1
Exhibit 10(a)
STAR BANK
October 9, 1998
Xxxxxx'x Restaurants, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxx
Vice President-Finance
Gentlemen:
This letter (this "Amendment") confirms and evidences certain
agreements between Star Bank, National Association, a national banking
association (the "Bank"), and Xxxxxx'x Restaurants, Inc., an Ohio corporation
(the "Borrower"), with respect to the Loan Agreement between the Bank and the
Borrower dated as of July 9, 1997 (as the same may be amended from time to time,
the "Agreement"), as follows:
1. Financial Information and Reports. Exhibit A to the Agreement is
hereby deleted and replaced with Exhibit A attached hereto, and the last
sentence of Section 1(d) of the Agreement is hereby deleted and replaced with
the following:
There has been no material adverse change in the business, operations
or condition (financial or otherwise) of the Borrower or any Subsidiary
since the date of such financial statements.
2. Actions. Exhibit B to the Agreement is hereby deleted and replaced
with Exhibit B attached hereto.
3. Permitted Liens. Exhibit C to the Agreement is hereby deleted and
replaced with Exhibit C attached hereto, and clause (ii) of Section 1(g) of the
Agreement is hereby deleted and replaced with the following:
(ii) leases required under generally accepted accounting principles to
be capitalized on the Borrower's or such Subsidiary's books
("Capitalized Leases") so long as there is no violation of any of the
Financial Covenants set forth on Exhibit D hereto,
4. Year 2000 Compliance Representation. The following is hereby added
to the Agreement as Section 1(m) thereof:
(m) Year 2000 Compliance. The Borrower has conducted a thorough
review of its mainframe
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Xxxxxx'x Restaurants, Inc.
October 9, 1998
Page 2
information systems, PC/LAN systems, software, facilities, machinery
and equipment (collectively, "Computer-Related Systems") and has
determined the total costs of becoming Year 2000 Compliant (as
hereinafter defined), including costs related to remediation,
replacement, upgrading, conversion and testing of hardware and other
equipment and software. On the basis of this review, the Borrower has
concluded that the incremental cost to the Borrower of becoming Year
2000 Compliant will not have a material adverse effect on the business,
operations, properties or financial condition of the Borrower. Further,
the Borrower's Computer-Related Systems are Year 2000 Compliant or the
Borrower has adequate plans and processes in place sufficient for all
of the Borrower's Computer-Related Systems to become Year 2000
Compliant prior to such time that a failure to be Year 2000 Compliant
might reasonably be expected to have a material adverse effect upon the
Borrower's business, operations, properties or financial condition. For
purposes of this Agreement, "Year 2000 Compliant" means that the
Borrower's Computer-Related Systems will (i) process all dates in and
after the Year 2000 in a correct and consistent manner in all
applicable operations including but not limited to input, output,
comparisons (branching) and arithmetic operations (such as the
difference between two dates), (ii) use fields providing at least four
decimal digits for the year portion of all stored dates, (iii)
calculate and handle leap year dates correctly, and (iv) otherwise
generally manipulate data and generate output and reports in a
fault-free manner during and after the Year 2000.
5. Financial Covenants. Exhibit D to the Agreement is hereby deleted
and replaced with Exhibit D attached hereto.
6. Financial Statements. Clauses (A), (B) and (C) of Section 2(b) of
the Agreement are hereby deleted and replaced with the following clauses (A) and
(B):
(A) setting forth a comparison between actual calculated results and
covenanted results for each of the Financial Covenants set forth on
Exhibit D hereto and (B) stating that, to the best of such Chief
Financial Officer's knowledge after diligent investigation, no Event of
Default hereunder then exists, or if such an Event of Default hereunder
does then exist, specifying the nature thereof, the period of existence
thereof, and the action the Borrower proposes to take with respect
thereto.
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Xxxxxx'x Restaurants, Inc.
October 9, 1998
Page 3
7. Liens. The following sentence is hereby added to the end of Section
2(i) of the Agreement:
Furthermore, the Borrower shall not, and shall not permit any
Subsidiary to, enter into any agreement with any other person or entity
pursuant to which the Borrower or any Subsidiary agrees not to create,
assume or permit to exist any Lien with respect to any of its assets,
whether now owned or hereafter acquired.
8. Permitted Indebtedness. Exhibit E to the Agreement is hereby deleted
and replaced with Exhibit E attached hereto, and clause (iv) of Section 2(j) of
the Agreement is hereby deleted and replaced with the following:
(iv) Indebtedness incurred in connection with Capitalized Leases so
long as there is no violation of any of the Financial Covenants set
forth on Exhibit D hereto.
9. Designated Properties. The term "Designated Properties" as used in
the Agreement shall not include any properties which have been sold as permitted
under the Agreement.
10. Lease/Rentals. Section 2(m) of the Agreement is hereby deleted and
replaced with the following:
(m) (This section omitted]
11. Year 2000 Compliant Covenant. Section 2(r) of the Agreement is
hereby re-named as "Section 2(s)", and the following is hereby added as Section
2(r) of the Agreement:
(r) Year 2000 Compliance. While any Loans are outstanding
hereunder, the Borrower shall (i) promptly evaluate each newly-acquired
item of software, hardware, machinery and equipment to determine if it
is Year 2000 Compliant and (ii) promptly take steps to ensure that all
material suppliers, vendors, third-parties providing goods or services
to the Borrower and all material customers of the Borrower are Year
2000 Compliant or have a comprehensive and reasonable plan to become
Year 2000 Compliant in a timely manner, such that suppliers, vendors,
third-parties and customers will not experience Year 2000 related
problems that could result in a material adverse effect upon the
Borrower's business, operations, property or financial condition.
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Xxxxxx'x Restaurants, Inc.
October 9, 1998
Page 4
12. Note and Maturity Date. Exhibit J to the Agreement is hereby
deleted and replaced with Exhibit J attached hereto, and the last two (2)
sentences of Section 4(a) are hereby deleted and replaced with the following:
The Loan shall be evidenced by an Amended and Restated Promissory Note
given by the Borrower to the Bank in substantially the form of Exhibit
J attached hereto (the "Note"). The Note shall replace the Promissory
Note dated as of August 15, 1997 given by the Borrower to the Bank (the
"Prior Note"), and amounts outstanding under the Prior Note shall not
be deemed cancelled or satisfied, but shall be evidenced by the Note
instead of by the Prior Note. The Loan shall mature and be payable in
full on August 15, 2000 (the "Maturity Date"), unless accelerated as
described herein, and subject to required principal and interest
payments as provided herein.
13. LIBOR-Based Rate Spread. The definition of "LIBOR-Based Rate
Spread" set forth in Section 4(b) of the Agreement is hereby deleted and
replaced with the following:
The "LIBOR-Based Rate Spread" shall be one hundred fifty (150) basis
points through and including October 15, 1998, and commencing on
October 16, 1998, the LIBOR-Based Rate Spread shall be one hundred
twenty-five (125) basis points.
14. Prime-Based Rate. The definition of "Prime-Based Rate" set forth in
Section 4(b) of the Agreement is hereby deleted and replaced with the following:
The "Prime-Based Rate" shall be the Prime Rate minus twenty-five
(25) basis points.
15. Recording. Section 4(d) of the Agreement is hereby deleted and
replaced with the following:
(d) Recording. The Bank will not record or file the Mortgages or
the Financing Statements if the outstanding principal balance of the
Loan has been reduced to the Designated Level on or before November 30,
1998 and so long as no Event of Default hereunder shall have occurred.
If the outstanding principal balance of the Loan has not been reduced
to the Designated Level on or before November 30, 1998, or if an Event
of Default hereunder shall have occurred, the Bank shall at any time
thereafter have the right, at its option, to record and file the
Mortgages and the Financing Statements, or any of them, at the expense
of
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Xxxxxx'x Restaurants, Inc.
October 9, 1998
Page 5
the Borrower, in the appropriate recording and filing offices, and upon
request by the Bank, the Borrower shall promptly provide the Bank, at
the expense of the Borrower, with title insurance policies insuring the
lien of any such recorded Mortgages which reflect no encumbrances or
restrictions on title other than as may be reflected in the Title
Reports, together with any endorsements thereto as may be deemed
appropriate by the Bank.
16. Bank Agreement Default. Section 5(e) of the Agreement is hereby
deleted and replaced with the following:
(e) There shall have occurred any violation or breach of any
covenant, agreement or condition contained in any other agreement
between the Borrower and the Bank which has not been cured by the
Borrower prior to the expiration of the applicable cure period, if any,
including without limitation, the 1996 Agreement, the Loan Agreement
dated as of October 9, 1998 between the Borrower and the Bank (as
amended from time to time, the "1998 Agreement") and the Loan Agreement
dated as of December 31, 1992 between the Borrower and the Bank (as
amended from time to time, the "1992 Agreement"); or
17. Conditions. The effectiveness of this Amendment shall be
conditioned upon the following:
(a) This Amendment and the Note shall have been duly executed and
delivered; and
(b) There shall have been delivered to the Bank a copy of the
Resolutions of the Board of Directors of the Borrower authorizing the execution
and delivery of this Amendment and the Note, certified by an officer of the
Borrower as being true and correct and in full force and effect, together with a
certificate as to the individuals authorized to sign this Amendment and the Note
(with specimen signatures included and certified to).
18. Representations, Warranties and Covenants. Except as expressly
amended hereby, all representations, warranties and covenants of the Borrower
set forth in the Agreement shall be deemed restated as of the date hereof, and
the Borrower further represents and warrants that:
(a) This Amendment and the Note have been duly executed and delivered
by the Borrower and authorized by all requisite action on the part of the
Borrower; and
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Xxxxxx'x Restaurants, Inc.
October 9, 1998
Page 6
(b) The execution and delivery by the Borrower of this Amendment and
the Note do not constitute a violation of any applicable law or a breach of any
provision contained in the Borrower's Articles of Incorporation or Code of
Regulations or contained in any order of any court or other governmental agency
or in any agreement, instrument or document to which the Borrower is a party or
by which the Borrower or any of its assets or properties is bound.
19. Miscellaneous.
(a) The Borrower shall reimburse the Bank for all out-of-pocket costs
and expenses, including without limitation reasonable attorney's fees, incurred
by the Bank or for which the Bank becomes obligated in connection with or
arising out of this Amendment.
(b) As amended hereby, the Agreement shall remain in full force and
effect, and all references in the Loan Documents to the Agreement shall mean the
Agreement as amended hereby.
(c) Capitalized terms used but not defined herein shall have the same
meanings herein as in the Agreement.
Please acknowledge the agreement of the Borrower to the foregoing by
having four copies of this Amendment signed in the appropriate place below and
return three of them to the Bank.
STAR BANK, NATIONAL ASSOCIATION
By: /s/Xxxxxx X. Xxxx
-----------------
Title: Vice President
--------------
Acknowledged and Agreed:
XXXXXX'X RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President - Finance
------------------------
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EXHIBIT A
FINANCIAL INFORMATION AND REPORTS
1. Annual Report for the year ended May 31, 1998.
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EXHIBIT B
ACTIONS
NONE
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October 9, 1998
Xxxxxx X. Xxxxxxx
Star Bank, NA
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
RE: Star Bank, N.A., Loan Agreement
dated as of October 9, 1998 and
Amendments to Loan Agreement
dated as of July 9, 1997
Amended and Restated Loan
Agreement dated as of August
29, 1996 and Loan Agreement
dated as of December 31, 1992.
Dear Andy:
This will confirm that from time-to-time, there are pending against Xxxxxx'x
Restaurants, Inc., or its subsidiaries, a number of lawsuits which are not
listed on Exhibit B to the above referenced Loan Agreements. These actions are
brought by business invitees of the Company's restaurants. The complaints filed
in these suits demand damages for alleged negligence on the Company's part. All
are covered by the Company's liability insurance policy and are, at any one
time, in the aggregate, within the policy limits and not a material liability of
the Company.
Typically, there are no more than fifty such suits pending at any one time.
Substantially all of these suits are settled for relatively nominal amounts,
without proceeding to trial. As of this date, there are thirty-seven such
actions pending, which, in the aggregate, are within the limits of the Company's
liability insurance policy and are not a material liability of the Company.
Sincerely,
Xxxxxx'x Restaurants, Inc.
By /s/ W. Xxxx Xxxx
-------------------
W. Xxxx Xxxx
Counsel-Secretary
/mm
Star Bank-Hawking 10-9
C: Xxxxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx
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EXHIBIT C
PERMITTED LIENS
Balance
Lien October 9,1998
-------------------------------------------------------------------------------
Loans against cash surrender values of life insurance policies:
Company Policy No. Amount
------- ---------- ------
Great West Life Assurance 1231-348 74,865
Great West Life Assurance 1511-228 23,608
Great West Life Assurance 0000-000 000,417
Great West Life Assurance 1724-573 96,928
The Hartford R559-474L 100,000
Lincoln National Life 00-0000000 75,648
Lincoln National Life 00-0000000 6,535
Lincoln National Life 00-0000000 16,376
Lincoln National Life 00-0000000 21,212
Lincoln National Life 00-0000000 6,891
Lincoln National Life 00-0000000 50,944
Lincoln National Life 00-0000000 24,369 602,793
--------
--------
$602,793
========
And any liens on property which is described above that replace any liens
described above, provided that the obligations secured by such liens do not
exceed the amounts described above.
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EXHIBIT D
FINANCIAL COVENANTS
The Borrower agrees that it shall:
(a) Tangible Net Worth. Not permit the Borrower's tangible net worth,
on a consolidated basis, to be less than the following amounts (each, a "Base
Tangible Net Worth") at any time during the following time periods (each, a "TNW
Year"):
TNW Year Worth Base Tangible Net Worth
-------------- -----------------------
the period commencing with the last
day of the fiscal year ended May 31, $48,000,000
1998, through the next to last day
of the next fiscal year ("FY 99")
any period commencing with the last the Base Tangible Net
day of a fiscal year, beginning with Worth for the immediately
the period commencing on the last day preceding TNW year plus of FY 99,
through the next to last $2,000,000
day of the next fiscal year
"Tangible net worth" for purposes hereof shall mean the total of book net worth
less any assets, except capitalized leases, considered intangible under
generally accepted accounting principles.
(b) Ratio of Senior Bank Debt to EBITDA. Not permit the ratio of the
Borrower's Senior Bank Debt to EBITDA to exceed 2.50 to 1.0 at any time.
"Senior Bank Debt" for purposes hereof shall mean the sum of all obligations of
the Borrower to the Bank, including without limitation all obligations of the
Borrower to the Bank incurred in connection with this Agreement, the 1998
Agreement, the 1996 Agreement and the 1992 Agreement and all obligations of the
Borrower to the Bank incurred in connection with any existing or future lease
transactions capitalized or required to be capitalized on the Borrower's books.
"EBITDA" for purposes hereof shall mean the Borrower's consolidated gross
(before interest, taxes, depreciation and amortization) earnings, less cash and
non-cash extraordinary gains and non-cash extraordinary losses, calculated in
accordance with generally accepted accounting principles consistently applied in
accordance with past practices on a rolling four (4) quarter basis.
(c) Cash Flow Coverage Ratio. Not permit the ratio of (i) the Borrower's
EBITDA plus operating lease payments minus Unfunded Capex minus cash dividends
to the Borrower's shareholders, to (ii) the sum of the Borrower's current
portion
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of long-term debt plus interest expense plus operating and capital lease
payments, calculated in accordance with generally accepted accounting principles
consistently applied in accordance with past practices on a rolling four (4)
quarter basis, to be less than 1.25 to 1.0 at any time.
"Unfunded Capex" for purposes hereof shall mean the Borrower's gross capital
expenditures minus any borrowings, as determined by the Bank, used to fund such
capital expenditures.
(d) Interest Coverage Ratio. Not permit the Borrower's Interest Coverage
Ratio to be less than 2.0 to 1.0 at any time. "Interest Coverage Ratio" for
purposes hereof shall mean the Borrower's ratio, on a consolidated basis, of (i)
its earnings before total interest expense (as required to be reflected in
audited financial statements prepared in accordance with generally accepted
accounting principles) and current and deferred taxes, less cash and non-cash
extraordinary gains and non-cash extraordinary losses, to (ii) its total
interest expense (as required to be reflected in audited financial statements
prepared in accordance with generally accepted accounting principles),
calculated on a rolling four (4) quarter basis.
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EXHIBIT E
PERMITTED INDEBTEDNESS
Balance
October 9, 1998
---------------
Loan Agreement dated December 31, 1992 (as amended) payable to Star Bank, N. A. $6,375,000
Loan Agreement dated August 29, 1996 (as amended) payable to Star Bank, N. A. 12,500,000
Loan Agreement dated July 9, 1997 (as amended) payable to Star Bank, N. A. 5,894,490
-----------
$24,769,490
===========
Contingent liability as assignor/guarantor of the following leases:
Remaining
Location Assignee Lease Term
-------- -------- ----------
Dayton, OH (HS Needmore) S & L Fast Foods, Inc. 9/30/98
Silver Springs, FL Xxxxxxxx Foods, Inc. 1/31/00
Ocala, FL Xxxxxxxx Foods, Inc. 8/1/00
Blue Ash, OH (HS Blue Ash) S & L Fast Foods, Inc. 9/30/00
Florence, KY (P & W) Olive Garden 12/31/01
Houston, TX (Westheimer) Xxxxxx Companies 10/31/03
Lease liability for closed restaurants & other non-operating property (lease not
presently assigned)
Remaining Rent Per
Location Lease Term Month
--------- ---------- -----
Indianapolis, IN (Ky. Ave.) 6/4/00 (ground lease) $3,000
Orlando, FL (Pershing) 3/31/06 8,150
Plus indebtedness secured by permitted liens as described on Exhibit C and
indebtedness replacing the indebtedness secured by the permitted liens as
described on Exhibit C, provided that no such replacement indebtedness shall
exceed the amount being replaced as shown on Exhibit C.
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EXHIBIT J
AMENDED AND RESTATED PROMISSORY NOTE
$18,000,000 Cincinnati, Ohio
October 9, 1998
XXXXXX'X RESTAURANTS, INC., an Ohio corporation (the "Borrower"), for
value received, hereby promises to pay to the order of STAR BANK, NATIONAL
ASSOCIATION, a national banking association (the "Bank"), or it successors or
assigns, on or before August 15, 2000, the principal sum of Eighteen Million
Dollars ($18,000,000), or such portion thereof as may be outstanding from time
to time, together with interest thereon as hereinafter provided.
This Note evidences the loan (the "Loan") made under the Loan Agreement
dated as of July 9, 1997 between the Borrower and the Bank, as amended from time
to time (the "Loan Agreement"), and is subject to the terms and conditions
thereof, including, without limitation, the terms thereof providing for
acceleration of maturity of the Loan. If any term or condition of this Note
conflicts with the express terms or conditions of the Loan Agreement, the terms
and conditions of the Loan Agreement shall control. Terms used herein shall have
the same meanings as in the Loan Agreement.
Subject to the terms of the Loan Agreement, the Borrower shall from
time to time have the option of designating that portions of the principal
balance of the Loan bear interest at a rate per annum equal to (i) the One-Month
LIBOR-Based Rate (as hereinafter defined) for a one (1) month period (the
"One-Month LIBOR-Based Rate Period") and (ii) the Two-Month LIBOR-Based Rate (as
hereinafter defined) for a two (2) month period (the "Two-Month LIBOR-Based Rate
Period"). Any portion of the Loan with respect to which a One-Month LIBOR-Based
Rate or a Two-Month LIBOR-Based Rate is not in effect shall bear interest at a
rate per annum equal to the Prime-Based Rate (as hereinafter defined), with such
rate to be adjusted on the effective date of any change in the Prime Rate (as
hereinafter defined) by the Bank.
The "One-Month LIBOR-Based Rate', shall mean the sum of (i) the annual
rate, determined solely by the Bank, as the British Banking Association 11:00
a.m. Fix offered rate obtained from Telerate Systems Incorporated, Bloomberg
Financial Systems or any other electronic media deemed appropriate by the Bank
(rounded upwards, if necessary, to the nearest 1/10000 of one percent), for
deposits in immediately available Dollars in the London Interbank Market (as
hereinafter defined) at or about 11:00 a.m., London time, for the applicable
One-Month LIBOR-Based Rate Period on the day two (2) London Business Days (as
hereinafter defined) preceding the first day of such One-Month LIBOR-Based Rate
Period, plus (ii) the LIBOR-Based Rate Spread
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(as hereinafter defined), and adjusted for Reserve Percentages (as hereinafter
defined) and any other regulatory and/or governmental costs incurred by the Bank
from eurocurrency liabilities. The "Two-Month LIBOR-Based Rate" shall mean the
sum of (i) the annual rate, determined solely by the Bank, as the British
Banking Association 11:00 a.m. Fix offered rate obtained from Telerate Systems
Incorporated, Bloomberg Financial Systems or any other electronic media deemed
appropriate by the Bank (rounded upwards, if necessary, to the nearest 1/10000
of one percent), for deposits in immediately available Dollars in the London
Interbank Market at or about 11:00 a.m., London time, for the applicable
Two-Month LIBOR-Based Rate Period on the day two (2) London Business Days
preceding the first day of such Two-Month LIBOR-Based Rate Period, plus (ii) the
LIBOR-Based Rate Spread, and adjusted for Reserve Percentages and any other
regulatory and/or governmental costs incurred by the Bank from eurocurrency
liabilities. In the event that Telerate Systems Incorporated, Bloomberg
Financial Systems or any other electronic media selected by the Bank ceases to
quote such rates, the Bank shall, in its discretion, select an alternative rate
source. The One-Month LIBOR-Based Rate and the Two-Month LIBOR-Based Rate are
each sometimes referred to herein as a "LIBOR-Based Rate," and the One-Month
LIBOR-Based Rate Period and the Two-Month LIBOR-Based Rate Period are each
sometimes referred to herein as a "LIBOR-Based Rate Period."
The "LIBOR-Based Rate Spread" shall be one hundred fifty (150) basis
points through and including October 15, 1998, and commencing on October 16,
1998, the LIBOR-Based Rate Spread shall be one hundred twenty-five (125) basis
points.
"London Interbank Market" shall mean the London eurodollar interbank
market where rates are offered to the Bank by prime banks for deposits of
immediately available Dollars. "London Business Day" shall mean any day other
than a Saturday, Sunday or holiday on which banks in London, England are
authorized by law to close.
"Reserve Percentages" shall mean the total maximum reserve percentages
for determining the reserves to be maintained by member banks of the Federal
Reserve System for eurocurrency liabilities, as defined in Federal Reserve Board
Regulation D, rounded upward to the nearest 1/100 of one percent, and includes,
but is not limited to, marginal, emergency, supplemental, special and other
reserve percentages. The amount of the adjustment for Reserve Percentages and
regulatory and/or governmental costs shall be based upon the assumption that the
Bank funded one hundred percent (100%) of the Loan or portion thereof bearing
interest at a LIBOR-Based Rate in the London Interbank Market.
The "Prime Rate", shall mean that rate announced by the Bank as its
prime rate, which rate is determined solely by the Bank pursuant to market
factors and its own operating needs and
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is not necessarily the Bank's best or most favorable rate for commercial or
other loans. The "Prime-Based Rate" shall be the Prime Rate minus twenty-five
(25) basis points.
Interest on any portion of the Loan bearing interest at the Prime-Based
Rate shall be payable monthly, in arrears, commencing on October 31, 1998, and
on the last day of each calendar month thereafter, and when this Note is due
(whether by reason of acceleration or otherwise). Interest on any portion of the
Loan bearing interest at a LIBOR-Based Rate shall be payable, in arrears, on the
last day of the LIBOR-Based Rate Period applicable thereto, and when this Note
is due (whether by reason of acceleration or otherwise). Interest on this Note
shall be computed on the basis of a year consisting of three hundred sixty (360)
days but applied to the actual number of days elapsed. At the option of the
Bank, (a) prior to acceleration of this Note, in the event that any interest on
or principal of this Note remains unpaid past thirty (30) days of the date due,
and/or (b) upon the occurrence of any other Event of Default under the Loan
Agreement or upon the acceleration of this Note, interest (computed and adjusted
in the same manner, and with the same effect, as interest on this Note prior to
maturity) on the outstanding balance of this Note shall be payable on demand at
the Prime Rate plus an additional three percent (3%) per annum up to any maximum
rate permitted by law, in all cases until paid and whether before or after the
entry of any judgment thereon. In addition, in the event that the Borrower
should fail to make any payment hereunder within ten (10) days of the date due,
the Borrower shall pay the Bank a fee in an amount of up to five percent (5%) of
the amount of such payment, but in no event less than fifty dollars ($50.00),
which fee shall be immediately due and payable without notice or demand.
The Borrower shall prepay the outstanding principal balance of the Loan
in an amount equal to the net after-tax proceeds from the sale of any assets of
the Borrower or any of its Subsidiaries (other than sales of any assets as
described in Section 2(l)(ii) or Section 2(l)(iii) of the Loan Agreement) on the
date of receipt of such proceeds (provided that if prepayment on such date would
cause the Borrower to be subject to a charge hereunder because of repayment of a
portion of the Loan bearing interest at a LIBOR-Based Rate prior to the
expiration of the LIBOR-Based Rate Period applicable hereto, then, at the option
of the Borrower, such proceeds shall not be applied to the prepayment of the
Loan on such date, but instead shall be deposited into a non-interest bearing
account at the Bank under the sole control of the Bank and shall be applied to
prepayment of the Loan at the expiration of such LIBOR-Based Rate Period).
Unless sooner due and payable as provided hereunder, the entire outstanding
principal balance of this Note shall be due and payable in full on August 15,
2000.
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All payments of principal and interest hereunder shall be made in
immediately available funds to the Bank at 000 Xxxxxx Xxxxxx, Xxxxxxxx 0000,
Xxxxxxxxxx, Xxxx 00000, or at such other place as may be designated by the Bank
to the Borrower in writing. The Bank is authorized by the Borrower to enter from
time to time the balance of this Note and all payments and prepayments thereon
on the reverse of this Note or in the Bank's regularly maintained data
processing records, and the aggregate unpaid amount set forth thereon or therein
shall be presumptive evidence of the amount owing to the Bank and unpaid on this
Note.
The Borrower may, at its option, from time to time repay or prepay part
or all of the outstanding principal balance of the Loan bearing interest at the
Prime-Based Rate without premium. The Loan or any portion thereof bearing
interest at a LIBOR-Based Rate may only be repaid without charge at the
expiration of the LIBOR-Based Rate Period applicable thereto, and any repayment
of the Loan or any portion thereof bearing interest at a LIBOR-Based Rate at any
time prior to the expiration of the LIBOR-Based Rate Period applicable thereto
shall be subject to a charge in an amount determined by the Bank in its
reasonable discretion, such charge to compensate the Bank for loss of bargain
with respect to the Loan or portion thereof being so paid, and not as a penalty,
payable upon demand accompanied by a reasonably detailed statement as to such
charge (which statement shall be conclusive in the absence of manifest error).
IMPORTANT: This Note shall be deemed made in Ohio and shall in all
respects be governed by and construed in accordance with the laws of the State
of Ohio, including all matters of construction, validity and performance.
Without limitation on the ability of the Bank to initiate and prosecute any
action or proceeding in any applicable jurisdiction related to loan repayment,
the Borrower and the Bank agree that any action or proceeding commenced by or on
behalf of the parties arising out of or relating to this Note shall be commenced
and maintained exclusively in the District Court of the United States for the
Southern District of Ohio, or any other court of applicable jurisdiction located
in Cincinnati, Ohio. The Borrower and the Bank also agree that a summons and
complaint commencing an action or proceeding in any such Ohio courts by or on
behalf of such parties shall be properly served and shall confer personal
jurisdiction on a party to which said party consents, if (a) served personally
or by certified mail to the other party at any of its addresses noted herein, or
(b) as otherwise provided under the laws of the State of Ohio. The interest
rates and all other terms of this Note negotiated with the Borrower are, in
part, related to the aforesaid provisions on jurisdiction, which the Bank deems
a vital part of this loan arrangement.
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This Note amends and restates the Promissory Note dated as of August
15, 1997 given by the Borrower to the Bank, and evidences all amounts
outstanding as of the date hereof under said Promissory Note.
Presentment for payment, notice of dishonor, protest and notice of
protest are hereby waived.
XXXXXX'X RESTAURANTS, INC.
By:
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Title:
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Address: 0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
-5-
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