, plus interest on each such advance, and any other amounts due all
as shown on the Bank's books and records, which shall be prima facie evidence of
the amount owed. *SEE ADDENDUM.
This Master Borrowing arrangement will terminate upon written notice from
the Bank to the undersigned, or if such notice is not sooner given,
_________________ from the date of this Note, unless an alternative termination
date is indicated in the Agreement, as defined below.
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 last 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.
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.
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 xxxxxxxx.
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. Notwithstanding the provisions of this Note under the heading,
"Repayment Terms," principal shall be payable on the Termination Date, as
defined in the Agreement (as hereinafter defined in this Note).
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
