|
Prospectus
Supplement
(To
Prospectus dated October 7, 2005)
|
Filed
Pursuant to Rule 424(b)(3) and 424(c)
Commission
File No. 333-126487
|
27,772,411
Shares
Common
Stock
This
prospectus supplement supplements the prospectus dated October 7, 2005, which
relates to the shares of our common stock that may be sold by the selling
stockholders named therein.
This
prospectus supplement should be read in connection with, and may not be
delivered or utilized without, the prospectus dated October 7, 2005, and the
prospectus supplements dated November 2, 2005, December 1, 2005, December 2,
2005, March 23, 2006, April 7, 2006, April 27, 2006, May 1, 2006, August 2,
2006
and August 3, 2006. This prospectus supplement is qualified by reference to
the
prospectus and the prospectus supplements, except to the extent that the
information in this prospectus supplement updates or supersedes the information
contained in the prospectus dated October 7, 2005, or the prospectus supplements
dated November 2, 2005, December 1, 2005, December 2, 2005, March 23, 2006,
April 7, 2006, April 27, 2006, May 1, 2006, August 2, 2006 and August 3, 2006.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.
The
date
of this prospectus supplement is August 4, 2006
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
__________________________________________
FORM
8-K
__________________________________________
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported) July
7, 2006
Shells
Seafood Restaurants, Inc.
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
0-28258
|
65-0427966
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
16313
N. Dale Mabry Hwy, Suite 100, Tampa,
FL
|
33618
|
|
(Address
of Principal Executive
Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code:
(813) 961-0944
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange
Act (17 CFR 240.13e-4(c))
| Item 1.01 |
Entry
into a Material Definitive
Agreement.
|
On
July
7, 2006, Colonial Bank, N.A. (the “Bank”) agreed, effective as of June 28, 2006,
to extend the maturity date of a loan and repayment of a promissory note
in the
principal amount of $500,000 (the “Note”) at an initial interest rate of 8.25%
per annum made by the Bank to Shells Seafood Restaurants, Inc. (the “Company”)
from June 28, 2006 to September 28, 2006. The Note, a business loan agreement
between the Company and the Bank (the “Loan Agreement”) and a commercial
security agreement between the Company and the Bank (the “Security Agreement”)
were each entered into on December 28, 2005 to fund remodeling of the Company’s
restaurants.
Pursuant
to the Note the Company will repay the Note in one payment of principal plus
all
accrued interest on its maturity date. The Note and the Loan Agreement contain
various events of default, including without limitation, (i) any failure
to make
payment when due (ii) making representations or warranties which are false
or
misleading in any material respect, (iii) breaches of covenants or agreements,
(iv) events of bankruptcy, (v) insolvency and (vi) any third party acquiring
25%
or more of common stock of the Company. The Loan Agreement and Note provide
an
opportunity for the Company to cure certain events of default. Upon the
occurrence of an event of default, all commitments of the Bank under the
Loan
Agreement and the Note shall terminate and at the Bank’s option, all
indebtedness will immediately become due and payable. Pursuant to the terms
of
the Security Agreement, the indebtedness under the Loan Agreement and the
Note
are secured by all of the business assets of the Company.
The
Note,
the Loan Agreement, the Security Agreement, and extension letter are filed
with
this Report as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively and are
incorporated by reference into this Item 1.01. The preceding description
of the
terms of the credit facility and extension are qualified by reference to
Exhibits 10.1, 10.2, 10.3 and 10.4 to this Report.
| Item 2.03 |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet
Arrangement of Registrant.
|
The
discussion under Item 1.01 of this Report is incorporated under this Item
2.03
as if set forth herein.
| Item 9.01 |
Financial
Statements and Exhibits.
|
| (d) |
Exhibits.
|
| Item No. | Description |
|
10.1
|
Promissory Note, dated December 28, 2005, made by the Company to the Bank. |
|
10.2
|
Business
Loan Agreement, dated December 28, 2005, between the Company and
the
Bank.
|
|
10.3
|
Commercial
Security Agreement, dated December 28, 2005, between the Company
and the
Bank.
|
|
10.4
|
Extension
letter, dated July 7, 2006 from the Bank to the
Company.
|
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Date: July 13, 2006 | SHELLS SEAFOOD RESTAURANTS, INC. |
| By: |
/s/
Warren R. Nelson
|
|
|
Name:
|
Warren
R. Nelson
|
|
|
Title:
|
Vice
President and Chief Financial
Officer
|
3
Exhibit
Index
| Item No. | Description |
| 10.1 | Promissory Note, dated December 28, 2005, made by the Company to the Bank. |
| 10.2 | Business Loan Agreement, dated December 28, 2005, between the Company and the Bank. |
| 10.3 | Commercial Security Agreement, dated December 28, 2005, between the Company and the Bank. |
| 10.4 | Extension letter, dated July 7, 2006 from the Bank to the Company. |
4
Exhibit
10.1
PROMISSORY
NOTE
Borrower:
Shells
Seafood Restaurants, Inc.
16313
North Dale Mabry Hwy, Suite 100
Tampa,
FL 33618
Lender:
COLONIAL
BANK, N.A.
Corporate
Lending
400
N. Tampa Street
Tampa,
FL 33602
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Principal
Amount: $500,000.00 Initial Rate: 8.250% Date of Note: December 28,
2005
PROMISE
TO PAY. Shells Seafood Restaurants, Inc. ("Bor rower") promises to pay to
COLONIAL BANK, N.A. ( "Lender"), or order, in lawful
money
of the United States of Amer ica, the pr incipal amount of Five Hundred Thousand
& 00/100 Dollars ($500,000.00) or so much as may be outstanding, together
with interest on the unpaid outstanding pr incipal balance of each advance.
Interest shall be calculated from the date of each advance until repayment
of
each advance.
PAYMENT.
Bor rower will pay this loan in one payment of all outstanding principal
plus
all accrued unpaid interest on June 28, 2006. In
addition,
Borrower will pay regular monthly payments of all accrued unpaid interest
due as
of each payment date, beginning January 28, 2006, with all subsequent interest
payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any
accrued unpaid interest; then to principal; then to any unpaid collection
costs;
and then to any late charges. The annual interest rate for this Note is computed
on a 365/360 basis; that is, by applying the ratio of the annual interest
rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the pr incipal balance is outstanding.
Bor rower will pay Lender at Lender ’s address shown above or at such other
place as Lender may designate inwriting.
VARIABLE
INTEREST RATE. The
interest rate on this Note is subject to change from time to time based on
changes in an index which is the
Colonial
Bank, N.A.’ s Base Rate (the "Index"). Base Rate. Lender will tell Bor rower the
cur rent Index rate upon Borrower ’s request. The
interest
rate change will not occur more often than each day. Borrower understands
that
Lender may make loans based on other rates as well.
The
Index cur rently is 7.250% per annum. The
interest rate to be applied to the unpaid pr incipal balance during this
Note
will be at a rate of
1.000
percentage point over the Index, resulting in an initial rate of 8.250% per
annum. NOTICE: Under no circumstances will the effective
rate
of
interest on this Note be more than the maximum rate allowed by applicable
law.
PREPAYMENT.
Borrower
agrees that all loan fees and other prepaid finance charges are earned fully
as
of the date of the loan and will not be
subject
to
refund upon ear ly payment (whether voluntary or as a result of default),
except
as otherwise required by law. Except for the
foregoing,
Bor rower may pay without penalty all or a portion of the amount owed earlier
than it is due. Early payments will not, unless agreed
to
by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to make
payments of accrued unpaid interest. Rather , early
payments
will reduce the principal balance due. Borrower agrees not to send Lender
payments marked "paid in full", "without recourse", or
similar
language. If Borrower sends such a payment, Lender may accept it without
losing
any of Lender ’s rights under this Note, and Borrower
will
remain obligated to pay any further amount owed to Lender . All wr itten
communications concerning disputed amounts, including any check
or
other
payment instrument that indicates that the payment constitutes "payment in
full"
of the amount owed or that is tendered with other
conditions
or limitations or as full satisfaction of a disputed amount must be mailed
or
delivered to: COLONIAL BANK, N.A.; Corporate Lending;
400
N.
Tampa Street; Tampa, FL 33602.
LATE
CHARGE. If
a
payment is 9 days or more late, Borrower will be charged 5.000%
of the unpaid portion of the regularly scheduled
payment.
INTEREST
AFTER DEFAULT. Upon
default, including failure to pay upon final maturity, the interest rate
on this
Note shall be increased to
18.000%
per annum. However, in no event will the interest rate exceed the maximum
interest rate limitations under applicable law.
DEFAULT.
Each
of
the following shall constitute an event of default ("Event of Default") under
this Note:
Payment
Default. Bor
rower
fails to make any payment when due under this Note.
Other
Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Note or in
any
of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement
between
Lender and Borrower .
Default
in Favor of Third Par ties. Borrower
or any Grantor defaults under any loan, extension of credit, secur ity
agreement, purchase or
sales
agreement, or any other agreement, in favor of any other creditor or person
that
may mater ially affect any of Bor rower’s proper ty or
Borrower
’s ability to repay this Note or per form Borrower ’s obligations under this
Note or any of the related documents.
False
Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower
or
on Borrower ’s behalf under this
Note
or
the related documents is false or misleading in any material respect, either
now
or at the time made or furnished or becomes false
or
misleading at any time thereafter.
Insolvency.
The
dissolution or termination of Bor rower’s existence as a going business, the
insolvency of Borrower , the appointment of a
receiver
for any part of Bor rower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the
commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor
or For feiture Proceedings. Commencement
of foreclosure or for feiture proceedings, whether by judicial proceeding,
self-help,
repossession
or any other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the loan.
This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall
not
apply
if there is a good faith dispute by Bor rower as to the validity or
reasonableness of the claim which is the basis of the creditor or
for
feiture proceeding and if Borrower gives Lender wr itten notice of the creditor
or forfeiture proceeding and deposits with Lender monies or
a
surety
bond for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate
reserve
or
bond for the dispute.
Events
Affecting Guarantor. Any
of the
preceding events occurs with respect to any guarantor, endorser, surety,
or
accommodation party
of
any of
the indebtedness or any guarantor, endorser, surety, or accommodation par
ty
dies or becomes incompetent, or revokes or
disputes
the validity of, or liability under, any guaranty of the indebtedness evidenced
by this Note. In the event of a death, Lender , at its
option,
may, but shall not be required to, permit the guarantor ’s estate to assume
unconditionally the obligations ar ising under the guaranty
in
a
manner satisfactory to Lender, and, in doing so, cure any Event of
Default.
Change
In Ownership. Any
change
in ownership of twenty-five percent (25%) or more of the common stock of
Bor
rower.
Adverse
Change. A
material
adverse change occurs in Borrower’s financial condition, or Lender believes the
prospect of payment or
per
formance of this Note is impaired.
Insecurity.
Lender
in
good faith believes itself insecure.
Cure
Provisions. If
any
default, other than a default in payment is curable and if Borrower has
not been
given a notice of a breach of the
same
provision of this Note within the preceding twelve (12) months, it may
be cured
if Bor rower, after receiving wr itten notice from
Lender
demanding cure of such default: (1) cures the default within fifteen (15)
days;
or (2) if the cure requires more than fifteen (15)
days,
immediately initiates steps which Lender deems in Lender’s sole discretion to be
sufficient to cure the default and thereafter
continues
and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
LENDER’S
RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this
Note
and all accrued unpaid interest
immediately
due, and then Bor rower will pay that amount.
ATTORNEYS’
FEES; EXPENSES. Lender
may
hire or pay someone else to help collect this Note if Bor rower does not
pay.
Borrower will pay
Lender
the
amount of these costs and expenses, which includes, subject to any limits
under
applicable law, Lender ’s reasonable attorneys’ fees
and
Lender
’s legal expenses whether or not there is a lawsuit, including reasonable
attorneys’ fees and legal expenses for bankruptcy
proceedings
( including efforts to modify or vacate any automatic stay or injunction),
and
appeals. If not prohibited by applicable law, Borrower
also
will
pay any court costs, in addition to all other sums provided by law.
JURYWAIVER.
Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Bor rower against
the
other .
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and,
to the
extent not preempted by federal law, the laws of the State of Florida without
regard to its conflicts of lawprovisions. This Note has been accepted by
Lender
in the State of Flor ida.
DISHONORED
ITEM FEE. Bor
rower
will pay a fee to Lender of $30.00 if Borrower makes a payment on Bor rower’s
loan and the check or
preauthorized
charge withwhich Bor rower pays is later dishonored.
RIGHT
OF SETOFF. To
the
extent permitted by applicable law, Lender reserves a r ight of setoff in
all
Bor rower’s accounts with Lender (whether
checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may
open
in
the future. However , this does not include any IRA or Keogh accounts, or
any
trust accounts for which setoff would be prohibited by
law.
Borrower authorizes Lender, to the extent permitted by applicable law, to
charge
or setoff all sums owing on the indebtedness against any
and
all
such accounts.
COLLATERAL.
Borrower
acknowledges this Note is secured by collateral as more fully described in
a
Commercial Security Agreement of even
date.
LINE
OF CREDIT. This
Note
evidences a revolving line of credit. Advances under this Note may be requested
orally by Bor rower or as provided
in
this
paragraph. All oral requests shall be confirmed in wr iting on the day of
the
request. All communications, instructions, or directions by
telephone
or otherwise to Lender are to be directed to Lender’s office shown above. The
following person currently is authorized to request
advances
and author ize payments under the line of credit until Lender receives from
Borrower , at Lender ’s address shown above, written notice
of
revocation of his or her author ity: Warren
R. Nelson, Vice President/CFO of Shells Seafood Restaurants, Inc.
Borrower
agrees to be liable for
all
sums
either: (A) advanced in accordance with the instructions of an authorized
person
or (B) credited to any of Bor rower’s accounts with
Lender
.
The unpaid pr incipal balance owing on this Note at any time may be evidenced
by
endorsements on this Note or by Lender’s internal
records,
including daily computer print-outs.
LETTERS
OF CREDIT. Borrower
may request that Lender , from time to time, issue letters of credit for
the
benefit of Bor rower (each a "Letter of
Credit").
Bor rower acknowledges that, when a Letter of Credit is issued by Lender
for the
benefit of Bor rower while the line of credit evidenced
hereby
(the "Line of Credit") remains outstanding, the amount available under the
Line
of Credit shall immediately be reduced by an amount
equal
to
the face amount of the Letter of Credit and Bor rower shall have no right
to
borrow such amount while the Letter of Credit remains
outstanding.
Therefore, as an example which is included for the purpose of demonstration
only, if Lender were to issue a Letter of Credit for the
benefit
of
Borrower in the amount of $50,000.00, the amount available to be borrowed
by Bor
rower under the Line of Credit evidenced by this
Note
shall
immediately be reduced by $50,000.00 (as if such amount had been drawn down
by
Bor rower under the Line of Credit) and Bor rower
shall
have
no right to borrowthe said funds while the Letter of Credit remains outstanding.
Lender shall have no obligation to issue a Letter of
Credit
if
the amount which remains unborrowed under the Line of Credit, at the point
in
time at which Bor rower requests the Letter of Credit, is
less
than
the face amount of the Letter of Credit. Borrower acknowledges that, in addition
to complying with the terms and conditions hereof,
Bor
rower
shall also be required to satisfy all of the other conditions of Lender with
respect to the issuance of any Letter of Credit, specifically
including,
but not limited to, the execution of any and all documents whichmay be required
by Lender with regard thereto.
SUCCESSOR
INTERESTS. The
terms
of this Note shall be binding upon Borrower , and upon Borrower ’s heirs,
personal representatives,
successors
and assigns, and shall inure to the benefit of Lender and its successors
and
assigns.
NOTIFY
US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please
notify us if we report any inaccurate information about your account(s) to
a
consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: COLONIAL BANK,
N.A., Corporate Lending, 400 N. Tampa Street, Tampa, FL 33602.
GENERAL
PROVISIONS. If
any par
t of this Note cannot be enforced, this fact will not affect the rest of
the
Note. Borrower does not agree or
intend
to
pay, and Lender does not agree or intend to contract for , charge, collect,
take, reserve or receive (collectively referred to herein as
"charge
or
collect"), any amount in the nature of interest or in the nature of a fee
for
this loan, which would in any way or event (including
demand,
prepayment, or acceleration) cause Lender to charge or collect more for this
loan than the maximum Lender would be permitted to
charge
or
collect by federal law or the law of the State of Florida (as applicable).
Any
such excess interest or unauthor ized fee shall, instead of
anything
stated to the contrary, be applied first to reduce the pr incipal balance
of
this loan, and when the principal has been paid in full, be
refunded
to Bor rower. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any
other
person who signs, guarantees or endorses this Note, to the extent allowed
by
law, waive presentment, demand for payment, and notice of
dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated
in writing, no party who signs this Note, whether
as
maker,
guarantor, accommodation maker or endorser , shall be released from liability.
All such parties agree that Lender may renew or extend
(repeatedly
and for any length of time) this loan or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender ’s
security
interest in the collateral; and take any other action deemed necessary by
Lender
without the consent of or notice to anyone. All such
parties
also agree that Lender may modify this loan without the consent of or notice
to
anyone other than the party with whom the modification
is
made.
The obligations under this Note are joint and several.
PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS
NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE
TERMS OF THE NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE.
BORROWER:
SHELLS
SEAFOOD RESTAURANTS, INC.
By:,/s/
War
ren R. Nelson, Vice President/CFO
Shells
Seafood Restaurants, Inc.
Florida
Documentary Stamp Tax
Florida
documentary stamp tax required by law in the amount of $1,750.00 has been
paid
or will be paid directly to the Department of Revenue.
Exhibit
10.2
BUSINESS
LOAN AGREEMENT
Borrower:
Shells
Seafood Restaurants, Inc.
16313
North Dale Mabry Hwy, Suite 100
Tampa,
FL 33618
Lender:
COLONIAL
BANK, N.A.
Corporate
Lending
400
N. Tampa Street
Tampa,
FL 33602
THIS
BUSINESS LOAN AGREEMENT dated December 28, 2005, is made and executed between
Shells Seafood Restaurants, Inc. ("Bor rower") and COLONIAL BANK, N.A. (
"Lender") on the following terms and conditions. Borrower has received pr
ior
commercial loans from Lender or has applied to Lender for a commercial loan
or
loans or other financial accommodations, including those which may be described
on any exhibit or schedule attached to this Agreement ("Loan"). Borrower
understands and agrees that: (A) in granting, renewing, or extending any
Loan,
Lender is relying upon Borrower ’s representations, warranties, and agreements
as set for th in this Agreement; (B) the granting, renewing, or extending
of any
Loan by Lender at all times shall be subject to Lender ’s sole judgment and
discretion; and (C) all such Loans shall be and remain subject to the terms
and
conditions of this Agreement.
TERM.
This
Agreement shall be effective as of December 28, 2005, and shall continue
in full
force and effect until such time as all of
Bor
rower’s Loans in favor of Lender have been paid in full, including pr incipal,
interest, costs, expenses, attorneys’ fees, and other fees and
charges,
or until such time as the par ties may agree in wr iting to terminate this
Agreement.
ADVANCE
AUTHORITY. The
following person currently is authorized to request advances and authorize
payments under the line of credit until
Lender
receives from Borrower, at Lender’s address shown above, written notice of
revocation of his or her author ity: Warren
R. Nelson, Vice
President/CFO
of Shells Seafood Restaurants, Inc.
CONDITIONS
PRECEDENT TO EACH ADVANCE. Lender’s
obligation to make the initial Advance and each subsequent Advance under
this
Agreement
shall be subject to the fulfillment to Lender’s satisfaction of all of the
conditions set for th in this Agreement and in the Related
Documents.
Loan
Documents. Borrower
shall provide to Lender the following documents for the Loan: (1) the Note;
(2)
Security Agreements
granting
to Lender security interests in the Collateral; (3) financing statements
and all
other documents per fecting Lender’s Security
Interests;
(4) evidence of insurance as required below; (5) together with all such Related
Documents as Lender may require for the Loan;
all
in
form and substance satisfactory to Lender and Lender’s counsel.
Borrower
’s Authorization. Borrower
shall have provided in form and substance satisfactory to Lender properly
cer
tified resolutions, duly
authorizing
the execution and delivery of this Agreement, the Note and the Related
Documents. In addition, Bor rower shall have provided
such
other
resolutions, author izations, documents and instruments as Lender or its
counsel, may require.
Payment
of Fees and Expenses. Borrower
shall have paid to Lender all fees, charges, and other expenses which are
then
due and payable
as
specified in this Agreement or any Related Document.
Representations
and Warranties. The
representations and warranties set forth in this Agreement, in the Related
Documents, and in any
document
or cer tificate delivered to Lender under this Agreement are true and
correct.
No
Event of Default. There
shall not exist at the time of any Advance a condition which would constitute
an
Event of Default under this
Agreement
or under any Related Document.
REPRESENTATIONS
AND WARRANTIES. Borrower
represents and war rants to Lender , as of the date of this Agreement, as
of the
date of each
disbursement
of loan proceeds, as of the date of any renewal, extension or modification
of
any Loan, and at all times any Indebtedness exists:
Organization.
Borrower
is a corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing
under
and
by vir tue of the laws of the State of Delaware. Bor rower is duly author
ized
to transact business in the State of Florida and all
other
states in which Borrower is doing business, having obtained all necessary
filings, governmental licenses and approvals for each state
in
which
Borrower is doing business. Specifically, Borrower is, and at all times shall
be, duly qualified as a foreign corporation in all states
in
which
the failure to so qualify would have a mater ial adverse effect on its business
or financial condition. Bor rower has the full power
and
author
ity to own its properties and to transact the business in which it is presently
engaged or presently proposes to engage. Borrower
maintains
an office at 16313 Nor th Dale Mabry Hwy, Suite 100, Tampa, FL 33618. Unless
Bor
rower has designated otherwise in wr iting,
the
pr
incipal office is the office at which Bor rower keeps its books and records
including its records concerning the Collateral. Borrower
will
notify Lender prior to any change in the location of Borrower ’s state of
organization or any change in Borrower ’s name. Bor rower shall
do
all
things necessary to preserve and to keep in full force and effect its existence,
r ights and privileges, and shall comply with all
regulations,
rules, ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to
Borrower
and Borrower’s business activities.
Assumed
Business Names. Borrower
has filed or recorded all documents or filings required by law relating to
all
assumed business names
used
by
Bor rower. Excluding the name of Borrower, the following is a complete list
of
all assumed business names under which Borrower
does
business: None.
Authorization.
Bor
rower’s execution, delivery, and performance of this Agreement and all the
Related Documents have been duly
authorized
by all necessary action by Borrower and do not conflict with, result in a
violation of, or constitute a default under (1) any
provision
of (a) Bor rower’ s ar ticles of incorporation or organization, or bylaws, or
(b) any agreement or other instrument binding upon
Borrower
or (2) any law, governmental regulation, court decree, or order applicable
to
Bor rower or to Borrower ’s properties.
Financial
Information. Each
of
Bor rower’s financial statements supplied to Lender truly and completely
disclosed Borrower’s financial
condition
as of the date of the statement, and there has been no material adverse change
in Bor rower’s financial condition subsequent to
the
date
of the most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in
such
financial statements.
Legal
Effect. This
Agreement constitutes, and any instrument or agreement Bor rower is required
to
give under this Agreement when
delivered
will constitute legal, valid, and binding obligations of Borrower enforceable
against Bor rower in accordance with their respective
terms.
Proper
ties. Except
as
contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender
and
as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Bor rower owns and has good title to
all
of
Borrower ’s properties free and clear of all Secur ity Interests, and has not
executed any security documents or financing statements
relating
to such properties. All of Bor rower’s properties are titled in Borrower’s legal
name, and Borrower has not used or filed a financing
statement
under any other name for at least the last five (5) years.
Hazardous
Substances. Except
as
disclosed to and acknowledged by Lender in writing, Borrower represents and
warrants that: (1) Dur ing
the
per
iod of Bor rower’s ownership of the Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release
or
threatened release of any Haz ardous Substance by any person on, under ,
about
or from any of the Collateral. (2) Bor rower has no
knowledge
of, or reason to believe that there has been (a) any breach or violation
of any
Environmental Laws; (b) any use, generation,
manufacture,
storage, treatment, disposal, release or threatened release of any Hazardous
Substance on, under , about or from the
Collateral
by any prior owners or occupants of any of the Collateral; or (c) any actual
or
threatened litigation or claims of any kind by any
person
relating to such matters. (3) Neither Borrower nor any tenant, contractor,
agent
or other authoriz ed user of any of the Collateral
shall
use,
generate, manufacture, store, treat, dispose of or release any Hazardous
Substance on, under , about or from any of the
Collateral;
and any such activity shall be conducted in compliance with all applicable
federal, state, and local laws, regulations, and
ordinances,
including without limitation all Environmental Laws. Borrower author izes
Lender
and its agents to enter upon the Collateral to
make
such
inspections and tests as Lender may deem appropriate to determine compliance
of
the Collateral with this section of the
Agreement.
Any inspections or tests made by Lender shall be at Bor rower’ s expense and for
Lender’ s purposes only and shall not be
construed
to create any responsibility or liability on the part of Lender to Borrower
or
to any other person. The representations and
war
ranties contained herein are based on Borrower’s due diligence in investigating
the Collateral for haz ardous waste and Hazardous
Substances.
Borrower hereby (1) releases and waives any future claims against Lender
for
indemnity or contribution in the event
Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees
to
indemnify and hold harmless Lender against
any
and
all claims, losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting
from
a
breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or
threatened
release of a hazardous waste or substance on the Collateral. The provisions
of
this section of the Agreement, including the
obligation
to indemnify, shall survive the payment of the Indebtedness and the termination,
expiration or satisfaction of this Agreement and
shall
not
be affected by Lender’s acquisition of any interest in any of the Collateral,
whether by foreclosure or otherwise.
Litigation
and Claims. No
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes)
against
Borrower is pending or threatened, and no other event has occurred which
may
mater ially adversely affect Borrower ’s financial
condition
or proper ties, other than litigation, claims, or other events, if any, that
have been disclosed to and acknowledged by Lender in
writing.
Taxes.
To
the
best of Bor rower’s knowledge, all of Bor rower’ s tax returns and repor ts that
are or were required to be filed, have been
filed,
and
all taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by
Borrower
in good faith in the ordinary course of business and for which adequate reserves
have been provided.
Lien
Pr iority. Unless
otherwise previously disclosed to Lender in writing, Borrower has not entered
into or granted any Security
Agreements,
or permitted the filing or attachment of any Security Interests on or affecting
any of the Collateral directly or indirectly
securing
repayment of Borrower ’s Loan and Note, that would be prior or that may in any
way be superior to Lender ’s Secur ity Interests and
rights
in
and to such Collateral.
Binding
Effect. This
Agreement, the Note, all Security Agreements (if any) , and all Related
Documents are binding upon the signers
thereof,
as well as upon their successors, representatives and assigns, and are legally
enforceable in accordance with their respective
terms.
AFFIRMATIVE
COVENANTS. Borrower
covenants and agrees with Lender that, so long as this Agreement remains
in
effect, Borrower will:
Notices
of Claims and Litigation. Promptly
inform Lender in wr iting of (1) all material adverse changes in Borrower
’s
financial condition,
and
(2)
all existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or
any
Guarantor which could materially affect the financial condition of Borrower
or
the financial condition of any Guarantor .
Financial
Records. Maintain
its books and records in accordance with GAAP, applied on a consistent basis,
and permit Lender to examine
and
audit
Borrower’s books and records at all reasonable times.
Financial
Statements. Furnish
Lender with the following:
Annual
Statements. As
soon as
available, but in no event later than thir ty (30) days after the end of
each
fiscal year, Bor rower’s
balance
sheet and income statement for the year ended, prepared by Bor
rower.
Interim
Statements. As
soon as
available, but in no event later than thirty (30) days after the end of each
fiscal quar ter, Bor rower’s
balance
sheet and profit and loss statement for the period ended, prepared by Borrower
.
Tax
Returns. As
soon as
available, but in no event later than thirty (30) days after the applicable
filing date for the tax repor ting per iod
ended,
Federal and other governmental tax returns, prepared by Borrower .
All
financial repor ts required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent
basis,
and
certified by Borrower as being true and correct.
Additional
Information. Furnish
such additional information and statements, as Lender may request fromtime
to
time.
Insurance.
Maintain
fire and other r isk insurance, public liability insurance, and such other
insurance as Lender may require with respect to
Borrower
’s properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender . Bor rower, upon
request
of
Lender, will deliver to Lender from time to time the policies or certificates
of
insurance in form satisfactory to Lender , including
stipulations
that coverages will not be cancelled or diminished without at least ten (10)
days prior wr itten notice to Lender . Each insurance
policy
also shall include an endorsement providing that coverage in favor of Lender
will not be impaired in any way by any act, omission or
default
of
Borrower or any other person. In connection with all policies cover ing assets
in which Lender holds or is offered a security
interest
for the Loans, Borrower will provide Lender with such lender ’s loss payable or
other endorsements as Lender may require.
Insurance
Repor ts. Furnish
to
Lender , upon request of Lender, reports on each existing insurance policy
showing such information as
Lender
may
reasonably request, including without limitation the following: (1) the name
of
the insurer; (2) the risks insured; (3) the
amount
of
the policy; (4) the proper ties insured; (5) the then current property values
on
the basis of which insurance has been obtained,
and
the
manner of determining those values; and (6) the expiration date of the policy.
In addition, upon request of Lender (however not
more
often
than annually), Borrower will have an independent appraiser satisfactory
to
Lender determine, as applicable, the actual cash
value
or
replacement cost of any Collateral. The cost of such appraisal shall be paid
by
Bor rower.
Other
Agreements. Comply
with all terms and conditions of all other agreements, whether now or hereafter
existing, between Bor rower
and
any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
Loan
Proceeds. Use
all
Loan proceeds solely for Borrower’s business operations, unless specifically
consented to the contrary by Lender in
writing.
Taxes,
Charges and Liens. Pay
and
discharge when due all of its indebtedness and obligations, includingwithout
limitation all assessments,
taxes,
governmental charges, levies and liens, of every kind and nature, imposed
upon
Borrower or its proper ties, income, or profits, prior
to
the
date on which penalties would attach, and all lawful claims that, if unpaid,
might become a lien or charge upon any of Borrower ’s
properties,
income, or profits.
Performance.
Perform
and comply, in a timely manner , with all terms, conditions, and provisions
set
forth in this Agreement, in the Related
Documents,
and in all other instruments and agreements between Borrower and Lender.
Borrower shall notify Lender immediately in
writing
of
any default in connection with any agreement.
Operations.
Maintain
executive and management personnel with substantially the same qualifications
and experience as the present
executive
and management personnel; provide wr itten notice to Lender of any change
in
executive and management personnel; conduct its
business
affairs in a reasonable and prudent manner.
Environmental
Studies. Promptly
conduct and complete, at Bor rower’s expense, all such investigations, studies,
samplings and testings as
may
be
requested by Lender or any governmental authority relative to any substance,
or
any waste or by-product of any substance defined
as
toxic
or a hazardous substance under applicable federal, state, or local law, rule,
regulation, order or directive, at or affecting any
property
or any facility owned, leased or used by Bor rower.
Compliance
with Governmental Requirements. Comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all
governmental
authorities applicable to the conduct of Borrower ’s properties, businesses and
operations, and to the use or occupancy of the
Collateral,
including without limitation, the Amer icans With Disabilities Act. Borrower
may
contest in good faith any such law, ordinance,
or
regulation and withhold compliance during any proceeding, including appropr
iate
appeals, so long as Bor rower has notified Lender in
writing
prior to doing so and so long as, in Lender’ s sole opinion, Lender ’s interests
in the Collateral are not jeopardiz ed. Lender may
require
Borrower to post adequate security or a surety bond, reasonably satisfactory
to
Lender , to protect Lender’s interest.
Inspection.
Permit
employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and
Borrower
’s other proper ties and to examine or audit Borrower ’s books, accounts, and
records and to make copies and memoranda of
Borrower
’s books, accounts, and records. If Bor rower now or at any time hereafter
maintains any records (including without limitation
computer
generated records and computer software programs for the generation of such
records) in the possession of a third par ty,
Borrower
,
upon request of Lender, shall notify such par ty to permit Lender free access
to
such records at all reasonable times and to
provide
Lender with copies of any records it may request, all at Borrower ’s
expense.
Compliance
Certificates. Unless
waived in wr iting by Lender , provide Lender at least annually, with a
certificate executed by Bor rower’s
chief
financial officer , or other officer or person acceptable to Lender, certifying
that the representations and war ranties set forth in this
Agreement
are true and correct as of the date of the certificate and further cer tifying
that, as of the date of the certificate, no Event of
Default
exists under this Agreement.
Environmental
Compliance and Reports. Bor
rower
shall comply in all respects with any and all Environmental Laws; not cause
or
permit to
exist,
as
a result of an intentional or unintentional action or omission on Borrower
’s
par t or on the par t of any third party, on property
owned
and/or occupied by Borrower , any environmental activity where damage may
result
to the environment, unless such environmental
activity
is pursuant to and in compliance with the conditions of a permit issued by
the
appropriate federal, state or local governmental
authorities;
shall furnish to Lender promptly and in any event within thir ty (30) days
after
receipt thereof a copy of any notice, summons,
lien,
citation, directive, letter or other communication from any governmental
agency
or instrumentality concerning any intentional or
unintentional
action or omission on Borrower ’s par t in connection with any environmental
activity whether or not there is damage to the
environment
and/or other natural resources.
Additional
Assurances. Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of
trust,
security agreements,
assignments,
financing statements, instruments, documents and other agreements as Lender
or
its attorneys may reasonably request to
evidence
and secure the Loans and to per fect all Security Interests.
LENDER’S
EXPENDITURES. If
any
action or proceeding is commenced that would materially affect Lender’s interest
in the Collateral or if
Bor
rower
fails to comply with any provision of this Agreement or any Related Documents,
including but not limited to Bor rower’ s failure to
discharge
or pay when due any amounts Borrower is required to discharge or pay under
this
Agreement or any Related Documents, Lender on
Bor
rower’s behalf may (but shall not be obligated to) take any action that Lender
deems appropr iate, including but not limited to discharging or
paying
all
taxes, liens, security interests, encumbrances and other claims, at any time
levied or placed on any Collateral and paying all costs for
insuring,
maintaining and preserving any Collateral. All such expenditures incurred
or
paid by Lender for such purposes will then bear interest at
the
rate
charged under the Note from the date incurred or paid by Lender to the date
of
repayment by Borrower. All such expenses will become
a
part of
the Indebtedness and, at Lender ’s option, will (A) be payable on demand; (B) be
added to the balance of the Note and be
apportioned
among and be payable with any installment payments to become due dur ing
either
(1) the term of any applicable insurance policy;
or
(2) the
remaining term of the Note; or (C) be treated as a balloon payment which
will be
due and payable at the Note’s matur ity.
NEGATIVE
COVENANTS. Bor
rower
covenants and agrees with Lender that while this Agreement is in effect,
Borrower shall not, without the
pr
ior
written consent of Lender:
Indebtedness
and Liens. (1)
Except
for trade debt incurred in the normal course of business and indebtedness
to
Lender contemplated by
this
Agreement, create, incur or assume indebtedness for bor rowed money, including
capital leases, (2) sell, transfer , mortgage, assign,
pledge,
lease, grant a security interest in, or encumber any of Borrower’s assets
(except as allowed as Permitted Liens) , or (3) sell with
recourse
any of Bor rower’s accounts, except to Lender.
Continuity
of Operations. (1)
Engage
in any business activities substantially different than those in which Bor
rower
is presently engaged,
(2)
cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve or transfer or sell
Collateral
out of the ordinary course of business, or (3) pay any dividends on Borrower’s
stock (other than dividends payable in its stock),
provided,
however that notwithstanding the foregoing, but only so long as no Event
of
Default has occurred and is continuing or would
result
from the payment of dividends, if Borrower is a "Subchapter S Corporation"
(as
defined in the Internal Revenue Code of 1986, as
amended),
Borrower may pay cash dividends on its stock to its shareholders from time
to
time in amounts necessary to enable the
shareholders
to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which
arise
solely from their status as Shareholders of a Subchapter S Corporation because
of their ownership of shares of Borrower’s stock, or
purchase
or retire any of Borrower’ s outstanding shares or alter or amend Bor rower’ s
capital structure.
Loans,
Acquisitions and Guaranties. (1)
Loan,
invest in or advance money or assets to any other person, enterpr ise or
entity,
(2)
purchase,
create or acquire any interest in any other enterprise or entity, or (3)
incur
any obligation as surety or guarantor other than in
the
ordinary course of business.
Agreements.
Borrower
will not enter into any agreement containing any provisions which would be
violated or breached by the
per
formance of Bor rower’s obligations under this Agreement or in connection
herewith.
CESSATION
OF ADVANCES. If
Lender
has made any commitment to make any Loan to Borrower , whether under this
Agreement or under any
other
agreement, Lender shall have no obligation to make Loan Advances or to disburse
Loan proceeds if: (A) Borrower or any Guarantor is in
default
under the terms of this Agreement or any of the Related Documents or any
other
agreement that Borrower or any Guarantor has with
Lender
;
(B) Bor rower or any Guarantor dies, becomes incompetent or becomes insolvent,
files a petition in bankruptcy or similar proceedings,
or
is
adjudged a bankrupt; (C) there occurs a mater ial adverse change in Borrower
’s
financial condition, in the financial condition of any
Guarantor
, or in the value of any Collateral secur ing any Loan; or (D) any Guarantor
seeks, claims or otherwise attempts to limit, modify or
revoke
such Guarantor ’s guaranty of the Loan or any other loan with Lender; or (E)
Lender in good faith deems itself insecure, even though no
Event
of
Default shall have occurred.
RIGHT
OF SETOFF. To
the
extent permitted by applicable law, Lender reserves a r ight of setoff in
all
Bor rower’s accounts with Lender (whether
checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may
open
in
the future. However , this does not include any IRA or Keogh accounts, or
any
trust accounts for which setoff would be prohibited by
law.
Borrower authorizes Lender, to the extent permitted by applicable law, to
charge
or setoff all sums owing on the Indebtedness against any
and
all
such accounts.
DEFAULT.
Each
of
the following shall constitute an Event of Default under this
Agreement:
Payment
Default. Bor
rower
fails to make any payment when due under the Loan.
Other
Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Agreement
or
in any
of the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other
agreement
between Lender and Borrower .
Default
in Favor of Third Par ties. Borrower
or any Grantor defaults under any loan, extension of credit, secur ity
agreement, purchase or
sales
agreement, or any other agreement, in favor of any other creditor or person
that
may mater ially affect any of Bor rower’s or any
Grantor’s
property or Bor rower’ s or any Grantor’s ability to repay the Loans or perform
their respective obligations under this Agreement or
any
of the
Related Documents.
False
Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower
or
on Borrower ’s behalf under this
Agreement
or the Related Documents is false or misleading in any mater ial respect,
either
nowor at the time made or furnished or becomes
false
or
misleading at any time thereafter.
Insolvency.
The
dissolution or termination of Bor rower’s existence as a going business, the
insolvency of Borrower , the appointment of a
receiver
for any part of Bor rower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the
commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Defective
Collateralization. This
Agreement or any of the Related Documents ceases to be in full force and
effect
(including failure of any
collateral
document to create a valid and perfected security interest or lien) at any
time
and for any reason.
Creditor
or For feiture Proceedings. Commencement
of foreclosure or for feiture proceedings, whether by judicial proceeding,
self-help,
repossession
or any other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the Loan.
This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall
not
apply
if there is a good faith dispute by Bor rower as to the validity or
reasonableness of the claim which is the basis of the creditor or
for
feiture proceeding and if Borrower gives Lender wr itten notice of the creditor
or forfeiture proceeding and deposits with Lender monies or
a
surety
bond for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate
reserve
or
bond for the dispute.
Events
Affecting Guarantor. Any
of the
preceding events occurs with respect to any Guarantor of any of the Indebtedness
or any
Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. In the
event
of a
death, Lender, at its option, may, but shall not be required to, permit the
Guarantor ’s estate to assume unconditionally the
obligations
ar ising under the guaranty in a manner satisfactory to Lender , and, in
doing
so, cure any Event of Default.
Change
in Ownership. Any
change
in ownership of twenty-five percent (25%) or more of the common stock of
Borrower.
Adverse
Change. A
material
adverse change occurs in Borrower’s financial condition, or Lender believes the
prospect of payment or
per
formance of the Loan is impaired.
Insecurity.
Lender
in
good faith believes itself insecure.
Right
to Cure. If
any
default, other than a default on Indebtedness, is curable and if Borrower
or
Grantor, as the case may be, has not been
given
a
notice of a similar default within the preceding twelve (12) months, it may
be
cured if Borrower or Grantor, as the case may be,
after
receiving wr itten notice from Lender demanding cure of such default: (1)
cure
the default within fifteen (15) days; or (2) if the cure
requires
more than fifteen (15) days, immediately initiate steps which Lender deems
in
Lender’ s sole discretion to be sufficient to cure the
default
and thereafter continue and complete all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably
practical.
EFFECT
OF AN EVENT OF DEFAULT. If
any
Event of Default shall occur, except where otherwise provided in this Agreement
or the Related
Documents,
all commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will
terminate
( including any obligation to make fur ther Loan Advances or disbursements),
and, at Lender’s option, all Indebtedness immediately will
become
due
and payable, all without notice of any kind to Borrower , except that in
the
case of an Event of Default of the type descr ibed in the
"Insolvency"
subsection above, such acceleration shall be automatic and not optional.
In
addition, Lender shall have all the rights and remedies
provided
in the Related Documents or available at law, in equity, or otherwise. Except
as
may be prohibited by applicable law, all of Lender’s
rights
and
remedies shall be cumulative and may be exercised singular ly or concurrently.
Election by Lender to pursue any remedy shall not
exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Bor rower or of any
Grantor
shall not affect Lender’s right to declare a default and to exercise its rights
and remedies.
MISCELLANEOUS
PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:
Amendments.
This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties
as
to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in wr iting
and
signed
by the par ty or parties sought to be charged or bound by the alteration
or
amendment.
Attorneys’
Fees; Expenses. Bor
rower
agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s
reasonable
attorneys’
fees and Lender’s legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may hire or pay
someone
else to help enforce this Agreement, and Borrower shall pay the costs and
expenses of such enforcement. Costs and expenses
include
Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys’ fees and
legal
expenses for bankruptcy proceedings (including effor ts to modify or vacate
any
automatic stay or injunction), appeals, and any
anticipated
post-judgment collection services. Borrower also shall pay all court costs
and
such additional fees as may be directed by the
court.
Caption
Headings. Caption
headings in this Agreement are for convenience purposes only and are not
to be
used to interpret or define the
provisions
of this Agreement.
Consent
to Loan Par ticipation. Borrower
agrees and consents to Lender ’s sale or transfer, whether now or later , of one
or more
par
ticipation interests in the Loan to one or more purchasers, whether related
or
unrelated to Lender . Lender may provide, without any
limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about
Borrower
or about any other matter relating to the Loan, and Borrower hereby waives
any
rights to privacy Borrower may have with respect
to
such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase
of
such
par ticipation interests. Borrower also agrees that the purchasers of any
such
participation interests will be considered as the
absolute
owners of such interests in the Loan and will have all the rights granted
under
the participation agreement or agreements
governing
the sale of such participation interests. Borrower further waives all rights
of
offset or counterclaim that it may have now or later
against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may
enforce
Bor rower’s obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan. Borrower
fur
ther
agrees that the purchaser of any such participation interests may enforce
its
interests ir respective of any personal claims or
defenses
that Borrower may have against Lender .
Governing
Law. This Agreement will be governed by federal law applicable to Lender
and, to
the extent not preempted by federal law, the
laws
of the State of Flor ida without regard to its conflicts of law provisions.
This
Agreement has been accepted by Lender in the State of
Florida.
No
Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless
such
waiver is given in wr iting
and
signed
by Lender . No delay or omission on the part of Lender in exercising any
right
shall operate as a waiver of such right or any
other
r
ight. A waiver by Lender of a provision of this Agreement shall not prejudice
or
constitute a waiver of Lender’s right otherwise to
demand
strict compliance with that provision or any other provision of this Agreement.
No prior waiver by Lender , nor any course of
dealing
between Lender and Borrower, or between Lender and any Grantor , shall
constitute a waiver of any of Lender ’s rights or of any of
Borrower
’s or any Grantor ’s obligations as to any future transactions. Whenever the
consent of Lender is required under this Agreement,
the
granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent
is
required and in all cases such consent may be granted or withheld in the
sole
discretion of Lender .
Notices.
Any
notice
required to be given under this Agreement shall be given in writing, and
shall
be effective when actually delivered,
when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier,
or,
if
mailed, when deposited in the United States mail, as first class, certified
or
registered mail postage prepaid, directed to the addresses
shown
near
the beginning of this Agreement. Any party may change its address for notices
under this Agreement by giving written notice
to
the
other parties, specifying that the purpose of the notice is to change the
par
ty’s address. For notice purposes, Borrower agrees to
keep
Lender informed at all times of Borrower ’s current address. Unless otherwise
provided or required by law, if there is more than one
Borrower
,
any notice given by Lender to any Borrower is deemed to be notice given to
all
Borrowers.
Severability.
If
a court
of competent jur isdiction finds any provision of this Agreement to be illegal,
invalid, or unenforceable as to any
circumstance,
that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible,
the
offending provision shall be considered modified so that it becomes legal,
valid
and enforceable. If the offending provision cannot be so
modified,
it shall be considered deleted from this Agreement. Unless otherwise required
by
law, the illegality, invalidity, or unenforceability
of
any
provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
Subsidiar
ies and Affiliates of Bor rower. To
the
extent the context of any provisions of this Agreement makes it appropriate,
including
without
limitation any representation, war ranty or covenant, the word "Borrower"
as
used in this Agreement shall include all of Borrower ’s
subsidiaries
and affiliates. Notwithstanding the foregoing however, under no circumstances
shall this Agreement be construed to require
Lender
to
make any Loan or other financial accommodation to any of Borrower’s subsidiaries
or affiliates.
Successors
and Assigns. All
covenants and agreements by or on behalf of Borrower contained in this Agreement
or any Related
Documents
shall bind Bor rower’s successors and assigns and shall inure to the benefit of
Lender and its successors and assigns. Borrower
shall
not,
however, have the r ight to assign Bor rower’s rights under this Agreement or
any interest therein, without the pr ior wr itten
consent
of
Lender .
Survival
of Representations and War ranties. Borrower
understands and agrees that in extending Loan Advances, Lender is relying
on
all
representations,
war ranties, and covenants made by Borrower in this Agreement or in any cer
tificate or other instrument delivered by
Borrower
to Lender under this Agreement or the Related Documents. Borrower further
agrees
that regardless of any investigation made by
Lender,
all such representations, war ranties and covenants will survive the extension
of Loan Advances and delivery to Lender of the
Related
Documents, shall be continuing in nature, shall be deemed made and redated
by
Borrower at the time each Loan Advance is made,
and
shall
remain in full force and effect until such time as Borrower’s Indebtedness shall
be paid in full, or until this Agreement shall be
terminated
in the manner provided above, whichever is the last to occur.
Time
is of the Essence. Time
is of
the essence in the performance of this Agreement.
Waive
Jury. All par ties to this Agreement hereby waive the right to any jury trial
in
any action, proceeding, or counterclaim brought by any
par
ty against any other par ty.
DEFINITIONS.
The
following capitaliz ed words and terms shall have the following meanings
when
used in this Agreement. Unless specifically
stated
to
the contrary, all references to dollar amounts shall mean amounts in lawful
money of the United States of Amer ica. Words and terms
used
in
the singular shall include the plural, and the plural shall include the singular
, as the context may require. Words and terms not otherwise
defined
in
this Agreement shall have the meanings attr ibuted to such terms in the Uniform
Commercial Code. Accounting words and terms not
otherwise
defined in this Agreement shall have the meanings assigned to themin accordance
with generally accepted accounting principles as in
effect
on
the date of this Agreement:
Advance.
The
word
"Advance" means a disbursement of Loan funds made, or to be made, to Bor
rower
or on Borrower ’s behalf on a line
of
credit
or multiple advance basis under the terms and conditions of this
Agreement.
Agreement.
The
word
"Agreement" means this Business Loan Agreement, as this Business Loan Agreement
may be amended or modified
fromtime
to time, together with all exhibits and schedules attached to this Business
Loan
Agreement from time to time.
Borrower
. The
word
"Borrower" means Shells Seafood Restaurants, Inc. and includes all co-signers
and co-makers signing the Note and all
their
successors and assigns.
Collateral.
The
word
"Collateral" means all proper ty and assets granted as collateral secur ity
for
a Loan, whether real or personal property,
whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest,
mortgage,
collateral mor tgage, deed of trust, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust,
factor’s
lien, equipment trust, conditional sale, trust receipt, lien, charge, lien
or
title retention contract, lease or consignment intended as a
secur
ity
device, or any other security or lien interest whatsoever, whether created
by
law, contract, or otherwise.
Environmental
Laws. The
words
"Environmental Laws" mean any and all state, federal and local statutes,
regulations and ordinances
relating
to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response,
Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Super fund Amendments and
Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.,
the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
or
other applicable state or federal laws, rules, or
regulations
adopted pursuant thereto.
Event
of Default. The
words
"Event of Default" mean any of the events of default set forth in this Agreement
in the default section of this
Agreement.
GAAP.
The
word
"GAAP" means generally accepted accounting principles.
Grantor.
The
word
"Grantor" means each and all of the persons or entities granting a Secur
ity
Interest in any Collateral for the Loan,
including
without limitation all Borrowers granting such a Security Interest.
Guarantor.
The
word
"Guarantor" means any guarantor, surety, or accommodation party of any or
all of
the Loan.
Guaranty.
The
word
"Guaranty" means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the
Note.
Hazardous
Substances. The
words
"Hazardous Substances" mean mater ials that, because of their quantity,
concentration or physical,
chemical
or infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when
improper
ly used, treated, stored, disposed of, generated, manufactured, transpor
ted or
otherwise handled. The words "Hazardous
Substances"
are used in their very broadest sense and include without limitation any
and all
hazardous or toxic substances, mater ials or
waste
as
defined by or listed under the Environmental Laws. The term "Hazardous
Substances" also includes, without limitation, petroleum
and
petroleumby-products or any fraction thereof and asbestos.
Indebtedness.
The
word
"Indebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and
interest
together with all other indebtedness and costs and expenses for which Bor
rower
is responsible under this Agreement or under any
of
the
Related Documents.
Lender.
The
word
"Lender" means COLONIAL BANK, N.A., its successors and assigns.
Loan.
The
word
"Loan" means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter
existing,
and however evidenced, including without limitation those loans and financial
accommodations descr ibed herein or described on
any
exhibit or schedule attached to this Agreement from time to time.
Note.
The
word
"Note" means the Note executed by Shells Seafood Restaurants, Inc. in the
pr
incipal amount of $500,000.00 dated
December
28, 2005, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for
the
note
or credit agreement.
Permitted
Liens. The
words
"Permitted Liens" mean (1) liens and security interests securing Indebtedness
owed by Bor rower to Lender ;
(2)
liens
for taxes, assessments, or similar charges either not yet due or being contested
in good faith; (3) liens of materialmen,
mechanics,
warehousemen, or carr iers, or other like liens arising in the ordinary course
of business and securing obligations which are not
yet
delinquent; (4) purchase money liens or purchase money secur ity interests
upon
or in any proper ty acquired or held by Borrower in the
ordinary
course of business to secure indebtedness outstanding on the date of this
Agreement or permitted to be incurred under the
paragraph
of this Agreement titled "Indebtedness and Liens"; (5) liens and security
interests which, as of the date of this Agreement,
have
been
disclosed to and approved by the Lender in wr iting; and (6) those liens
and
security interests which in the aggregate constitute
an
immaterial and insignificant monetary amount with respect to the net value
of
Borrower’s assets.
Related
Documents. The
words
"Related Documents" mean all promissory notes, credit agreements, loan
agreements, environmental
agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments,
agreements
and documents, whether now or hereafter existing, executed in connection
with
the Loan.
Security
Agreement. The
words
"Security Agreement" mean and include without limitation any agreements,
promises, covenants,
arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or
creating
a
Security Interest.
Security
Interest. The
words
"Secur ity Interest" mean, without limitation, any and all types of collateral
security, present and future,
whether
in
the form of a lien, charge, encumbrance, mortgage, deed of trust, security
deed,
assignment, pledge, crop pledge, chattel
mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien or title retention
contract,
lease or consignment intended as a security device, or any other security
or
lien interest whatsoever whether created by law,
contract,
or otherwise.
BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT
AND
BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED DECEMBER
28,
2005.
BORROWER:
SHELLS
SEAFOOD RESTAURANTS, INC.
By:/s/
Warren
R. Nelson, Vice President/CFO
Shells
Seafood Restaurants, Inc.
LENDER:
COLONIAL
BANK, N.A.
By:/s/
David
Ogburn, Authorized
Signer
EXHIBIT
10.3
COMMERCIAL
SECURITY AGREEMENT
Grantor:
Shells
Seafood Restaurants, Inc.
16313
North Dale Mabry Hwy, Suite 100
Tampa,
FL 33618
Lender:
COLONIAL
BANK, N.A.
Corporate
Lending
400
N. Tampa Street
Tampa,
FL 33602
THIS
COMMERCIAL SECURITY AGREEMENT dated December 28, 2005, is made and executed
between Shells Seafood Restaurants, Inc.
(
"Grantor") and COLONIAL BANK, N.A. ("Lender").
GRANT
OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a
security interest in the Collateral to secure the
Indebtedness
and agrees that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights
which
Lender may have by law.
COLLATERAL
DESCRIPTION. The
word
"Collateral" as used in this Agreement means the following descr ibed property,
whether now owned or
hereafter
acquired, whether now existing or hereafter ar ising, and wherever located,
in
which Grantor is giving to Lender a secur ity interest for
the
payment of the Indebtedness and performance of all other obligations under
the
Note and this Agreement:
Blanket
Lien on all Business Assets including but not limited to all Inventory,
Accounts, Equipment and General Intangibles
In
addition, the word "Collateral" also includes all the following, whether
now
owned or hereafter acquired, whether now existing or hereafter
arising,
and wherever located:
(A)
All
accessions, attachments, accessor ies, tools, parts, supplies, replacements
of
and additions to any of the collateral described herein,
whether
added now or later.
(B)
All
products and produce of any of the property descr ibed in this Collateral
section.
(C)
All
accounts, general intangibles, instruments, rents, monies, payments, and
all
other rights, arising out of a sale, lease, consignment
or
other
disposition of any of the property described in this Collateral
section.
(D)
All
proceeds (including insurance proceeds) from the sale, destruction, loss,
or
other disposition of any of the property described in this
Collateral
section, and sums due from a third party who has damaged or destroyed the
Collateral or from that party’s insurer, whether due
to
judgment, settlement or other process.
(E)
All
records and data relating to any of the property described in this Collateral
section, whether in the form of a writing, photograph,
microfilm,
microfiche, or electronic media, together with all of Grantor’s right, title,
and interest in and to all computer software required to
utilize,
create, maintain, and process any such records or data on electronic
media.
RIGHT
OF SETOFF. To
the
extent permitted by applicable law, Lender reserves a right of setoff in
all
Grantor ’s accounts with Lender (whether
checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may
open
in
the future. However , this does not include any IRA or Keogh accounts, or
any
trust accounts for which setoff would be prohibited by
law.
Grantor authorizes Lender, to the extent permitted by applicable law, to
charge
or setoff all sums owing on the Indebtedness against any
and
all
such accounts.
GRANTOR’S
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With
respect to the Collateral, Grantor represents and promises to Lender
that:
Perfection
of Secur ity Interest. Grantor
agrees to take whatever actions are requested by Lender to perfect and continue
Lender’s security
interest
in the Collateral. Upon request of Lender, Grantor will deliver to Lender
any
and all of the documents evidencing or constituting the
Collateral,
and Grantor will note Lender ’s interest upon any and all chattel paper and
instruments if not delivered to Lender for possession
by
Lender.
This
is a continuing Secur ity Agreement and will continue in effect even though
all
or any par t of the Indebtedness is paid in full
and
even though for a per iod of time Grantor may not be indebted to Lender
.
Notices
to Lender . Grantor
will promptly notify Lender in writing at Lender ’s address shown above (or such
other addresses as Lender may
designate
from time to time) prior to any (1) change in Grantor’s name; (2) change in
Grantor’s assumed business name(s); (3) change
in
the
management of the Corporation Grantor; (4) change in the authorized signer(s)
;
(5) change in Grantor’ s pr incipal office address;
(6)
change
in Grantor ’s state of organization; (7) conversion of Grantor to a new or
different type of business entity; or (8) change in
any
other
aspect of Grantor that directly or indirectly relates to any agreements between
Grantor and Lender. No change in Grantor ’s name
or
state
of organizationwill take effect until after Lender has received
notice.
No
Violation. The
execution and delivery of this Agreement will not violate any law or agreement
governing Grantor or to which Grantor is
a
party,
and its certificate or articles of incorporation and bylaws do not prohibit
any
term or condition of this Agreement.
Enforceability
of Collateral. To
the
extent the Collateral consists of accounts, chattel paper , or general
intangibles, as defined by the
Uniform
Commercial Code, the Collateral is enforceable in accordance with its terms,
is
genuine, and fully complies with all applicable laws
and
regulations concerning form, content and manner of preparation and execution,
and all persons appearing to be obligated on the
Collateral
have author ity and capacity to contract and are in fact obligated as they
appear to be on the Collateral. At the time any account
becomes
subject to a secur ity interest in favor of Lender, the account shall be
a good
and valid account representing an undisputed, bona
fide
indebtedness incurred by the account debtor, for merchandise held subject
to
delivery instructions or previously shipped or delivered
pursuant
to a contract of sale, or for services previously per formed by Grantor with
or
for the account debtor. So long as this Agreement
remains
in
effect, Grantor shall not, without Lender’ s prior written consent, compromise,
settle, adjust, or extend payment under or with
regard
to
any such Accounts. There shall be no setoffs or counterclaims against any
of the
Collateral, and no agreement shall have been
made
under
which any deductions or discounts may be claimed concerning the Collateral
except those disclosed to Lender in writing.
Location
of the Collateral. Except
in
the ordinary course of Grantor ’s business, Grantor agrees to keep the
Collateral (or to the extent the
Collateral
consists of intangible property such as accounts or general intangibles,
the
records concerning the Collateral) at Grantor ’s
address
shown above or at such other locations as are acceptable to Lender. Upon
Lender’s request, Grantor will deliver to Lender in form
satisfactory
to Lender a schedule of real properties and Collateral locations relating
to
Grantor’s operations, including without limitation the
following:
(1) all real property Grantor owns or is purchasing; (2) all real property
Grantor is renting or leasing; (3) all storage facilities
Grantor
owns, rents, leases, or uses; and (4) all other proper ties where Collateral
is
or may be located.
Removal
of the Collateral. Except
in
the ordinary course of Grantor ’s business, including the sales of inventory,
Grantor shall not remove
the
Collateral from its existing location without Lender’ s pr ior written consent.
To the extent that the Collateral consists of vehicles, or
other
titled property, Grantor shall not take or permit any action which would
require
application for cer tificates of title for the vehicles
outside
the State of Florida, without Lender’s pr ior written consent. Grantor shall,
whenever requested, advise Lender of the exact location
of
the
Collateral.
Transactions
Involving Collateral. Except
for
inventory sold or accounts collected in the ordinary course of Grantor ’s
business, or as
otherwise
provided for in this Agreement, Grantor shall not sell, offer to sell, or
otherwise transfer or dispose of the Collateral. While
Grantor
is
not in default under this Agreement, Grantor may sell inventory, but only
in the
ordinary course of its business and only to buyers
who
qualify as a buyer in the ordinary course of business. A sale in the ordinary
course of Grantor ’s business does not include a transfer in
par
tial
or total satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to
be
subject
to any lien, security interest, encumbrance, or charge, other than the secur
ity
interest provided for in this Agreement, without
the
prior
wr itten consent of Lender. This includes secur ity interests even if junior
in
r ight to the secur ity interests granted under this
Agreement.
Unless waived by Lender , all proceeds from any disposition of the Collateral
(
for whatever reason) shall be held in trust for
Lender
and
shall not be commingledwith any other funds; provided however, this requirement
shall not constitute consent by Lender to any
sale
or
other disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
Title.
Grantor
represents and war rants to Lender that Grantor holds good and marketable
title
to the Collateral, free and clear of all liens
and
encumbrances except for the lien of this Agreement. No financing statement
cover
ing any of the Collateral is on file in any public
office
other than those which reflect the secur ity interest created by this Agreement
or to which Lender has specifically consented.
Grantor
shall defend Lender’s rights in the Collateral against the claims and demands of
all other persons.
Repairs
and Maintenance. Grantor
agrees to keep and maintain, and to cause others to keep and maintain, the
Collateral in good order ,
repair
and
condition at all times while this Agreement remains in effect. Grantor further
agrees to pay when due all claims for work done
on,
or
services rendered or material furnished in connection with the Collateral
so
that no lien or encumbrance may ever attach to or be
filed
against the Collateral.
Inspection
of Collateral. Lender
and
Lender’s designated representatives and agents shall have the right at all
reasonable times to examine
and
inspect the Collateral wherever located.
Taxes,
Assessments and Liens. Grantor
will pay when due all taxes, assessments and liens upon the Collateral, its
use
or operation, upon
this
Agreement, upon any promissory note or notes evidencing the Indebtedness,
or
upon any of the other Related Documents. Grantor
may
withhold any such payment or may elect to contest any lien if Grantor is
in good
faith conducting an appropr iate proceeding to contest
the
obligation to pay and so long as Lender’ s interest in the Collateral is not
jeopardized in Lender’s sole opinion. If the Collateral is
subjected
to a lien which is not discharged within fifteen (15) days, Grantor shall
deposit with Lender cash, a sufficient corporate surety
bond
or
other security satisfactory to Lender in an amount adequate to provide for
the
discharge of the lien plus any interest, costs,
reasonable
attorneys’ fees or other charges that could accrue as a result of foreclosure or
sale of the Collateral. In any contest Grantor
shall
defend itself and Lender and shall satisfy any final adverse judgment before
enforcement against the Collateral. Grantor shall name
Lender
as
an additional obligee under any surety bond furnished in the contest
proceedings. Grantor further agrees to furnish Lender with
evidence
that such taxes, assessments, and governmental and other charges have been
paid
in full and in a timely manner. Grantor may
withhold
any such payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the
obligation
to pay and so long as Lender’s interest in the Collateral is not jeopardiz
ed.
Compliance
with Governmental Requirements. Grantor
shall comply promptly with all laws, ordinances, rules and regulations of
all
governmental
author ities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral, including
all
laws
or regulations relating to the undue erosion of highly-erodible land or relating
to the conversion of wetlands for the production of an
agr
icultural product or commodity. Grantor may contest in good faith any such
law,
ordinance or regulation and withhold compliance
dur
ing
any proceeding, including appropriate appeals, so long as Lender ’s interest in
the Collateral, in Lender ’s opinion, is not jeopardized.
Hazardous
Substances. Grantor
represents and warrants that the Collateral never has been, and never will
be so
long as this Agreement
remains
a
lien on the Collateral, used in violation of any Environmental Laws or for
the
generation, manufacture, storage, transpor tation,
treatment,
disposal, release or threatened release of any Hazardous Substance. The
representations and warranties contained herein are
based
on
Grantor ’s due diligence in investigating the Collateral for Hazardous
Substances. Grantor hereby (1) releases and waives any
future
claims against Lender for indemnity or contr ibution in the event Grantor
becomes liable for cleanup or other costs under any
Environmental
Laws, and (2) agrees to indemnify and hold harmless Lender against any and
all
claims and losses resulting from a breach
of
this
provision of this Agreement. This obligation to indemnify shall survive the
payment of the Indebtedness and the satisfaction of this
Agreement.
Maintenance
of Casualty Insurance. Grantor
shall procure and maintain all risks insurance, including without limitation
fire, theft and
liability
coverage together with such other insurance as Lender may require with respect
to the Collateral, in form, amounts, coverages and
basis
reasonably acceptable to Lender and issued by a company or companies reasonably
acceptable to Lender . Grantor , upon request of
Lender,
will deliver to Lender from time to time the policies or cer tificates of
insurance in form satisfactory to Lender, including stipulations
that
coverages will not be cancelled or diminished without at least ten (10) days’ pr
ior written notice to Lender and not including any
disclaimer
of the insurer’s liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that
coverage
in favor of Lender will not be impaired in any way by any act, omission or
default of Grantor or any other person. In connection
with
all
policies cover ing assets in which Lender holds or is offered a security
interest, Grantor will provide Lender with such loss payable
or
other
endorsements as Lender may require. If Grantor at any time fails to obtain
or
maintain any insurance as required under this
Agreement,
Lender may (but shall not be obligated to) obtain such insurance as Lender
deems
appropriate, including if Lender so chooses
"single
interest insurance," which will cover only Lender’s interest in the
Collateral.
Application
of Insurance Proceeds. Grantor
shall promptly notify Lender of any loss or damage to the Collateral, whether
or
not such
casualty
or loss is covered by insurance. Lender may make proof of loss if Grantor
fails
to do so within fifteen (15) days of the casualty.
All
proceeds of any insurance on the Collateral, including accrued proceeds thereon,
shall be held by Lender as par t of the Collateral. If
Lender
consents to repair or replacement of the damaged or destroyed Collateral,
Lender
shall, upon satisfactory proof of expenditure, pay
or
reimburse Grantor fromthe proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement
of
the
Collateral, Lender shall retain a sufficient amount of the proceeds to pay
all
of the Indebtedness, and shall pay the balance to
Grantor.
Any proceeds which have not been disbursed within six (6) months after their
receipt and which Grantor has not committed to
the
repair
or restoration of the Collateral shall be used to prepay the
Indebtedness.
Insurance
Reserves. Lender
may
require Grantor tomaintain with Lender reserves for payment of insurance
premiums, which reserves shall
be
created
by monthly payments from Grantor of a sum estimated by Lender to be sufficient
to produce, at least fifteen (15) days before
the
premium due date, amounts at least equal to the insurance premiums to be
paid.
If fifteen (15) days before payment is due, the reserve
funds
are
insufficient, Grantor shall upon demand pay any deficiency to Lender . The
reserve funds shall be held by Lender as a general
deposit
and shall constitute a non-interest-bearing account which Lender may satisfy
by
payment of the insurance premiums required to be
paid
by
Grantor as they become due. Lender does not hold the reserve funds in trust
for
Grantor, and Lender is not the agent of Grantor
for
payment of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain
Grantor’s
sole responsibility.
Insurance
Repor ts. Grantor,
upon request of Lender, shall furnish to Lender repor ts on each existing
policy
of insurance showing such
information
as Lender may reasonably request including the following: (1) the name of
the
insurer ; (2) the risks insured; (3) the amount
of
the
policy; (4) the property insured; (5) the then cur rent value on the basis
of
which insurance has been obtained and the manner of
determining
that value; and (6) the expiration date of the policy. In addition, Grantor
shall upon request by Lender (however not more
often
than
annually) have an independent appraiser satisfactory to Lender determine,
as
applicable, the cash value or replacement cost of
the
Collateral.
Financing
Statements. Grantor
authorizes Lender to file a UCC financing statement, or alternatively, a
copy of
this Agreement to perfect
Lender’
s
secur ity interest. At Lender’s request, Grantor additionally agrees to sign all
other documents that are necessary to per fect,
protect,
and continue Lender ’s security interest in the Property. Grantor will pay all
filing fees, title transfer fees, and other fees and costs
involved
unless prohibited by law or unless Lender is required by law to pay such
fees
and costs. Grantor irrevocably appoints Lender to
execute
documents necessary to transfer title if there is a default. Lender may file
a
copy of this Agreement as a financing statement. If
Grantor
changes Grantor ’s name or address, or the name or address of any person
granting a security interest under this Agreement
changes,
Grantor will promptly notify the Lender of such change.
GRANTOR’S
RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until
default and except as otherwise provided below with respect to
accounts,
Grantor may have possession of the tangible personal property and beneficial
use
of all the Collateral and may use it in any lawful
manner
not
inconsistent with this Agreement or the Related Documents, provided that
Grantor’s right to possession and beneficial use shall not
apply
to
any Collateral where possession of the Collateral by Lender is required by
law
to perfect Lender ’s security interest in such Collateral.
Until
otherwise notified by Lender, Grantor may collect any of the Collateral
consisting of accounts. At any time and even though no Event of
Default
exists, Lender may exercise its r ights to collect the accounts and to notify
account debtors to make payments directly to Lender for
application
to the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall
be
deemed
to have exercised reasonable care in the custody and preservation of the
Collateral if Lender takes such action for that purpose as
Grantor
shall request or as Lender, in Lender’s sole discretion, shall deem appropr iate
under the circumstances, but failure to honor any request
by
Grantor
shall not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to
preserve
any rights in the Collateral against prior parties, nor to protect, preserve
or
maintain any security interest given to secure the
Indebtedness.
LENDER’S
EXPENDITURES. If
any
action or proceeding is commenced that would materially affect Lender’s interest
in the Collateral or if
Grantor
fails to comply with any provision of this Agreement or any Related Documents,
including but not limited to Grantor’s failure to
discharge
or pay when due any amounts Grantor is required to discharge or pay under
this
Agreement or any Related Documents, Lender on
Grantor’s
behalf may (but shall not be obligated to) take any action that Lender deems
appropriate, including but not limited to discharging or
paying
all
taxes, liens, security interests, encumbrances and other claims, at any time
levied or placed on the Collateral and paying all costs for
insuring,
maintaining and preserving the Collateral. All such expenditures incurred
or
paid by Lender for such purposes will then bear interest at
the
rate
charged under the Note from the date incurred or paid by Lender to the date
of
repayment by Grantor. All such expenses will become a
part
of
the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be
added to the balance of the Note and be apportioned
among
and
be payable with any installment payments to become due during either (1)
the
term of any applicable insurance policy; or (2) the
remaining
term of the Note; or (C) be treated as a balloon payment which will be due
and
payable at the Note’s maturity. The Agreement also
will
secure payment of these amounts. Such r ight shall be in addition to all
other r
ights and remedies to which Lender may be entitled upon
Default.
DEFAULT.
Each
of
the following shall constitute an Event of Default under this
Agreement:
Payment
Default. Grantor
fails to make any payment when due under the Indebtedness.
Other
Defaults. Grantor
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Agreement or
in
any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other
agreement
between Lender and Grantor .
Default
in Favor of Third Parties. Should
Borrower or any Grantor default under any loan, extension of credit, secur
ity
agreement, purchase
or
sales
agreement, or any other agreement, in favor of any other creditor or person
that
may materially affect any of Grantor’s proper ty or
Grantor’s
or any Grantor’s ability to repay the Indebtedness or perform their respective
obligations under this Agreement or any of the
Related
Documents.
False
Statements. Any
warranty, representation or statement made or furnished to Lender by Grantor
or
on Grantor’ s behalf under this
Agreement
or the Related Documents is false or misleading in any mater ial respect,
either
nowor at the time made or furnished or becomes
false
or
misleading at any time thereafter.
Defective
Collateralization. This
Agreement or any of the Related Documents ceases to be in full force and
effect
(including failure of any
collateral
document to create a valid and perfected security interest or lien) at any
time
and for any reason.
Insolvency.
The
dissolution or termination of Grantor ’s existence as a going business, the
insolvency of Grantor, the appointment of a
receiver
for any part of Grantor’s property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement
of
any
proceeding under any bankruptcy or insolvency laws by or against Grantor
.
Creditor
or For feiture Proceedings. Commencement
of foreclosure or for feiture proceedings, whether by judicial proceeding,
self-help,
repossession
or any other method, by any creditor of Grantor or by any governmental agency
against any collateral securing the
Indebtedness.
This includes a garnishment of any of Grantor’ s accounts, including deposit
accounts, with Lender. However, this Event of
Default
shall not apply if there is a good faith dispute by Grantor as to the validity
or reasonableness of the claim which is the basis of the
creditor
or forfeiture proceeding and if Grantor gives Lender wr itten notice of the
creditor or for feiture proceeding and deposits with Lender
monies
or
a surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an
adequate
reserve or bond for the dispute.
Events
Affecting Guarantor. Any
of the
preceding events occurs with respect to any guarantor, endorser, surety,
or
accommodation party
of
any of
the Indebtedness or guarantor , endorser, surety, or accommodation party
dies or
becomes incompetent or revokes or disputes the
validity
of, or liability under, any Guaranty of the Indebtedness.
Adverse
Change. A
material
adverse change occurs in Grantor’s financial condition, or Lender believes the
prospect of payment or
per
formance of the Indebtedness is impaired.
Insecurity.
Lender
in
good faith believes itself insecure.
Cure
Provisions. If
any
default, other than a default in payment is curable and if Grantor has not
been
given a notice of a breach of the
same
provision of this Agreement within the preceding twelve (12) months, it may
be
cured if Grantor, after receiving written notice from
Lender
demanding cure of such default: (1) cures the default within fifteen (15)
days;
or (2) if the cure requires more than fifteen (15)
days,
immediately initiates steps which Lender deems in Lender’s sole discretion to be
sufficient to cure the default and thereafter
continues
and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
RIGHTS
AND REMEDIES ON DEFAULT. If
an
Event of Default occurs under this Agreement, at any time thereafter , Lender
shall have all the
r
ights of
a secured party under the Florida Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more
of
the
following rights and remedies:
Accelerate
Indebtedness. Lender
may
declare the entire Indebtedness, including any prepayment penalty which Grantor
would be required
to
pay,
immediately due and payable, without notice of any kind to Grantor
.
Assemble
Collateral. Lender
may
require Grantor to deliver to Lender all or any por tion of the Collateral
and
any and all cer tificates of title
and
other
documents relating to the Collateral. Lender may require Grantor to assemble
the
Collateral and make it available to Lender at a
place
to
be designated by Lender. Lender also shall have full power to enter upon
the
property of Grantor to take possession of and
remove
the
Collateral. If the Collateral contains other goods not covered by this Agreement
at the time of repossession, Grantor agrees
Lender
may
take such other goods, provided that Lender makes reasonable efforts to return
them to Grantor after repossession.
Sell
the Collateral. Lender
shall have full power to sell, lease, transfer, or otherwise deal with the
Collateral or proceeds thereof in Lender’s
own
name
or that of Grantor. Lender may sell the Collateral at public auction or private
sale. Unless the Collateral threatens to decline
speedily
in value or is of a type customarily sold on a recognized market, Lender
will
give Grantor, and other persons as required by law,
reasonable
notice of the time and place of any public sale, or the time after which
any pr
ivate sale or any other disposition of the Collateral
is
to be
made. However, no notice need be provided to any person who, after Event
of
Default occurs, enters into and authenticates an
agreement
waiving that person’s right to notification of sale. The requirements of
reasonable notice shall be met if such notice is given at
least
ten
(10) days before the time of the sale or disposition. All expenses relating
to
the disposition of the Collateral, including without
limitation
the expenses of retaking, holding, insur ing, preparing for sale and selling
the
Collateral, shall become a part of the Indebtedness
secured
by
this Agreement and shall be payable on demand, with interest at the Note
rate
from date of expenditure until repaid.
Appoint
Receiver . In
the
event of a suit being instituted to foreclose this Agreement, Lender shall
be
entitled to apply at any time pending
such
foreclosure suit to the court having jurisdiction thereof for the appointment
of
a receiver of any or all of the Collateral, and of all rents,
incomes,
profits, issues and revenues thereof, from whatsoever source. The parties
agree
that the cour t shall for thwith appoint such
receiver
with the usual powers and duties of receivers in like cases. Such appointment
shall be made by the cour t as a matter of strict
right
to
Lender and without notice to Grantor, and without reference to the adequacy
or
inadequacy of the value of the Collateral, or to
Grantor’s
solvency or any other party defendant to such suit. Grantor hereby specifically
waives the right to object to the appointment of a
receiver
and agrees that such appointment shall be made as an admitted equity and
as a
matter of absolute right to Lender, and consents to
the
appointment of any officer or employee of Lender as receiver. Lender shall
have
the right to have a receiver appointed to take
possession
of all or any par t of the Collateral, with the power to protect and preserve
the Collateral, to operate the Collateral preceding
foreclosure
or sale, and to collect the Rents from the Collateral and apply the proceeds,
over and above the cost of the receivership, against
the
Indebtedness. The receiver may serve without bond if permitted by law. Lender’s
r ight to the appointment of a receiver shall exist
whether
or
not the apparent value of the Collateral exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not
disqualify
a person from serving as a receiver .
Collect
Revenues, Apply Accounts. Lender,
either itself or through a receiver , may collect the payments, rents, income,
and revenues from
the
Collateral. Lender may at any time in Lender ’s discretion transfer any
Collateral into Lender’s own name or that of Lender’s nominee
and
receive the payments, rents, income, and revenues therefrom and hold the
same as
security for the Indebtedness or apply it to
payment
of
the Indebtedness in such order of preference as Lender may determine. Insofar as
the Collateral consists of accounts, general
intangibles,
insurance policies, instruments, chattel paper, choses in action, or similar
property, Lender may demand, collect, receipt for ,
settle,
compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender
may determine, whether or not Indebtedness or
Collateral
is then due. For these purposes, Lender may, on behalf of and in the name
of
Grantor, receive, open and dispose of mail
addressed
to Grantor; change any address to which mail and payments are to be sent;
and
endorse notes, checks, drafts, money orders,
documents
of title, instruments and items per taining to payment, shipment, or storage
of
any Collateral. To facilitate collection, Lender
may
notify
account debtors and obligors on any Collateral to make payments directly
to
Lender .
Obtain
Deficiency. If
Lender
chooses to sell any or all of the Collateral, Lender may obtain a judgment
against Grantor for any deficiency
remaining
on the Indebtedness due to Lender after application of all amounts received
from
the exercise of the r ights provided in this
Agreement.
Grantor shall be liable for a deficiency even if the transaction described
in
this subsection is a sale of accounts or chattel
paper.
Other
Rights and Remedies. Lender
shall have all the rights and remedies of a secured creditor under the
provisions of the Uniform
Commercial
Code, as may be amended from time to time. In addition, Lender shall have
and
may exercise any or all other rights and
remedies
it may have available at law, in equity, or otherwise.
Election
of Remedies. Except
as
may be prohibited by applicable law, all of Lender’s rights and remedies,
whether evidenced by this
Agreement,
the Related Documents, or by any other writing, shall be cumulative and may
be
exercised singularly or concurrently. Election
by
Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to
per
form
an obligation of Grantor under this Agreement, after Grantor ’s failure to
perform, shall not affect Lender ’s r ight to declare a default
and
exercise its remedies.
MISCELLANEOUS
PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:
Amendments.
This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties
as
to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in wr iting
and
signed
by the par ty or parties sought to be charged or bound by the alteration
or
amendment.
Attorneys’
Fees; Expenses. Grantor
agrees to pay upon demand all of Lender ’s costs and expenses, including Lender
’s reasonable
attorneys’
fees and Lender’s legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may hire or pay
someone
else to help enforce this Agreement, and Grantor shall pay the costs and
expenses of such enforcement. Costs and expenses
include
Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys’ fees and
legal
expenses for bankruptcy proceedings (including effor ts to modify or vacate
any
automatic stay or injunction), appeals, and any
anticipated
post-judgment collection services. Grantor also shall pay all court costs
and
such additional fees as may be directed by the
court.
Caption
Headings. Caption
headings in this Agreement are for convenience purposes only and are not
to be
used to interpret or define the
provisions
of this Agreement.
Governing
Law. This Agreement will be governed by federal law applicable to Lender
and, to
the extent not preempted by federal law, the
laws
of the State of Flor ida without regard to its conflicts of law provisions.
This
Agreement has been accepted by Lender in the State of
Florida.
No
Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless
such
waiver is given in wr iting
and
signed
by Lender . No delay or omission on the part of Lender in exercising any
right
shall operate as a waiver of such right or any
other
r
ight. A waiver by Lender of a provision of this Agreement shall not prejudice
or
constitute a waiver of Lender’s right otherwise to
demand
strict compliance with that provision or any other provision of this Agreement.
No prior waiver by Lender , nor any course of
dealing
between Lender and Grantor , shall constitute a waiver of any of Lender’s rights
or of any of Grantor’s obligations as to any future
transactions.
Whenever the consent of Lender is required under this Agreement, the granting
of
such consent by Lender in any instance
shall
not
constitute continuing consent to subsequent instances where such consent
is
required and in all cases such consent may be
granted
or
withheld in the sole discretion of Lender .
Notices.
Any
notice
required to be given under this Agreement shall be given in writing, and
shall
be effective when actually delivered,
when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier,
or,
if
mailed, when deposited in the United States mail, as first class, certified
or
registered mail postage prepaid, directed to the addresses
shown
near
the beginning of this Agreement. Any party may change its address for notices
under this Agreement by giving written notice
to
the
other parties, specifying that the purpose of the notice is to change the
party’s address. For notice purposes, Grantor agrees to keep
Lender
informed at all times of Grantor ’s current address. Unless otherwise provided
or required by law, if there is more than one Grantor ,
any
notice
given by Lender to any Grantor is deemed to be notice given to all
Grantors.
Power
of Attorney. Grantor
hereby appoints Lender as Grantor’s ir revocable attorney-in-fact for the
purpose of executing any documents
necessary
to perfect, amend, or to continue the security interest granted in this
Agreement or to demand termination of filings of other
secured
par ties. Lender may at any time, and without further authorization from
Grantor, file a carbon, photographic or other reproduction
of
any
financing statement or of this Agreement for use as a financing statement.
Grantor will reimburse Lender for all expenses for the
per
fection and the continuation of the perfection of Lender ’s secur ity interest
in the Collateral.
Severability.
If
a cour
t of competent jur isdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any
circumstance,
that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible,
the
offending provision shall be considered modified so that it becomes legal,
valid
and enforceable. If the offending provision cannot be so
modified,
it shall be considered deleted from this Agreement. Unless otherwise required
by
law, the illegality, invalidity, or unenforceability
of
any
provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
Successors
and Assigns. Subject
to
any limitations stated in this Agreement on transfer of Grantor’s interest, this
Agreement shall be
binding
upon and inure to the benefit of the par ties, their successors and assigns.
If
ownership of the Collateral becomes vested in a
person
other than Grantor , Lender, without notice to Grantor, may deal with Grantor’ s
successors with reference to this Agreement and the
Indebtedness
by way of forbearance or extension without releasing Grantor from the
obligations of this Agreement or liability under the
Indebtedness.
Survival
of Representations and Warranties. All
representations, war ranties, and agreements made by Grantor in this Agreement
shall
survive
the execution and delivery of this Agreement, shall be continuing in nature,
and
shall remain in full force and effect until such time
as
Grantor’s Indebtedness shall be paid in full.
Time
is of the Essence. Time
is of
the essence in the performance of this Agreement.
Waive
Jury. All par ties to this Agreement hereby waive the right to any jury trial
in
any action, proceeding, or counterclaim brought by any
par
ty against any other par ty.
DEFINITIONS.
The
following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically
stated
to
the contrary, all references to dollar amounts shall mean amounts in lawful
money of the United States of Amer ica. Words and terms
used
in
the singular shall include the plural, and the plural shall include the singular
, as the context may require. Words and terms not otherwise
defined
in
this Agreement shall have the meanings attributed to such terms in the Uniform
Commercial Code:
Agreement.
The
word
"Agreement" means this Commercial Security Agreement, as this Commercial
Secur
ity Agreement may be amended
or
modified fromtime to time, together with all exhibits and schedules attached
to
this Commercial Security Agreement from time to time.
Borrower
. The
word
"Borrower" means Shells Seafood Restaurants, Inc. and includes all co-signers
and co-makers signing the Note and all
their
successors and assigns.
Collateral.
The
word
"Collateral" means all of Grantor’s right, title and interest in and to all the
Collateral as descr ibed in the Collateral
Descr
iption section of this Agreement.
Default.
The
word
"Default" means the Default set forth in this Agreement in the section titled
"Default".
Environmental
Laws. The
words
"Environmental Laws" mean any and all state, federal and local statutes,
regulations and ordinances
relating
to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response,
Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Super fund Amendments and
Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.,
the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
or
other applicable state or federal laws, rules, or
regulations
adopted pursuant thereto.
Event
of Default. The
words
"Event of Default" mean any of the events of default set forth in this Agreement
in the default section of this
Agreement.
Grantor.
The
word
"Grantor" means Shells Seafood Restaurants, Inc..
Guaranty.
The
word
"Guaranty" means the guaranty from guarantor, endorser , surety, or
accommodation party to Lender, including
without
limitation a guaranty of all or part of the Note.
Hazardous
Substances. The
words
"Hazardous Substances" mean mater ials that, because of their quantity,
concentration or physical,
chemical
or infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when
improper
ly used, treated, stored, disposed of, generated, manufactured, transpor
ted or
otherwise handled. The words "Hazardous
Substances"
are used in their very broadest sense and include without limitation any
and all
hazardous or toxic substances, mater ials or
waste
as
defined by or listed under the Environmental Laws. The term "Hazardous
Substances" also includes, without limitation, petroleum
and
petroleum by-products or any fraction thereof and asbestos.
Indebtedness.
The
word
"Indebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and
interest
together with all other indebtedness and costs and expenses for which Grantor
is
responsible under this Agreement or under any of
the
Related Documents.
Lender.
The
word
"Lender" means COLONIAL BANK, N.A., its successors and assigns.
Note.
The
word
"Note" means the Note executed by Shells Seafood Restaurants, Inc. in the
pr
incipal amount of $500,000.00 dated
December
28, 2005, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for
the
note
or credit agreement.
Proper
ty. The
word
"Proper ty" means all of Grantor ’s r ight, title and interest in and to all the
Proper ty as described in the "Collateral
Descr
iption" section of this Agreement.
Related
Documents. The
words
"Related Documents" mean all promissory notes, credit agreements, loan
agreements, environmental
agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments,
agreements
and documents, whether now or hereafter existing, executed in connection
with
the Indebtedness.
GRANTOR
HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT
AND AGREES TO ITS
TERMS.
THIS AGREEMENT IS DATED DECEMBER 28, 2005.
GRANTOR:
SHELLS
SEAFOOD RESTAURANTS, INC.
By:/s/
War
ren R. Nelson, Vice President/CFO
Shells
Seafood Restaurants, Inc.
Exhibit
10.4
July
7,
2006
Mr.
Warren Nelson
Shells
Seafood Restaurants, Inc.
16313
N.
Dale Mabry Highway
Suite
100
Tampa,
FL
33618
|
Re:
|
Colonial Bank, N.A. (the “Bank”) |
| Loan to Shells Seafood Restaurants, Inc. (“Shells”) |
Dear
Mr.
Nelson:
This
letter will confirm that effective as of June 28, 2006, the Bank has agreed
to
extend the maturity date of Loan Number 8035494726 (the “Loan”) and the
repayment of the Promissory Note in the principal amount of $500,000 (the
“Note”) issued thereunder from June 28, 2006 to September 28, 2006. The Bank
acknowledges and agrees that no Event of Default has occurred under the Loan
or
the Note from the date it was entered into through the date of hereof. Except
as
set forth above, all of the terms and conditions of the Loan and the Note
remain
in full force and effect.
Please
call me at (813) 314-5285 with any questions.
| Sincerely, | |
| COLONIAL BANK, N.A. | |
| By: /s/ David Ogburn | |
|
Name:
J. David Ogburn
|
|
|
Title:
Sr. Vice
President
|