Exhibit 10.1

 

LOAN and Security AGREEMENT

[MAIN STREET PRIORITY LOAN FACILITY]

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”), dated as of this 18th day
of September, 2020, by and between ARC FAT PATTY’S LLC, a Louisiana limited
liability company, whose address is 1409 Kingsley Avenue, Unit #2, Orange Park,
Florida 32073 (the “Borrower”), and CITY NATIONAL BANK OF FLORIDA, its
successors and/or assigns (the “Lender”), whose address is 100 S.E. 2nd Street,
13th Floor, Miami, Florida 33131.

 

RECITALS

 

A. Borrower has requested and Lender has agreed to make a term loan to Borrower
in the original principal amount of FOUR MILLION THREE HUNDRED SIXTY-NINE
THOUSAND EIGHT HUNDRED SIXTY AND NO/100 DOLLARS ($4,369,860.00) (the “Loan”), to
provide additional credit assistance to the Borrower in order to maintain or
reinstate ongoing operations and payroll as a result of the COVID-19 pandemic,
pursuant to the Main Street Priority Loan Facility as established by the Board
of Governors of the Federal Reserve System under Section 13(3) of the Federal
Reserve Act, and subject to the terms and conditions contained in this
Agreement.

 

B. Borrower and Lender have negotiated the terms and conditions of, and wish to
enter into, this Agreement in order to set forth the terms and conditions of the
Loan.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, Borrower and Lender agree as follows:

 

1. DEFINITIONS. As used in this Agreement the terms listed below shall have the
following meanings unless otherwise required by the context:

 

(a) Bank Product Obligations: Shall mean all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by an Obligor or
any subsidiary of an Obligor to the Lender or any affiliate of the Lender
pursuant to or evidenced by certain cash management service agreements entered
into from time to time by an Obligor or any subsidiary of an Obligor with the
Lender or any affiliate of the Lender concerning Bank Products and irrespective
of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising.

 

(b) Bank Products: Shall mean any service or facility extended to an Obligor or
any Subsidiary of an Obligor by the Lender or any affiliate of the Lender,
including: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH transactions, or (f) cash management,
including controlled disbursement, accounts or services.

 

(c) Borrower Certification: That certain Main Street Priority Loan Facility
Borrower Certifications and Covenants dated as of even date herewith, from
Borrower in favor of Lender, as the same may be amended or modified from time to
time.

 

(d) CARES Act: The Coronavirus Aid, Relief, and Economic Security Act.

 

(e) Change of Control: A change of ownership in excess of fifty-one percent
(51%) of the ownership interests of Borrower.

 

(f) Collateral: Shall have the meaning ascribed to such term in Section 4
hereof.

 

(g) EBITDA: The sum of earnings before interest, taxes, depreciation, and
amortization.

 

(h) Facility: The Main Street Priority Loan Facility, which has been authorized
under Section 13(3) of the Federal Reserve Act.

 

 

 

 

(i) FAQS: The Main Street Lending Program Frequently Asked Questions as
published by the Board of Governors of the Federal Reserve System, as the same
may be amended or modified from time to time.

 

(j) Financing Statement: The financing statement(s) from Borrower to Lender to
perfect Lender’s security interest in the Collateral.

 

(k) GAAP: Generally accepted accounting principles consistently applied, as
adopted in the United States, and as amended from time to time.

 

(l) Governmental Assignee: Shall have the meaning ascribed to such term in the
instructions to the Borrower Certification.

 

(m) Governmental Authority: Any governmental or quasi-governmental authority,
agency, authority, board, commission, or governing body authorized by federal,
state or local laws or regulations as having jurisdiction over the Lender or the
Borrower.

 

(n) Loan: That certain term loan in the amount of FOUR MILLION THREE HUNDRED
SIXTY-NINE THOUSAND EIGHT HUNDRED SIXTY AND NO/100 DOLLARS ($4,369,860.00), made
pursuant to the Facility, as evidenced by the Note and other Loan Documents as
provided herein.

 

(o) Loan Documents: Any and all documents evidencing, securing, or executed in
connection with the Loan, including, without limitation, the Note, this
Agreement, the Borrower Certification and the Financing Statement.

 

(p) Mortgage Debt: Shall have the meaning given to such term in the FAQS.

 

(q) Note: That certain Promissory Note dated as of even date herewith from
Borrower in favor of Lender in the principal amount of $4,369,860.00, as the
same may be amended, restated, modified or replaced from time to time.

 

(r) Obligations: Shall mean all loans, advances and other financial
accommodations made or extended by Lender to an Obligor, including, without
limitation, those arising pursuant to the Note and the Loan Agreement, all
interest accrued thereon (including interest which would be payable as
post-petition in connection with any bankruptcy or similar proceeding, whether
or not permitted as a claim thereunder), any fees due the Lender under the Loan
Documents, any expenses incurred by the Lender under the Loan Documents and any
and all other liabilities and obligations of an Obligor to the Lender, including
any reimbursement obligations of an Obligor to Lender in respect of any letter
of credit issued by the Lender for the account of an Obligor and surety bonds,
and all Bank Product Obligations of an Obligor, all in each case howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, together with
any and all renewals or extensions thereof.

 

(s) Obligor: Shall mean the Borrower, any subsidiary of the Borrower, any
guarantor, accommodation endorser, third party pledgor, or any other party
liable with respect to the Obligations.

 

(t) Permitted Debt: Shall mean (i) the Loan, (ii) the endorsement of checks for
collection in the ordinary course of business, (iii) debt payable to suppliers
and other trade creditors in the ordinary course of business on ordinary and
customary trade terms and which is not past due, (iv) Mortgage Debt, and (v) any
existing debt owed by Borrower to Lender.

 

(u) Permitted Liens: Shall mean (i) liens securing obligations under the Loan;
(ii) liens on real property in connection with loans with respect to which
substantially all of the proceeds were used for acquisition, construction,
fit-out, and/or renovation of such property; (iii) liens securing permitted
indebtedness that are junior or pari-passu to any lien securing the Loan; (iv)
liens on receivables assets and related assets incurred in connection with a
receivables facility, provided that such debt is secured only by the newly
acquired property; (v) liens for taxes, fees, assessments or other government
charges or levies, either not delinquent or being contested in good faith; (vi)
statutory liens securing claims or demands of materialmen, suppliers, producers,
mechanics, carriers, warehousemen, landlords and other Persons imposed without
action of such parties; (vii) liens to secure payment of workers’ compensation,
employment insurance, old-age pensions, social security and other like
obligations incurred in the ordinary course of business (other than liens
imposed by ERISA); (viii) liens that are rights of set-off, bankers’ liens or
similar non-consensual liens relating to deposit or securities accounts in favor
of banks, other depositary institutions and securities intermediaries arising in
the ordinary course of business of Borrower; and (ix) liens on limited recourse
equipment financings (including equipment capital or finance leasing and
purchase money equipment loans) secured only by the acquired equipment.

 

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(v) Person: A natural person, a partnership, a joint venture, an unincorporated
association, a limited liability company, a corporation, a trust, any other
legal entity, or any Governmental Authority.

 

(w) SPV: MS FACILITIES LLC, a Delaware limited liability company.

 

(x) UCC: Shall mean the Uniform Commercial Code in effect in the State of
Louisiana from time to time. Any term used in this Agreement and in any
Financing Statement filed in connection herewith which is defined in the UCC and
not otherwise defined in this Agreement or in any other Loan Document has the
meaning given to the term in the UCC.

 

(y) Unmatured Event of Default: Any event that, if it continues uncured, will,
with lapse of time or notice, or both, constitute an Event of Default hereunder
and under the other Loan Documents.

 

2. LOAN. All Loan proceeds under the Note shall be funded within three (3)
business days of the date of the Commitment Letter (as defined in Section 6(ff)
below).

 

3. EXPENSES: Borrower shall pay all fees and charges incurred in the procuring
and making of the Loan and all other expenses incurred by Lender during the term
of the Loan, including without limitation, Florida Documentary Stamp Taxes, if
applicable, and the fees of the attorneys for Lender. The Borrower shall also
pay any and all insurance premiums, taxes, assessments, and other charges, liens
and encumbrances upon the Collateral. Such amounts, unless sooner paid, shall be
paid from time to time as Lender shall request either to the Person to whom such
payments are due or to Lender if Lender has paid the same.

 

4. SECURITY AGREEMENT.

 

(a) Security for Obligations. As security for the payment and performance of the
Obligations, the Borrower does hereby pledge, assign, transfer, deliver and
grant to the Lender, for its own benefit and as agent for its affiliates, a
continuing and unconditional security interest in and to any and all property of
the Borrower, of any kind or description, tangible or intangible, wheresoever
located and whether now existing or hereafter arising or acquired, including the
following (all of which property, along with the products and proceeds
therefrom, are individually and collectively referred to as the “Collateral”):

 

(i) all property of, or for the account of, the Borrower now or hereafter coming
into the possession, control or custody of, or in transit to, the Lender or any
agent or bailee for the Lender or any parent, affiliate or subsidiary of the
Lender or any participant with the Lender in the Obligations (whether for
safekeeping, deposit, collection, custody, pledge, transmission or otherwise),
including all earnings, dividends, interest, or other rights in connection
therewith and the products and proceeds therefrom, including the proceeds of
insurance thereon; and

 

(ii) the additional property of the Borrower, whether now existing or hereafter
arising or acquired, and wherever now or hereafter located, together with all
additions and accessions thereto, substitutions, betterments and replacements
therefor, products and Proceeds therefrom, and all of the Borrower’s books and
records and recorded data relating thereto (regardless of the medium of
recording or storage), together with all of the Borrower’s right, title and
interest in and to all computer software required to utilize, create, maintain
and process any such records or data on electronic media, identified and set
forth as follows:

 

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1. All Accounts and all Goods whose sale, lease or other disposition by the
Borrower has given rise to Accounts and have been returned to, or repossessed or
stopped in transit by, the Borrower, or rejected or refused by an Account
Debtor;

 

2. All Inventory, including raw materials, work-in-process and finished goods;

 

3. All Goods (other than Inventory), including embedded software, Equipment,
vehicles, furniture and Fixtures;

 

4. All Software and computer programs;

 

5. All Securities, Investment Property, Financial Assets and Deposit Accounts;

 

6. All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter
of Credit Rights, all proceeds of letters of credit, Health-Care-Insurance
Receivables, Supporting Obligations, notes secured by real estate, Commercial
Tort Claims and General Intangibles, including Payment Intangibles; and

 

7. All Proceeds (whether Cash Proceeds or Noncash Proceeds) of the foregoing
property, including all insurance policies and proceeds of insurance payable by
reason of loss or damage to the foregoing property, including unearned premiums,
and of eminent domain or condemnation awards.

 

(b) Possession and Transfer of Collateral. Until an Event of Default has
occurred hereunder, the Borrower shall be entitled to possession or use of the
Collateral (other than Collateral required to be delivered to the Lender
pursuant to this Section 4). The cancellation or surrender of any promissory
note evidencing the Obligations, upon payment or otherwise, shall not affect the
right of the Lender to retain the Collateral for any other of the Obligations.
The Borrower shall not sell, assign (by operation of law or otherwise), license,
lease or otherwise dispose of, or grant any option with respect to any of the
Collateral, except that the Borrower may sell inventory in the ordinary course
of Borrower’s business.

 

(c) Financing Statements. The Borrower shall, at the Lender’s request, at any
time and from time to time, execute and deliver to the Lender such financing
statements, amendments and other documents and do such acts as the Lender deems
necessary in order to establish and maintain valid, attached and perfected
security interests in the Collateral in favor of the Lender, for its own benefit
and as agent for its affiliates. The Borrower hereby irrevocably authorizes the
Lender at any time, and from time to time, to file in any jurisdiction any
initial financing statements and amendments thereto without the signature of the
Borrower that (a) indicate the Collateral (i) is comprised of all assets of the
Borrower or words of similar effect, regardless of whether any particular asset
comprising a part of the Collateral falls within the scope of Article 9 of the
UCC, or (ii) as being of an equal or lesser scope or within greater detail as
the grant of the security interest set forth herein, and (b) contain any other
information required by Section 5 of Article 9 of the UCC. The Borrower further
ratifies and affirms its authorization for any financing statements and/or
amendments thereto, executed and filed by the Lender in any jurisdiction prior
to the date of this Agreement. In addition, the Borrower shall make appropriate
entries on its books and records disclosing the security interests of the
Lender, for its own benefit and as agent for its affiliates, in the Collateral.

 

(d) Preservation of the Collateral. The Lender may, but is not required, to take
such actions from time to time as the Lender deems appropriate to maintain or
protect the Collateral. The Lender shall have exercised reasonable care in the
custody and preservation of the Collateral if the Lender takes such action as
the Borrower shall reasonably request in writing which is not inconsistent with
the Lender’s status as a secured party, but the failure of the Lender to comply
with any such request shall not be deemed a failure to exercise reasonable care;
provided, however, the Lender’s responsibility for the safekeeping of the
Collateral shall (i) be deemed reasonable if such Collateral is accorded
treatment substantially equal to that which the Lender accords its own property,
and (ii) not extend to matters beyond the control of the Lender, including acts
of God, war, insurrection, riot or governmental actions. In addition, any
failure of the Lender to preserve or protect any rights with respect to the
Collateral against prior or third parties, or to do any act with respect to
preservation of the Collateral, not so requested by the Borrower, shall not be
deemed a failure to exercise reasonable care in the custody or preservation of
the Collateral. The Borrower shall have the sole responsibility for taking such
action as may be necessary, from time to time, to preserve all rights of the
Borrower and the Lender in the Collateral against prior or third parties.
Without limiting the generality of the foregoing, where Collateral consists in
whole or in part of securities, the Borrower represents to, and covenants with,
the Lender that the Borrower has made arrangements for keeping informed of
changes or potential changes affecting the securities (including rights to
convert or subscribe, payment of dividends, reorganization or other exchanges,
tender offers and voting rights), and the Borrower agrees that the Lender shall
have no responsibility or liability for informing the Borrower of any such or
other changes or potential changes or for taking any action or omitting to take
any action with respect thereto.

 

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(e) Other Actions as to any and all Collateral. The Borrower further agrees to
take any other action reasonably requested by the Lender to ensure the
attachment, perfection and priority of, and the ability of the Lender to
enforce, the security interest of the Lender, for its own benefit and as agent
for its affiliates, in any and all of the Collateral including (a) causing the
Lender’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or
priority of, or ability of the Lender to enforce, the security interest of the
Lender, for its own benefit and as agent for its affiliates, in such Collateral,
(b) complying with any provision of any statute, regulation or treaty of the
United States as to any Collateral if compliance with such provision is a
condition to attachment, perfection or priority of, or ability of the Lender to
enforce, the security interest of the Lender, for its own benefit and as agent
for its affiliates, in such Collateral, (c) obtaining governmental and other
third party consents and approvals, including any consent of any licensor,
lessor or other Person obligated on Collateral, (d) obtaining waivers from
mortgagees and landlords in form and substance satisfactory to the Lender, and
(e) taking all actions required by the UCC in effect from time to time or by
other law, as applicable in any relevant UCC jurisdiction, or by other law as
applicable in any foreign jurisdiction. The Borrower further agrees to indemnify
and hold the Lender harmless against claims of any Persons not a party to this
Agreement concerning disputes arising over the Collateral.

 

(f) Collateral in the Possession of a Warehouseman or Bailee. If any of the
Collateral at any time is in the possession of a warehouseman or bailee, the
Borrower shall promptly notify the Lender thereof, and shall promptly obtain a
collateral access agreement.

 

(g) Letter-of-Credit Rights. If the Borrower at any time is a beneficiary under
a letter of credit now or hereafter issued in favor of the Borrower, the
Borrower shall promptly notify the Lender thereof and, at the request and option
of the Lender, the Borrower shall, pursuant to an agreement in form and
substance satisfactory to the Lender, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Lender,
for its own benefit and as agent for its affiliates, of the proceeds of any
drawing under the letter of credit, or (ii) arrange for the Lender, for its own
benefit and as agent for its affiliates, to become the transferee beneficiary of
the letter of credit, with the Lender agreeing, in each case, that the proceeds
of any drawing under the letter to credit are to be applied as provided in this
Agreement.

 

(h) Commercial Tort Claims. If the Borrower shall at any time hold or acquire a
Commercial Tort Claim, the Borrower shall immediately notify the Lender in
writing signed by the Borrower of the details thereof and grant to the Lender,
for its own benefit and as agent for its affiliates, in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, in each case in form and substance satisfactory to the Lender, and
shall execute any amendments hereto deemed reasonably necessary by the Lender to
perfect the security interest of the Lender, for its own benefit and as agent
for its affiliates, in such Commercial Tort Claim.

 

(i) Electronic Chattel Paper and Transferable Records. If the Borrower at any
time holds or acquires an interest in any electronic chattel paper or any
“transferable record”, as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Borrower shall promptly notify the Lender thereof and, at the
request of the Lender, shall take such action as the Lender may reasonably
request to vest in the Lender control under Section 9-105 of the UCC of such
electronic chattel paper or control under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Lender agrees with the Borrower
that the Lender will arrange, pursuant to procedures satisfactory to the Lender
and so long as such procedures will not result in the Lender ‘s loss of control,
for the Borrower to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the UCC or, as the case may
be, Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to make without loss of control.

 

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All capitalized words and phrases used in this Section 4 and not otherwise
specifically defined in this Agreement shall have the respective meanings
assigned to such terms in the UCC, to the extent the same are used or defined
therein.

 

5. WARRANTIES AND REPRESENTATIONS. Borrower represents and warrants (which
representations and warranties shall be deemed continuing) as follows:

 

(a) Organization Status. Borrower (i) is duly organized under the laws of the
State of Louisiana, (ii) is in good standing under the laws of the State of
Louisiana, (iii) is qualified to do business in the State of Louisiana, and (iv)
has membership interests which have been duly and validly issued.

 

(b) Place of Business. The principal place of business, and the location of all
Collateral and books and records of the Borrower is set forth in the preamble to
this Agreement. The Borrower shall promptly notify the Lender of any change in
such location. The Borrower will not remove or permit the Collateral to be
removed from such location without the prior written consent of the Lender,
except for inventory sold in the usual and ordinary course of the Borrower’s
business.

 

(c) Compliance with Laws. Borrower is in compliance with all laws, regulations,
ordinances and orders of all Governmental Authorities. Borrower is not engaged
in any activity that is illegal under federal, state or local law.

 

(d) Accurate Information. All information now and hereafter furnished to Lender
is and will be true, correct and complete in all material respects. Any such
information relating to Borrower’s financial condition has and will accurately
reflect such financial condition as of the date(s) thereof, (including all
contingent liabilities of every type), and Borrower further represent that its
financial condition has not changed materially or adversely since the date(s) of
such documents, including Borrower’s calculation of EBITDA for fiscal year end
2019.

 

(e) Authority to Enter into Loan Documents. The Borrower has full power and
authority to enter into the Loan Documents and consummate the transactions
contemplated hereby, and the facts and matters expressed or implied in the
opinions of its legal counsel are true and correct.

 

(f) Validity of Loan Documents. The Loan Documents have been approved by those
Persons having proper authority, and are in all respects legal, valid and
binding according to their terms.

 

(g) Conflicting Transactions. The consummation of the transaction hereby
contemplated and the performance of the obligations of Borrower under and by
virtue of the Loan Documents will not result in any breach of, or constitute a
default under, any lease, loan or credit agreement, or other instrument to which
Borrower is a party or by which they may be bound or affected.

 

(h) Pending Litigation. There are no actions, suits or proceedings pending
against Borrower or the Collateral, or circumstances which could lead to such
action, suits or proceedings against or affecting Borrower or the Collateral, or
involving the validity or enforceability of any of the Loan Documents, before or
by any Governmental Authority, except actions, suits and proceedings which have
been specifically disclosed to and approved by Lender in writing; and Borrower
is not in default with respect to any order, writ, injunction, decree or demand
of any court or any Governmental Authority.

 

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(i) Condition of Collateral. The Collateral is not now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty.

 

(j) Discharge of Liens and Taxes. Borrower is current (or will be current with
any Loan proceeds specified for eligible tax payments) on all federal, state,
and local taxes, including but not limited to income taxes, payroll taxes, real
estate taxes, and sales taxes. Borrower has duly filed, paid and/or discharged
all other taxes or other claims that may become a lien on any of its property or
assets, except to the extent that such items are being appropriately contested
in good faith and an adequate reserve for the payment thereof is being
maintained.

 

(k) Sufficiency of Capital. Borrower is not, and after consummation of this
Agreement and after giving effect to all indebtedness incurred and liens created
by Borrower in connection with the Note and any other Loan Documents, will not
be, insolvent within the meaning of 11 U.S.C. § 101, as in effect from time to
time.

 

(l) ERISA. Each employee pension benefit plan, as defined in Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), maintained by Borrower meets,
as of the date hereof, the minimum funding standards of ERISA and all applicable
regulations thereto and requirements thereof, and of the Internal Revenue Code
of 1986, as amended. No “Prohibited Transaction” or “Reportable Event” (as both
terms are defined by ERISA) has occurred with respect to any such plan.

 

(m) No Default. Borrower is not in default in any material respect under any
agreement or instrument to which it is a party or by which it may be bound which
would individually or in the aggregate have a material adverse effect on the
financial condition or business of Borrower.

 

(n) EBITDA Leverage Condition. Borrower meets the EBITDA leverage condition of
the Facility.

 

(o) Eligible Borrower. Borrower represents and warrants to Lender that Borrower
is an Eligible Borrower (as that term is defined under the Facility), and that
the Borrower:

 

(i) is a Business (as defined in the Borrower Certification) that was
established prior to March 13, 2020;

 

(ii) is not an Ineligible Business, as that term is described under 13 CFR
120.110(b)-(j) and (m)-(s), as modified by regulations implementing the Paycheck
Protection Program (“PPP”) established by Section 1102 of the CARES Act on or
before April 24, 2020;

 

(iii) when aggregated with its affiliates (in accordance with the Instructions
to the Borrower Certification), either: (i) has 15,000 employees or fewer, or
(ii) had 2019 annual revenues of $5,000,000,000.00 or less;

 

(iv) is created or organized in the United States or under the laws of the
United States and has significant operations in and a majority of its employees
based in the United States, consistent with Section 4003(c)(3)(C) of the CARES
Act;

 

(v) does not and will not also participate in any other Main Street Lending
Program loan or the Primary Market Corporate Credit Facility; and

 

(vi) has not received specific support pursuant to Subtitle A of Title IV of the
CARES Act.

 

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(p) Other Indebtedness. Borrower represents and warrants to Lender that, as of
the date hereof, (i) the Borrower has other indebtedness, and (ii) the Borrower
has obtained any required consents from the lenders of such other indebtedness
to enter into this Loan, or such consents have otherwise been waived or no such
consents are required.

 

6. COVENANTS. Borrower covenants and agrees with Lender as follows:

 

(a) Taxes. Borrower certifies that it has filed or caused to be filed all
federal, state and other tax returns which are required to be filed, and have
paid or caused to be paid all taxes as shown on said returns or in any manner
due to be paid (including, but not limited to, ad valorem and personal property
taxes) or on any assessment received by Borrower and not being contested in good
faith, to the extent that such taxes have become due.

 

(b) Notice of Litigation. Borrower shall promptly give Lender written notice of
(a) a judgment entered against Borrower, or (b) the commencement of any action,
suit, claim, counterclaim or proceeding against or investigation of Borrower
which, if adversely determined, would materially adversely affect the business
of Borrower, or which questions the validity of this Agreement or the Note, or
any other actions or agreements taken or to be made pursuant to any of the
foregoing.

 

(c) Notice of Default. Borrower shall promptly give Lender written notice of any
act of default under any agreement with Lender or under any other contract to
which Borrower is a party and of any acceleration of indebtedness caused thereby
which would have a materially adverse affect to the business of Borrower.

 

(d) Reports. Borrower shall promptly furnish Lender with copies of all
governmental agency, and other special reports pertaining to or affecting
Borrower, which would materially adversely affect the business of Borrower.

 

(e) Change of Control. Borrower shall not have a Change of Control without the
prior written approval of the Lender, which approval shall not be unreasonably
withheld. Borrower shall promptly notify Lender of any change in ownership
during the term of the Loan. Borrower shall at all times comply with the
Lender’s standard and customary “know your customer” reviews and clearance in
connection with any approved Change of Control.

 

(f) Ownership of Borrower. Borrower and/or the direct and indirect owners of
Borrower are not “Specially Designated Nationals” by the Office of Foreign Asset
Control. No owner of twenty (20%) or more of Borrower is (i) incarcerated, on
probation or parole; (ii) subject to an indictment, criminal arraignment or any
other means of formal criminal charges brought in any jurisdiction; or (iii)
convicted of a felony in the last five (5) years.

 

(g) Change in Fiscal Year. Borrower shall not change its fiscal year without the
prior written consent of Lender. Borrower’s fiscal year ends on December 31.

 

(h) No Sale of Assets. Borrower shall not, during the term of the Loan, transfer
any material portion of its assets unless such transfer is in the ordinary
course of Borrower’s business, for fair market value and such fair market value
is given to Borrower, in its sole name, and such transfer will not have a
material adverse effect on the financial condition of Borrower and/or its
ability to perform the obligations hereunder, as determined by Lender in its
sole and absolute discretion.

 

(i) Title to Collateral. Borrower will deliver to Lender, on demand, any
contracts, bills of sale, statements, receipted vouchers or agreements under
which Borrower claims title to any of the Collateral.

 

(j) Payment of Debts. Borrower shall pay and discharge when due, and before
subject to penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes.

 

8

 

 

(k) Collection of Insurance Proceeds. Borrower will cooperate with Lender in
obtaining for Lender the benefits of any insurance or other proceeds lawfully or
equitably payable to it in connection with the transaction contemplated hereby
and the collection of any indebtedness or obligation of Borrower to Lender
incurred hereunder.

 

(l) Further Assurances and Preservation of Security. Borrower will do all acts
and execute all documents for the better and more effective carrying out of the
intent and purposes of this Agreement, as Lender shall reasonably require from
time to time, and will do such other acts necessary or desirable to preserve and
protect the Collateral at any time securing or intending to secure the Note, as
Lender may require.

 

(m) No Assignment. Borrower shall not assign this Agreement or any interest
therein and any such assignment is void and of no effect. Lender may assign this
Agreement and any other Agreements contemplated hereby, and all of its rights
hereunder and thereunder, and all provisions of this Agreement shall continue to
apply to the Loan. Lender also shall have the right to participate the Loan with
any other lending institution.

 

(n) Access to Books and Records. Borrower shall allow Lender, or its agents,
after reasonable prior notice and during reasonable normal business hours, to
access Borrower’s books, records and such other documents, and allow Lender, at
Borrower’s expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof.

 

(o) Business Continuity. Borrower shall conduct its business in substantially
the same manner and locations as such business is now and has previously been
conducted during the term of the Loan.

 

(p) Insurance.

 

(A) Borrower shall obtain, maintain and keep in full force and effect during the
term of the Loan adequate insurance coverage, with all premiums paid thereon and
without notice or demand, with respect to its properties and business against
loss or damage of the kinds and in the amounts customarily insured against by
companies of established reputation engaged in the same or similar businesses
including, without limitation:

 

(i) Public liability insurance insuring against all claims for personal or
bodily injury, death, or property damage in an amount of not less than
$1,000,000.00 single limit coverage, and $2,000,000.00 in the aggregate. Such
policy shall include an additional insured endorsement naming the Lender as loss
payee; and

 

(ii) Insurance in such amounts and against such other casualties and
contingencies as may from time to time be required by Lender.

 

(B) All policies of insurance required hereunder shall: (i) be written by
carriers which are licensed or authorized to transact business in the State of
Florida, and are rated “A” or higher, Class XII or higher, according to the
latest published Best’s Key Rating Guide and which shall be otherwise acceptable
to Lender in all other respects, (ii) provide that the Lender shall receive
thirty (30) days’ prior written notice from the insurer before a cancellation,
modification, material change or non-renewal of the policy becomes effective,
and (iii) be otherwise satisfactory to Lender.

 

(C) Borrower shall not, without the prior written consent of Lender, take out
separate insurance concurrent in form or contributing with regard to any
insurance coverage required by Lender.

 

(D) At all times during the term of the Loan, Borrower shall have delivered to
Lender the original (or a certified copy) of all policies of insurance required
hereby, together with receipts or other evidence that the premiums therefor have
been paid.

 

9

 

 

(E) Not less than thirty (30) days prior to the expiration date of any insurance
policy, Borrower shall deliver to Lender the original (or certified copy), or
the original certificate, as applicable, of each renewal policy, together with
receipts or other evidence that the premiums therefor have been paid.

 

(F) The delivery of any insurance policy and any renewals thereof, shall
constitute an assignment thereof to Lender, and Borrower hereby grants to Lender
a security interest in all such policies, in all proceeds thereof and in all
unearned premiums therefor.

 

(q) Subordination of Debt. Borrower will fully subordinate all of the Borrower’s
debts owed to third parties, including, without limitation, officers, employees,
stockholders, and affiliates, upon terms and conditions acceptable to Lender,
other than Permitted Debt.

 

(r) Indemnification. Borrower hereby indemnifies and holds Lender, its
directors, officers, agents, employees and attorneys harmless from and against
any liability, loss, expenses, damage of any nature, and claims, including,
without limitation, brokers’ claims, arising in connection with the Loan.

 

(s) Indebtedness. During the term of the Loan, Borrower shall not incur, create,
assume or permit to exist any indebtedness or liability on account of advances
or deposits, any indebtedness or liability for borrowed money, any indebtedness
constituting the deferred purchase price of any property or assets, any
indebtedness owed under any conditional sale or title retention agreement,
contingent obligations pursuant to guaranties, endorsements, letters of credit
and other secondary liabilities, or any other indebtedness or liability
evidenced by notes, bonds, debentures or similar obligations without the prior
written approval of Lender, except for Permitted Debt.

 

(t) Liens. Borrower will not, nor will it permit any subsidiary to, create,
incur, assume or suffer to exist any lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, securing any debt for
borrowed money or any obligations evidenced by a bond, debenture, note, loan
agreement or other similar instrument, or any guarantee of the foregoing, other
than Permitted Liens.

 

(u) Cancellation or Reduction of Lines of Credit. Borrower will not seek to
cancel or reduce any of its committed lines of credit with the Lender or any
other lender until (i) the Loan is repaid in full or (ii) neither the SPV nor a
Governmental Assignee holds an interest in the Loan in any capacity.

 

(v) Solvency and Bankruptcy. The Borrower has a reasonable basis to believe
that, as of the date of origination of the Loan, and after giving effect to such
Loan, the Borrower has the ability to meet its financial obligations for at
least the next ninety (90) days and does not expect to file for bankruptcy
during that time period.

 

(w) Compensation, Stock Repurchase, and Capital Distribution Restrictions. The
Borrower will follow compensation, stock repurchase, and capital distribution
restrictions that apply to direct loan programs under Section 4003(c)(3)(A)(ii)
of the CARES Act, including, without limitation:

 

(i) Until twelve (12) months after the Loan has been repaid, Borrower shall not
buyback stock of equity securities listed on a national securities exchange of
Borrower or a parent of Borrower (exceptions for contractual obligations entered
in to prior to March 27, 2020);

 

(ii) Borrower shall not make dividend payments or capital distributions on
common stock of Borrower (except that an S-corporation or other tax pass-through
entity that is a Borrower may make distributions to the extent reasonably
required to cover its owners’ tax obligations in respect of the entity’s
earnings); and

 

(iii) From the date hereof until twelve (12) months after the Loan has been
repaid, Borrower shall comply with the compensation limits set out in Section
4004 of the CARES Act.

 

10

 

 

(x) Eligible To Participate in the Facility. The Borrower is eligible to
participate in the Facility, including in light of the conflicts of interest
prohibition in Section 4019(b) of the CARES Act. In addition, Borrower certifies
to Lender that it has not obtained, and will not obtain, (i) another loan under
the Facility, (ii) any other Main Street Lending Program loan, or (iii) a
Primary Market Corporate Credit Facility.

 

(y) Payroll Maintenance and Employee Retention. The Borrower will make
commercially reasonable efforts to maintain its payroll and retain its employees
during the time the Loan is outstanding to the extent required by the CARES Act,
the Facility and the FAQs.

 

(z) Priority of Loan. At the time of origination of the Loan and at all times
during the term of the Loan, the Loan shall be senior to, or pari passu with, in
terms of priority and security, the Borrower’s other loans or debt instruments,
other than Mortgage Debt.

 

(aa) Repayment of Other Indebtedness. Borrower will not repay the principal
balance of, or pay any interest on, any debt unless the principal or interest
payment is mandatory and due, until (i) the Loan is repaid in full or (ii)
neither the SPV nor a Governmental Assignee holds an interest in the Loan in any
capacity, provided that Borrower may, at the time of origination of the Loan,
refinance existing debt owed by the Borrower to a lender that is not the Lender.

 

With respect to debt that predates the Loan, principal and interest payments are
“mandatory and due”: (i) on the future date upon which they were scheduled to be
paid as of the date of origination of the Loan, or (ii) upon the occurrence of
an event that automatically triggers mandatory prepayments under a contract for
indebtedness that the Borrower executed prior to the date of origination of the
Loan, except that any such prepayments triggered by the incurrence of new debt
can only be paid (i) if such prepayments are de minimis, or (ii) under the
Facility at the time of origination of the Loan.

 

For the avoidance of doubt, Borrower may continue to pay, and Lender may request
that Borrowers pay, interest or principal payments on outstanding debt on (or
after) the payment due date, provided that the payment due date was scheduled
prior to the date of origination of the Loan. Borrower may not pay, and Lender
may not request that Borrower pay, interest or principal payments on such debt
ahead of schedule during the life of the Loan, unless required by a mandatory
prepayment clause as specifically permitted above.

 

For future debt incurred by the Borrower in compliance with the terms and
conditions of the Facility, principal and interest payments are “mandatory and
due” on their scheduled dates or upon the occurrence of an event that
automatically triggers mandatory prepayments.

 

(bb) Mandatory Prepayment. If, on any date (such date, a “Trigger Date”), the
Board of Governors of the Federal Reserve System or a designee thereof has,
after consultation with Lender, notified Lender in writing that the Borrower has
materially breached, made a material misrepresentation with respect to or
otherwise failed to comply with certifications in Section 2 (CARES Act Borrower
Eligibility Certifications and Covenants) or Section 3 (FRA and Regulation A
Borrower Eligibility Certifications) of the Borrower Certification in any
material respect or that any such certification has failed to be true and
correct in any material respect, then Lender shall promptly so notify the
Borrower and the Borrower shall, no later than two (2) business days after such
Trigger Date, prepay the Loan in full, along with any accrued and unpaid
interest thereon.

 

(cc) Compliance with Borrower Certification, the Facility and the CARES Act. At
all times during the term of the Loan, Borrower shall comply with all other
covenants, terms and conditions set forth in the Borrower Certification, the
Facility and/or the CARES Act.

 

(dd) Cooperation Agreement. In the event any of the documents evidencing and/or
securing the Loan between Borrower and Lender are misstated or inaccurately
reflect the agreed upon, true and correct terms and provisions of the Loan and
said misstatements or inaccuracies are due to the unilateral mistake on the part
of Lender, mutual mistake on the part of Lender and/or Borrower, or clerical
error, then in such event Borrower shall, upon reasonable request by Lender, and
in order to correct such misstatement or inaccuracy, or to comply with the
Facility requirements or in Lender’s reasonable opinion, more accurately
evidence the Loan, execute such new documents or initial such corrected original
documents as Lender may deem reasonably necessary to remedy said inaccuracy or
mistake or to comply with the Facility requirements or in Lender’s reasonable
opinion, more accurately evidence the Loan.

 

11

 

 

(ee) Fees and Expenses. Upon the funding of the Loan, (i) Borrower shall pay to
SPV a transaction fee in the amount of $43,698.60 in connection with the Loan,
and (ii) Borrower shall pay to Lender an origination fee in the amount of
$43,698.60 in connection with the Loan. At Borrower’s option, the foregoing fees
can be deducted from the Loan proceeds at closing. In addition to the foregoing
fees, Borrower agrees to pay all other fees and expenses incurred by Lender in
connection with the Loan, as more particularly described in Section 3 above,
which shall include, but not be limited to, the legal fees and costs of Lender’s
counsel.

 

(ff) Facility Commitment Letter. Borrower hereby acknowledges and agrees that
Lender shall be under no obligation to close and fund the Loan until the Lender
has received a commitment letter (the “Commitment Letter”) from SPV that it will
purchase a participation interest in the amount of $4,151,367.00 of the
aggregate principal amount of the Loan under the Facility in accordance with the
terms and guidelines of the Facility.

 

7. FINANCIAL AND REPORTING REQUIREMENTS.

 

(a) Depository Relationship. At all times during the term of the Loan, the
Borrower shall maintain with Lender (i) its primary depository account(s),
including its primary Operating Account(s), and (ii) its primary Treasury
Management Services. As used herein, “Operating Account(s)” shall mean bank
accounts that facilitate the collection of sales, including accounts receivable,
and the payment of expenses and payroll disbursements; and “Treasury Management
Services” shall mean commercial banking platforms that facilitate the
origination of wire transfers and ACH transactions, the transfer of funds
between accounts, positive pay decisioning, remote capture of check deposits
and/or other electronic banking services. The Operating Accounts must be opened,
and the Treasury Management Services established prior to closing or funding of
the Loan. In addition, at all times during the term of the Loan, Borrower shall
maintain a minimum deposit ledger balance with Lender in an amount equal to the
lesser of (i) $655,479.00, or (ii) fifteen percent (15%) of the outstanding
principal balance of the Loan (based on the principal balance in effect as of
the end of each applicable quarter) (the “Minimum Deposit Relationship”), to be
tested and applied on a quarterly basis. Failure to maintain the Minimum Deposit
Relationship will result in a fee payable to Lender equal to two percent (2%)
per annum of the amount of the deficiency (the “Deficiency Fee”), which
Deficiency Fee shall be charged automatically without any notice to Borrower.
The Deficiency Fee shall not be deemed to be or constitute additional interest
under the Loan, as it relates specifically and directly to the required deposit
balances. In the event Borrower fails to maintain the required Minimum Deposit
Relationship and the Deficiency Fee becomes due and payable by Borrower, Lender
shall be entitled to either (i) exercise its rights of setoff against the
Borrower’s accounts held with Lender in order to collect the Deficiency Fee, or
(ii) send a written demand to Borrower that the Deficiency Fee be paid within
ten (10) days of written notice thereof. At Lender’s sole discretion, the
Minimum Deposit Relationship may be satisfied not only with Borrower accounts,
but also with (a) accounts maintained with Lender by any guarantor of the Loan,
and/or Borrower’s affiliates and shareholders, or (b) any accounts owned or
controlled by the Borrower, any guarantor of the Loan, and/or Borrower’s
affiliates and shareholders (collectively, the “Related Accounts”). To the
extent such Related Accounts are included in the calculation of the Minimum
Deposit Relationship, Lender may exercise its right of setoff against any such
Related Accounts along with any Borrower accounts.

 

(b) Borrower’s Annual Financial Statements. Within one hundred twenty (120) days
after the end of each fiscal year, Borrower shall provide Lender with an annual
financial statement prepared on a consolidated basis in accordance with GAAP,
with comparable information for the year to date and the immediately preceding
fiscal year, all certified (as to the consolidated financial statements) by a
recognized firm of certified public accountants. In addition, as soon as
available, but in any event within sixty (60) days after the end of each fiscal
year of the Borrower, (i) the Borrower shall deliver to the Lender financial
reporting applicable for the Facility, in a form and substance reasonably
acceptable to the Lender, setting forth the financial information, and where
applicable reasonably detailed calculations of the required data, set forth in
Appendix C to the FAQs as at the end of such fiscal year of the Borrower, which
financial reporting and calculations, in each case, shall be true and accurate
in all material respects and, where applicable, present fairly in all material
respects the financial condition of the Borrower for the period covered thereby
in accordance with GAAP, consistently applied, and (ii) such supporting
documentation as Lender reasonably requests.

 

12

 

 

(c) Borrower’s Quarterly Financial Reporting Requirements. As soon as available,
but in any event within sixty (60) days after the end of each fiscal quarter of
the Borrower, (i) the Borrower shall deliver to the Lender financial reporting
applicable for the Facility, in a form and substance reasonably acceptable to
the Lender, setting forth the financial information, and where applicable
reasonably detailed calculations of the required data, set forth in Appendix C
to the FAQs as at the end of such fiscal quarter of the Borrower, which
financial reporting and calculations, in each case, shall be true and accurate
in all material respects and, where applicable, present fairly in all material
respects the financial condition of the Borrower for the period covered thereby
in accordance with GAAP, consistently applied, and (ii) such supporting
documentation as Lender reasonably requests.

 

(d) Tax Returns. Within thirty (30) days of filing, Borrower shall supply Lender
with a copy of its annual federal income tax returns, including, without
limitation, K-1 statements for all Partnerships and Sub Chapter S Corporations,
or, if an extension is filed for any tax return, within thirty (30) days after
any permitted extension date.

 

(e) Changes to Financial Reporting Requirements. Lender may, in its sole and
absolute discretion, upon written notice to the Borrower, do the following: (i)
change the financial reporting requirements applicable to the Borrower with
respect to the Facility in accordance with any changes made to the financial
reporting requirements of the Federal Reserve set forth on Appendix C to the
FAQs attached hereto as Exhibit “A”, (ii) change the frequency of delivery of
the financial statements and reports required to be provided to Lender by
Borrower hereunder, (iii) change the method of preparation for the financial
statements required to be provided to Lender by Borrower hereunder, or (iv)
require Borrower to provide additional financial statements, reports or
information regarding the Collateral, or the operation, business affairs or
financial condition of Borrower. In the event that Lender notifies the Borrower
of a change to the financial reporting requirements hereunder, Borrower agrees
(i) to execute any and all documentation required by Lender to acknowledge such
change, and (ii) to comply with Lender’s request for the revised and/or
additional financial reporting requirements.

 

(f) Form of Financial Statements. The form and content of each financial
statement as required above, shall be acceptable to Lender in its sole
discretion, shall be certified by each party to be correct and complete, and
shall include a complete description of all contingent liabilities, including,
without limitation, all indebtedness guaranteed.

 

For ease of reference and for the convenience of the parties, Appendix C to the
FAQs is attached to this Agreement as Exhibit “A” and is incorporated by
reference as if fully set forth herein..

 

8. DEFAULT. Upon the occurrence of any of the following events (each an “Event
of Default” and collectively, the “Events of Default”), Lender may at its option
exercise any of its remedies set forth herein:

 

(a) Borrower fails to perform any obligation under the Note when due, whether on
the scheduled due date or upon acceleration, maturity or otherwise; or

 

(b) Borrower fails to perform any other obligation under the Loan Documents
beyond any applicable notice and cure periods; or

 

(c) Borrower fails to perform any obligations under this Agreement (other than
the items set forth in subsection (d) through (p) below for which there will be
no grace periods other than as specifically stated therein) and such failure
continues for thirty (30) days after written notice thereof shall have been
given to Borrower, provided that if such breach cannot reasonably be cured
within such thirty (30) day period and Borrower shall commence to cure such
breach with such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure same, the thirty (30) day period shall be
extended for so long as it shall reasonably require Borrower in the exercise of
its best efforts to cure such breach, it being agreed that no such extension
shall be for a period in excess of sixty (60) days after written notice of such
breach; or

 

13

 

 

(d) Borrower fails to pay or perform any other obligation, liability or
indebtedness to any other party beyond the expiration of any applicable notice
and cure period; or

 

(e) A “Default” or an “Event of Default” (as defined in each respective
document) occurs (beyond any applicable notice and cure period) under any of the
Loan Documents; or

 

(f) If any warranty or representation made by Borrower in this Agreement or
pursuant to the terms hereof shall at any time be false or misleading in any
material respect, or if Borrower shall fail to keep, observe or perform any of
the terms, covenants, representations or warranties contained in this Agreement,
the Note or any other document given in connection with the Loan, or is
unwilling to meet its obligations thereunder; or

 

(g) The dissolution of, termination of existence of, loss of good standing
status by Borrower, its subsidiaries or affiliates, if any, or any party to the
Loan Documents; or

 

(h) Borrower becomes the subject of any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships, and, in the case of any involuntary proceeding,
such proceeding is not discharged within ninety (90) days of the filing thereof;
or

 

(i) The entry of a judgment against Borrower that would reasonably be expected
to have a material adverse effect on Borrower’s business or financial condition
in Lender’s reasonable discretion; or

 

(j) The seizure or forfeiture of, or the issuance of any writ of possession,
garnishment or attachment, or any turnover order for any property of Borrower;
or

 

(k) A material alteration in the kind or type of Borrower’s prospects or
business, financial or otherwise, or in the financial condition of the Borrower,
is made without the prior written consent of Lender, such consent not to be
unreasonably withheld; or

 

(l) (i) Borrower or any subsidiary of Borrower shall fail to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness (other than the Loan) owing
to the Lender or any commonly controlled affiliate of the Lender, in each case
beyond the applicable grace period with respect thereto, if any; or (ii)
Borrower or any subsidiary of Borrower shall fail to observe or perform any
other agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which failure to make a payment, default or
other event described in clause (i) or (ii) is to cause such Indebtedness to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity; provided that clause (ii)
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness,
if such sale or transfer is permitted hereunder and under the documents
providing for such Indebtedness and such Indebtedness is repaid when required
under the documents providing for such Indebtedness. As used in this Section
8(l), “Indebtedness” shall mean all debt for borrowed money and any obligations
evidenced by a bond, debenture, note, loan agreement or other similar
instrument, and any guarantee of any of the foregoing; or

 

(m) A Change of Control occurs; or

 

(n) The failure of Borrower to timely provide any of the information as required
in Section 7 above; or

 

(o) The failure of the Borrower’s business to materially comply with any law or
regulation controlling its operation, and such failure continues for more than
thirty (30) days after Borrower becomes aware thereof; or

 

14

 

 

(p) The failure of Borrower to comply with the terms and conditions of Section
6(t) through Section 6(bb), or any other terms and conditions of the Borrower
Certification, the Facility or the CARES Act.

 

9. REMEDIES OF LENDER. Upon the happening of an Event of Default, then Lender
may, at its option, upon written notice to Borrower:

 

(a) Commence an appropriate legal or equitable action to enforce performance of
this Agreement;

 

(b) Accelerate the payment of the Note and the Loan, apply all or any portion of
any equity funds toward payment of the Loan, and commence appropriate legal and
equitable action to collect all such amounts due Lender; or

 

(c) Exercise any other rights or remedies Lender may have under the Loan
Documents referred to in this Agreement or executed in connection with the Loan
or which may be available under applicable law.

 

10. GENERAL TERMS. The following shall be applicable throughout the period of
this Agreement or thereafter as provided herein:

 

(a) Rights of Third Parties. All conditions of the Lender hereunder are imposed
solely and exclusively for the benefit of Lender and its successors and assigns,
and no other Person shall have standing to require satisfaction of such
conditions or be entitled to assume that Lender will make advances in the
absence of strict compliance with any or all thereof, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of this Agreement or the
Loan Documents, any provisions of which may be freely waived in whole or in part
by the Lender at any time if, in its sole discretion, it deems it desirable to
do so.

 

(b) Borrower is not Lender’s Agent. Nothing in this Agreement, the Note or any
other Loan Document shall be construed to make the Borrower the Lender’s agent
for any purpose whatsoever, or the Borrower and Lender partners, or joint or
co-venturers, and the relationship of the parties shall, at all times, be that
of debtor and creditor.

 

(c) Loan Expense/Enforcement Expense. Borrower agrees to pay to Lender on demand
all reasonable costs and expenses incurred by Lender in seeking to enforce
Lender’s rights and remedies under this Agreement, including court costs, costs
of alternative dispute resolution and reasonable attorneys’ fees and costs,
whether or not suit is filed or other proceedings are initiated hereon.

 

(d) Evidence of Satisfaction of Conditions. Lender shall, at all times, be free
independently to establish to its good faith and satisfaction, and in its
absolute discretion, the existence or nonexistence of a fact or facts which are
disclosed in documents or other evidence required by the terms of this
Agreement.

 

(e) Headings. The headings of the sections, paragraphs and subdivisions of this
Agreement are for the convenience of reference only, and shall not limit or
otherwise affect any of the terms hereof.

 

(f) Invalid Provisions to Affect No Others. If performance of any provision
hereof or any transaction related hereto is limited by law, then the obligation
to be performed shall be reduced accordingly; and if any clause or provision
herein contained operates or would prospectively operate to invalidate this
Agreement in part, then the invalid part of said clause or provision only shall
be held for naught, as though not contained herein, and the remainder of this
Agreement shall remain operative and in full force and effect. In addition, if
any clause or provision herein contained is deemed to violate the governmental
restrictions affecting the Facility, then the portion of such clause that
violates the terms of the Facility shall be deemed void ab initio, as though not
contained herein, and the remainder of the terms and conditions of this
Agreement shall remain operative and in full force and effect.

 

15

 

 

(g) Application of Interest to Reduce Principal Sums Due. In the event that any
charge, interest or late charge is above the maximum rate provided by law, then
any excess amount over the lawful rate shall be applied by Lender to reduce the
principal sum of the Loan or any other amounts due Lender hereunder.

 

(h) Governing Law. The laws of the State of Florida shall govern the
interpretation and enforcement of this Agreement.

 

(i) Number and Gender. Whenever the singular or plural number, masculine or
feminine or neuter gender is used herein, it shall equally include the others
and shall apply jointly and severally.

 

(j) Prior Agreement. To the extent necessary, this Agreement shall be deemed to
be an amendment to any prior loan agreement between Borrower and Lender, and in
the event of a conflict between the terms of this Agreement or any such prior
agreement, the terms of this Agreement shall govern.

 

(k) Waiver. If Lender shall waive any provisions of the Loan Documents, or shall
fail to enforce any of the conditions or provisions of this Agreement, such
waiver shall not be deemed to be a continuing waiver and shall never be
construed as such; and Lender shall thereafter have the right to insist upon the
enforcement of such conditions or provisions. Furthermore, no provision of this
Agreement shall be amended, waived, modified, discharged or terminated, except
by instrument in writing signed by the parties hereto.

 

(l) Notices. All notices from the Borrower to Lender and Lender to Borrower
required or permitted by any provision of this Agreement shall be in writing and
sent by registered or certified mail or nationally recognized overnight delivery
service and addressed as follows:

 

  TO LENDER: CITY NATIONAL BANK OF FLORIDA     100 S.E. 2nd Street, 13th Floor  
  Miami, Florida 33131     Attention: Legal Department          TO BORROWER: ARC
FAT PATTY’S LLC     1409 Kingsley Avenue, Unit #2     Orange Park, Florida 32073
    Attention: Seenu G. Kasturi, Manager

 

Such addresses may be changed by such notice to the other party. Notice given as
hereinabove provided shall be deemed given on the date of its deposit in the
United States Mail and, unless sooner actually received, shall be deemed
received by the party to whom it is addressed on the third calendar day
following the date on which said notice is deposited in the mail, or if a
courier system is used, on the date of delivery of the notice.

 

(m) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding on the parties hereto and their heirs, legal representatives, successors
and assigns.

 

(n) USA Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), Lender is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act.

 

(o) Counterparts, Facsimiles and Electronic Signatures. This Agreement may be
executed in counterparts. Each executed counterpart of this Agreement will
constitute an original document, and all executed counterparts, together, will
constitute the same agreement. Any counterpart evidencing signature by one party
that is delivered by facsimile by such party to the other party hereto shall be
binding on the sending party when such facsimile is sent, and such sending party
shall within ten (10) days thereafter deliver to the other parties a hard copy
of such executed counterpart containing the original signature of such party or
its authorized representative. This Agreement may be executed and delivered by
electronic signature, and such electronic signature(s) shall be deemed an
original signature for purposes of this Agreement and all matters related
thereto, with such electronic signature(s) having the same legal effect as an
original signature.

 

16

 

 

(p) No Marshaling. The Lender shall not be required to marshal any present or
future collateral security (including this Agreement and the Collateral) for, or
other assurances of payment of, the Obligations or any of them or to resort to
such collateral security or other assurances of payment in any particular order.
To the extent that it lawfully may, the Borrower hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the Lender’s rights under this Agreement or
under any other instrument creating or evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, the Borrower hereby irrevocably waives the benefits
of all such laws.

 

(q) WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT TO BE CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT.

 

(r) Consent to Jurisdiction; Forum. Borrower hereby irrevocably submits
generally and unconditionally for itself and in respect of their property to the
jurisdiction of any state court or any United States federal court sitting in
Miami-Dade County, Florida. Borrower hereby irrevocably waives, to the fullest
extent permitted by law, any objection that Borrower may now or hereafter have
to the laying of venue in any such court and any claim that any such court is an
inconvenient forum. Borrower hereby agrees and consents that, in addition to any
methods of service of process provided for under applicable law, all service of
process in any such suit, action or proceeding in any state court or any United
States federal court sitting in the state specified in the governing law section
of this Agreement may be made by certified or registered mail, return receipt
requested, directed to Borrower, at its address for notice set forth in this
Agreement, or at a subsequent address of which Lender received actual notice
from Borrower, in accordance with the notice section of this Agreement, and
service so made shall be complete five (5) days after the same shall have been
so mailed. Nothing herein shall affect the right of Lender to serve process in
any manner permitted by law or limit the right of Lender to bring proceedings
against Borrower in any other court or jurisdiction.

 

[CONTINUES ON THE FOLLOWING PAGE]

 

17

 

 

IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
executed on the date first above written.

 

  BORROWER:         ARC FAT PATTY’S LLC, a Louisiana limited liability company  
      By: /s/ Seenu G. Kasturi     Seenu G. Kasturi, Manager         LENDER:    
    CITY NATIONAL BANK OF FLORIDA         By: /s/ Lance Aylsworth     Lance
Aylsworth, Senior Vice President

 

18

 

 

Exhibit “A”

 

Appendix C to the FAQs: Required Financial Reporting

 

[see attached]

 

19

 

 

Effective: September 18, 2020

 

Appendix C: Required Financial Reporting

 

Each Main Street loan should contain a financial reporting covenant requiring
the regular delivery of certain financial information and calculations. The
items listed in Table I below must be provided by each Main Street borrower to
their Eligible Lender at least annually. The items listed in Table II must be
provided by each Main Street borrower to their Eligible Lender at least
quarterly; the quarterly requirements vary based on the Main Street facility in
which the borrower is participating. Eligible Lenders will specify the required
reporting standards and forms for each Eligible Borrower.

 

Table I: Data Required Annually from All Main Street Borrowers Required Data  
Definition Total Assets   The sum of current assets, fixed assets, and other
non-current assets (including, but not limited to, intangible assets, deferred
items, investments, and advances). Current Assets  

Cash, accounts receivable, inventory, and other short-term assets that are
likely to be converted into cash, used, sold, exchanged, or otherwise expensed
in the normal course of business within one year.

Cash & Marketable Securities   Cash, depository accounts, and marketable
securities that can be easily sold and readily converted into cash. Tangible
Assets  

Assets having a physical existence, measured as total assets less intangible
assets. Tangible assets are distinguished from intangible assets, such as
trademarks, copyrights, and goodwill.

Total Liabilities   The total amount of all outstanding obligations, both
current and noncurrent. Current Liabilities   Short term debt, accounts payable,
and other current liabilities that are due within one year.

Total Debt (Incl. Undrawn Available Lines of Credit)

  Existing outstanding and committed debt (including any undrawn available
amounts). Total Equity   Measured as total assets minus total liabilities. Total
Revenue   Total income generated by the sale of goods or services from ongoing
operations. Total Revenue excludes any non-recurring sales or gains. Net Income
  The income (or loss) after expenses and losses have been subtracted from all
revenues and gains for the fiscal period, including discontinued operations.
Unadjusted EBITDA   Earnings before interest expense, income tax expense,
depreciation expense, and amortization expense. The starting point is net
income. Adjusted EBITDA   Unadjusted EBITDA adjusted for any non-recurring,
one-time, or irregular items. The Adjusted EBITDA measurement should align with
the relevant facility’s term sheet.

 

 

 

 

Effective: September 18, 2020

 

Table I: Data Required Annually from All Main Street Borrowers Required Data  
Definition Depreciation Expense   Non-cash expense measured based on the use of
fixed assets, recognized over the useful life of the fixed assets. Amortization
Expense   Non-cash expense measured based on the use of intangible assets,
recognized over the life of the intangible asset. Interest Expense   The
periodic finance expense of short term and long term debt. Tax Expense  
Federal, state and local income tax expenses. Rent Expense   The contractual
costs of occupying leased real estate. Dividends / Equity Distributions  
Distributions to equity owners. Accounts Receivable (net of allowances)  
Amounts owed to the borrower resulting from providing goods and/or services.
Accounts receivable will be net of any allowances for uncollectible amounts.
Inventory (net of reserves)  

Value of the raw materials, work in process, supplies used in operations,
finished goods, and merchandise bought which are intended to be sold in the
ordinary course of business. Inventory should be net of reserves.

Fixed Assets, Gross   Tangible property used in the business and not for resale,
including buildings, furniture, fixtures, equipment, and land. Report fixed
assets gross of depreciation. Accumulated Depreciation   Cumulative depreciation
of all fixed assets up to the Date of Financial Information. Accounts Payable
(A/P)  

The obligations owed to the borrower’s creditors arising from the entity’s
ongoing operations, including the purchase of goods, materials, supplies, and
services. Accounts payable excludes short term and long term debt.

Short Term Debt   Debt obligations of the borrower due with a term of less than
one year, including the current portion of any Long Term Debt. Long Term Debt  
Debt obligations of the borrower that are due in one year or more, excluding the
current portion that is otherwise captured in Short Term Debt. Description of
EBITDA Adjustments   Description of items that are added to Unadjusted EBITDA to
determine Adjusted EBITDA. Total Expenses  

All money spent and costs incurred, both recurring and non-recurring, to
generate revenue. Expenses exclude items capital in nature (i.e., expenses that
are allowed to be capitalized and included in the cost basis of a fixed asset).

Operating Expenses   Money spent and costs incurred related to normal business
operations including selling, general & administrative expenses, depreciation,
and amortization (i.e., total expenses less non-recurring expenses). Exclude
capital expenditures. Operating Income  

Profit (or loss) realized from continuing operations (i.e., revenue less
operating expenses).

Fixed Charges   Expenses that recur on a regular basis, regardless of the volume
of business (i.e., lease payments, rental payments, loan interest payments, or
insurance payments). Capitalized Expenditures   Non-operating expenditures
capitalized to fixed assets. Guarantor Net Assets   Total assets less total
liabilities of the guarantor (also referred to as net worth). Sr. Debt Balance  
Debt amount ranking senior to the Main Street loan. Additional Pari Passu Debt
Balance   Debt amount ranking pari passu to the Main Street loan. Collateral
Type (Non-Real Estate)  

If the loan is secured by collateral that is not predominantly real estate,
including if the collateral provided is different types, report the predominant
type of collateral (e.g., inventory, receivables, securities, etc.) by aggregate
value.

 

 

 

 

Effective: September 18, 2020

 

Table I: Data Required Annually from All Main Street Borrowers Required Data  
Definition Collateral Type (Real Estate)   If the loan is secured by real estate
collateral, indicate the property type (e.g., hotel, multifamily, residential,
industrial, etc.). If the loan is secured by multiple real estate property
types, report the predominant property type by aggregate value.

Collateral Value Reporting

 

For loans that require ongoing or periodic valuation of the collateral, report
the market value of the collateral as of the reporting date.

Collateral Value Date   Define the as-of date that corresponds with the
Collateral Value Reporting field. Covenant Status (Pass / Fail)   Yes/no,
indicating if the facility has satisfied covenant tests. Date of Covenant
Default   If applicable, report the date when borrower defaulted covenants.

Nature of Covenant Default

 

If applicable, describe the covenant default (i.e., missing financial
statements, ratio trigger).

Date of Covenant Cure   If applicable, report the date when borrower cured
previous defaults.

 

Table II: Data Required Quarterly from Main Street Borrowers by Main Street
Facility Required Data   MSELF   MSNLF   MSPLF   Definition Total Assets   Yes  
Yes   Yes  

The sum of current assets, fixed assets, and other non- current assets
(including, but not limited to, intangible assets, deferred items, investments,
and advances).

Current Assets   Yes   Yes   Yes   Cash, accounts receivable, inventory, and
other short term assets that are likely to be converted into cash, used, sold,
exchanged, or otherwise expensed in the normal course of business within one
year. Cash & Marketable Securities   Yes   Yes   Yes   Cash, depository
accounts, and marketable securities that can be easily sold and readily
converted into cash. Tangible Assets   Yes   No   No  

Assets having a physical existence measured as total assets less intangible
assets. Tangible assets are distinguished from intangible assets, such as
trademarks, copyrights, and goodwill.

Total Liabilities   Yes   Yes   Yes  

The total amount of all outstanding obligations, both current and noncurrent.

Current Liabilities   Yes   Yes   Yes   Short term debt, accounts payable, and
other current liabilities that are due within one year.

Total Debt (Incl. Undrawn Available Lines of Credit)

  Yes   Yes   Yes   Existing outstanding and committed debt (including any
undrawn available amounts). Total Equity   Yes   Yes   Yes   Measured as total
assets minus total liabilities. Total Revenue   Yes   Yes   Yes  

Total income generated by the sale of goods or services from ongoing operations.
Total Revenue excludes any non-recurring sales or gains.

Net Income   Yes   Yes   Yes   The income (or loss) after expenses and losses
have been subtracted from all revenues and gains for the fiscal period,
including discontinued operations. Unadjusted EBITDA   Yes   Yes   Yes  

Earnings before interest expense, income tax expense, depreciation expense and
amortization expense. The starting point is net income.

 

 

 

 

Effective: September 18, 2020

 

Table II: Data Required Quarterly from Main Street Borrowers by Main Street
Facility Required Data   MSELF   MSNLF   MSPLF   Definition Adjusted EBITDA  
Yes   Yes   Yes   Unadjusted EBITDA adjusted for any non-recurring, one- time or
irregular items. The Adjusted EBITDA measurement should align with the relevant
facility’s term sheet. Depreciation Expense   Yes   No   No   Non-cash expense
measured based on the use of fixed assets, recognized over the useful life of
the fixed assets. Amortization Expense   Yes   No   No   Non-cash expense
measured based on the use of intangible assets, recognized over the life of the
intangible asset. Interest Expense   Yes   Yes   Yes   The periodic finance
expense of short term and long term debt. Tax Expense   Yes   No   No   Federal,
state and local income tax expenses. Rent Expense   Yes   No   No   The
contractual costs of occupying leased real estate. Dividends / Equity
Distributions   Yes   Yes   Yes   Distributions to equity owners.

Accounts Receivable (net of allowances)

  Yes   No   No  

Amounts owed to the borrower resulting from providing goods and/or services.
Accounts receivable will be net of any allowances for uncollectible amounts.

Inventory (net of reserves)   Yes   No   No  

Value of the raw materials, work in process, supplies used in operations,
finished goods, and merchandise bought which are intended to be sold in the
ordinary course of business. Inventory should be net of reserves.

Fixed Assets, Gross   Yes   No   No  

Tangible property used in the business and not for resale, including buildings,
furniture, fixtures, equipment, and land. Report fixed assets gross of
depreciation.

Accumulated Depreciation   Yes   No   No   Cumulative depreciation of all fixed
assets up to the Date of Financial Information. Accounts Payable (A/P)   Yes  
No   No  

The obligations owed to the borrower’s creditors arising from the entity’s
ongoing operations, including the purchase of goods, materials, supplies, and
services. Accounts payable excludes short term and long term debt.

Short Term Debt   Yes   No   No  

Debt obligations of the borrower due with a term of less than one year,
including the current portion of any Long Term Debt.

Long Term Debt   Yes   No   No   Debt obligations of the borrower that are due
in one year or more, excluding the current portion that is otherwise captured in
Short Term Debt.

Description of EBITDA Adjustments

  Yes   No   No   Description of items that are added to Unadjusted EBITDA to
determine Adjusted EBITDA. Total Expenses   Yes   No   No  

All money spent and costs incurred, both recurring and non- recurring, to
generate revenue. Expenses exclude items capital in nature (i.e., expenses that
are allowed to be capitalized and included in the cost basis of a fixed asset).

Operating Expenses   Yes   Yes   Yes  

Money spent and costs incurred related to normal business operations, including
selling, general & administrative expenses, depreciation, and amortization (i.e.
total expenses less non-recurring expenses). Exclude capital expenditures.

 

 

 

 

Effective: September 18, 2020

 

Table II: Data Required Quarterly from Main Street Borrowers by Main Street
Facility Required Data   MSELF   MSNLF   MSPLF   Definition Operating Income  
Yes   Yes   Yes   Profit (or loss) realized from continuing operations (i.e.,
revenue less operating expenses). Fixed Charges   Yes   No   No  

Expenses that recur on a regular basis, regardless of the volume of business
(i.e., lease payments, rental payments, loan interest payments, or insurance
payments).

Capitalized Expenditures

  Yes   Yes   Yes   Non-operating expenditures capitalized to fixed assets.
Guarantor Net Assets   Yes   No   No   Total assets less total liabilities of
the guarantor (also referred to as net worth). Sr. Debt Balance   Yes   Yes  
Yes   Debt amount ranking senior to the Main Street loan. Additional Pari Passu
Debt Balance   Yes   Yes   Yes   Debt amount ranking pari passu to the Main
Street loan. Collateral Type (Non-Real Estate)   Yes   No   No  

If the loan is secured by collateral that is not predominantly real estate,
including if the collateral provided is different types, report the predominant
type of collateral (e.g., inventory, receivables, securities, etc.) by aggregate
value.

Collateral Type (Real Estate)   Yes   No   No  

If the loan is secured by real estate collateral, indicate the property type
(e.g., hotel, multifamily, residential, industrial, etc.). If the loan is
secured by multiple real estate property types, report the predominant property
type by aggregate value.

Collateral Value Reporting   Yes   No   No   For loans that require ongoing or
periodic valuation of the collateral, report the market value of the collateral
as of the reporting date.

Collateral Value Date

  Yes   No   No  

Define the as-of date that corresponds with the Collateral Value Reporting
field.

Covenant Status (Pass / Fail)   Yes   Yes   Yes   Yes/no, indicating if the
facility has satisfied covenant tests. Date of Covenant Default   Yes   Yes  
Yes   If applicable, report the date when borrower defaulted covenants.

Nature of Covenant Default

  Yes   Yes   Yes  

If applicable, describe the covenant default (i.e., missing financial
statements, ratio trigger).

Date of Covenant Cure   Yes   Yes   Yes   If applicable, report the date when
borrower cured previous defaults.