EXHIBIT 10.52
[LETTERHEAD]
January 6, 1998
Xx. Xxxxxx X. Xxxxxx
Vice President/Chief Financial Officer
Shells Seafood Restaurants, Inc.
00000 Xxxxx Xxxx Xxxxx Xxxxx 000
Xxxxx, XX 00000
Dear Xxxxxx,
XXXX CREDIT CORPORATION is please to present this proposal under the following
terms and conditions:
1. LENDER: LYON CREDIT CORPORATION or its assignees.
2. BORROWER: Shells Seafood Restaurants, Inc.
3. TRANSACTION: The transaction is structured as a term loan in which
the Borrower will be entitled to claim and retain all of the tax
benefits associated with ownership of the Equipment with Lender
retaining a security interest in the equipment.
4. EQUIPMENT: Restaurant Furniture, Fixtures and Equipment.
5. DELIVERY: All equipment is to be delivered, accepted and placed under
a Loan schedule on or before July 30, 1998.
6. LOAN AMOUNT: Approximately $600,000 in increments as needed.
7. TERM: Five (5) years from the Loan Commencement Date.
8. LOAN COMMENCEMENT DATE: First or the fifteenth day of the month
following the date proceeds of the loan are disbursed. Borrower will
be required to make an Interim Loan Payment equal to the daily
equivalent of the monthly Loan Payment for the period of time
between the actual Loan disbursement date and the Loan Payment Date.
9. LOAN PAYMENTS: Borrower will be required to make Sixty (60)
consecutive loan payments, monthly in arrears, in an amount
incremental with the amount financed up to $12,079.87.
Xx. Xxxxxx X. Xxxxxx
Shells Seafood Restaurants, Inc.
January 6, 1998
Page 2 of 3
10. ADJUSTMENTS TO LOAN PAYMENT: The Loan Payment reflects current money
market rates as indicated by the yield to maturity of 5.45% for the Five
(5) Year Treasury Note as of January 5, 1998 ("225 B.P. over Index"). For
any movement in the treasury note prior to the Loan Commencement Date, the
Lender reserves the right to adjust the Loan Payments up or down to
preserve its economics by notification to borrower prior to the loan
closing.
11. LOAN STRUCTURE: All other terms and conditions notwithstanding, this
transaction is structured as a fully amortizing loan.
12. FACILITY DEPOSIT: An amount equal to $3,000.00, calculated as one half
of one percent (1/2%) of the Loan Amount, shall be paid to Lender at the
time of acceptance and return of this proposal. The Facility Deposit is
refundable on a pro-rata basis for any portion of the Loan Amount for
which Xxxxxx fails to approve a firm commitment in the form of this
proposal. The facility deposit is fully refundable until which time the
transaction is approved by the borrower's Board of Directors.
Thereafter, if Xxxxxx approves the transaction and for any reason Borrower
elects not to enter into the Loan or if Borrower requests that Lender no
longer consider the transaction for approval, the Facility Deposit will be
considered earned by Xxxxxx as a Facility Fee and is non-refundable. All
other terms and conditions notwithstanding, the Facility Deposit will be
applied toward the initial and subsequent schedules, if applicable after
payment of all reasonable expenses.
13. TAX BENEFITS: Depreciation deductions arising out of the ownership of
the Equipment will be for the account of Borrower.
14. INSURANCE: Borrower shall bear all risk of loss or damage to the
equipment and Borrower shall be responsible to keep the equipment insured
in an amount and in a reasonable form acceptable to Lender, including
insurance for damage to or loss of the Equipment and liability coverage.
15. WARRANTIES: Lender shall finance the Equipment on behalf of Borrower
without representation or warranty on an AS IS BASIS. However, Lender
shall assign to Borrower all warranties, guarantees and services provided
by the manufacturer(s) and/or vender(s) to the extent that they are
assignable. XXXXXX IS NOT RESPONSIBLE FOR PROVIDING ANY OF THE FOREGOING.
16. EQUIPMENT SPECIFICATIONS: With respect to the Equipment, this is only a
preliminary proposal and will not become final until, among other things,
Lender verifies the Equipment specifications including, but not limited to:
Model number, number of units, installation costs and maintenance
contracts; and Lender's approval of the final Equipment configuration.
This final approval may be revoked by the Lender if there are any
material changes to the specification or configuration of the Equipment.
Xx. Xxxxxx X. Xxxxxx
Shells Seafood Restaurants, Inc.
January 6, 1998
Page 3 of 3
17. BUSINESS INFORMATION: Borrower will make available to Lender a copy of
Xxxxxxxx's last three years fiscal year-end audited, 10-K financial
statements. Xxxxxxxx's latest comparative interim 10-Q statements and
other business information as may be reasonably requested by Xxxxxx. Such
financial statements will comply with Federal Securities Laws.
18. GENERAL: The loan will be a net loan in which the Borrower will be
responsible for all reasonable expenses relating to the Equipment and the
transaction, including, reasonable expenses, insurance coverage, payment of
personal property taxes, UCC financing statement recording fees, lien
search fees and other expenses relating to the purchase, possession, and
use of the Equipment. This proposal is an expression by Lender of its
interest in considering a loan transaction on the general terms and
conditions outlined above. This proposal is not intended to and does not
create any binding legal obligation on the part of either party. THIS
LETTER IS NOT, AND IS NOT TO BE CONSTRUED AS, A COMMITMENT BY XXXXXX TO
ENTER INTO THE PROPOSED LOAN TRANSACTION. Lender shall not be obligated
to provide any term loan financing until the satisfactory completion of
its due diligence, the receipt of all requisite approvals by Xxxxxx's
management, and the prior execution and delivery of final legal
documentation in form and substance acceptable to Lender, including
acceptance of the Equipment by the Borrower.
If this Proposal meets with your approval, kindly indicate your acceptance below
and return it with a check for one half of one percent (1/2%) of Loan Amount or
$3,000.00 as a Facility Deposit.
All other terms and conditions notwithstanding, this Proposal expires January
16, 1998, after which it shall have no force or effect.
LYON CREDIT CORPORATION
/s/XXX XXXXXXX
------------------------------
Wm. Xxxxxx Xxxxxxx
Eastern Division Sales Manager
ACCEPTED FOR: Shells Seafood Restaurants, Inc.
BY:/s/ XXXXXX X. XXXXXX
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TITLE: VP Finance/CFO
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DATES: January 7, 1998
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