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EXHIBIT 10.2
LINE OF CREDIT NOTE
$30,000,000.00 Nashville, Tennessee August 29, 1995
FOR VALUE RECEIVED, VOLUNTEER CAPITAL CORPORATION, VCE RESTAURANTS,
INC. AND TOTAL QUALITY MANAGEMENT, INC., Tennessee corporations, (collectively
the "Maker") jointly and severally promise to pay to the order of NATIONSBANK
OF TENNESSEE, N.A. ("Payee" or "NationsBank"), the sum of Thirty Million and
No/100 Dollars ($30,000,000.00), or as much thereof as may be outstanding from
time to time, together with interest thereon as set forth below.
Advances under this Note shall be governed by that certain Loan
Agreement dated June 30, 1995 ("Loan Agreement"). Subject to the provisions of
the Loan Agreement, Maker may borrow, repay and reborrow and there is no limit
on the number of advances against this Note as long as the total unpaid
principal balance at any time outstanding does not exceed Thirty Million and
No/100 Dollars ($30,000,000.00).
Interest shall accrue at either (i) the NationsBank Prime Rate, as it
may change from time to time; or (ii) upon Maker's written election, for any
given period of 30, 60, 90, or 180 days (a "LIBOR Period") the LIBOR Rate plus
a spread of either 1.5% or 2.5% depending on the Fixed Charge Coverage Ratio
("FCCR") as further provided in the Loan Agreement.
A non-usage fee of either .25% or .50% based upon the daily average
unused amount and based on the FCCR will be paid quarterly in arrears. If the
FCCR is greater than or equal to 1.20, the fee will be .25%. If the FCCR is
less than 1.20, the fee will be .50%.
Interest in arrears shall be due and payable on the first (1st) day of
each month beginning in August 1, 1995, except in the case of a LIBOR Rate
Borrowing, at Maker's option, interest shall be payable monthly as set forth
above or at the end of the LIBOR Period.
All remaining principal and interest shall become due on July 1, 1998
under the three year revolver, or July 1, 2005 if the option to convert to an
additional seven (7) year term loan is exercised.
Should Maker elect in writing to use the LIBOR Rate Option for a LIBOR
Period, the following restrictions will apply. No more than five (5) LIBOR
Rate Borrowings may be outstanding at any time. The borrowings will be in
minimum amounts of One Million and 00/100 Dollars ($1,000,000.00) each or
greater amounts in Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
increments.
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Maker has the option to convert this Line of Credit Note to a Term
Note. Providing that ▇▇▇▇▇▇▇▇ is not then in default hereunder, Borrower may
make a written election to convert the Line of Credit Note to a Term Note any
time prior to July 1, 1998. The written election must be delivered to Payee at
least fifteen (15) days prior to the conversion date. There will be a
conversion fee equal to one-quarter (1/4) of one percent (1%) of the then
outstanding principal balance. The unpaid principal balance will then be
repayable in eighty-four (84) equal monthly installments of principal with the
first principal payment due thirty (30) days following the conversion date.
Interest will continue to be paid monthly at the same time as the principal
payment is due. Interest shall accrue on the Term Note at the NationsBank
Prime Rate, as it may change from time to time or the LIBOR Rate discussed
above (subject to the restriction on the number of LIBOR borrowings discussed
above) or at a fixed rate equal to the rate for treasury securities having a
comparable maturity plus 200 basis points. Maker shall specify the interest
rate option (Prime Rate, LIBOR Rate or fixed) to be used in the conversion
election.
As used herein, the term "NationsBank Prime Rate" shall mean the
fluctuating rate of interest established by NationsBank from time to time as
its "Prime Rate", whether or not such rate shall be otherwise published. Such
Prime Rate is established by NationsBank as an index or base rate and may or
may not at any time be the best or lowest rate charged by NationsBank on any
loan. If at any time or from time to time the Prime Rate increases or
decreases, then the rate of interest hereunder shall be correspondingly
increased or decreased effective on the day on which any such increase or
decrease of the Prime Rate changes, unless otherwise herein provided. In the
event that NationsBank, during the term hereof, shall abolish or abandon the
practice of establishing a Prime Rate, or should the same become
unascertainable, NationsBank shall designate a comparable reference rate which
shall be deemed to be the Prime Rate for purposes hereof.
For purposes hereof, the "LIBOR Rate" shall mean the rate per annum
announced by NationsBank as its LIBOR Rate for a period equal to the length of
such LIBOR Period and in an amount comparable to the then aggregate unpaid
principal balance hereunder (or will be outstanding by the commencement of the
LIBOR Period requested by Maker) as adjusted to reflect NationsBank's reserve
requirements, all as calculated and announced from time to time by ▇▇▇▇▇, whose
announcement shall be binding absent manifest error.
Interest hereunder shall be calculated based upon a 360 day year and
actual days elapsed. The interest rate required hereby shall not exceed the
maximum rate permissible under applicable law, and any amounts paid in excess
of such rate shall be applied to reduce the principal amount hereof or shall be
refunded to Maker, at the option of the holder of this Note.
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All amounts due under this Note are payable at par in lawful money of
the United States of America, at the principal place of business of Payee in
Nashville, Tennessee, or at such other address as the Payee or other holder
hereof (herein "Holder") may direct.
Any payment not made within fifteen (15) days of its due date will be
subject to assessment of a late charge equal to five percent (5%) of such
payment. ▇▇▇▇▇▇'s right to impose a late charge does not evidence a grace
period for the making of payments hereunder.
The occurrence of any of the following shall constitute an event of
default under this Note: (a) the failure of Maker to timely pay any amount due
Holder under this Note or any other obligation to Holder if such failure
continues for ten (10) days after notice of nonpayment from Holder to Maker
provided, however, that should Holder give Maker a notice of nonpayment, then
for the twelve month period following such notice of nonpayment, Holder shall
not be required to give Maker notice of nonpayment and Maker will be in default
if it fails to make a monetary payment within ten (10) days of the due date;
(b) the institution of proceedings by Maker under any state insolvency law or
under any federal bankruptcy law; (c) the institution of proceedings against
Maker under any state insolvency law or under any federal bankruptcy law, if
such proceedings are not dismissed within sixty (60) days; (d) Maker's becoming
insolvent or generally failing to pay its debts as they become due; (e) the
discovery by Holder that Maker has made a material misrepresentation of
financial condition in any written statement made to any present or previous
Holder which remains uncured for thirty (30) days; (f) the instigation of legal
proceedings against Maker for the violation of a material criminal statute; (g)
the issuance of an attachment against property of Maker unless removed, by bond
or otherwise, within ten (10) days; (h) the entry of a judgment against Maker
that remains unsatisfied for thirty (30) days after execution may first issue;
(i) Maker's liquidation or cessation of business; (j) the occurrence of a
default under the terms of any loan agreement, security agreement, deed of
trust, or similar document to which Maker is a party or to which any property
securing this Note is subject which results in the acceleration of an
indebtedness of One Hundred Thousand and 00/100 Dollars ($100,000.00) or more;
or (k) the occurrence of any of the foregoing with regard to any surety,
guarantor, endorser, or other person or entity primarily or secondarily liable
for the payment of the indebtedness evidenced by this Note.
Upon the occurrence of an event of default, as defined above, Holder
may, at its option and without notice, terminate any obligation to advance
funds under this Note, declare all principal and interest provided for under
this Note, and any other obligations available to Holder under any documents
securing or evidencing debts of Maker to Holder. Holder
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may waive any default before or after it occurs and may restore this Note in
full effect without impairing the right to declare it due for a subsequent
default, this right being a continuing one. Upon default, at ▇▇▇▇▇▇'s
election, the remaining unpaid principal balance of the indebtedness evidenced
hereby and all expenses due Holder shall bear interest at the interest rate in
effect immediately before the default plus three percent (3%).
All amounts received for payment of this Note shall be first applied
to any expenses due Holder under this Note or under any other documents
evidencing or securing obligations of Maker to Holder, then to accrued
interest, and finally to the reduction of principal. Prepayment of principal
or accrued interest may be made, in whole or in part, at any time without
penalty. Any prepayment(s) shall reduce the final payment(s) and shall not
reduce or defer installments next due.
This Note may be freely transferred by Holder.
Maker and all sureties, guarantors, endorsers and other parties to
this instrument hereby consent to any and all renewals, waivers, modifications,
or extensions of time (of any duration) that may be granted by Holder with
respect to this Note and severally waive demand, presentment, protest, notice
of dishonor, and all other notices that might otherwise be required by law.
All parties hereto waive the defense of impairment of collateral and all other
defenses of suretyship.
Maker's performance under this Note is unsecured. There will be a
negative pledge on existing unencumbered assets, as further described in the
Loan Agreement.
Maker and all sureties, guarantors, endorsers and other parties hereto
agree to pay reasonable attorneys' fees and all court and other costs that
Holder may incur in the course of efforts to collect the debt evidenced hereby
or to protect ▇▇▇▇▇▇'s interest in any collateral securing the same.
The validity and construction of this Note shall be determined
according to the laws of Tennessee applicable to contracts executed and
performed within that state. If any provision of this Note should for any
reason be invalid or unenforceable, the remaining provisions hereof shall
remain in full effect.
The provisions of this Note may be amended or waived only by
instrument in writing signed by the Holder and Maker and attached to this Note.
Any controversy or claim between or among the parties to this Note or
any related loan or collateral agreements or instruments (collectively, "Loan
Documents"), including any claim based on or arising from an alleged tort,
shall be determined by binding
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arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the Rules of Practice and Procedure for
the arbitration of commercial disputes of Judicial Arbitration and Mediation
Services, Inc. (J.A.M.S.), and the "special rules" set forth below. In the
event of any inconsistency, the special rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any party
to the Loan Documents may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
agreement applies in any court having jurisdiction over such action.
The following "Special Rules" shall apply. The arbitration shall be
conducted in Nashville, Tennessee and administered by J.A.M.S. who will
appoint an arbitrator; if J.A.M.S. is unable or legally precluded from
administering the arbitration, then the American Arbitration Association will
serve. All arbitration hearings will be commenced within 90 days of the demand
for arbitration; further, the arbitrator shall only, upon a showing of cause,
be permitted to extend the commencement of such hearing for up to an additional
60 days.
Nothing in foregoing arbitration shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of limitation or repose and
any waivers contained in the Loan Documents; or (ii) be a waiver by NationsBank
of the protection afforded to it by 12 U.S.C. Sec. 91 or any substantially
equivalent state law; or (iii) limit the rights of NationsBank under the Loan
Documents (a) to exercise self help remedies such as (but not limited to)
set-off, or (b) to foreclose against any real or personal property collateral,
or (c) to obtain from a court provisional or ancillary remedies such as (but
not limited to) injunctive relief, possession of collateral or the appointment
of a receiver. NationsBank may exercise such self help rights, foreclose upon
such property, or obtain such provisional or ancillary remedies before, during
or after the pendency of any arbitration proceeding brought pursuant to the
Loan Documents. At NationsBank's option, foreclosure under a deed of trust or
mortgage may be accomplished by any of the following: the exercise of a power
of sale under the deed of trust or mortgage, or by judicial sale under the deed
of trust or mortgage, or by judicial foreclosure. Neither this exercise or
self help remedies nor the institution or maintenance of an action for
foreclosure or provisional or ancillary remedies shall constitute a waiver of
the right of any party, including the claimant in any such action, to arbitrate
the merits of the controversy or claim occasioning resort to such remedies.
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Words used herein indicating gender or number shall be read as context may
require.
VOLUNTEER CAPITAL CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
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VCE RESTAURANTS, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Its: Secretary
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TOTAL QUALITY MANAGEMENT, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Its: Secretary
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