Document:

Exhibit 10.28

 

FIFTH AMENDMENT TO RESTATED LOAN AGREEMENT

THIS FIFTH AMENDMENT (“Amendment”) to Restated Loan Agreement dated November 26, 2013, as modified by joinder dated December 12, 2014, amended on May 29, 2015, August 7, 2015, August 5, 2016, and August 1, 2017 (“Agreement”) is made by and between FIFTH THIRD BANK, an Ohio banking corporation (“Lender”), and INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation, FOOD INNOVATIONS, INC., a Florida corporation, GOURMET FOODSERVICE GROUP, INC., a Florida corporation, ARTISAN SPECIALTY FOODS, INC., a Delaware corporation, 4 THE GOURMET, INC., a Florida corporation, HALEY FOOD GROUP, INC., a Florida corporation, GOURMET FOODSERVICE GROUP WAREHOUSE, INC., a Florida corporation, ORGANIC FOOD BROKERS, LLC, a Colorado limited liability company, INNOVATIVE GOURMET, LLC, a Delaware limited liability company, and FOOD FUNDING, LLC, a Delaware limited liability company (collectively, “Obligors”) on February 28, 2018 (“Amendment Date”).

RECITALS:

WHEREAS, the Agreement governs five credit facilities established by Lender, consisting of a term loan in the original principal sum of FIVE HUNDRED FORTY-SIX THOUSAND and 00/100 DOLLARS ($546,000.00) (“Loan 1”), a revolving loan in the maximum principal sum ONE MILLION and 00/100 DOLLARS ($1,000,000.00), which was renewed and increased to ONE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000.00), which was renewed and increased to TWO MILLION and 00/100 DOLLARS (2,000,000.00) (“Loan 2”), a term loan in the original principal sum of ONE MILLION and 00/100 DOLLARS ($1,000,000.00) (“Loan 3”) which has been paid out, a term loan in the original principal sum of NINE HUNDRED EIGHTY THOUSAND and 00/100 DOLLARS ($980,000.00) (“Loan 4”), and a term loan in the original principal sum of ONE MILLION TWO HUNDRED THOUSAND and 00/100 DOLLARS ($1,200,000.00) (“Loan 5”) which has paid out;

WHEREAS, Obligors and Lender have agreed to amend the Agreement to renew Loan 1 in the maximum sum of TWO HUNDRED SEVENTY-THREE THOUSAND and 00/100 DOLLARS ($273,000.00), which is and shall continue to be secured by a Mortgage on real estate in Lee County, Florida, executed by INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation, and Obligors’ tangible and intangible personal property; and

WHEREAS, Obligors and Lender have agreed to amend the Agreement to amend Loan 2 to add INNOVATIVE GOURMET, LLC, a Delaware limited liability company, and FOOD FUNDING, LLC, a Delaware limited liability company, as additional co-borrowers; and

WHEREAS, Obligors and Lender have agreed to amend the Agreement to establish a sixth credit facility for Obligors in the principal sum of ONE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000.00), which shall be secured by Obligors’ tangible and intangible personal property; and

WHEREAS, Obligors and Lender desire to set forth the mutually agreed upon amended terms and conditions to the Agreement for the renewal of Loan 1, the amendment of Loan 2, and the establishment of the additional credit facility for Loan 6.

 

 

 

 

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NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

The following Definitions are hereby amended to add or be redefined:

a. “Fixed Charge Coverage Ratio” shall mean the ratio of (a) consolidated Borrower’s EBITDA, plus Rent, less cash taxes paid, distributions, dividends, unfinanced capital expenses and other extraordinary items for the trailing twelve (12) month period then ending to (b) the consolidated sum of (i) Borrower’s rent expense, interest expense, and (ii) all principal payments with respect to Indebtedness that were paid or were due and payable by all Consolidated Entities during the period.  The Fixed Charge Coverage Ratio shall be no less than 1:20:1.00.

b. “Loan 6” shall mean the term loan established for Borrowers pursuant to Section 2.1.F.

c. “Loans” shall mean Loan 1, Loan 2, Loan 4, Loan 6 and each other loan governed by this Agreement, all of which shall be cross-defaulted and cross-collateralized.  The term “Loan” may refer to any of the Loans, individually.

d. “Loan Documents” shall mean this Agreement, the Notes, any and all Rate Management Agreements, the Security Instruments, the Financing Statements, the Loan Commitment Letter, each Environmental Agreement and all the other documents, agreements, certificates, schedules, statements and opinions, however described, referenced herein or executed or delivered pursuant hereto or in connection with or arising with the Loans or the transactions contemplated by this Agreement.

e. “Maturity Date” as to Loan 1 shall mean February 28, 2023, as to Loan 2 shall mean August 1, 2018, as to Loan 4 shall mean May 29, 2020, and as to Loan 6 shall mean August 28, 2019.

f.  “Note 1” shall mean the renewal term note dated effective as of February 26, 2018 in the original principal sum of TWO HUNDRED SEVENTY-THREE THOUSAND and 00/100 DOLLARS ($273,000.00), and all renewals, modifications, substitutions, amendments and consolidations thereto.

g. “Note 2” shall mean the amended revolving renewal note dated effective as of August 1, 2017 in the principal sum of TWO MILLION and 00/100 DOLLARS ($2,000,000.00), and all renewals, modifications, substitutions, amendments and consolidations thereto.

h.  “Note 6” shall mean the term note dated effective as of February 28, 2018 in the original principal sum of ONE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000.00), and all renewals, modifications, substitutions, amendments and consolidations thereto.

i. “Notes” shall mean Note 1, Note 2, Note 4, Note 6, and each other note executed and delivered pursuant to this Agreement.  The term “Note” may refer to any of the Notes, individually.

	
2.

	
Paragraph A of Section 1.5 of the Agreement is hereby amended to read:

A.  Interest on Loan 1 shall, until an Event of Default or maturity, accrue interest at the LIBOR Rate plus 3.00%.  Interest on Loan 2 shall, until an Event of Default or maturity, accrue interest at the 

 

 

 

 

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LIBOR Rate plus 3.250%.  Interest on Loan 4 shall, until an Event of Default or maturity, accrue interest at the LIBOR Rate plus 2.750%. Interest on Loan 6 shall, until an Event of Default or maturity, accrue interest at the LIBOR Rate plus 4.25%.

	
3.

	
 Paragraph A of Section 2.1 of the Agreement is hereby restated to read:

A.  Loan 1.  Lender agrees, upon the terms and conditions set forth in this Agreement, and in reliance upon the representations and warranties made under this Agreement, to renew Loan 1 in the maximum sum of TWO HUNDRED SEVENTY-THREE THOUSAND and 00/100 DOLLARS ($273,000.00).  In consideration of Lender renewing Loan 1, Obligors shall pay Lender a loan commitment fee of TWO THOUSAND FIVE HUNDRED and 00/100 DOLLARS ($2,500.00) and a note fee of EIGHT HUNDRED and 00/100 DOLLARS ($800.00), of which FOUR HUNDRED and 00/100 DOLLARS ($400.00) shall be waived by Lender at Closing. Obligors shall pay all expenses, taxes, and fees incurred in connection with the documentation, underwriting and Closing of Loan 1 and this Amendment, including but not limited to, Lender’s attorneys’ fees, recording fees, lien search fees, UCC fees, appraisal fees, and other reasonable fees and expenses as may be required.

4. Paragraph F is hereby added to Section 2.1 of the Agreement to read:

F. Loan 6.  Lender agrees, upon the terms and conditions set forth in the Agreement, and in reliance upon the representations and warranties made under the Agreement and in this Amendment, to loan to Obligors the amount of ONE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000.00).  At Closing, Lender shall disburse the entire Loan 6 proceeds for Obligors’ acquisition and refinance of non-residential property.  In consideration of Lender making Loan 6, Obligors shall pay Lender a loan commitment fee of TEN THOUSAND and 00/100 DOLLARS ($10,000.00) and a note fee of EIGHT HUNDRED and 00/100 DOLLARS ($800.00), of which FOUR HUNDRED and 00/100 DOLLARS ($400.00) shall be waived by Lender at Closing.  Obligors shall pay all expenses, taxes, and fees incurred in connection with the documentation, underwriting and Closing of Loan 6 and this Amendment, including but not limited to, Lender’s attorneys’ fees, recording fees, lien search fees, UCC fees, appraisal fees, and other reasonable fees and expenses as may be required.

5. Paragraph A of Section 2.4 of the Agreement is hereby amended to add sub-paragraph 5 to read:

SECTION 2.4 Collateral Borrowers

A. 5.  As Collateral for Loan 6, a perfected security interest in all Personal Property of Obligors.  In connection with this security interest pledged in the Personal Property, Obligors shall execute and deliver to Lender such affirmations of the Security Agreements and authorize the filing of such Financing Statements, as required by Lender, to be recorded with the Secured Transaction Registry for the State of Florida, as Lender deems appropriate to grant Lender a security interest in the Personal Property of Obligors.

6. Paragraph F is hereby added to Section 5.1 of the Agreement to read:

F. Annually, beginning December 31, 2018, INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation, shall provide Lender a company-prepared compliance certificate within one hundred twenty (120) days of fiscal year end.

 

 

 

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7. Section 5.14 of the Agreement is hereby restated to read:

On a consolidated basis, Obligors shall maintain a Fixed Charge Coverage Ratio of no less than 1:20 to 1.00 which shall be tested annually at calendar year end based on Obligor’s consolidated certified public accountant prepared audited financial statements.

8. Section 6.7 of the Agreement is hereby restated to read:

Except as may be approved by writing by Lender in advance, no Obligor shall incur, create, assume or permit to exist any new Debt other than the indebtedness represented by the Loans except additional Debt to the Lender and new Debt not to exceed TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS ($250,000.00) on an annual basis considered on a consolidated basis for all Obligors and their subsidiaries.

9. Additional Representations, and Warranties of the Obligors. Obligors hereby make the following additional representations and warranties under Article IV, to the Lender:

a. No Change. Since the Statement Date there has been no material adverse change in the good standing, business, operations, assets, or financial or other condition of Obligors except as specifically disclosed to Lender in writing or in financial statements delivered by Obligors to Lender since the Statement Date. Since the Statement Date, no Obligor has entered into, incurred, or assumed any long-term debt, mortgages, material leases or oral or written commitments, nor commenced any significant project, nor made any purchase or acquisition of any significant property.

b. No Legal Bar. The execution, delivery, and performance of the Loan Documents and specifically this Amendment and the documents associated with Loan 2 and the borrowing hereunder and the use of the proceeds thereof, will not violate any Requirement of Law or any Contractual Obligation of any Obligor.

c. No Material Litigation. There is no litigation, investigation, or proceeding (including, without limitation, claims arising out of violation of any Environmental Laws or improper use or disposal of any Hazardous Substances) of or before any arbitrator or Governmental Authority is pending or, to the knowledge of any Obligor threatened by or against any Obligor, or against any of such parties’ properties or revenues which is likely to be adversely determined and which, if adversely determined, is likely to have a material adverse effect on the business, operations, property, or financial or other condition of such Obligor.

d. Taxes.

(i) Each Obligor has filed or caused to be filed all tax returns that are required to be filed and have paid all taxes shown to be due and payable on said returns or on any assessments made against them or any of their property other than taxes that are being contested in good faith by appropriate proceedings and as to which such Obligor has established adequate reserves.

(ii) Lender and Obligors believe that since Note 6 is not secured by Florida real estate, the documentary stamp tax due under Florida law in connection with the new obligations created by Note 6 is limited to the amount of TWO THOUSAND FOUR HUNDRED FIFTY and 00/100 DOLLARS ($2,450.00), pursuant to §201.08(1) of the Florida Statutes (2017) (“Maximum Tax”).  Lender and Obligors believe that since Note 2 is an amendment of a renewal Note not secured by Florida real estate, but which adds additional 

 

 

 

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obligors, the documentary stamp tax due under Florida law in connection with Note 2 is limited to the Maximum Tax.  Lender and Obligors believe that Note 1 is a renewal Note secured by a Mortgage on real estate in Lee County, Florida, upon which documentary stamp taxes were previously paid in the amount of ONE THOUSAND NINE HUNDRED ELEVEN and 00/100 DOLLARS ($1,911.00) and intangible taxes were previously aid in the amount of ONE THOUSAND NINETY-TWO and 00/100 DOLLARS ($1,092.00) (“Previous Tax”).  Lender and Obligor believe that no additional documentary stamp taxes are due herewith on Note 1 in excess of the Previous Tax.  Obligors, jointly and severally, warrant that they will pay to the Lender, its successors and assigns, all sums of money, with interest at the rate equal to the Default Rate, which the Lender shall or may advance, pay or cause to be paid, or become liable to pay, on account of or in connection with the failure to pay any documentary stamp taxes on Note 1, Note 2, and Note 6 in excess of the Maximum Tax (for Note 1 and Note 2) and the Previous Tax (for Note 6)  (Maximum Tax and Previous Tax shall be collectively referred to herein as “Taxes”) and any interest and penalties associated with such Taxes.  Obligors will make such payment to the Lender within ten (10) days of Lender’s demand therefore, whether Lender shall have paid out such sum, or any part thereof or not.  Upon receipt of such payment by the Lender, the Lender agrees to remit such payments to the appropriate Governmental Authority, if not previously paid.  In any accounting which may be had between the Lender and Obligors, Lender shall be entitled to charge for any and all disbursements in and about the matters herein contemplated made by it in good faith, under the belief that it is or was liable for the Taxes so assessed.  Obligors waive any defense to an action by Lender to enforce payment of Loan 1, Loan 2 and Loan 6 and collection of any Indebtedness based upon nonpayment of any documentary stamp tax on Note 1, Note 2 and Note 6.

e. Assets.  Each Obligor has good and marketable title to all property and assets reflected in the most current Financial Statements, except property and assets sold or otherwise disposed of in the ordinary course of business subsequent to the respective dates thereof. No Obligor has any outstanding liens on any of their properties or assets nor are there any security agreements to which either of them is a party, or title retention agreements, whether in the form of leases or otherwise, of any personal property except as reflected in the most current Financial Statements.

10. Each Obligor acknowledges that it has no claims of offset or defenses to the Indebtedness and hereby confirms that there has been no Event of Default under the Agreement or any other Loan Document. Each Obligor waives any and all claims of offset or defenses to the Loan Documents and the Indebtedness as a condition to the extension of the credit represented by Loan 1, Loan 2 and Loan 6 by Lender hereunder.

11. These covenants shall be deemed supplemental to the covenants contained within the Agreement unless they expressly conflict with such covenants in which event these provisions shall prevail.

12. This Amendment may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

13. In all other respects, Obligors and Lender hereby ratify and confirm the terms and conditions of the Agreement.

[SIGNATURE PAGES FOLLOW]

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have executed or caused this Amendment to be executed effective on the Amendment Date.

Signed, sealed and delivered in the presence of:

	
WITNESSES:

	 	
OBLIGORS:

	 
	 	 	 	 
	 	 	
INNOVATIVE FOOD HOLDINGS, INC.,

	 
	 	 	
a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
FOOD INNOVATIONS, INC.,

	 
	 	 	
a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
GOURMET FOODSERVICE GROUP, INC.,

	 
	 	 	
a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

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ARTISAN SPECIALTY FOODS, INC.,

	 
	 	 	
a Delaware corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
4 THE GOURMET, INC.,

	 
	 	 	
a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
HALEY FOOD GROUP, INC.,

	 
	 	 	
a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

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GOURMET FOODSERVICE GROUP WAREHOUSE,

	 
	 	 	
INC., a Florida corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
ORGANIC FOOD BROKERS, LLC,

	 
	 	 	
a Colorado limited liability company

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, Manager

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
INNOVATIVE GOURMET, LLC,

	 
	 	 	
a Delaware limited liability company

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, Manager

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

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FOOD FUNDING, LLC,

	 
	 	 	
a Delaware limited liability company

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Justin Wiernasz, Manager

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
WITNESSES:

	 	
LENDER:

	 
	 	 	 	 
	 	 	
FIFTH THIRD BANK,

	 
	 	 	
an Ohio banking corporation

	 
	 	 	 	 
	 	 	 	 
	
Witness #1 Signature

	 	
By: Timothy J. Reiter, Sr., Vice President

	 
	 	 	 	 
	
Witness #1 Printed Name

	 	 	 
	 	 	 	 
	
Witness #2 Signature

	 	 	 
	 	 	 	 
	
Witness #2 Printed Name

	 	 	 

Fifth Amendment to Restated Loan Agreement

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Page 9Exhibit 10.29

PROMISSORY NOTE

NOTE 6

NOTICE TO TAX EXAMINER: THIS NOTE IS NOT SECURED BY FLORIDA REAL ESTATE AND PURSUANT TO §201.08 (1)(a), FLORIDA STATUTES (2017) DOCUMENTARY STAMP TAX LIABILITY IS LIMITED TO $2,450.00, WHICH HAS BEEN PAID UPON THIS NOTE.

	
$1,500,000.00

	
Payable at Naples, Florida

	
 

	
Effective February 28, 2018

 

FOR VALUE RECEIVED, the undersigned, INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation, FOOD INNOVATIONS, INC., a Florida corporation, GOURMET FOODSERVICE GROUP, INC., a Florida corporation, ARTISAN SPECIALTY FOODS, INC., a Delaware corporation, 4 THE GOURMET, INC., a Florida corporation, HALEY FOOD GROUP, INC., a Florida corporation, GOURMET FOODSERVICE GROUP WAREHOUSE, INC., a Florida corporation, and ORGANIC FOOD BROKERS, LLC, a Colorado limited liability company, INNOVATIVE GOURMET, LLC, a Delaware limited liability company, and FOOD FUNDING, LLC, a Delaware limited liability company (collectively, “Borrowers”), jointly and severally, promise to pay in lawful money of the United States of America to FIFTH THIRD BANK, an Ohio banking corporation (“Lender”) or other holder of this Note, at 999 Vanderbilt Beach Road, 7th Floor, Naples, Florida 34108, or such other place as Lender may direct in writing, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($1,500,000.00), or such lesser amount as may be outstanding pursuant to the Loan Agreement dated November 26, 2013, as amended and restated from time to time (“Loan Agreement”) together with all accrued and unpaid interest thereon. (Capitalized terms not otherwise defined in this Note shall have the definitions ascribed to them under the Loan Agreement.)

A.  The principal sum outstanding shall bear interest at a floating rate per annum equal to 4.25% plus the LIBOR Rate. The “LIBOR Rate” is, as of any date of determination in accordance with this Note, the rate of interest rounded upwards (the “Rounding Adjustment”), if necessary, to the next 1/8 of 1% (and adjusted for reserves if Lender is required to maintain reserves with respect to relevant advances) fixed by ICE Benchmark Administration Limited (or any successor thereto, or replacement thereof, approved by Lender, each an “Alternate LIBOR Source”) at approximately 11:00 a.m., London, England time (or the relevant time established by ICE Benchmark Administration Limited, an Alternate LIBOR Source, or Lender, as applicable), two Business Days prior to such date of determination, relating to quotations for the one month London InterBank Offered Rates on U.S. Dollar deposits, as displayed by Bloomberg LP (or any successor thereto, or replacement thereof, as approved by Lender, each an “Approved Bloomberg Successor”), or, if no longer displayed by Bloomberg LP (or any Approved Bloomberg Successor), such rate as shall be determined in good faith by Lender from such sources as it shall determine to be comparable to Bloomberg LP (or any Approved Bloomberg Successor), all as determined by Lender in accordance with this Note and Lender’s loan systems and procedures periodically in effect.  Notwithstanding anything to the contrary contained herein, in no event shall the LIBOR Rate be less than 0% as of any date (the “LIBOR Rate Minimum”); provided that, at any time during which a Rate Management Agreement with Lender is then in effect with respect to all or a portion of the Obligations, the LIBOR Rate Minimum, the Rounding Adjustment and the Adjustment Protocol (as defined below) shall all be disregarded and no longer of any force and effect with respect to such portion of the Obligations subject to such Rate Management Agreement.   Each determination by Lender of the LIBOR Rate shall be binding and conclusive in the absence of manifest error. The LIBOR Rate shall be initially determined as of the date of the initial

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advance of funds to Borrower under this Note and shall be effective until the first Business Day of the month following the period commencing on the date of such initial advance (such first Business Day being the “First Adjustment Date”).  The interest rate based upon the LIBOR Rate shall be adjusted automatically on the First Adjustment Date and on the first Business Day of each month thereafter (the “Adjustment Protocol”).

Notwithstanding anything herein contained to the contrary, if Lender, by written or telephonic notice, notifies Borrowers that:

(a)          any change in any law, regulation or official directive, or in the interpretation thereof, by any governmental body charged with the administration thereof, has made it unlawful for Lender to fund or maintain its funding in Eurodollars of any portion of any advance subject to the LIBOR Rate or otherwise give effect to Lender’s obligations as contemplated hereby, or

(b)          (i) LIBOR deposits for periods of one month are not readily available in the London Interbank Offered Rate Market, (ii) by reason of circumstances affecting such market or other economic conditions, adequate and reasonable methods do not exist for ascertaining the rate of interest applicable to such deposits, or (iii) the LIBOR Rate as determined by Lender will not adequately and fairly reflect the cost to Lender of making or maintaining advances under this Note bearing interest with reference to the LIBOR Rate (including inaccurate or inadequate reflection of actual costs resulting from the calculation of rates by reporting sources), then, in any of such events: (A) Lender’s obligations in respect of the LIBOR Rate shall terminate forthwith, (B) the LIBOR Rate with respect to Lender shall forthwith cease to be in effect, (C) Borrowers’ right to utilize LIBOR Rate index pricing as set forth in this Note shall be terminated forthwith, and (D) amounts outstanding hereunder shall, on and after such date, bear interest at a rate per annum equal to: (1) 4.50% plus (2) the floating rate of interest established from time to time by Fifth Third Bank at its principal office as its “Prime Rate”, whether or not Fifth Third Bank shall at times lend to borrowers at lower rates of interest or, if there is no such Prime Rate, then such other rate as may be substituted by Fifth Third Bank for such Prime Rate. Each determination by Lender of the Prime Rate shall be binding and conclusive in the absence of manifest error. In the event of a change in the Prime Rate, the interest rate accruing hereunder based upon the Prime Rate shall be changed immediately with such change to be based upon such new Prime Rate.

B.  “The "LIBOR Interest Period" for each LIBOR Rate Loan is a period of one month, at Borrowers’ election, which period shall commence on a Business Day selected by Borrower subject to the terms of this Note and shall be determined by Lender in accordance with this Note and Lender’s loan systems and procedures periodically in effect, including, without limitation, in accordance with the following terms and conditions, as applicable:

(a)   In the case of immediately successive LIBOR Interest Periods with respect to a continued LIBOR Rate Loan, each successive LIBOR Interest Period shall commence on the day on which the immediately preceding LIBOR Interest Period expires, with interest for such day to be calculated based upon the LIBOR Rate in effect for the new LIBOR Interest Period;

(b)     If a LIBOR Interest Period would otherwise end on a day that is not a Business Day, such LIBOR Interest Period shall end on the next succeeding Business Day; provided that, if the next succeeding Business Day falls in a new month, such LIBOR Interest Period shall end on the immediately preceding Business Day; and

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(c)   If any LIBOR Interest Period begins on a Business Day for which there is no numerically corresponding day in the calendar month at the end of such LIBOR Interest Period, then the LIBOR Interest Period shall end on the last Business Day of the calendar month ending at the end of such LIBOR Interest Period.”

C.  Interest shall be calculated based on a 360-day year and charged for the actual number of days elapsed and shall be payable in full with the entire outstanding principal amount on the Maturity Date.

D.  Notwithstanding any provision to the contrary in this Note, in no event shall the interest rate charged on the Obligations exceed the maximum rate of interest permitted under applicable state and/or federal usury law. Any payment of interest that would be deemed unlawful under applicable law for any reason shall be deemed received on account of, and will automatically be applied to reduce, the principal sum outstanding and any other sums (other than interest) due and payable to Lender under this Note, and the provisions hereof shall be deemed amended to provide for the highest rate of interest permitted under applicable law.

E.  Borrowers, jointly and severally, agree to pay said principal, and all accrued and unpaid interest thereon as follows:

1.  Beginning on March 28, 2018, and continuing on the 29th day of each succeeding month thereafter until the Maturity Date, Borrowers shall pay all accrued interest.

2.  Borrowers shall make monthly payments of principal in the amount of EIGHTY-THREE THOUSAND THREE HUNDRED THIRTY-THREE and 33/100 DOLLARS ($83,333.33) beginning on March 28, 2018, and continuing on the 29th day of each succeeding month thereafter until the Maturity Date.

3.    The entire principal balance and all accrued and unpaid interest thereon shall be due and payable on the Maturity Date of August 28, 2019, unless sooner accelerated following a Default (as defined herein).

F.  Borrowers shall be in default under this Note (herein “Default”) upon the happening of any of the following events, circumstances or conditions; namely:

1.  Default in the payment when due of any principal or interest under this Note.

2.  Any other Event of Default under the Loan Agreement or other Loan Document, which continues beyond any applicable notice and cure period.

In the event of such Default, the entire amount of this Note shall become due and payable at the election of the holder and all such sums shall bear interest at the Default Rate as defined in the Loan Agreement.  Failure to precipitate for Default shall not estop the right to assert for subsequent Defaults.

G.  The use of the masculine pronoun herein shall include the feminine and neuter and also the plural.  If any provision of this instrument shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

Promissory Note - Note 6 ($1,500,000.00)

Fifth Third Bank

Page 3

H.  If any payment is not paid within ten (10) days of the Due Date, undersigned agrees to pay to Lender a late payment fee as provided for in the Loan Agreement.

I.  Interest not paid when due shall bear interest.

J.  Should it become necessary to collect this Note through an attorney, all parties hereto, whether maker, endorser, surety or guarantor each severally agree to pay all costs of collecting this Note, including a reasonable attorney's fee, whether at trial, at any appellate level, or in any bankruptcy proceeding, whether collected by suit or otherwise. As used herein, attorney's fees shall include a separate award for paralegal or legal assistants’ fees.

K.  Each Borrower waives presentment for payment, protest and notice of protest and non‐payment of this Note, and consents that this Note or any part hereof may be extended without further notice.

L.  Each Borrower waives its right to a jury trial of any claim or cause of action based upon or arising out of this Note, and/or the transactions contemplated by this Note, or any dealings between Borrowers and Lender.  The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims.

Borrowers acknowledge that this waiver is a material inducement to Lender to loan money to Borrowers.

M.  Any judgment rendered on this Note shall bear interest at the highest rate of interest permitted pursuant to Chapter 687, Florida Statutes.

N.  This Note is not secured by Florida real property and pursuant to §201.08 of Florida Statutes documentary stamp taxes in the amount of $2,450.00 have been paid in connection with this Note.

[SIGNATURE PAGES FOLLOW]

Promissory Note - Note 6 ($1,500,000.00)

Fifth Third Bank

Page 4

	
BORROWER:

 

 

INNOVATIVE FOOD HOLDINGS, INC.,

a Florida corporation

 

By:                                                                           

Justin Wiernasz, President

EIN:  20-1167761

 

 

FOOD INNOVATIONS, INC.,

a Florida corporation

 

By:                                                                                    

Justin Wiernasz, President

EIN:  10-0002630

 

 

GOURMET FOODSERVICE GROUP, INC.,

a Florida corporation

 

By:                                                                                    

Justin Wiernasz, President

EIN:  26-3780857

 

 

ARTISAN SPECIALTY FOODS, INC.,

a Delaware corporation

 

By:                                                                                    

Justin Wiernasz, President

EIN:  45-5301842

 

 

4 THE GOURMET, INC.,

a Florida corporation

 

By:                                                                                    

Justin Wiernasz, President

EIN:  26-3780922

 

 

HALEY FOOD GROUP, INC.,

a Florida corporation

 

By:                                                                                    

Justin Wiernasz, President

EIN:  46-1290142

 

	 

 

Promissory Note - Note 6 ($1,500,000.00)

Fifth Third Bank

Page 5

	
GOURMET FOODSERVICE GROUP WAREHOUSE, INC.,

a Florida corporation

 

By:                                                                                     

Justin Wiernasz, President

EIN:  46-1331955

 

 

ORGANIC FOOD BROKERS, LLC,

a Colorado limited liability company

 

By:                                                                                     

Justin Wiernasz, Manager

EIN:  75-3119907

 

 

INNOVATIVE GOURMET, LLC

a Delaware limited liability company

 

By:                                                                                    

Justin Wiernasz, Manager

EIN:  61-1863458

 

 

FOOD FUNDING, LLC,

a Delaware limited liability company

 

 

By:                                                                                    

Justin Wiernasz, Manager

EIN:  __-_______

	 

Promissory Note - Note 6 ($1,500,000.00)

Fifth Third Bank

Page 6

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