Secretary of State to perfect Lender’s security interest in the Collateral, as required by the Uniform Commercial Code, Article 9, Section 9501 et seq. Filing of the Financing Statement will ensure that Lender’s interest in the Collateral is secured and that Lender’s security interest has priority over any other interest arising in the same property.
SECTION 6
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of each Obligation, unless Lender waives compliance in writing, Borrower will not:
6.1 ENCUMBRANCES AND LIENS. Create, execute, assume or allow any mortgage, deed of trust, security agreement, pledge, encumbrance, including the lien of an attachment, judgment or execution, securing a charge or obligation on or of, or execute or allow to be filed any financing statement affecting, any or all of its property, real, personal or mixed, whether now owned or hereafter acquired, except:
A. Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or which remain payable without penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided Borrower sets aside on its books and maintains adequate reserves for their payment in conformity with Generally Accepted Accounting Principles.
B. Liens, deposits or pledges less than $500,000.00 made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of its business.
C. Purchase money security interests for property less than $500,000.00, hereafter acquired, conditional sale agreements, or other title retention agreements, with respect to property hereafter acquired, provided, however, that no such security interest or agreement may extend to any property other than such after-acquired property.
___________(Borrower’s Initials)
6.2 BORROWING. Sell or discount any accounts or evidences of indebtedness or other right to payment of money, nor incur, or have outstanding at any time, any indebtedness for borrowed money except for indebtedness incurred pursuant to this Agreement or other written agreement with Lender, nor incur, directly or indirectly, any other liability or obligation for borrowed money.
6.3 CONSOLIDATION AND MERGER. Liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination, except that Borrower may be consolidated with or merged with any entity, provided that in any such merger or consolidation, Borrower is the surviving or resulting entity and immediately after the effectiveness of such merger or consolidation, there is no Event of Default or any event - Page 12 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
which with notice or lapse of time or both would become an Event of Default under this Agreement.
6.4 ACQUISITIONS. Purchase, acquire or incur any liability for the purchase or acquisition of any or all of the assets or business of any person, firm or corporation.
6.5 DISPOSAL OF ASSETS. Sell, lease, assign, transfer or otherwise dispose of any material part of its property or assets, now owned or hereafter acquired, except obsolete or worn-out property and real estate not used or useful in its business, and except for inventory sold in the ordinary course of business.
6.8 DEFAULT UNDER OTHER AGREEMENTS OR INDENTURES. Commit or do, or fail to commit or do, any act or thing which would constitute an event of default under any of the terms or provisions of any other agreement, indenture, contract, document or instrument executed, or to be executed by Borrower. ______(Borrower's Initials).
6.9 PURCHASE OF SECURITIES. Utilize any part of the proceeds of the loans to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock.
SECTION 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. If one or more of the following described Events of Default occurs:
A. Borrower defaults in the punctual payment of any principal or interest on any Obligation when due;
B. Any of the representations or warranties made by Borrower or any Guarantor in this Agreement or in any Note, agreement, guarantee, certificate or financial or other statements delivered or later furnished by or on behalf of Borrower or such Guarantor is false or misleading in any material respect at the time made;
C. Borrower fails to perform or observe any other covenant, term, provision, condition, agreement or obligation of this Agreement or any Note;
D. Borrower fails to perform or observe any of the covenants, terms, provisions, conditions, agreements or obligations under any other agreement, indenture, document, note or other instrument (including, but not limited to the generality of the foregoing, other indebtedness owing to Lender) executed or to be executed by Borrower;
E. Borrower or any Guarantor becomes insolvent; or admits in writing its inability to pay its debts as they mature; or fails generally to pay its debts as they become due; or make an assignment for the benefit of creditors or commences a case for its dissolution; or applies for or consents to the appointment of or taking possession by - Page 13 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
a trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) for it or for a substantial part of its property or business; or takes any action in furtherance of any of the foregoing;
F. A trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) is appointed for Borrower or for a substantial part of its property or business without its consent and is not discharged within 30 days after such appointment;
G. Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency assumes custody or control of the whole or any substantial portion of the properties or assets of Borrower or any Guarantor and is not dismissed within 30 days thereafter;
H. Any money judgment, writ or warrant of attachment, or similar process is entered or filed against Borrower or any Guarantor or any of its properties or other assets and is not vacated, bonded, or stayed within the earlier of (a) a period of 15 days or (b) before 5 days prior to the date of any proposed sale thereunder;
I. A bankruptcy, reorganization, insolvency, or liquidation case or other case for relief under any bankruptcy law or any law for the relief of debtors is commenced by or against Borrower and, if instituted against Borrower or any Guarantor, is not dismissed within 30 days after such institution, or Borrower or any Guarantor by any action or answer approves of, consents to, or acquiesces in any such case or admits the material allegations of, or defaults in answering a petition filed in any such case;
J. Borrower voluntarily suspends the transaction of business for more than 15 days in any calendar year within the term of the Loan from the effective date of this Agreement; and/or
K. This Agreement or any Note or any guarantee or other agreement taken in connection herewith or therewith, at any time while any Obligation remains unpaid, ceases to be in full force and effect or is declared null and void, or the validity or enforceability thereof is contested or any party thereto denies that it has any or further liability or obligation under this Agreement or such Note or such guarantee or any other agreement;
THEN, or at any time thereafter, and in each and every such case, unless such Event of Default is waived in writing by Lender, at the option of Lender and at Lender's sole discretion, Lender may terminate each commitment to extend any credit accommodations to Borrower and each Obligation outstanding must, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, if not otherwise then due and payable, anything herein or in any Note or other document contained to the contrary notwithstanding, and Lender may immediately, and without expiration of any period of grace, enforce any and all of Lender's rights or remedies provided by this Agreement or any Note or any other rights or remedies afforded by law.
- Page 14 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
SECTION 8
MISCELLANEOUS PROVISIONS
8.1 NOTICES. Any notices, payments, requests, reports, information or demands which any party may desire or may be required to give to the other party must be given or made upon the other party either through deposit in the mail or by hand delivery at its address as follows:
BORROWER: Golden Flower, Inc.
Attn: Ehsan Shakibaie
17308 Bellflower Blvd.
Bellflower, CA 90706
LENDER: City of Bellflower
Attn: Director of Economic Development
16600 Civic Center Drive
Bellflower, CA 90706
or to such other address as the other party may designate in writing pursuant to this Section. All such notices, requests, demands, directions and other communications must, when mailed, be effective when deposited in the mail company.
8.2 WAIVER. Neither the failure of nor any delay on the part hereto in exercising any right, power or privilege hereunder precludes other or further exercise thereof or the exercise of any right, power or privilege; nor will any waiver of any right, power, privilege or default hereunder constitute a waiver of any other right, power, privilege or default or constitute a waiver of any other default of the same or of any other term or provision. All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law, or in any Note.
8.3 BANKER'S LIEN OR SETOFF. Nothing in this Agreement will be deemed any waiver or prohibition of Lender's right of Lender's lien or setoff.
8.4 EXPENSES OF LENDER. Borrower must pay on demand all costs and expenses, including, without limitation, reasonable counsel fees, including allocated costs of Lender's in-house counsel and appellate fees and costs, incurred by Lender in connection with the administration of this Agreement and the enforcement and protection of the rights of Lender under this Agreement, including the protection of the rights of Lender in any bankruptcy, reorganization, liquidation or insolvency proceeding, whether or not litigation is commenced.
8.5 ASSIGNABILITY. This Agreement binds and its benefits inure to Borrower and Lender, and their respective successors and assigns, as the case may be. Borrower may not assign this Agreement or any of Borrower's rights as described in this Agreement without the prior written consent of Lender.
8.6 GOVERNING LAW. This Agreement, any Note and all other documents executed pursuant to this Agreement or any Note were entered into, and are governed and construed according to the laws of the State of California, unless otherwise provided for in - Page 15 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
writing. Exclusive venue for any action arising from this Agreement will be in Los Angeles County.
8.7 HEADINGS. The headings of this Agreement are solely for the purpose of identification and will not be construed as a part of the paragraphs they head.
CITY OF BELLFLOWER
__________________________________
Jeffrey L. Stewart, City Manager
GOLDEN FLOWER, INC.
__________________________________
Ehsan Shakibaie, President
APPROVED AS TO FORM:
__________________________________
Karl H. Berger, City Attorney
ATTEST:
__________________________________
Mayra Ochiqui, City Clerk
- Page 16 of 19 -
PROMISSORY NOTE OF
AGREEMENT FILE NO. 616.4
BETWEEN THE CITY OF BELLFLOWER
AND
GOLDEN FLOWER INC.
(DBA GOLDEN CORRAL RESTAURANT)
$23,000.00 Bellflower, CA
For value received, the undersigned (“Borrower”) promises to pay to the order of the City Bellflower, as applicable, (“Payee”) (“Holder”) at its office in the City of Bellflower, State of California or at Holder's option, at such other place as may be designated from time to time by the holder, $23,000.00 (Twenty-three Thousand Dollars) (“Obligation”), at the rate of zero percent (0.00%) interest per annum, payment to be made in installments as follows:
The Obligation will be amortized over five years immediately following the execution date of Loan Agreement File No. 616.4 (“Five Year Term”). One Hundred percent of the Obligation will be forgiven immediately after the Five Year Term, provided the Payee has not defaulted on Loan Agreement File No. XXX. However, if the Borrower defaults on the Obligation within the Five Year Term, the remaining balance of the amortized portion of the Obligation will be due immediately to the Payee.
If a payment not timely made remains overdue for a period of (10) days after the same becomes due and payable, Borrower, without notice or demand by the City of Bellflower or any other Holder of the Note, must pay a late charge in an amount equal to five percent (5%) of the delinquent payment owing (the “Late Charge”) or $100.00, whichever is greater. Borrower agrees that an amount equal to the Late Charge is a reasonable estimate of the damage to the City of Bellflower or other Holder of the Note in the event of late payment due hereunder.
Payment of any installment of principal or interest owing on this Note may be made before the maturity date thereof without penalty.
The term "Indebtedness" as used herein means the indebtedness evidenced by this Note, including principal, interest, and expenses, whether contingent, now due or hereafter to become due and whether heretofore or contemporaneously herewith or hereafter contracted. The term "Collateral" as used in the Note means any funds, guaranties, machinery and equipment, inventory, accounts receivable or other personal and real property or rights therein of any nature whatsoever, or the proceeds thereof which may have been, are, or hereafter may be assigned, pledged or hypothecated, directly by the undersigned or by third parties, in connection with, or as security for, the Indebtedness or any part thereof. The Collateral, and each part thereof, will secure the Indebtedness and each part thereof. The covenants and conditions set forth or referred to in any and all instruments of hypothecation constituting the Collateral are hereby incorporated in the Note as covenants and conditions of the undersigned with the same force and effects as though such covenants and conditions were fully set forth herein.
- Page 17 of 19 -
City of Bellflower
Promissory Note – Golden Flower Inc. (dba Golden Corral Restaurant)
Upon the nonpayment of the Indebtedness, or any part thereof, when due, whether by acceleration or otherwise, Holder is empowered to sell, assign, and deliver the whole or any part of the Collateral at public or private sale, without demand, advertisement or notice of the time or place of sale or of any adjournment thereof, which are hereby expressly waived. After deducting all expenses incidental to or arising from such sale or sales, Holder may apply the residue of the proceeds thereof to the payment of the Indebtedness returning the excess, if any, to the undersigned. The undersigned hereby waives all right of redemption or appeasement whether before or after sale.
In the event of a default, Holder is further empowered to collect or cause to be collected or otherwise to be converted into money all or any part of the Collateral, by suit or otherwise, and to surrender, compromise, release, renew, extend, exchange, or substitute any item of the Collateral in transactions with the undersigned or any third party, irrespective of any assignment thereof by the undersigned, and without prior notice to or consent of the undersigned or any assignee. Whenever any item of the Collateral is not paid when due, or is otherwise in default, whether or not the indebtedness, or any part thereof, has become due, Holder has the same rights and powers with respect to such item of the Collateral as are granted in this paragraph in case of nonpayment of the Indebtedness, or any part thereof, when due. None of the rights, remedies, privileges, or powers of Holder expressly provided for therein are exclusive, but each of them are cumulative with and in addition to every other right, remedy, privilege, and power now or hereafter existing in favor of Holder, whether at law or equity, by statue or otherwise.
The undersigned agree to take all necessary steps to administer, supervise, preserve, and protect the Collateral; and regardless of any action taken by Holder, there is no duty upon Holder in this respect. In the event of a default the undersigned must pay all expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note will become due at its maturity date or otherwise, including without limitation to reasonable attorney's fees and costs, which Holder may deem necessary or proper in connection with the satisfaction of the Indebtedness or the administration, supervision, preservation, protection of (including, but not limited to, the maintenance of adequate insurance) or the realization upon the Collateral. Holder is authorized to pay at any time and from time to time any or all of such expenses, add the amount of such payment to the amount of the Indebtedness, and charge interest thereon at the rate specified herein with respect to the principal amount of this Note.
The security rights of Holder and its assigns hereunder will not be impaired by Holder's sale, hypothecation or re-hypothecation of any note of the undersigned or any item of the Collateral, or by any indulgence, including but not limited to (a) any renewal, extension, or modification which Holder may grant with respect to the Indebtedness or any part thereof, or (b) any surrender, compromise, release, renewal, extension, exchange, or substitution which Holder may grant in respect of the Collateral, or (c) any indulgence granted in respect of any endorser, guarantor, or surety. The purchaser, assignee, transferee, pledgee of this Note, the Collateral, and guaranty, and any other document (or any of them), sold, assigned, transferred, pledged, or re-pledged, will forthwith become vested with and entitled to exercise all the powers and rights given by - Page 18 of 19 -
City of Bellflower
Promissory Note – Golden Flower Inc. (dba Golden Corral Restaurant)
2 this Note and all applications of the undersigned to Holder or, as if said purchaser, assignee, transferee, or pledge were originally named as Payee in this Note and in said application or applications.
By: _______________________ Dated: ____________
Ehsan Shakibaie, Title
Golden Flower Inc.
Note - Corporate applicants must execute Note, in corporate name, by authorized officer, and seal must be affixed and duly attested; partnership applicants must execute Note in firm name, together with signature of a general partner. - Page 19 of 19 -