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EXHIBIT 10(a)
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LINE OF CREDIT
AGREEMENT
DATED AS OF DECEMBER 18, 1996
BY AND AMONG
LONGHORN STEAKS, INC.
AS BORROWER,
AND
FIRST UNION NATIONAL BANK OF GEORGIA
AS LENDER
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................................... 1
SECTION 1.1 Definitions.............................................................. 1
SECTION 1.2 Miscellaneous............................................................ 4
ARTICLE II CREDIT FACILITY................................................................... 4
SECTION 2.1 Loans.................................................................... 4
SECTION 2.2 Interest................................................................. 4
SECTION 2.3 Requests for Advances, Disbursements..................................... 4
SECTION 2.4 Payment of Principal..................................................... 4
SECTION 2.5 Note..................................................................... 5
SECTION 2.6 Use of Proceeds.......................................................... 5
SECTION 2.7 Default Rate............................................................. 5
SECTION 2.8 Maximum Rate............................................................. 5
SECTION 2.9 Date for Payments........................................................ 5
SECTION 2.10 Changed Circumstances.................................................... 6
SECTION 2.11 Capital Requirements..................................................... 7
SECTION 2.12 Taxes.................................................................... 8
ARTICLE III CLOSING; CONDITIONS OF CLOSING AND ISSUING LETTERS OF CREDIT...................... 9
SECTION 3.1 Closing.................................................................. 9
SECTION 3.2 Conditions to Closing and Initial Loans.................................. 9
SECTION 3.3 Conditions to All Loans.................................................. 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................................... 10
SECTION 4.1 Representations and Warranties........................................... 10
SECTION 4.2 Survival of Representations and Warranties, Etc.......................... 10
ARTICLE V FINANCIAL INFORMATION AND NOTICES................................................. 10
ARTICLE VI COVENANTS......................................................................... 11
ARTICLE VII DEFAULT AND REMEDIES.............................................................. 11
SECTION 7.1 Events of Default........................................................ 11
SECTION 7.2 Remedies................................................................. 14
SECTION 7.3 Rights and Remedies Cumulative; Non-Waiver; etc.......................... 14
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ARTICLE VIII MISCELLANEOUS..................................................................... 14
SECTION 8.1 Notices.................................................................. 14
SECTION 8.2 Expenses; Indemnity...................................................... 15
SECTION 8.3 Set-off.................................................................. 16
SECTION 8.4 Governing Law............................................................ 16
SECTION 8.5 Consent to Jurisdiction.................................................. 16
SECTION 8.6 Binding Arbitration; Waiver of Jury Trial................................ 17
SECTION 8.7 Reversal of Payments..................................................... 18
SECTION 8.8 Punitive Damages......................................................... 18
SECTION 8.9 Accounting Matters....................................................... 18
SECTION 8.10 Successors and Assigns. ................................................ 19
SECTION 8.11 Performance of Duties.................................................... 19
SECTION 8.12 All Powers Coupled with Interest......................................... 19
SECTION 8.13 Survival of Indemnities.................................................. 19
SECTION 8.14 Titles and Captions...................................................... 19
SECTION 8.15 Severability of Provisions............................................... 19
SECTION 8.16 Counterparts............................................................. 19
SECTION 8.17 Term of Agreement........................................................ 20
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Revolving Credit Agreement
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Exhibit A
NOTE
$1,000,000 December __, 1996
FOR VALUE RECEIVED, the undersigned, LONGHORN STEAKS, INC., a
corporation organized under the laws of Georgia (the "Borrower") hereby promises
to pay to the order of FIRST UNION NATIONAL BANK OF GEORGIA (the "Lender"), at
the times, at the place and in the manner provided in the Credit Agreement
hereinafter referred to, the principal sum of up to One Million and No/100
Dollars ($1,000,000), or, if less, the aggregate unpaid principal amount of all
Loans disbursed by the Lender under the Credit Agreement referred to below,
together with interest at the rates as in effect from time to time with respect
to each portion of the principal amount hereof, determined and payable as
provided in Article II of the Credit Agreement.
This Note is the Note referred to in, and is entitled to the benefits
of, the Line of Credit Agreement dated as of December __, 1996 (as amended,
restated or otherwise modified, the "Credit Agreement") between Borrower and the
Lender. The Credit Agreement contains, among other things, provisions for the
time, place and manner of payment of this Note, the determination of the
interest rate borne by and fees payable in respect of this Note, acceleration of
the payment of this Note upon the happening of certain stated events and the
mandatory repayment of this Note under certain circumstances.
The Borrower agrees to pay on demand all actual costs of collection,
including reasonable attorneys' fees, if any part of this Note, principal or
interest, is collected after maturity with the aid of an attorney.
Presentment for payment, notice of dishonor, protest and notice of
protest are hereby waived.
THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NORTH CAROLINA.
The Debt evidenced by this Note is senior in right of payment to all
Subordinated Debt referred to in the Credit Agreement.
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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
under seal by a duly authorized officer as of the day and year first above
written.
[CORPORATE SEAL] LONGHORN STEAKS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
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Exhibit B
Revolving Credit Agreement
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LINE OF CREDIT AGREEMENT, dated as of the 18th day of December, 1996,
by and among LONGHORN STEAKS, INC., a corporation organized under the laws of
Georgia ("Longhorn" or the "Borrower"), and FIRST UNION NATIONAL BANK OF
GEORGIA, as Lender.
STATEMENT OF PURPOSE
The Borrower has requested, and the Lender has agreed to extend,
certain Loans to the Borrower on the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used herein and not defined
herein shall have the meanings assigned thereto in the Revolving Credit
Agreement. In addition, the following terms when used in this Agreement shall
have the meanings assigned to them below:
"Agreement" means this Line of Credit Agreement, as amended, restated,
or otherwise modified.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Borrower" means Longhorn Steaks, Inc. in its capacity as borrower
hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any Loan bearing interest based on the LIBOR Rate, any day that is
a Business Day described in clause (a) and that is also a day for trading by and
between banks in Dollar deposits in the London interbank market.
"Closing Date" means the date of this Agreement.
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"Commitment" means the obligation of the Lender to make Loans to the
Borrower hereunder in an aggregate principal amount at any time outstanding not
to exceed $1,000,000.
"Credit Facility" means the credit facility established pursuant to
Article II hereof.
"Default" means any of the events specified in Section 7.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Event of Default" means any of the events specified in Section 7.1;
provided, that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Lender and confirmed in Federal Reserve
Board Statistical Release H.15 (519) or any successor or substitute publication
selected by the Lender. If, for any reason, such rate is not available, then
"Federal Funds Rate" shall mean a daily rate which is determined, in the opinion
of the Lender, to be the rate at which federal funds are being offered for sale
in the national federal funds market at 9:00 a.m. (Charlotte time). Rates for
weekends or holidays shall be the same as the rate for the immediately preceding
Business Day.
"Lender" means First Union National Bank of Georgia in its capacity as
lender hereunder.
"LIBOR Rate" means the percentage rate of interest per annum which is:
(a) the rate for deposits in United States dollars which
appears on the Telerate Page 3750 at approximately 11:00 a.m. (London
time) for a term equal to one month, from time to time, with each
change in such rate to be effective as of the opening of business on
the effective date of the change in such rate.
(b) If, for any reason, the rate described in clause (a) is
not available, such rate shall be the rate per annum at which, in the
reasonable opinion of the Lender, United States dollars in an amount
substantially equal to the amount of the applicable Loan are being
offered by leading reference banks for settlement in the London
interbank market at approximately 11:00 a.m. (London time), on the
second Business Day next preceding the applicable date for a term equal
to one month.
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"Loan" means any loan made to the Borrower pursuant to Section 2.1, and
all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Note, and
each other document, instrument and agreement executed and delivered by the
Borrower in connection with this Agreement or otherwise referred to herein or
contemplated hereby, all as may be amended, restated or otherwise modified.
"Master Agreement" means the Repurchase Master Agreement between the
Borrower and the Lender dated as of July 29, 1996 and the Controlled Cash Flow
Plus Services Description offered by the Lender in connection therewith.
"Note" means the separate Note made by the Borrower payable to the
order of the Lender, substantially in the form of Exhibit A hereto, evidencing
the Credit Facility, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part.
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans and
(b) all other fees and commissions (including attorney's fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations,
covenants and duties owing by the Borrower to the Lender, of every kind, nature
and description, direct or indirect, absolute or contingent, due or to become
due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, and whether or not for the payment of money, but only to
the extent owing under or in respect of this Agreement, the Note or any of the
other Loan Documents.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by the Lender as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by the Lender as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Revolving Credit Agreement" means the credit agreement of even date
herewith, by and among Longhorn Steaks, Inc. and certain Subsidiaries thereof
listed on the signature pages
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thereto, as Borrowers, the lenders referred to therein, and First Union National
Bank of Georgia, as Agent for the lenders.
"Termination Date" means December 1, 1997.
SECTION 1.2 Miscellaneous.
(a) General. Unless otherwise specified, a reference in this Agreement
to a particular section, subsection, Schedule or Exhibit is a reference to that
section, subsection, schedule or Exhibit of this Agreement. Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter. Any reference herein to "Charlotte time" shall refer to the
applicable time of day in Charlotte, North Carolina. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement.
(b) Revolving Credit Agreement. The terms and conditions of the
Revolving Credit Agreement, a copy of which is attached hereto as Exhibit B, are
hereby incorporated herein by this reference as if fully set forth herein and
such terms and conditions shall continue irrespective of any termination
thereof.
ARTICLE II
CREDIT FACILITY
SECTION 2.1 Loans. Subject to the terms and conditions of this
Agreement, the Lender agrees to make Loans to the Borrower from time to time
from the Closing Date through the Termination Date as requested by the Borrower
in accordance with the terms of Section 2.3; provided, that the aggregate
principal amount of all outstanding Loans (after giving effect to any amount
requested) shall not exceed the Commitment.
SECTION 2.2 Interest. Subject to Section 2.7, the Loans shall
bear interest on the unpaid principal balance outstanding from time to time at
the LIBOR Rate plus 1.25%. Interest shall be payable daily pursuant to the terms
and conditions of the Master Agreement. Interest shall be calculated on the
basis of a year of 360 days and actual days elapsed.
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SECTION 2.3 Requests for Advances; Disbursements. Loans shall be
requested and advanced pursuant to the terms and conditions of the Master
Agreement. Each Loan will be advanced in the minimum principal amount of $1,000
or any integral multiple thereof.
SECTION 2.4 Payment of Principal. Principal shall be paid daily
pursuant to the terms and conditions of the Master Agreement. Unless sooner
paid pursuant to the provisions hereof or the provisions of the Master
Agreement, the principal of the Loans shall be paid in full together with
accrued interest thereon on the Termination Date.
SECTION 2.5 Note. The Lender's Loans and the obligation of the
Borrower to repay such Loans shall be evidenced by a Note executed by the
Borrower payable to the order of the Lender representing the Borrower's
obligation to pay the Commitment or, if less, the aggregate unpaid principal
amount of all Loans made by the Lender to the Borrower hereunder, plus interest
and all other fees, charges and other amounts due thereon. The Note shall be
dated the date hereof and shall bear interest on the unpaid principal amount
thereof at the applicable interest rate per annum specified in Section 2.2.
SECTION 2.6 Use of Proceeds. The Borrower shall use the proceeds of
the Loans for working capital and general corporate requirements of the
Borrower.
SECTION 2.7 Default Rate. Upon the occurrence and during the
continuance of an Event of Default, all outstanding Loans shall bear
interest at a rate per annum two percent (2%) in excess of the rate then
applicable. Interest shall continue to accrue on the Note after the filing by or
against the Borrower of any petition seeking any relief in bankruptcy or under
any act or law pertaining to insolvency or debtor relief, whether state, federal
or foreign.
SECTION 2.8 Maximum Rate. In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under the Note
charged or collected pursuant to the terms of this Agreement or pursuant to the
Note exceed the highest rate permissible under any Applicable Law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Lender has charged
or received interest hereunder in excess of the highest applicable rate, the
rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lender shall promptly refund to the
Borrower any interest received by the Lender in excess of the maximum lawful
rate or shall apply such excess to the
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principal balance of the Obligations. It is the intent hereof that the Borrower
not pay nor contract to pay, and that the Lender not receive nor contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrower under Applicable Law.
SECTION 2.9 Date for Payments. Whenever any payment hereunder,
including, without limitation, payment of principal or interest, shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next Business Day and interest shall continue to accrue on any
principal amount for which the payment date is so extended.
SECTION 2.10 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If the Lender
shall reasonably determine that, by reason of circumstances affecting the
foreign exchange and interbank markets generally, deposits in eurodollars, in
the applicable amounts are not being quoted via Telerate Page 3750 or offered to
the Lender, then the Lender shall forthwith give notice thereof to the Borrower.
Thereafter, until the Lender notifies the Borrower that such circumstances no
longer exist (which the Lender agrees to do; provided, that the Lender shall
have no liability for any failure to do so), the Loans shall bear interest based
on the Base Rate.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Lender with any request or directive (whether or
not having the force of law) of any such Governmental Authority, central bank or
comparable agency, shall make it unlawful or impossible for the Lender to honor
its obligations hereunder to make or maintain any Loan bearing interest based on
the LIBOR Rate, the Lender shall promptly give notice thereof to the Borrower.
Thereafter, until the Lender notifies the Borrower that such circumstances no
longer exist (which the Lender agrees to do; provided, that the Lender shall
have no liability for any failure to do so), the Loans shall bear interest based
on the Base Rate.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental
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Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject the Lender to any tax, duty or other charge
with respect to the Note or shall change the basis of taxation of payments to
the Lender of the principal of or interest on the Note or any other amounts due
under this Agreement in respect thereof (except for changes in the rate of or
additional taxes imposed on or measured by the overall net income of the Lender
imposed by the jurisdiction in which the Lender is organized or is or should be
qualified to do business); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System but excluding any such reserve included in the definition
of LIBOR Rate), special deposit, insurance or capital or similar requirement
against assets of, deposits with or for the account of, or credit extended by
the Lender or shall impose on the Lender or the foreign exchange and interbank
markets any other condition affecting the Note;
and the result of any of the foregoing is to increase the costs to the Lender of
maintaining Loans bearing interest based on the LIBOR Rate or to reduce the
yield or amount of any sum received or receivable by the Lender under this
Agreement or under the Note in respect of a Loan bearing interest based on the
LIBOR Rate, then the Lender shall promptly notify the Borrower of such fact and
demand compensation therefor and, within fifteen (15) days after such notice by
the Lender, the Borrower shall pay to the Lender such additional amount or
amounts as will compensate the Lender for such increased cost or reduction. The
Lender agrees to notify the Borrower of any event occurring after the Closing
Date entitling the Lender to compensation under any of the preceding subsections
of this Section as promptly as practicable; provided, that except as otherwise
limited by the next sentence, the failure of the Lender to give such notice
shall not result in any liability to the Lender or release the Borrower from any
of its obligations hereunder. The Lender shall only be entitled to compensation
under any of the preceding subsections of this Section for events occurring
during the 120-day period ending on the date the Borrower receives the notice
described in the immediately preceding sentence. The Lender agrees to furnish to
the Borrower a certificate setting forth the basis and amount of each request by
the Lender for compensation under this Section, which certificate shall be prima
facie
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evidence of the matters stated therein. Determinations by the Lender of the
effect of any of the events described in this subsection shall be made on a
reasonable basis and in good faith and using any reasonable attribution or
averaging methods which the Lender deems appropriate and practical.
(d) Eurodollar Reserve Requirements. In the event that the Lender shall
determine at any time that by reason of Regulation D, the Lender is required to
maintain Eurodollar Reserve Requirements during any period that it has any Loans
outstanding bearing interest based on the LIBOR Rate, then the Lender shall
promptly notify the Borrower by written notice (or telephonic notice promptly
confirmed in writing) specifying the additional amounts reasonably determined by
the Lender to be required to indemnify the Lender against the cost of
maintaining such Eurodollar Reserve Requirements (such written notice to provide
a computation of such additional amounts) and the Borrower shall directly pay to
the Lender such specified amounts as additional interest.
SECTION 2.11 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request issued after the date hereof from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has or would have the effect of reducing the rate
of return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, the Lender or any corporation controlling
the Lender as a consequence of, or with reference to the Commitment and other
commitments of this type, below the rate which the Lender or such other
corporation could have achieved but for such introduction, change or
compliance, then within five (5) Business Days after written demand by the
Lender, the Borrower shall pay to the Lender from time to time as specified by
the Lender additional amounts sufficient to compensate the Lender or other
corporation for such reduction. The Lender shall furnish to the Borrower a
certificate setting forth the basis and amount of such request, which
certificate shall be prima facie evidence of the matters stated therein.
Determinations by the Lender of the amount of any claim for compensation under
this Section shall be made on a reasonable basis and in good faith.
SECTION 2.12 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Borrower hereunder or under the Note shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholding, and all liabilities with respect thereto excluding, (i)
income and
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franchise taxes imposed by the jurisdiction under the laws of which the Lender
is organized or is or should be qualified to do business or any political
subdivision thereof and (ii) income and franchise taxes imposed by the United
States of America or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under the
Note to the Lender, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) the Lender receives an amount
equal to the amount such party would have received had no such deductions been
made, (B) the Borrower shall make such deductions, (C) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrower shall deliver to the Lender
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 2.12(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay
any present or future stamp, registration, recordation or documentary taxes or
any other similar fees or charges or excise or property taxes, levies of the
United States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Loans, the other Loan Documents, or the perfection of any rights
or security interest in respect thereto (hereinafter referred to as "Other
Taxes").
(c) Indemnity. The Borrower shall indemnify the Lender for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) paid by the Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be made within thirty (30) days from the date the Lender
makes written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the
date of any payment of Taxes or Other Taxes, the Borrower shall furnish to the
Lender the original or a certified copy of a receipt evidencing payment thereof
or other evidence of payment satisfactory to the Lender.
(e) Tax Credits. In the event that an additional payment is
made under Section 2.12(a) or (c) for the account of
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the Lender and the Lender receives or is granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it in respect of or
calculated with reference to the deduction or withholding giving rise to such
payment, the Lender shall, to the extent that it can do so without prejudice to
the retention of the amount of such credit, relief, remission or repayment, pay
to the Borrower such amount as is attributable to such deduction or withholding
as will leave the Lender (after such payment) in no better or worse position
than it would have been in if the Borrower had not been required to make such
deduction or withholding.
ARTICLE III
CLOSING; CONDITIONS OF CLOSING AND ISSUING LETTERS OF CREDIT
SECTION 3.1. Closing. The closing shall take place at the offices of
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx at 10:00 a.m. on December 18, 1996, or on such other date as the
parties hereto shall mutually agree.
SECTION 3.2. Conditions to Closing and Initial Loans. The obligation
of the Lender to close this Agreement and to extend the initial Loan is subject
to the satisfaction of each of the conditions set forth in Section 4.2 of the
Revolving Credit Agreement.
SECTION 3.3. Conditions to All Loans. The obligations of the Lender
to extend any Loan is subject to the satisfaction of the following conditions
precedent on the relevant borrowing date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article IV shall be true and correct
in all material respects on and as of such borrowing date with the same effect
as if made on and as of such date except to the extent that such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date).
(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing hereunder on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 4.1. Representations and Warranties. To induce the Lender to
enter into this Agreement and to extend the Loans, the Borrower hereby
represents and warrants to the Lender that each and every representation and
warranty of the Borrower set forth in Article V of the Revolving Credit
Agreement is true, correct and complete in all material respects.
SECTION 4.2. Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article IV and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lender or any borrowing hereunder.
ARTICLE V
FINANCIAL INFORMATION AND NOTICES
Until all the Loans have been finally and indefeasibly paid and
satisfied in full and the Commitment terminated, the Borrower will furnish or
cause to be furnished to the Lender each and every financial statement,
certificate or other document or instrument required to be delivered to the
Lenders pursuant to Article VI of the Revolving Credit Agreement. So long as the
Lender is the "Agent" under the Revolving Credit Agreement, the Borrower's
furnishing of all such financial statements, certificates and other documents or
instruments to the Agent which are required to be delivered to the Agent under
the Revolving Credit Agreement shall constitute delivery to the Lender under
this Article V.
ARTICLE VI
COVENANTS
Until all of the Loans have been finally and indefeasibly paid and
satisfied in full and the Commitment terminated, the Borrower will, and will
cause each of its Subsidiaries to comply with each and every covenant and
agreement set forth in Articles VII, VIII, and IX of the Revolving Credit
Agreement.
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ARTICLE VII
DEFAULT AND REMEDIES
SECTION 7.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrower
shall default in any payment of principal of any Loan or the Note when and as
due (whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan or the Note or the payment of any other
Obligation, and such default shall continue unremedied for three (3) Business
Days.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower or any of its Subsidiaries under this
Agreement, any Loan Document or any amendment hereto or thereto, shall at any
time prove to have been incorrect or misleading in any material respect when
made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower
shall default in the performance or observance of any covenant or agreement
contained in Sections 6.2 and 6.4(e) or Articles VIII or IX (excluding Sections
9.8 and 9.9) of the Revolving Credit Agreement, as incorporated herein by
reference.
(e) Default in Performance of Other Covenants and Conditions.
The Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
7.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Lender.
(f) Cross-Default to Revolving Credit Agreement. An Event of
Default shall have occurred under the Revolving Credit Agreement.
(g) Debt Cross-Default. The Borrower or any of its
Subsidiaries shall (i) default in the payment of any Debt (other than the Note)
the aggregate outstanding amount of which Debt is in excess of $500,000 beyond
the period of grace if any, provided
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in the instrument or agreement under which such Debt was created, or (ii)
default in the observance or performance of any other agreement or condition
relating to any Debt (other than the Note) the aggregate outstanding amount of
which Debt is in excess of $500,000 or contained in any instrument or agreement
evidencing, securing or relating thereto or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Debt (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, any such Debt to become due prior to its stated maturity (any
applicable grace period having expired).
(h) Other Cross-Defaults. The Borrower or any of its
Subsidiaries shall default in the payment when due, or in the performance or
observance, of any obligation or condition of any Material Contract unless, but
only as long as, the existence of any such default is being contested by the
Borrower or such Subsidiary in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of the
Borrower or such Subsidiary to the extent required by GAAP.
(i) Change in Control. Any person or group of persons shall
obtain "beneficial ownership" (within the meaning of Section 13 (d) of the
Securities Exchange Act of 1934, as amended) in one or more series of
transactions of more than thirty percent (30%) of the voting power of the
Borrower entitled to vote in the election of members of the board of directors
of the Borrower or there shall have occurred under any indenture or other
instrument evidencing any Debt in excess of $500,000 any "change in control" (as
defined in such indenture or other evidence of Debt) obligating the Borrower to
repurchase, redeem or repay all or any part of the Debt or capital stock
provided for therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect), (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts, (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit
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of creditors, or (vii) take any corporate action for the purpose of authorizing
any of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or for all or any substantial part of its assets, domestic or
foreign, and such case or proceeding shall continue without dismissal or stay
for a period of sixty (60) consecutive days, or an order granting the relief
requested in such case or proceeding (including, but not limited to, an order
for relief under such federal bankruptcy laws) shall be entered.
(l) Termination Event. The occurrence of any of the following
events that, individually or in the aggregate, results in or could reasonably be
expected to result in a Material Adverse Effect: (i) the Borrower or any ERISA
Affiliate fails to make full payment when due of all amounts which, under the
provisions of any Pension Plan or Section 412 of the Code, the Borrower or any
ERISA Affiliate is required to pay as contributions thereto, (ii) an accumulated
funding deficiency in excess of $250,000 occurs or exists, whether or not
waived, with respect to any Pension Plan, (iii) a Termination Event or (iv) the
Borrower or any ERISA Affiliate as employer under one or more Multiemployer
Plans makes a complete or partial withdrawal from any such Multiemployer Plan
and the plan sponsor of any such Multiemployer Plan notifies such withdrawing
employer that such employer has incurred a withdrawal liability requiring
payments in an amount exceeding $250,000.
(n) Judgment. A judgment or order for the payment of money
which causes the aggregate amount of all such judgments to exceed $250,000 in
any Fiscal Year (excluding any amounts which the Borrower's insurance carrier
has affirmatively agreed in writing are covered by insurance) shall be entered
against the Borrower or any Subsidiary thereof by any court and such judgment or
order shall continue without discharge or stay for a period of thirty (30) days.
SECTION 7.2 Remedies. Upon the occurrence of an Event of Default, the
Lender may, by notice to the Borrower:
(a) Acceleration; Termination of Facility. Declare the
principal of and interest on the Loans and the Note at the time outstanding, and
all other amounts owed to the Lender under
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this Agreement or any of the other Loan Documents and all other Obligations, to
be forthwith due and payable, whereupon the same shall immediately become due
and payable without presentment, demand, protest or other notice of any kind,
all of which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Commitment and any
right of the Borrower to request borrowings thereunder; provided, that upon the
occurrence of an Event of Default specified in Section 7.1(j) or (k), the
Commitment shall be automatically terminated and all Obligations shall
automatically become due and payable.
(b) Other Rights. Exercise all of its other rights and
remedies under this Agreement, the other Loan Documents and Applicable Law, in
order to satisfy all of the Borrower's Obligations.
SECTION 7.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Lender set forth in this
Agreement is not intended to be exhaustive and the exercise by the Lender of
any right or remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative, and shall be in addition to any
other right or remedy given hereunder or under the Loan Documents or that may
now or hereafter exist in law or in equity or by suit or otherwise. No delay or
failure to take action on the part of the Lender in exercising any right, power
or privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or be
construed to be a waiver of any Event of Default. No course of dealing between
the Borrower and the Lender or its agents or employees shall be effective to
change, modify or discharge any provision of this Agreement or any of the other
Loan Documents or to constitute a waiver of any Event of Default.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices.
(a) Method of Communication. Except as otherwise provided in
this Agreement, all notices and communications hereunder shall be in writing, or
by telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii)
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on the next Business Day if sent by recognized overnight courier service and
(iii) on the third Business Day following the date sent by certified mail,
return receipt requested. A telephonic notice to the Lender as understood by the
Lender will be deemed to be the controlling and proper notice in the event of a
discrepancy with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: Longhorn Steaks, Inc.
0000 Xxxxxxx Xxxx
Xxxx. #000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to the Lender: First Union National Bank of
Georgia
000 Xxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Portfolio Management
Telecopy No.: (000) 000-0000
SECTION 8.2 Expenses; Indemnity. The Borrower will (a) pay all
reasonable out-of-pocket expenses of the Lender actually incurred in connection
with: (i) the preparation, execution and delivery of this Agreement and each
other Loan Document, whenever the same shall be executed and delivered,
including without limitation all out-of-pocket due diligence expenses and
reasonable fees and disbursements of counsel for the Lender, (ii) the
preparation, execution and delivery of any waiver, amendment or consent by the
Lender relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of counsel for the Lender and
(iii) the enforcement of any rights and remedies of the Lender hereunder and
under the Loan Documents, including consulting with appraisers,
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accountants, engineers, attorneys and other Persons concerning the nature, scope
or value of any right or remedy of the Lender hereunder or under any other Loan
Document or any factual matters in connection therewith, which expenses shall
include without limitation the reasonable fees and disbursements of such
Persons, and (b) defend, indemnify and hold harmless the Lender, and its
parents, Subsidiaries, Affiliates, employees, agents, officers and directors,
from and against any losses, penalties, fines, liabilities, settlements,
damages, costs and expenses, suffered by any such Person in connection with any
claim, investigation, litigation or other proceeding (whether or not the Lender
is a party thereto) and the prosecution and defense thereof, arising out of or
in any way connected with the Agreement, any other Loan Document or the Loans,
including without limitation reasonable attorney's and consultant's fees, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 8.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and during the continuance of any Event of Default, the Lender is hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lender to or for the credit
or the account of the Borrower against and on account of the obligations
irrespective of whether or not (a) the Lender shall have made any demand under
this Agreement or any of the other Loan Documents or (b) the Lender shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 7.2 and although such Obligations shall be contingent or unmatured. If
the Lender shall exercise any of the rights referred to in this Section, the
Lender shall promptly notify the Borrower; provided, that the failure to give
such notice shall not result in any liability to the Lender or in any way affect
the validity of the exercise of such right.
SECTION 8.4 Governing Law. This Agreement, the Note and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 8.5 Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Mecklenburg County, North Carolina,
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in any action, claim or other proceeding arising out of any dispute in
connection with this Agreement, the Note and the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations. The Borrower hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Lender in connection with this Agreement, the Note or the other
Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its property,
in the manner specified in Section 8.1. Nothing in this Section 8.5 shall affect
the right of the Lender to serve legal process in any other manner permitted by
Applicable Law or affect the right of the Lender to bring any action or
proceeding against any Borrower or its properties in the courts of any other
jurisdictions.
SECTION 8.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether
made before or after institution of any judicial proceeding, any dispute, claim
or controversy arising out of, connected with or relating to the Note or any
other Loan Documents ("Disputes"), between or among parties to the Note or any
other Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
Hedging Agreement that is a Loan Document.
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(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and to the other
Loan Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone or in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining provisional
or ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 8.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Lender or the Lender receives any payment or
proceeds of the collateral which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by the Lender.
SECTION 8.8 Punitive Damages. The Lender and the Borrower (on behalf
of itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
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SECTION 8.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Lender to the contrary
agreed to by the Borrower, be performed in accordance with GAAP as in effect on
the Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and
the Lender shall have amended this Agreement to the extent necessary to reflect
any such changes in the financial covenants and other terms and conditions of
this Agreement.
SECTION 8.10 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Lender, all future
holders of the Note, and their respective successors and assigns, except that
the Borrower shall not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Lender.
SECTION 8.11 Performance of Duties. The Borrower's obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 8.12 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lender and any Persons designated by
the Lender pursuant to any provisions of this Agreement or any of the other
Loan Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Obligations remain unpaid or unsatisfied or
the Commitment has not been terminated.
SECTION 8.13 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Lender is entitled under the
provisions of this Article VIII and any other provision of this Agreement and
the Loan Documents shall continue in full force and effect and shall protect
the Lender against events arising after such termination as well as before.
SECTION 8.14 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for
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convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 8.15 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8.16 Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 8.17 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which
all Obligations shall have been indefeasibly and irrevocably paid and satisfied
in full. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] LONGHORN STEAKS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
FIRST UNION NATIONAL BANK OF
GEORGIA
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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