exv10w59



 




Exhibit 10.59



CREDIT AGREEMENT




     THIS CREDIT AGREEMENT (as the same may be amended, modified or
supplemented from time to time, the “Agreement”) dated as of the 25th day of
June, 2004 by and between BANK OF CHARLES TOWN, a West Virginia banking
corporation (the “Bank”), and CUISINE SOLUTIONS, INC., a Delaware corporation
(the “Borrower”), recites and provides:



RECITALS




     Subject to the terms of this Agreement, the Bank agrees to establish a
working capital line of credit (the “Line”) in favor of the Borrower.
The Bank and the Borrower agree that advances under the Line shall be made on
the following terms, covenants and conditions.



AGREEMENT




     ACCORDINGLY, for and in consideration of the mutual covenants set forth in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Bank and the Borrower agree as
follows:



SECTION 1. The Line




     1.1 Amount and Purpose.



          (a) Subject to the terms and conditions of this Agreement, the Bank agrees
to make advances under the Line to the Borrower from time to time. The
aggregate principal amount of advances under the Line outstanding at any time
shall not exceed the lesser of $2,500,000 or the Borrowing Base (as defined
below). Within this limit, the Borrower may borrow, repay and reborrow until
September 1, 2005 (as extended from time to time in accordance with the
provisions set forth below, the “Termination Date”).



          (b) Each request for an advance under the Line shall be made by written
notice from the Borrower to the Bank, given not less than two business days
prior to the date of the advance. The proceeds of advances under the Line
shall be used to carry accounts receivable and inventory and for other
short-term working capital purposes. The Borrower also may request that the
Bank issue letters of credit for the account of the Borrower from time to time.
The Bank shall not be required to issue any letter of credit unless the form,
term and purpose for which the letter of credit is to be issued are approved by
the Bank in its sole discretion. Each letter of credit issued by the Bank for
the account of the Borrower shall be treated as an outstanding advance under
the Line for the purposes of this Agreement. Advances under the Line shall be
credited to the operating account of the Borrower with the Bank.



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     1.2 Borrowing Base.



          (a) The “Borrowing Base” shall mean, at any time, the sum of 80% of the
Eligible Receivables plus 50% of Eligible Inventory, valued at the lower of
cost or market value, on a last-in, first out basis.



          (b) “Eligible Receivables” means accounts receivable of the Borrower (1)
that represent valid obligations incurred by a customer of the Borrower (a
“Customer”) for goods shipped or delivered or services completed under valid
and binding contracts of sale, lease or service; (2) with respect to which the
Borrower has no knowledge or notice of any inability of the Customer to make
full payment; (3) from the face amounts of which have been deducted all
payments, setoffs, amounts subject to adverse claims made in writing to the
Borrower, contractual allowances, bad debt reserves and other applicable
credits; (4) that are subject to no liens or encumbrances; (5) that continue to
be in full conformity with the applicable representations and warranties made
by the Borrower to the Bank in the Security Agreement (as defined below); (6)
with respect to which the Bank is and continues to be satisfied with the credit
standing of the Customer; (7) on which the Customer is not an affiliate of the
Borrower; and (8) that have been billed to the appropriate Customer and are
aged less than 90 days from the date of the initial invoice. Notwithstanding
the foregoing provisions, if the Bank reasonably determines that the
collectibility of any account receivable makes it unacceptable for inclusion in
the Borrowing Base and gives written notice to the Borrower indicating the
reasons for such determination, then such account receivable shall be excluded
from the category of Eligible Receivables from the date of such notice.



          (c) “Eligible Inventory” means, as applied to the Borrower, goods, as
defined under Article 9 of the West Virginia Uniform Commercial Code, which are
owned and held for sale by the Borrower in the ordinary course of the
Borrower’s business and in which the Bank has a perfected security interest,
but excludes the following, unless otherwise specifically approved in writing
as being eligible by the Bank: (1) goods held for lease; (2) goods that are to
be furnished under a contract of service; (3) work in process; (4) materials
used or consumed in the Borrower’s business; (5) farm products; (6) goods which
have been held for sale by the Borrower for a period of 12 months or more; (7)
damaged, broken, flawed, imperfect, inoperable, discounted, returned,
repossessed or reclaimed goods; (8) goods held for sale to an affiliate or a
subsidiary of the Borrower; (9) goods being sold by others on “sale or return”
or under some other consignment arrangement with the Borrower; (10) goods of
another being sold on consignment by the Borrower; (11) goods located outside
of the borders of the United States of America, (12) goods located in the
borders of the United States of America but in the possession of someone else
without the Borrower having appropriate warehouse receipts or other negotiable
documentation evidencing a valid bailment and the ownership of the goods by the
Borrower; and (13) goods which are subject to a lien or security interest in
favor of someone other than Bank, whether a superior lien or security interest
or an inferior lien or security interest.



     1.3 Interest. Advances made under the Line shall bear interest at
a rate per annum equal to the Prime Rate plus 0.50%, adjusted daily when and as
the Prime Rate is changed. The



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“Prime Rate” shall mean the Wall Street Journal Prime Rate, which
is the highest Prime Rate published in the “Money Rates” section of the Wall
Street Journal from time to time. Accrued interest shall be payable monthly,
in arrears, on the first day of each month, beginning on August 1, 2004.



     1.4 Line Note. The Borrower’s obligations to pay the principal
amount of all advances of the Line, together with accrued interest, shall be
evidenced by a promissory note, in form and substance satisfactory to the Bank,
in the principal amount of the Line, made by the Borrower and payable to the
order of the Bank (as the same may be amended, modified or supplemented from
time to time, the “Line Note”). The unpaid principal balance of the
Line Note, and all accrued and unpaid interest thereon, shall be due and
payable in full on the Termination Date. The Borrower shall prepay the Line
Note to the extent that the aggregate amount of outstanding advances under the
Line exceeds the Borrowing Base at any time.



     1.5 Extensions. The Bank may elect from time to time, in its sole
discretion, to extend the Termination Date. During any period or periods of
extension, all of the remaining terms and conditions of this Agreement shall
remain in full force and effect.



SECTION 2. Payments, Computations, Fees and Charges




     2.1 Payments. All payments due with respect to this Agreement and
the Line shall be made in immediately available funds to the Bank at its office
at 111 East Washington Street, Charles Town, West Virginia 25414. The Bank is
authorized, but shall be under no obligation, to charge any deposit account
maintained by the Borrower with the Bank for any payments due to the Bank with
respect to this Agreement or the Line. Payments shall be applied first to
accrued late charges, next to accrued fees, next to accrued interest and then
to principal.



     2.2 Default Charges. If any payment due under the Line Note is not
made within ten days of its due date, the Borrower shall pay to the Bank a late
charge equal to 5% of the amount of such payment. Upon the occurrence and
during the continuation of an Event of Default under this Agreement, the rate
at which interest accrues on the Line Note shall be increased to an amount
equal to the rate of interest then in effect under the Line Note plus 2.00% per
annum.



     2.3 Fees. The Borrower agrees to pay the to the Bank a one-time
loan fee equal to $6,250 on or before June 15, 2004.



     2.4 Computations. Interest and fees shall be computed on the basis
of a year of 360 days and actual days elapsed.



     2.5 Increased Costs. The Borrower agrees to reimburse the Bank for
any regulatory costs or expenses incurred by the Bank in connection with its
obligations under this Agreement, including, without limitation, costs arising
out of the Bank’s compliance with capital adequacy guidelines, reserve
requirements and deposit insurance regulations. A statement of the costs
incurred shall be rendered to the Borrower by the Bank, setting forth the
method of calculation,



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and such increased costs shall be paid to the Bank by the Borrower within
30 days after such statement is received by the Borrower.



SECTION 3. Security 




     3.1 Indebtedness. As used in this Agreement, the term
“Indebtedness” means all present and future indebtedness of the Borrower
to the Bank, whether direct or indirect, fixed or contingent, due or to become
due, several, joint or joint and several, including, without limitation, the
Line, the Line Note, the obligations of the Borrower to the Bank with respect
to any letter of credit issued by the Bank for the account of the Borrower and
overdrafts in any deposit account maintained by the Borrower with the Bank.



     3.2 Collateral. The Indebtedness is secured by the following (the
“Collateral”):



          (a) UCC Collateral. A first priority security interest in all of
the Borrower’s present and future accounts, chattel paper, deposit accounts,
documents, instruments, general intangibles, inventory, investment property,
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), supporting obligations and all proceeds and products of all of the
foregoing (the “UCC Collateral”), other than any accounts of the
Borrower and securities and monies held therein from time to time maintained at
Wachovia Bank, N.A. (“Wachovia”), securing Borrower’s reimbursement
obligations with respect to that certain letter of credit issued by Wachovia
for the account of Borrower (the “Wachovia Collateral”). The security
interest of the Bank in the UCC Collateral shall be subject to a security
agreement, in form and substance acceptable to the Bank, from the Borrower in
favor of the Bank (as amended, modified or supplemented from time to time, the
“Security Agreement”); and



          (b) Deed of Trust. A limited recourse credit line deed of trust,
in form and substance acceptable to the Bank, from Food Investors Corporation,
a Delaware corporation (the “Grantor”) to C. Christopher Giragosian and
Kevin F. Hull, as trustees, in the amount of $2,500,000 (as amended, modified
or supplemented from time to time, the “Deed of Trust”) creating a first
lien against the approximately 345.55 acres of land, and improvements thereon
owned by the Grantor and located at 40506 Tamworth Farm Lane, Leesburg, Loudoun
County, Virginia, as more particularly described in the Deed of Trust (the
“Real Estate”). The Bank agrees that it shall release the lien of the
Deed of Trust provided that at the time of such release, the Borrower or the
Grantor assigns to the Bank, as security for the Indebtedness, and on the
Bank’s standard assignment form, a deposit account maintained at the Bank in
the amount of $2,500,000.



SECTION 4. Conditions




     4.1 Conditions Precedent to Closing. In addition to any other
conditions stated in this Agreement, the following conditions must be satisfied
prior to the Bank making the first disbursement under this Agreement:



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          (a) Loan Documents. Receipt by the Bank of appropriately completed
and duly executed originals of this Agreement, the Line Note, the Security
Agreement and, the Deed of Trust, (collectively, together with any other
documents executed and delivered in connection with the Indebtedness, the
“Loan Documents”);



          (b) Corporate Documents. Receipt by the Bank of (1) certified
copies of the articles or certificate of incorporation and bylaws of the
Borrower and the Grantor, (2) appropriate resolutions of the boards of
directors of the Borrower and the Grantor authorizing the execution, delivery
and performance of the Loan Documents, (3) current certificates as to the good
standing or qualification to do business, as applicable, of the Borrower and
the Grantor in their respective states of incorporation and each other state in
which either does business, and (4) certificates of the secretaries of the
Borrower and the Grantor as to the incumbency and signatures of the officers of
such corporations authorized to execute and deliver the Loan Documents;



          (c) Opinion. Receipt by the Bank of the opinion of Dickstein
Shapiro Morin & Oshinsky LLP, counsel to the Borrower and the Grantor. By
executing this Agreement, the Borrower directs such counsel to deliver such
opinion;



          (d) Insurance. Receipt by the Bank of evidence that all insurance
required by the Loan Documents has been obtained;



          (e) Financing Statements. Financing statements necessary to
perfect the Bank’s security interest in the UCC Collateral shall be duly filed
in all appropriate offices and jurisdictions, all other financing statements
covering any of the UCC Collateral shall be terminated (other than those
permitted by this Agreement), and filing and recording receipts evidencing such
filings and terminations shall be delivered to the Bank, all in form and
substance satisfactory to the Bank;



          (f) Real Estate Documents. The Deed of Trust shall be recorded
among the land records of Loudoun County, Virginia, and the Bank shall receive
and approve the following:




          (1) Appraisal. An appraisal of the Real Estate, prepared by
an appraiser acceptable to the Bank, reflecting a value of not less than
$5,000,000;




          (2) Title Insurance. A mortgagee title insurance policy
insuring the lien of the Deed of Trust and containing only such
exceptions as may be approved by the Bank in its sole discretion;




          (3) Survey. A current survey of the Real Estate conforming
to the minimum standards established by the American Land Title
Association and the ACSM;




          (4) Environmental Audit. An environmental audit of the Real
Estate prepared by an environmental consulting firm acceptable to the
Bank, confirming that the Real Estate is in compliance with all
applicable environmental laws;



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          (5) Compliance with Laws. Certificates of architects,
engineers or public officials confirming that the Real Estate and its use
are in compliance with all applicable zoning, land use, subdivision and
building codes, ordinances, laws and regulations; and



          (g) Flood Hazard. Evidence that no part of the improvements
forming a part of the Real Estate is located in a special flood hazard area;



          (h) Landlord Waivers. Receipt by the Bank of such landlord and
mortgagee waivers as it deems to be necessary to protect its security interest
in the UCC Collateral;



          (i) No Default. No event shall have occurred and be continuing
that constitutes an Event of Default (as defined below), or that would
constitute an Event of Default but for the requirement that notice be given or
that a period of time elapse, or both;



          (j) Representations. All representations and warranties contained
in this Agreement shall be true and correct as of the date of the first
disbursement under this Agreement; and



          (k) Satisfactory Documents. All documents delivered pursuant to
this Agreement must be in form and substance satisfactory to the Bank and its
counsel, and all legal matters incident to this Agreement must be satisfactory
to the Bank’s counsel.



     4.2 Subsequent Disbursements. The following conditions must be
satisfied prior to any subsequent disbursements under this Agreement:



          (a) No Default. No event shall have occurred and be continuing
that constitutes an Event of Default (as defined below), or that would
constitute an Event of Default but for the requirement that notice be given or
that a period of time elapse, or both, either before or after such
disbursement;



          (b) Representations. All representations and warranties contained
in this Agreement shall be true and correct as of the date of the disbursement
with the same effect as though made on such date, both before and after giving
effect to such disbursement, except that the representations and warranties set
forth in Section 5.4 shall be deemed to apply to the most recent financial
statements furnished by the Borrower to the Bank prior to such disbursement;



          (c) Borrowing Base Certificate. If required by the Bank, a
Borrowing Base Certificate (as defined below), setting forth a calculation of
the Borrowing Base as of the date of the applicable disbursement; and



          (d) Legal Matters. All legal matters incident to the advance of
the disbursement will be satisfactory to the Bank and its counsel.



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     Each borrowing by the Borrower shall be deemed to be a representation and
warranty by the Borrower on the date of such borrowing as to matters specified
above in subparagraphs (b) and (c) of this Section 4.2.



SECTION 5. Representations and Warranties




     In order to induce the Bank to extend credit to the Borrower, the Borrower
represents and warrants as follows:



     5.1 Organization. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such qualification
is required.



     5.2 Execution and Delivery. The Borrower has the corporate power,
and has taken all the necessary corporate actions, to execute and deliver and
perform its obligations under the Loan Documents, and the Loan Documents, when
executed and delivered, will be binding obligations of the Borrower,
enforceable in accordance with their terms.



     5.3 Corporate Power. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being
conducted.



     5.4 Financial Statements. All financial statements and information
delivered to the Bank by the Borrower (including, without limitation, the
Borrower’s audited financial statements for its fiscal year ending on June 28,
2003 were prepared in accordance with generally accepted accounting principles,
are correct and complete and present fairly the financial conditions, and
reflect all known liabilities, contingent or otherwise, of the Borrower as of
the dates of such statements and information, and since such dates no material
adverse change in the assets, liabilities, financial condition, business or
operations of the Borrower has occurred.



     5.5 Taxes. All tax returns and reports of the Borrower required by
law to be filed have been duly filed, and all taxes, assessments, other
governmental charges or levies (other than those presently payable without
penalty or interest and those that are being contested in good faith in
appropriate proceedings) upon the Borrower and upon any of its properties,
assets, income or franchises, that are due and payable have been paid.



     5.6 Litigation. Except as set forth in the Borrower’s annual
report filed with the Securities and Exchange Commission on Form 10-K for the
fiscal year ended on June 28, 2003 and any quarterly report on Form 10-Q for
the following three fiscal quarters (collectively, the “Current
Filings”) there is no action, suit or proceeding pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower that,
either in any case or in the aggregate, may result in any material adverse
change in the business, properties or assets or in the condition, financial or
otherwise, of the Borrower, or that may result in any material liability on the
part of the Borrower, or that questions the validity of any of the Loan
Documents or any



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action taken or to be taken in connection with the Loan Documents
(collectively, a “Material Adverse Effect”).



     5.7 No Breach. The execution and delivery of the Loan Documents,
and compliance with the provisions of the Loan Documents, will not conflict
with or violate any provisions of law or conflict with, result in a breach of,
or constitute a default under the charter or bylaws of the Borrower, any
judgment, order or decree binding on the Borrower, or any other agreements to
which the Borrower is a party.



     5.8 No Defaults. The Borrower is not in default with respect to
any debt, direct or indirect, which default could reasonably be expected to
have a Material Adverse Effect.



     5.9 Compliance. The Borrower is in compliance in all material
respects with all applicable laws and regulations, including, without
limitation, the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).



     5.10 Approvals. No authorizations, approvals or consents of, and
no filings and registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance of the Loan
Documents by the Borrower.



     5.11 Title to Assets. The Borrower has good and marketable title
to all assets purported to be owned by it, as reflected in the financial
statements delivered to the Bank pursuant to this Agreement, subject only to
the liens and security interests permitted by this Agreement.



     5.12 Use of Proceeds. The proceeds of the advances under the Line
shall be used only for the purposes described in this Agreement. No proceeds
of any advance shall be used to purchase or carry any margin stock, as such
term is defined in Regulation U of the Board of Governors of the Federal
Reserve System.



SECTION 6. Covenants of the Borrower




     In consideration of credit extended or to be extended by the Bank, the
Borrower covenants and agrees as follows:



     6.1 Financial Information. The Borrower shall deliver to the Bank,
(a) within 90 days after the close of each of its fiscal years, audited
financial statements of the Borrower and its subsidiaries, prepared in
accordance with generally accepted accounting principles, including a
consolidated balance sheet and consolidated statements of income, stockholders’
equity and cash flow, prepared by an independent certified public accountant
acceptable to the Bank, who shall render an unqualified opinion with respect to
such financial statements; (b) within 45 days after the conclusion of each
quarter of each fiscal year of the Borrower consolidated and consolidating
financial statements of the Borrower and its subsidiaries, including
consolidating and consolidated balance sheets and income statements, prepared
in accordance with generally accepted accounting principles and certified to be
accurate by the president, treasurer or chief



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financial officer of the Borrower; (c) within 15 days after the end of
each four week accounting period of the Borrower a schedule of all outstanding
accounts receivable of the Borrower as of the last day of the such accounting
period showing the age of such accounts receivable in intervals of not more
than 30 days, and a summary of inventory by location and type with a supporting
perpetual inventory report, in each case accompanied by such supporting detail
and documentation as shall be requested by the Bank; together with a
certificate of the president, treasurer or chief financial officer of the
Borrower setting forth a computation of the Eligible Receivables and the
Eligible Inventory and the amount available to be borrowed under the Line as of
the last day of such accounting period (the “Borrowing Base
Certificate”), each of which shall be in form and detail satisfactory to
the Bank; (d) as soon as available, copies of all management reports provided
to the board of directors of the Borrower by its independent public accountants
and all other reports filed by the Borrower with the Securities and Exchange
Commission; (e) from time to time, such other financial data and information
regarding the Borrower or the Collateral as the Bank reasonably may request.
So long as the Borrower is subject to the Securities Exchange Act of 1934
reporting requirements, annual reports on Form 10-K and quarterly reports on
Form 10-Q filed with the Securities Exchange Commission will satisfy
requirements of (a) and (b) if delivered to the Bank within time periods
required by such clauses.



     6.2 Taxes. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges lawfully levied or imposed on or against it
and its properties prior to the time they become delinquent; provided that this
covenant shall not apply to any tax, assessment or charge that is being
contested in good faith and with respect to which adequate reserves as
determined in good faith the Borrower have been established and are being
maintained.



     6.3 Compliance with Laws. The Borrower shall comply with all
applicable laws and regulations, including, without limitation, ERISA, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.



     6.4 Maintain Existence. The Borrower shall maintain its corporate
existence in good standing, maintain and keep its properties in good condition,
comply at all times with the provisions of all leases to which it is a party
and maintain adequate insurance for all of its property with financially sound
and reputable insurers. The Borrower shall remain in the same line of business
as it is in on the date of this Agreement and shall not enter into any new
lines of business without the prior written consent of the Bank, which consent
shall not be unreasonably withheld.



     6.5 Notices. As soon as it has actual knowledge, the Borrower
shall notify the Bank of (a) the institution or threat of any material
litigation or administrative proceeding of any nature involving the Borrower,
and (b) the occurrence of any Event of Default under this Agreement, or any
event that, with the giving of notice or lapse of time, or both, would
constitute an Event of Default.



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     6.6 Books and Records. The Borrower shall maintain complete and
accurate books of account and records. The principal books of account and
records shall be kept and maintained at 85 South Bragg Street, Suite 600,
Alexandria, Virginia 23212. The Borrower shall not remove such books of
account and records without giving the Bank at least 30 days’ prior written
notice. The Borrower, upon reasonable notice from the Bank, shall permit the
Bank, or any officer, employee or agent designated by the Bank, to examine the
Collateral and the books of account and records maintained by the Borrower, and
agrees that the Bank or such officer, employee or agent may audit and verify
the books and records and the Collateral. The Borrower shall reimburse the
Bank for any expenses incurred by the Bank in connection with any audits with
no more than two audits per calendar year if no Event of Default has occurred.
Any additional audits requested by the Bank shall be conducted at its sole
expense, unless an Event of Default has occurred, which case such additional
audits shall be at the Borrower’s expense. All accounting records and
financial reports furnished to the Bank pursuant to this Agreement shall be
maintained and prepared in accordance with generally accepted accounting
principles consistently applied.



     6.7 Liens. The Borrower shall not create, incur, assume or permit
to exist any mortgage, deed of trust, assignment, pledge, lien, security
interest, charge or encumbrance, including, without limitation, the right of a
vendor under a conditional sale contract or the lessor under a capitalized
lease (collectively, the “Liens”) of any kind or nature in or upon any
of the UCC Collateral, except:



          (a) Liens created or deposits made that are incidental to the conduct of
the business of the Borrower, that are not incurred in connection with any
borrowing or the obtaining of any credit and that do not and will not interfere
with the use by the Borrower of any of its assets in the normal course of its
business or materially impair the value of such assets for the purpose of such
business;



          (b) Liens securing the Indebtedness; and



          (c) Liens in favor of Wachovia encumbering the Borrower’s interest in the
Wachovia Collateral.



     6.8 Sale of Assets. Without the prior written consent of the Bank,
the Borrower shall not sell, lease, assign or otherwise dispose of any of its
assets except for (a) sales in the ordinary course of business of any product
or service marketed by the Borrower, and (b) the disposition of assets that are
no longer needed or useful in the Borrower’ business.



     6.9 Mergers and Acquisitions. Without the prior written consent of
the Bank, which consent shall not be unreasonably withheld or conditioned, the
Borrower shall not merge or consolidate with, or acquire all or substantially
all of the assets, stock or other ownership interests of, any other person.



SECTION 7. Default and Remedies




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     7.1 Events of Default. Each of the following shall constitute an
“Event of Default” under this Agreement:



          (a) Failure to Pay. If the Borrower fails to make, when due, any
installment, prepayment or other payment owing to the Bank under the terms of
this Agreement, the Line Note or any other Loan Document and such failure shall
continue for a period of ten days after written notice of such failure has been
given to the Borrower by the Bank (which may be a computer-generated late
payment notice);



          (b) Failure to Give Notices. If the Borrower fails to give the
Bank any notice required by this Agreement within five days after it has actual
knowledge of the event giving rise to the obligation to give such notice;



          (c) Failure to Permit Inspections. If the Borrower refuses to
permit the Bank to inspect the Borrower’s books and records in accordance with
the provisions of this Agreement;



          (d) Failure to Deliver Borrowing Base Certificate. If the Borrower
fails to deliver a current Borrowing Base Certificate to the Bank within five
days after the Bank makes a written request therefor;



          (e) Failure to Observe Other Covenants. If the Borrower fails to
perform or observe any other term, covenant, warranty or agreement contained in
this Agreement and such failure shall continue for a period of 30 days after
written notice of such failure has been given to Company by the Bank;



          (f) Defaults under Loan Documents. If an event of default shall
occur under any other Loan Document and shall not be cured within any
applicable grace period;



          (g) Breach of Representation. Discovery that any representation or
warranty made or deemed made by the Borrower in this Agreement, or any
statement or representation made in any certificate, report or opinion
delivered pursuant to this Agreement or other Loan Document or in connection
with any borrowing under this Agreement was materially untrue when made or
deemed made, or is breached in any material respect;



          (h) Voluntary Bankruptcy. If the Borrower or the Grantor makes an
assignment for the benefit of creditors, files a petition in bankruptcy,
petitions or applies to any tribunal for any receiver or any trustee of the
Borrower or the Grantor or any substantial part of the property of the Borrower
or the Grantor, or commences any proceeding relating to the Borrower or the
Grantor under any reorganization, arrangement, composition, readjustment,
liquidation or dissolution law or statute of any jurisdiction, whether in
effect now or after this Agreement is executed;



          (i) Involuntary Bankruptcy. If, within 60 days after the filing of
a bankruptcy petition or the commencement of any proceeding against the
Borrower or the Grantor seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar



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relief under any present or future statute, law or regulation, the
proceeding shall not have been dismissed, or, if within 60 days, after the
appointment, without the consent or acquiescence of the Borrower or the
Grantor, of any trustee, receiver or liquidator of the Borrower or the Grantor
or all or any substantial part of the properties of the Borrower or the
Grantor, the appointment shall not have been vacated;



          (j) Cross Default. If, as a result of default, any present or
future obligations of the Borrower or the Grantor to the Bank, or any present
or future obligations of the Borrower or the Grantor of $500,000 or more to any
other creditor, are declared to be due and payable prior to the expressed
maturity of such obligations, unless and to the extent that the declaration is
being contested in good faith in a court of appropriate jurisdiction;



          (k) Material Adverse Change. A material adverse change occurs in
the financial or business condition of the Borrower or the Grantor;



          (l) Judgment. If a judgment, attachment, garnishment or other
process in excess of $500,000 is entered against the Borrower or the Grantor
and is not vacated or bonded within 30 days after entry;



          (m) Ownership. If Stanislas Vilgrain and members of his immediate
family cease to own, directly or indirectly, through one or more intermediaries
at least 51% of the outstanding capital stock of the Borrower and the Grantor;
or



          (n) Dissolution. The dissolution, liquidation, or termination of
existence the Borrower or the Grantor.



     7.2 Remedies. Upon the occurrence of an Event of Default (a) any
obligation of the Bank to make advances under the Line shall terminate, (b) the
Bank, at its option, by written notice to the Borrower, may declare all
Indebtedness to the Bank to be immediately due and payable, whether such
Indebtedness was incurred prior to, contemporaneous with or subsequent to the
date of this Agreement and whether represented in writing or otherwise, without
presentment, demand, protest or further notice of any kind, and (c) the Bank
may exercise all rights and remedies available to it under the Loan Documents
and applicable law. The Borrower agrees to pay all costs and expenses incurred
by the Bank in enforcing any obligation under this Agreement or the other Loan
Documents, including, without limitation, reasonable attorneys’ fees. No
failure or delay by the Bank in exercising any power or right will operate as a
waiver of such power or right, nor will any single or partial exercise of any
power or right preclude any other future exercise of such power or right, or
the exercise of any other power or right.



SECTION 8. Miscellaneous




     8.1 Defined Terms. Each accounting term used in this Agreement,
not otherwise defined, shall have the meaning given to it under generally
accepted accounting principles in the United States, applied on a consistent
basis. The term “person” shall mean any individual partnership, limited
liability company, corporation, trust, joint venture, unincorporated



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association, governmental subdivision or agency or any other entity of any
nature. The term “subsidiary” means, with respect to any person, a
corporation or other person of which shares of stock or other ownership
interest having ordinary voting power to elect a majority of the board of
directors or other managers of such corporation or person are at the time
owned, or the management of which it otherwise controlled, directly or
indirectly, through one or more intermediaries, by such person. The term
“affiliate” means, with respect to any specified person, any other
person that, directly or indirectly, controls or is controlled by, or is under
common control with, such specified person. All meanings assigned to defined
terms in this Agreement shall be applicable to the singular and plural forms of
the terms defined.



     8.2 Notices. All notices, requests, demands and other
communications provided for in this Agreement shall be in writing and shall be
delivered by hand, sent prepaid by Federal Express (or a comparable overnight
delivery service), sent by telecopy or facsimile or sent by United States mail,
certified, postage prepaid, return receipt requested, to the parties at their
respective addresses set forth on the signature pages of this Agreement or at
such other addresses as may be designated by such party from time to time in a
writing forwarded in a like manner. Any notice, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) upon the earliest of (a) the date it is actually received, (b) the
business day after the day on which it is delivered by hand or transmitted by
telecopy or facsimile, (c) the business day after the day on which it is
delivered to Federal Express (or a comparable overnight delivery service), or
(d) the third business day after the day on which it is deposited in the United
States mail.



     8.3 Successors and Assigns. This Agreement will be binding upon
and inure to the benefit of the Bank, the Borrower and their respective
successors, assigns, personal representatives, executors and administrators,
provided that the Borrower may not assign or transfer its rights under this
Agreement. If no Event of Default has occurred and is continuing, any
assignment by the Bank will be limited to transfers to one or more commercial
banks, reasonably satisfactory to the Borrower.



     8.4 Entire Agreement. Except for the other Loan Documents
expressly referred to in this Agreement, this Agreement represents the entire
agreement between the Bank and the Borrower, supersedes all prior commitments
and may be modified only by an agreement in writing.



     8.5 Survival. All agreements, covenants, representations and
warranties made in this Agreement and all other provisions of this Agreement
will survive the delivery of this Agreement and the other Loan Documents and
the making of the advances under this Agreement and will remain in full force
and effect until the obligations of the Borrower under this Agreement and the
other Loan Documents are fully discharged.



     8.6 Governing Law. This Agreement will be governed by the laws of
the State of West Virginia, without reference to conflict of laws principles.



13









 





     8.7 Expenses. Whether or not any advances are made under this
Agreement, the Borrower shall pay all out-of-pocket expenses incurred by the
Bank in connection with the transactions contemplated by this Agreement,
including, but not limited to, the reasonable fees and expenses of its counsel.



     8.8 Headings. Section headings are for convenience of reference
only and shall not affect the interpretation of this Agreement.



     8.9 Participations. The Bank shall have the right to sell all or
any part of its rights under the Loan Documents, and the Borrower authorize the
Bank to disclose to any prospective participant in the Line any and all
financial and other information in the Bank’s possession concerning the
Borrower or the Collateral. If no Event of Default has occurred and is
continuing, any participations will be limited to transfers to one or more
commercial banks, reasonably satisfactory to the Borrower.



     8.10 Third Party Beneficiary. The parties do not intend the
benefits of this Agreement or any other Loan Document to inure to any third
party.



     8.11 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE BANK AND THE BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY BASED ON, ARISING OUT OF OR UNDER, OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.



     8.12 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
Agreement, and any of the parties to this Agreement may execute this Agreement
by signing any such counterpart.



     8.13 Waiver. The rights of the Bank under this Agreement and the
other Loan Documents shall be in addition to all other rights provided by law.
No waiver of any provision of this Agreement, or any other Loan Document, shall
be effective unless in writing, and no waiver shall extend beyond the
particular purpose involved. No waiver in any one case shall require the Bank
to give any subsequent waivers.



     8.14 Severability. If any provision of this Agreement or any other
Loan Document is held to be unenforceable, such provision shall be fully
severable and this Agreement or the applicable Loan Document shall be construed
as if the unenforceable provision were not included in this Agreement or in
such Loan Document.



     8.15 No Setoffs. No setoff, claim, counterclaim, reduction or
diminution of any obligation or defense of any kind or nature that the Borrower
has or may have against the Bank (other than the defense of payment) shall be
available against the Bank in any action, suit or proceeding brought by the
Bank to enforce this Agreement or any other Loan Document. The foregoing shall
not be construed as a waiver by the Borrower of any such rights or claims
against the Bank, but any recovery upon any such rights or claims shall be had
from the Bank separately,



14









 






it being the intent of this Agreement and the other Loan Documents that
the Borrower shall be obligated to pay, absolutely and unconditionally, all
amounts due under this Agreement and the other Loan Documents.



[SIGNATURES ON FOLLOWING PAGES.]




15









 







     WITNESS the following signatures.



	 	 	 
	

	 	BANK:
	 
	 	 
	

	 	BANK OF CHARLES TOWN,
	

	 	a West Virginia banking corporation
	 
	 	 
	

	 	By: /s/ David W. Irvin
	

	 	
 
	

	 	Name: David W. Irvin
	

	 	
 
	

	 	Title: Senior Vice President
	

	 	
 
	 
	 	 
	

	 	Address for Notices:
	 
	 	 
	

	 	Bank of Charles Town
	

	 	111 East Washington Street,
	

	 	Charles Town, West Virginia 25414
	

	 	Attention: David W. Irvin
	

	 	Telecopy Number: 304-728-2428
	 
	 	 
	

	 	BORROWER:
	 
	 	 
	

	 	CUISINE SOLUTIONS, INC.
	

	 	a Delaware corporation
	 
	 	 
	

	 	By: /s/ Stanislas Vilgrain
	

	 	
 
	

	 	Name: Stanislas Vilgrain
	

	 	
 
	

	 	Title: CEO
	

	 	
 
	 
	 	 
	

	 	Address for Notices:
	 
	 	 
	

	 	85 S. Bragg Street, Suite 600
	

	 	Alexandria, VA 22312
	

	 	Telecopy Number: (703) 270-2900