Document:

cuo_Ex10_1

		
			
		

		
			Exhibit 10.1
		

		
			 
		

		
			
		

		
			 
		

		
			
		

		
			 
		

			
					
						 

					
						 

					
					
						 

				
	
					
						SBA Loan #

					
					
						881642070-01

				
	
					
						SBA Loan Name

					
					
						Continental Materials Corporation

				
	
					
						Date

					
					
						04/08/20

				
	
					
						Loan Amount

					
					
						5,487,000.00

				
	
					
						Interest Rate

					
					
						1.00% Fixed

				
	
					
						Borrower

					
					
						Continental Materials Corporation

				
	
					
						Operating
Company

					
					
						 

				
	
					
						Lender

					
					
						CIBC Bank USA

				

		
			 
		

		
			1.    PROMISE TO PAY:
		

		
			 
		

		
			In return for the Loan, Borrower promises to pay to the order of Lender the amount of Five Million Four Hundred Eighty Seven Thousand ($5,487,000.00)
		

		
			 
		

		
			Dollars, interest on the unpaid principal balance, and all other amounts required by this Note.
		

		
			 
		

		
			2.    DEFINITIONS:
		

		
			 
		

		
			"Collateral" means any property taken as security for payment of this Note or any guarantee of this Note.
		

		
			 
		

		
			"Guarantor" means each person or entity that signs a guarantee of payment of this Note.
		

		
			 
		

		
			"Loan" means the loan evidenced by this Note.
		

		
			 
		

		
			"Loan Documents" means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.
		

		
			 
		

		
			"SBA" means the Small Business Administration, an Agency of the United States of America.
		

		
			 
		

		
			
		

		
			 
		

		
			 
		

		
			

		 

		

		
			 
		

		
			3.    PAYMENT TERMS:
		

		
			 
		

		
			Borrower must make all payments at the place Lender designates. The payment terms for this Note are:
		

		
			 
		

		
			The interest rate is on this Note is fixed at 1.00% per year.
		

		
			 
		

		
			All payments of principal and interest are deferred for the first six (6) months from the date of this Note ("Deferment Period").
		

		
			 
		

		
			On or about the date that is eight weeks following the date of this Note, Borrower shall submit to Lender a certified and attested schedule or eligible amounts of forgiveness ("Forgiven Balance"), together with documentation verifying the number of full-time equivalent employees on Borrower's payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utility payments for the eight week period following the date of the first disbursement under this Note, as required by the Payroll Protection Program ("PPP"). Subject to the terms of the PPP, the Forgiven Balance will reduce the principal balance of this Note and the accrued interest on the Forgiven Balance is also forgiven.
		

		
			 
		

		
			Borrower must pay any remaining principal balance and accrued interest on or before the Maturity Date (defined below) with interest thereon paid monthly after the Deferment Period over the remaining term of this Note. Payments must be made on the same day as the date of this Note in the months they are due.
		

		
			 
		

		
			Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.
		

		
			 
		

		
			The interest rate identified in the Note may not be changed during the life of the Loan unless changes in accordance with SOP 5010.
		

		
			 
		

		
			Loan Prepayment:
		

		
			Notwithstanding any provision in this Note to the contrary:
		

		
			Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:
		

		
			a.  Give Lender written notice;
		

		
			b.  Pay all accrued interest; and
		

		
			c.  If the prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days' interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.
		

		
			If Borrower does not prepay within 30 days from the date Lender received the notice, Borrower must give Lender a new notice.
		

		
			 
		

		
			All remaining principal and accrued interest is due and payable 2 years from date of Note ("Maturity Date").
		

		
			 
		

		
			Late Charge: If a payment on this Note is more than 10 days late, Lender may charge Borrower a late fee of up to 5.00% of the unpaid portion of the regularly scheduled payment.
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

			

					

						 

					

						

					

					

						SBA Form 147 (06/03/02) Version 4.1

					

					

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			4.    DEFAULT:
		

		
			 
		

		
			Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:
		

		
			 
		

			
	
			
				 A.
			

			
	
			
			Fails to do anything required by this Note and other Loan Documents;

		
			 
		

			
	
			
				 B.
			

			
	
			
			Defaults on any other loan with Lender;

		
			 
		

			
	
			
				 C.
			

			
	
			
			Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds;

		
			 
		

			
	
			
				 D.
			

			
	
			
			Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

		
			 
		

			
	
			
				 E.
			

			
	
			
			Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

		
			 
		

			
	
			
				 F.
			

			
	
			
			Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note;

		
			 
		

			
	
			
				 G.
			

			
	
			
			Fails to pay any taxes when due;

		
			 
		

			
	
			
				 H.
			

			
	
			
			Becomes the subject of a proceeding under any bankruptcy or insolvency law;

		
			 
		

			
	
			
				 I.
			

			
	
			
			Has a receiver or liquidator appointed for any part of their business or property;

		
			 
		

			
	
			
				 J.
			

			
	
			
			Makes an assignment for the benefit of creditors;

		
			 
		

			
	
			
				 K.
			

			
	
			
			Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note;

		
			 
		

			
	
			
				 L.
			

			
	
			
			Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or

		
			 
		

			
	
			
				 M.
			

			
	
			
			Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note.

		
			 
		

		
			5.    LENDER'S RIGHTS IF THERE IS A DEFAULT:
		

		
			 
		

		
			Without notice or demand and without giving up any of its rights, Lender may:
		

		
			 
		

			
	
			
				 A.
			

			
	
			
			Require immediate payment of all amounts owing under this Note;

		
			 
		

			
	
			
				 B.
			

			
	
			
			Collect all amounts owing from any Borrower or Guarantor;

		
			 
		

			
	
			
				 C.
			

			
	
			
			File suit and obtain judgment;

		
			 
		

			
	
			
				 D.
			

			
	
			
			Take possession of any Collateral; or

		
			 
		

			
	
			
				 E.
			

			
	
			
			Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

		
			 
		

		
			6.    LENDER'S GENERAL POWERS:
		

		
			 
		

		
			Without notice and without Borrower's consent, Lender may:
		

		
			
		

		
			

		 

		

			 

		

			

					

						 

					

						

					

					

						SBA Form 147 (06/03/02) Version 4.1

					

					

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				 A.
			

			
	
			
			Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

		
			 
		

			
	
			
				 B.
			

			
	
			
			Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

		
			 
		

			
	
			
				 C.
			

			
	
			
			Release anyone obligated to pay this Note;

		
			 
		

			
	
			
				 D.
			

			
	
			
			Compromise, release, renew, extend or substitute any of the Collateral; and

		
			 
		

			
	
			
				 E.
			

			
	
			
			Take any action necessary to protect the Collateral or collect amounts owing on this Note.

		
			 
		

		
			7.    WHEN FEDERAL LAW APPLIES:
		

		
			 
		

		
			When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.
		

		
			 
		

		
			8.    SUCCESSORS AND ASSIGNS:
		

		
			 
		

		
			Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.
		

		
			 
		

		
			9.    GENERAL PROVISIONS:
		

		
			 
		

			
	
			
				 A.
			

			
	
			
			All individuals and entities signing this Note are jointly and severally liable.

		
			 
		

			
	
			
				 B.
			

			
	
			
			Borrower waives all suretyship defenses.

		
			 
		

			
	
			
				 C.
			

			
	
			
			Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral.

		
			 
		

			
	
			
				 D.
			

			
	
			
			Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

		
			 
		

			
	
			
				 E.
			

			
	
			
			Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

		
			 
		

			
	
			
				 F.
			

			
	
			
			If any part of this Note is unenforceable, all other parts remain in effect.

		
			 
		

			
	
			
				 G.
			

			
	
			
			To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

		
			 
		

		
			
		

		
			

		 

		

			 

		

			

					

						 

					

						

					

					

						SBA Form 147 (06/03/02) Version 4.1

					

					

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			10.   STATE-SPECIFIC PROVISIONS:
		

		
			 
		

		
			This Note is made pursuant to the terms and conditions of the Paycheck Protection Program (“PPP”), which is part of the CARES Act 2020. Notwithstanding any provision to the contrary, this Note shall be interpreted in accordance with the PPP and guidance issued by the Small Business Administration implementing the PPP.
		

		
			 
		

		
			Borrower agrees to execute and deliver to Lender any additional documents consistent with the Loan Documents as may be recommended or required in connection with the PPP. Borrower acknowledges the speed of the implementation of the PPP and recognizes that additional documents may be required to document the Loan.
		

		
			 
		

		
			This Note may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. Without limitation, “electronic signature” shall include faxed versions of an original signature or electronically scanned and transmitted versions (e.g., via pdf) of an original signature.
		

		
			 
		

		
			THE HOLDER OF THIS NOTE SHALL NOT BE REQUIRED TO RENEW, EXTEND OR REFINANCE THIS NOTE OR ANY AMOUNTS DUE UNDER THIS NOTE.
		

		
			 
		

		
			JURY WAIVER AND CONSENT TO JURISDICTION. LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER. TO INDUCE LENDER TO ACCEPT THIS NOTE BORROWER IRREVOCABLY AGREE THAT, SUBJECT TO LENDER’S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE WILL BE LITIGATED IN COURTS HAVING SITUS IN COOK COUNTY, ILLINOIS. BORROWER HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY COURT LOCATED WITHIN COOK COUNTY, ILLINOIS, WAIVES PERSONAL SERVICE OF PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

			

					

						 

					

						

					

					

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			11.   BORROWER'S NAME(S) AND SIGNATURE(S):
		

		
			 
		

		
			By signing below, each individual or entity becomes obligated under this Note as Borrower.
		

		
			 
		

		
			BORROWER:
		

		
			 
		

		
			
		

		
			 
		

		
			By: Continental Materials Corporation
		

		
			 
		

		
			Name: Paul Ainsworth
		

		
			 
		

		
			Title: CFO
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			 

		

			

					

						 

					

						

					

					

						SBA Form 147 (06/03/02) Version 4.1

					

					

						6 of 6Exhibit

EXHIBIT 10.1

THE HOWARD HUGHES CORPORATION
RESTRICTED STOCK AGREEMENT
WHEREAS, <INSERT NAME> (the “Grantee”) is an employee of The Howard Hughes Corporation (and its successors, the “Company”);

WHEREAS, the grant of Restricted Stock was authorized by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) on February 12, 2020;

WHEREAS, the date of grant is February 12, 2020 (“Date of Grant”); and

WHEREAS, pursuant to The Howard Hughes Corporation Amended and Restated 2010 Incentive Plan (the “Plan”), and subject to the terms and conditions thereof and the terms and conditions of this agreement (this “Agreement”), the Company has granted to Grantee as of the Date of Grant the right to receive <INSERT AMOUNT> shares of common stock of the Company (the “Restricted Shares”).

NOW, THEREFORE, the Company and Grantee hereby agree as follows:

1.Rights of Grantee.  The Restricted Shares subject to this grant shall be fully paid and nonassessable and shall be either: (i) represented by certificates held in custody by the Company until all restrictions thereon have lapsed, together with a stock power or powers executed by Grantee in whose name such certificates are registered, endorsed in blank and covering such Restricted Shares; or (ii) held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Shares, and endorsed with an appropriate legend referring to the restrictions hereinafter set forth. Grantee shall have the right to vote the Restricted Shares. Upon vesting of the Restricted Shares hereunder, the Grantee: (x) shall receive cash dividends or cash distributions, if any, paid or made by the Company with respect to common shares after the Date of Grant and prior to the vesting of the Restricted Stock; and (y) shall receive any additional Restricted Shares that Grantee may become entitled to receive by virtue of a Restricted Share dividend, a merger or reorganization in which the Company is the surviving corporation or any other change in the capital structure of the Company.

2.Restrictions on Transfer of Restricted Shares. The Restricted Shares subject to this grant may not be assigned, exchanged, pledged, sold, transferred or otherwise disposed of by Grantee, except to the Company, until the Restricted Shares have become nonforfeitable in accordance with Sections 3, 4 and 5 hereof. The Grantee’s rights with respect to such purported transfer in violation of the provisions of this Section 2 of this Agreement shall be null and void, and the purported transferee shall obtain no rights with respect to such Restricted Shares. 

3.Vesting of Restricted Shares. Subject to the terms and conditions of Sections 4 and 5 of this Agreement and the applicable provisions of that certain Employment Agreement, dated as of <INSERT DATE> (as amended, the “Employment Agreement”), by and between 

the Company and the Grantee, the Restricted Shares covered by this Agreement shall vest ratably over a five-year period (the “Time-based Vesting Component”), with 20% of the Time-based Vesting Component vesting on each of December 31, 2020; December 31, 2021; December 31, 2021; December 31, 2023; and December 31, 2024.

4.Forfeiture of Awards. Except as otherwise expressly provided in the Employment Agreement, the Grantee’s rights to receive the unvested Restricted Shares covered by this Agreement shall be forfeited automatically and without further notice on the date that Grantee ceases to be an employee of the Company or a Subsidiary.

5.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, that notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any of the Restricted Shares covered by this Agreement if the issuance thereof would result in violation of any such law.

6.Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any proposed, temporary or final regulations, or any other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

7.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of Grantee under this Agreement or the Employment Agreement without Grantee’s consent; further, provided, that Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any regulations promulgated thereunder, including as a result of the implementation of any recoupment policy the Company adopts to comply with the requirements set forth in the Dodd-Frank Act.

8.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

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9.Relation to Plan and Employment Agreement. This Agreement is subject to the terms and conditions of the Plan and the Employment Agreement. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan or the Employment Agreement. The Compensation Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with the grant of Restricted Shares.

10.Successors and Assigns. Without limiting Section 2 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Grantee, and the successors and assigns of the Company.

11.Governing Law. This Agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Delaware without giving effect to the principles of conflict of laws thereof.

[Remainder of Page Intentionally Left Blank, Signature Page to Follow]

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Executed in the name and on behalf of the Company, as of the 12th day of February 2020.

THE HOWARD HUGHES CORPORATION

By:      

Name: 
Title:    

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the right to receive the Restricted Shares or other securities covered hereby, subject to the terms and conditions of the Plan and the terms and conditions herein above set forth.

Employee (Grantee)

Date:        

5

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