EXHIBIT 10.12
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT ("Agreement") is made this 8th day of
November, 2004, by and between Wi-Tenn Restaurants, 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 November 8, 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
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
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. 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"), and (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"; this
Agreement, the Note, the Security Agreement, 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 for the
purposes set forth in Section 1(b), in an aggregate amount outstanding
at any one time not to exceed the maximum principal amount of the Loan.
Each Advance shall be in a minimum amount of $5,000.
(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 shall 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 such
Advance is for the purposes set forth in Section 1(b) and 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 any Franchise Agreement (as defined in the LLC
Agreement) or 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
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 as of the dates thereof. No material adverse
change has occurred in the financial condition of Borrower 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 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 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 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 shall be liquidated, dissolved,
partitioned or terminated or the articles of organization or
certificate of authority shall expire or be revoked;
(viii) Borrower 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 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 indebtedness of Borrower to Lender shall be
immediately due and payable in full; and
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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
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:
Wi-Tenn Restaurants, LLC
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
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: WI-TENN RESTAURANTS, LLC
By: /s/ Xxxxxxx X. Xxxxx
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Title: President and Chief Exec. Officer
Location(s) of Collateral: ______________________
______________________
______________________
______________________
______________________
______________________
LENDER: O'CHARLEY'S INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Chairman and Chief Exec. Officer
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