EXHIBIT 10.8
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT ("Agreement") is made this 20th day of
August, 2004, by and between JFC Enterprises, LLC, a Delaware limited liability
company ("Borrower") and O'CHARLEY'S INC., a Tennessee corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower has been formed for the purpose of owning and operating
O'Charley's restaurants in accordance with the terms of the Limited Liability
Company Agreement dated August 20, 2004 (the "LLC Agreement");
WHEREAS, the Borrower has obtained (or may obtain in the future) a
franchise from the Lender for the purpose set forth above; and
WHEREAS, pursuant to the LLC Agreement, Lender has agreed to make
available to Borrower a revolving line of credit, in the maximum principal
amount of SEVEN HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS ($750,000) (the
"Loan") on the terms hereinafter set forth;
NOW, THEREFORE, for and in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. The Loan.
(a) Note. The Loan shall be evidenced by a Master Secured Demand
Promissory Note of even date herewith in the maximum principal amount of
$750,000, made and executed by Borrower and payable to Lender, in form and
substance satisfactory to Lender (said Master Secured Demand Promissory
Note, as well as any and all modifications, extensions and renewals
thereof are hereinafter collectively referred to as the "Note").
(b) Purpose. The purpose of the Loan shall be to provide working
capital to Borrower on a revolving basis in accordance with the terms of
the LLC Agreement for the establishment and operation of the O'Charley's
restaurants in accordance with the Pre-Opening Budget (as defined in the
LLC Agreement) and the Operating Budget (as defined in the LLC Agreement).
The proceeds of the Loan shall not be used for any other purpose.
(c) Security; Guarantor. The Loan shall be secured by (i) a
Security Agreement of even date herewith granting Lender a lien in certain
collateral described therein (the "Security Agreement"),(ii) one or
mortgages, deeds to secure debt or deeds of trust from Borrower for the
use and benefit of Lender covering real property of the Borrower
(individually and collectively, the "Security Instrument"), and (iii) a
Guaranty
Agreement of even date herewith (the "Guaranty") executed by Xxxx Xxxxxx
(the "Guarantor"; this Agreement, the Note, the Security Agreement, the
Guaranty, the Security Instrument and any other documents now or hereafter
executed in connection with the Loan, as the same may be amended or
modified from time to time, are hereinafter collectively referred to as
the "Loan Documents").
(d) Advances. So long as no Event of Default exists hereunder, nor
any event with which with the giving of notice, passage of time or both
would constitute an Event of Default hereunder, upon the terms and
conditions herein set forth and in accordance with and subject to the
terms of the LLC Agreement, Lender will make advances (each an "Advance")
under the Loan to Borrower at Borrower's request in an aggregate amount
outstanding at any one time not to exceed the maximum principal amount of
the Loan.
(e) Notice and Manner of Borrowing. Borrower shall give Lender at
least five (5) Business Days' written or telegraphic notice (effective
upon receipt) of any Advance under this Agreement, specifying the date and
amount thereof. Not later than 3:00 p.m. (Nashville, Tennessee time) on
the date of such Advance and upon fulfillment of the applicable conditions
set forth in Section 1 (f), Lender may, in its sole and absolute
discretion, make such Advance available to the Borrower in immediately
available funds.
(f) Effect of Request for Advance. Each request by Borrower for an
Advance shall constitute an affirmation by Borrower that the
representations and warranties in Section 2 of this Agreement remain true
and correct on and as of the date of such request.
2. Representations and Warranties. Borrower hereby represents and
warrants to Lender as follows:
(a) Corporate Status. Borrower is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business and in good
standing in each state in which a failure to be so qualified would have a
material adverse effect on Borrower's business. Borrower has the limited
liability company power to own and operate its properties, to carry on its
business as now conducted and to enter into and perform its obligations
under this Agreement and the other Loan Documents to which it is a party.
(b) Authorization. Borrower has full legal right, power and
authority to conduct its business and affairs in the manner contemplated
by the Loan Documents and to enter into and perform its obligations
thereunder without the consent of any other person, firm, governmental
agency or legal entity.
(c) Other Agreements. The transactions hereby contemplated will
not result in a breach of or constitute a default under any other
agreement to which Borrower is party. Borrower is not in breach of or in
default under each Franchise Agreement (as defined in the LLC Agreement)
and the Development Agreement (as defined in the LLC Agreement).
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(d) Litigation. There is no litigation or proceeding pending
against Borrower, nor to the knowledge of the Borrower threatened, which,
if decided adversely to Borrower would have a material adverse effect upon
its financial condition or business.
(e) Financial Statements. The financial statements of Borrower and
Guarantor heretofore delivered to Lender are true and correct in all
respects, have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present the
financial conditions of Borrower and Guarantor as of the dates thereof. No
material adverse change has occurred in the financial condition of
Borrower or Guarantor since the dates thereof.
(f) Compliance with Law. Borrower has obtained all necessary
licenses, permits, governmental approvals and authorizations necessary or
proper in order to conduct its business and affairs as heretofore
conducted and as hereafter intended to be conducted and is in compliance
with all laws, regulations, decrees and orders applicable to it.
(g) Taxes. Borrower has filed all required federal, state and
local tax returns and has paid all taxes as shown on such returns as they
have become due and have paid all other taxes, fees or other charges
imposed on it prior to delinquency.
(h) Environmental Matters. Borrower represents and warrants to
Lender as follows:
(i) All of Borrower's property is being operated by Borrower
in full compliance with all applicable environmental laws, and
Borrower has obtained, maintained and is in good standing under all
approvals, consents, certificates, licenses and permits required by
all applicable environmental laws with respect to its property.
(ii) All of Borrower's property is free of all hazardous
wastes, and is free of all hazardous materials other than those
maintained therein or thereon in full compliance with all applicable
environmental laws. Borrower has not caused or permitted any of its
property to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process
hazardous materials except in full compliance with all applicable
environmental laws.
(iii) Borrower has not received notice, and has no knowledge,
of any noncompliance with or violation of any environmental laws
with respect to any of its property or its business.
3. Covenants and Agreements. Borrower covenants and agrees during the
term of this Agreement as follows:
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(a) Payment of Obligations. Borrower shall pay the indebtedness
evidenced by the Note according to the tenor thereof, and shall timely pay
or perform, as the case may be, all of its other obligations to Lender.
(b) Further Assurances. Borrower will take all actions requested
by Lender to create and maintain in Lender's favor valid liens and/or
perfected security interests in any collateral for the Loan.
(c) Financial Statements. Borrower shall furnish to Lender (or
cause to be furnished to Lender) the following:
(i) financial statements for each fiscal year within ninety
(90) days after the end of such fiscal year, and accompanied by a
certificate of the President of Borrower, stating that to the best
of the knowledge of such officer, Borrower has kept, observed,
performed and fulfilled each covenant, term and condition of this
Agreement and the other Loan Documents during the preceding fiscal
year and that no Event of Default hereunder has occurred and is
continuing (or if an Event of Default has occurred and is
continuing, specifying the nature of same, the period of existence
of same and the action Borrower proposes to take in connection
therewith (a "Compliance Certificate");
(ii) quarterly financial statements within thirty (30) days
after the end of each quarterly period of Borrower's fiscal year,
accompanied by a Compliance Certificate with respect to such
quarterly period; and
(iii) monthly financial statements within twenty (20) days
after the end of each calendar month, accompanied by a Compliance
Certificate with respect to such calendar month.
In addition, Borrower shall promptly furnish Lender any other
financial data Lender may reasonably request. All such financial
statements shall be prepared in conformity with generally accepted
accounting principles consistently applied and shall be in form
satisfactory to Lender.
(d) Insurance. Borrower shall maintain insurance coverage in
amounts and of types satisfactory to Lender, including but not limited to
insurance against loss by fire or other hazards included in the term
"Extended Coverage" and xxxxxxx'x compensation insurance in such amounts
as Lender may from time to time reasonably require. All such policies of
insurance shall provide that such insurance shall be payable to Borrower
and Lender as their respective interests may appear, and that at least
thirty (30) days' prior written notice of cancellation or modification of
the policy shall be given to Lender by the insurer.
(e) Taxes. Borrower shall file all required federal, state and
local tax returns and pay all taxes as shown on such returns as they
become due, and shall pay all other taxes, fees or other charges imposed
on it prior to delinquency.
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(f) Existence. Borrower shall maintain its limited liability
company existence in good standing in the state of its organization and
its qualification in good standing as a foreign limited liability company
in any jurisdiction in which such qualification is necessary pursuant to
applicable law.
(g) Compliance with Law and Other Agreements. Borrower shall
maintain its business operations and property owned or used in connection
therewith in compliance with (a) all applicable federal, state and local
laws, regulations and ordinances governing such business operations in the
use and ownership of such property, and (b) all agreements, licenses,
franchises, indentures and mortgages to which Borrower is a party or by
which Borrower or any of its properties is bound, including each Franchise
Agreement, the Development Agreement and the LLC Agreement.
(h) Notice of Default. Borrower shall give written notice to
Lender of the occurrence of any default under this Agreement or any other
Loan Documents promptly upon the occurrence thereof.
(i) Notice of Litigation. Borrower shall give notice in writing to
Lender of any action, suit or proceeding wherein the amount in issue is in
excess of $10,000 instituted by any persons whomsoever against any
Borrower or any dispute between Borrower on the one hand and any
governmental regulatory body on the other hand in which dispute might
interfere with the normal operations of Borrower.
(j) Mergers, Consolidations, Acquisitions and Sales. Without the
express prior written consent of Lender, which may be denied in Lender's
sole discretion, Borrower shall not (i) be a party to any merger,
consolidation or corporate reorganization, nor (ii) purchase or otherwise
acquire all or substantially all of the assets or stock of, or any
partnership or joint venture interest in, or any other person, firm or
entity, nor (iii) sell, transfer, convey or grant a security interest in
or lease all or any substantial part of its assets, nor (iv) create any
subsidiaries nor convey any of its assets to any subsidiary.
(k) Management, Ownership. Borrower shall not permit any change in
the ownership, or executive management of Borrower without the prior
written consent of Lender. The ownership and executive management of
Borrower are material factors in Lender's willingness to institute and
maintain a lending relationship with Borrower.
(l) Guaranties; Loans. Borrower shall not guarantee nor be liable
in any manner, whether directly or indirectly, or become contingently
liable after the date of this Agreement in connection with the obligations
or indebtedness of any person or persons whomsoever, except for the
indorsement of negotiable instruments payable to Borrower for deposit or
collection in the ordinary course of business. Borrower shall not make any
loan, advance or extension of credit to any person other than in the
normal course of its business.
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(m) Debt. Without the express prior written consent of Lender,
which Lender may withhold in its sole discretion, Borrower shall not
create, incur, assume or suffer to exist indebtedness of any description
whatsoever other than the indebtedness evidenced by the Note, trade
accounts payable and accrued expenses incurred in the ordinary course of
business and the indorsement of negotiable instruments payable to Borrower
for deposit or collection in the ordinary course of business and a loan in
the maximum principal amount of $2,500,000, to be made by GE Capital
Franchise Finance Corporation, a Delaware corporation ("GECFFC"), as
lender, to Borrower, as borrower, evidenced by one or more promissory
notes from Borrower to GECFFC, for the purpose of constructing or
acquiring an O'Charley's restaurant, all upon terms and conditions
reasonably acceptable to Lender (the "GE Loan").
(n) Environmental Matters.
(i) Borrower will cause all of its property to remain free
of all hazardous wastes, and to remain free of all hazardous
materials other than those maintained therein or thereon in full
compliance with all applicable environmental laws. Borrower will not
cause or permit any of its property to be used to generate,
manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process hazardous materials except in full
compliance with all applicable environmental laws.
(ii) Borrower will notify Lender immediately if it receives
any notice or obtains knowledge of any noncompliance with or
violation of any environmental laws with respect to any of its
property or its business.
(iii) In the event that hazardous materials unrelated to
Borrower's business, or hazardous wastes, are discovered on or are
brought onto any of Borrower's property, Borrower will cause such
hazardous materials or hazardous wastes to be removed and disposed
of promptly and in full compliance with all applicable environmental
laws. Borrower will provide Lender prior written notice of such
removal and disposal actions.
(iv) Borrower will comply with all applicable environmental
laws in all jurisdictions in which Borrower operates, now or in the
future, and will comply with all environmental laws that in the
future become applicable to its property or business.
4. Default and Remedies.
(a) Events of Default. The occurrence of any of the following
shall constitute an Event of Default hereunder:
(i) Default in the payment of principal of or interest on
the indebtedness evidenced by the Note;
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(ii) Any misrepresentation by Borrower or Guarantor as to
any matter hereunder or under any of the other Loan Documents or
delivery of any statement, notice or writing to Lender that is
untrue in any respect;
(iii) Failure of Borrower or Guarantor to perform any of its
obligations under this Agreement, the Note or any other Loan
Documents or any default or event of default shall occur under any
of the other Loan Documents;
(iv) A default or event of default, shall occur under the GE
Loan;
(v) Any default or event of default, or event which with
the giving of notice, passage of time or both would constitute a
default or event of default, under any agreement between Borrower
and Lender or Borrower and any affiliate of Lender, including,
without limitation, each Franchise Agreement, the Development
Agreement and the LLC Agreement;
(vi) Borrower or Guarantor shall (i) generally not pay or
shall be unable to pay its debts as such debts become due; or (ii)
shall make an assignment for the benefit of creditors or petition or
apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii)
shall commence any proceedings under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect; or
(iv) shall have had any such petition or application filed or any
such proceeding commenced against it in which an order for relief is
entered or an adjudication or appointment is made; or (v) shall
indicate by any act or omission, its consent to, approval of or
acquiescence in any such petition, application, proceeding or order
for relief or the appointment of a custodian, receiver or trustee
for it or a substantial part of its assets; or (vi) shall suffer any
such custodianship, receivership or trusteeship to continue
undischarged for a period of thirty (30) days or more;
(vii) Borrower or Guarantor shall be liquidated, dissolved,
partitioned or terminated or the articles of organization or
certificate of authority shall expire or be revoked;
(viii) Borrower or Guarantor shall default in the timely
payment or performance of any obligation now or hereafter owed to
Lender in connection with any other indebtedness of such Borrower or
Guarantor to Lender; or
(ix) Lender shall reasonably suspect the occurrence of one
or more of the aforesaid events of default and Borrower, upon the
request of Lender, shall fail to provide evidence reasonably
satisfactory to Lender that such event or events of default have not
in fact occurred.
(b) Remedies. Upon the occurrence of an Event of Default described
in Subsection 4(iv) hereof, the indebtedness evidenced by the Note as well
as any other
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indebtedness of Borrower to Lender shall be immediately due and payable in
full; and upon the occurrence of any other Event of Default described
above, Lender at any time thereafter may, at its option, accelerate the
maturity of the indebtedness evidenced by the Note as well as any and all
indebtednesses of Borrower to Lender, all without notice of any kind. Upon
the occurrence of such Event of Default and the acceleration of the
maturity of the indebtedness evidenced by the Note, Lender shall have all
rights and remedies that Lender may now or hereafter possess at law, in
equity or by statute.
5. Miscellaneous.
(a) Performance by Lender. If Borrower shall default in the
payment, performance or observance of any covenant, term or condition of
this Agreement, Lender may, at its option, pay, perform or observe the
same and all payments made or costs or expenses incurred by Lender in
connection therewith, with interest thereon at the default rate provided
in the Note, shall be immediately repaid to Lender by Borrower.
(b) Successors and Assigns. All covenants and agreements contained
in this Agreement by or on behalf of Borrower or by or on behalf of Lender
shall bind and inure to the benefit of their respective heirs, legal
representatives, successors-in-title and assigns.
(c) Costs and Expenses. Borrower shall pay any and all costs and
expenses incurred in connection with the making, administration, servicing
and collection of the Loan, promptly upon demand of Lender.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable, the remainder of this Agreement shall not be
affected and shall be enforced to the greatest extent permitted by law.
(e) Notices. Any notices permitted or required to be made
hereunder shall be made in writing, signed by the party giving such notice
and shall be delivered personally, telecopied or sent by certified mail or
nationally recognized courier service (such as Federal Express) to the
party at the address set forth below or at such other address as may be
supplied in writing and of which receipt has been acknowledged in writing.
The date of personal delivery, telecopy or the date of mailing (or
delivery to such courier service) as the case may be shall be the date of
such notice. For purposes of this Agreement:
The address of Lender is:
O'Charley's Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxxxxx, Assistant Secretary
Telecopy Number: (000) 000-0000
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with a copy to:
Bass, Xxxxx & Xxxx PLC
0000 XxXxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: J. Page Davidson
Telecopy Number: 615/742-2753
The address of Borrower is:
JFC Enterprises, LLC
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy Number: (000) 000-0000
(f) Miscellaneous. This Agreement shall be construed and enforced
under the laws of the State of Tennessee. No amendment or modification
hereof shall be effective except in a writing executed by the parties
hereto.
[Remainder of this page intentionally left blank. Signatures on following
page(s).]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BORROWER: JFC ENTERPRISES, LLC
By: /s/ Xxxx Xxxxxx
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Title: President
Location(s) of Collateral: ______________________
______________________
______________________
______________________
______________________
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LENDER: O'CHARLEY'S INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Chairman and CEO
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