EXHIBIT 10.8
EXECUTION COPY CREDIT AGREEMENT
SECURITY AGREEMENT (BORROWER)
THIS SECURITY AGREEMENT (BORROWER), dated as of February 5, 1999, is made
and given by BUCA, INC., a Minnesota corporation (the "Grantor"), to U.S. BANK
NATIONAL ASSOCIATION, a national banking association (the "Secured Party").
RECITALS
A. The Grantor and the Secured Party have entered into a Credit Agreement
dated as of the date hereof (as the same may hereafter be amended, supplemented,
extended, restated, or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Secured Party has agreed to extend to the
Grantor certain credit accommodations.
B. It is a condition precedent to the obligation of the Secured Party to
extend credit accommodations pursuant to the terms of the Credit Agreement that
this Agreement be executed and delivered by the Grantor.
C. The Grantor finds it advantageous, desirable and in its best interests
to comply with the requirement that it execute and deliver this Security
Agreement to the Secured Party.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Secured Party to enter into the Credit Agreement and to extend credit
accommodations to the Grantor thereunder, the Grantor hereby agrees with the
Secured Party for the Secured Party's benefit as follows:
Section 1. Defined Terms.
1(a) As used in this Agreement, the following terms shall have the
meanings indicated:
"Account" shall mean the rights of the Grantor to payment for goods
sold or leased or for services rendered which is not evidenced by an
Instrument or Chattel Paper, whether or not such right has been earned by
performance, all guaranties and security therefor, and all interests in the
goods the sale or lease of which gave rise thereto, including the right to
stop such goods in transit.
"Account Debtor" shall mean a Person who is obligated on or under any
Account, Chattel Paper, Instrument or General Intangible.
"Chattel Paper" shall mean a writing or writings which evidence both a
monetary obligation and a security interest in or lease of specific goods;
when a transaction is
evidenced by both a security agreement or a lease and by an Instrument or a
series of Instruments, the group of writings taken together constitutes
Chattel Paper.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a
Security Interest is granted to the Secured Party by the Grantor under this
Agreement.
"Document" shall mean any xxxx of lading, dock warrant, dock receipt,
warehouse receipt or order for the delivery of goods, together with any
other document or receipt which in the regular course of business or
financing is treated as adequately evidencing that the Person in possession
of it is entitled to receive, hold and dispose of the document and the
goods it covers.
"Equipment" shall mean all machinery, equipment, furniture,
furnishings and fixtures, including all accessions, accessories and
attachments thereto, and any guaranties, warranties, indemnities and other
agreements of manufacturers, vendors and others with respect to such
Equipment.
"Event of Default" shall have the meaning given to such term in
Section 18 hereof.
"Financing Statement" shall have the meaning given to such term in
Section 4 hereof.
"General Intangibles" shall mean any personal property (other than
goods and other Inventory, Accounts, Chattel Paper, Documents, Instruments,
Equipment, shares of capital stock of any Subsidiary (as defined in the
Credit Agreement), and money) including choses in action, causes of
action, contract rights, corporate and other business records, inventions,
designs, patents, patent applications, service marks, trademarks,
tradenames, trade secrets, engineering drawings, good will, registrations,
copyrights, licenses, franchises, customer lists, tax refund claims,
royalties, licensing and product rights, rights to the retrieval from third
parties of electronically processed and recorded data and all rights to
payment resulting from an order of any court.
"Instrument" shall mean a draft, check, certificate of deposit, note,
xxxx of exchange, security or any other writing which evidences a right to
the payment of money and is not itself a security agreement or lease and is
of a type which is transferred in the ordinary course of business by
delivery with any necessary endorsement or assignment.
"Inventory" shall mean any and all goods owned or held by or for the
account of the Grantor for sale or lease, or for furnishing under a
contract of service, or as raw materials, work in process, materials
incorporated in or consumed in the production of any of the foregoing and
supplies, in each case wherever the same shall be located,
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whether in transit, on consignment, in retail outlets, warehouses,
terminals or otherwise, and all property the sale, lease or other
disposition of which has given rise to an Account and which has been
returned to the Grantor or repossessed by the Grantor or stopped in
transit.
"Lien" shall mean any security interest, mortgage, pledge, lien,
charge, encumbrance, title retention agreement or analogous instrument or
device (including the interest of the lessors under capitalized leases),
in, of or on any assets or properties of the Person referred to.
"Loan Documents" shall have the meaning given to such term in the
Credit Agreement.
"Material Adverse Occurrence" shall mean any occurrence of whatsoever
nature (including, without limitation, any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding) which
(a) has materially adversely affected the present, or which is reasonably
likely to materially adversely affect the prospective, financial condition
or operations of the Grantor and the Subsidiaries, taken as a whole, or (b)
impair the ability of the Grantor or the Subsidiaries, taken as a whole, to
perform their respective obligations under the Loan Documents or any
writing executed pursuant thereto.
"Obligations" shall mean (a) all indebtedness, liabilities and
obligations of the Grantor to the Secured Party of every kind, nature or
description under the Credit Agreement, including the Grantor's obligation
on any promissory note or notes issued under the Credit Agreement and any
note or notes hereafter issued in substitution or replacement thereof and
(b) all liabilities of the Grantor under this Agreement, in all of the
foregoing cases whether due or to become due, and whether now existing or
hereafter arising or incurred.
"Person" shall mean any individual, corporation, partnership, limited
partnership, limited liability company, joint venture, firm, association,
trust, unincorporated organization, government or governmental agency or
political subdivision or any other entity, whether acting in an individual,
fiduciary or other capacity.
"Security Interest" shall have the meaning given such term in Section
2 hereof.
"Subsidiary" shall have the meaning given to such term in the Credit
Agreement.
1(b) All other terms used in this Agreement which are not specifically
defined herein shall have the meaning assigned to such terms in the Uniform
Commercial Code in
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effect in the State of Minnesota as of the date of this Agreement to the
extent such other terms are defined therein.
1(c) Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular, the plural and
"or" has the inclusive meaning represented by the phrase "and/or." The
words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The words "hereof," "herein,"
"hereunder," and similar terms in this Agreement refer to this Agreement as
a whole and not to any particular provision of this Agreement. References
to Sections are references to Sections in this Security Agreement unless
otherwise provided.
Section 2. Grant of Security Interest. As security for the payment and
performance of all of the Obligations, the Grantor hereby grants to the Secured
Party a security interest (the "Security Interest") in all of the Grantor's
right, title, and interest in and to the following, whether now or hereafter
owned, existing, arising or acquired and wherever located:
2(a) All Accounts.
2(b) All Chattel Paper.
2(c) All Documents.
2(d) All Equipment.
2(e) All General Intangibles.
2(f) All Instruments.
2(g) All Inventory.
2(h) To the extent not otherwise included in the foregoing, (i) all
other rights to the payment of money, including rents and other sums
payable to the Grantor under leases, rental agreements and other Chattel
Paper and insurance proceeds; (ii) all books, correspondence, credit files,
records, invoices, bills of lading, and other documents relating to any of
the foregoing, including, without limitation, all tapes, cards, disks,
computer software, computer runs, and other papers and documents in the
possession or control of the Grantor or any computer bureau from time to
time acting for the Grantor; and (iii) all accessions and additions to,
parts and appurtenances of, substitutions for and replacements of any of
the foregoing.
2(i) To the extent not otherwise included, all proceeds and products
of any and all of the foregoing.
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Notwithstanding the foregoing, no security interest shall be considered to have
been granted hereunder to the Secured Party in any rights of the Grantor in, to
or under
(x) any lease, license or other agreement or instrument which, by its
express terms, prohibits the Grantor from granting a security interest
in Grantor's rights therein, thereto or thereunder without the prior
consent of a third party,
(y) any policies insuring the life of any officer, director,
stockholder or employee of the Grantor or any of the Subsidiaries, or
and such rights shall not be considered for any purposes of this Agreement to be
included in the Collateral or any of the categories of property, assets and
rights listed in Section 2(a) through 2(i), above unless, as to any rights
described in clause (x), above, the necessary consent of third parties with
respect to such rights has been obtained.
Section 3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under the Accounts, Chattel
Paper, General Intangibles and other items included in the Collateral to the
extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by the Secured Party of any of the rights hereunder shall not release the
Grantor from any of its duties or obligations under any items included in the
Collateral, and (c) the Secured Party shall have no obligation or liability
under Accounts, Chattel Paper, General Intangibles and other items included in
the Collateral by reason of this Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of the Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
Section 4. Title to Collateral. The Grantor has (or will have at the time
it acquires rights in Collateral hereafter acquired or arising) and, subject to
the provision of Section 5 hereof, will maintain so long as the Security
Interest may remain outstanding, title to each item of Collateral (including the
proceeds and products thereof), free and clear of all Liens except the Security
Interest and except Liens permitted by the Credit Agreement. The Grantor will
defend the Collateral against all claims or demands of all Persons (other than
the Secured Party and holders of Liens permitted under the Credit Agreement)
claiming the Collateral or any interest therein. As of the date of execution of
this Security Agreement, no effective financing statement or other similar
document used to perfect and preserve a security interest under the laws of any
jurisdiction (a "Financing Statement") covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed (a) in favor of the Secured Party relating to this Agreement, (b) to
perfect the Liens permitted by the Credit Agreement, or (c) by lenders under the
Existing Credit Documents (as defined in the Credit Agreement) for which
terminations shall have been delivered to the Secured Party on or before the
date of this Agreement.
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Section 5. Disposition of Collateral. The Grantor will not sell, lease or
otherwise dispose of, or discount or factor with or without recourse, any
Collateral, except as permitted by Section 6.2 of the Credit Agreement. Upon any
sale, lease or other disposition of Collateral permitted by Section 6.2 of the
Credit Agreement, such Collateral shall be considered, automatically and without
any further action on the part of the Grantor or the Secured Party, to be
released from the Security Interest, the Secured Party shall thereafter promptly
return to the Grantor such Collateral if then in its possession, and the Secured
Party shall, upon the request and at the expense of the Grantor, thereafter
promptly execute and deliver to the Grantor such documents as the Grantor shall
reasonable request evidencing such release, including complete or partial (as
appropriate) releases of relevant Financing Statements.
Section 6. Names, Offices, Locations. The Grantor does business solely
under its own name and the trade names, if any, set forth on Schedule II hereto.
Except as noted on said Schedule, no such trade name and no trademark or other
similar xxxx owned by the Grantor is registered with any governmental unit. No
trade style used by the Grantor is registered with any governmental unit. The
chief place of business and chief executive office of the Grantor and the office
where it keeps its books and records concerning the Accounts and General
Intangibles and the originals of all Chattel Paper, Documents and Instruments
are located at its address set forth on the signature page hereof. All items of
Equipment and Inventory existing on the date of this Agreement are located at
the places specified on Schedule I hereto. The Grantor will immediately notify
the Secured Party of any additional state in which any item of Inventory or
Equipment is hereafter located. The Grantor will from time to time at the
request of the Secured Party provide the Secured Party with current lists as to
the locations of the Equipment and Inventory. The Grantor will not permit any
Inventory, Equipment, Chattel Paper or Documents or any records pertaining to
Accounts and General Intangibles to be located in any state or area in which a
financing statement covering such Collateral would be required to be, but has
not in fact been, filed in order to perfect the Security Interest. The Grantor
will not change its name or the location of its chief place of business and
chief executive office unless the Secured Party has been given at least 30 days
prior written notice thereof and the Grantor has executed and delivered to the
Secured Party such Financing Statements and other instruments required or
appropriate to continue the perfection of the Security Interest. The Grantor's
federal tax identification number is set forth on the signature page of this
Agreement.
Section 7. Rights to Payment. Except as the Grantor may otherwise advise
the Secured Party in writing, each Account, Chattel Paper, Document, General
Intangible and Instrument constituting or evidencing Collateral is (or, in the
case of all future Collateral, will be when arising or issued) the valid,
genuine and legally enforceable obligation of the Account Debtor or other
obligor named therein or in the Grantor's records pertaining thereto as being
obligated to pay or perform such obligation. Without the Secured Party's prior
written consent, the Grantor will not agree to any modifications, amendments,
subordinations, cancellations or terminations of the obligations of any such
Account Debtors or other obligors except in the
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ordinary course of business and in amounts not exceeding $25,000 per Account
Debtor or other obligor in any calendar year. The Grantor will perform and
comply in all material respects with all its obligations under any items
included in the Collateral and, to the extent required by sound business
judgment, exercise promptly and diligently its material rights thereunder.
Section 8. Further Assurances; Attorney-in-Fact.
8(a) The Grantor agrees that from time to time, at its expense, it
will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or that the Secured
Party may reasonably request, in order to perfect and protect the Security
Interest granted or purported to be granted hereby or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral (but any failure to request or assure that the
Grantor execute and deliver such instrument or documents or to take such
action shall not affect or impair the validity, sufficiency or
enforceability of this Agreement and the Security Interest, regardless of
whether any such item was or was not executed and delivered or action taken
in a similar context or on a prior occasion). Without limiting the
generality of the foregoing, the Grantor will, promptly and from time to
time at the request of the Secured Party: (i) xxxx, or permit the Secured
Party to xxxx, conspicuously its books, records, and accounts showing or
dealing with the Collateral, and each item of Chattel Paper included in the
Collateral, with a legend, in form and substance satisfactory to the
Secured Party, indicating that each such item of Collateral and each such
item of Chattel Paper is subject to the Security Interest granted hereby;
(ii) deliver to the Secured Party, all Instruments and Documents, duly
indorsed or accompanied by duly executed instruments of transfer or
assignment, with full recourse to the Grantor, all in form and substance
satisfactory to the Secured Party; and (iii) execute and file such
Financing Statements or continuation statements in respect thereof, or
amendments thereto, and such other instruments or notices (including
fixture filings with any necessary legal descriptions as to any goods
included in the Collateral which the Secured Party determines might be
deemed to be fixtures, and instruments and notices with respect to vehicle
titles), as may be necessary or desirable, or as the Secured Party may
request, in order to perfect, preserve, and enhance the Security Interest
granted or purported to be granted hereby.
8(b) The Grantor hereby authorizes the Secured Party to file one or
more Financing Statements or continuation statements in respect thereof,
and amendments thereto, relating to all or any part of the Collateral
without the signature of the Grantor where permitted by law. A photocopy or
other reproduction of this Agreement or any Financing Statement covering
the Collateral or any part thereof shall be sufficient as a Financing
Statement where permitted by law.
8(c) The Grantor will furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral
and such other
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reports in connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail and in form and substance
reasonably satisfactory to the Secured Party.
8(d) In furtherance, and not in limitation, of the other rights,
powers and remedies granted to the Secured Party in this Agreement, the
Grantor hereby appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the place and stead of Grantor and in the name of
Grantor or otherwise, from time to time in the Secured Party's good faith
discretion, to take any action (including the right to collect on any
Collateral) and to execute any instrument that the Secured Party may
reasonably believe is necessary or advisable to accomplish the purposes of
this Agreement, in a manner consistent with the terms hereof.
Section 9. Taxes and Claims. The Grantor will promptly pay all taxes and
other governmental charges levied or assessed upon or against any Collateral or
upon or against the creation, perfection or continuance of the Security
Interest, as well as all other claims of any kind (including claims for labor,
material and supplies) against or with respect to the Collateral, except to the
extent (a) such taxes, charges or claims are being contested in good faith by
appropriate proceedings, (b) such proceedings do not involve any material danger
of the sale, forfeiture or loss of any of the Collateral or any interest therein
and (c) such taxes, charges or claims are adequately reserved against on the
Grantor's books in accordance with generally accepted accounting principles.
Section 10. Books and Records. The Grantor will keep and maintain at its
own cost and expense satisfactory and complete records of the Collateral,
including a record of all payments received and credits granted with respect to
all Accounts, Chattel Paper and other items included in the Collateral.
Section 11. Inspection, Reports, Verifications. The Grantor will at all
reasonable times and upon reasonable notice permit the Secured Party or its
representatives to examine or inspect any Collateral, any evidence of Collateral
and the Grantor's books and records concerning the Collateral, wherever located,
provided that at any time an Event of Default has occurred and is continuing, no
such notice shall be required. The Grantor will from time to time when requested
by the Secured Party furnish to the Secured Party a report on its Accounts,
Chattel Paper, General Intangibles and Instruments, naming the Account Debtors
or other obligors thereon, the amount due and the aging thereof. The Secured
Party or its designee is authorized to contact Account Debtors and other Persons
obligated on any such Collateral from time to time to verify the existence,
amount and/or terms of such Collateral.
Section 12. Notice of Loss. The Grantor will promptly notify the Secured
Party of any loss of or material damage to any material item of Collateral or of
any substantial adverse change, known to Grantor, in any material item of
Collateral or the prospect of payment or performance thereof.
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Section 13. Insurance. The Grantor will keep the Equipment and Inventory
insured against "all risks" for the full replacement cost thereof subject to a
deductible not exceeding $10,000 per location, per occurrence, and with a
financially sound and reputable insurance company or companies, the policies to
protect the Secured Party as its interests may appear, with such policies or
certificates with respect thereto to be delivered to the Secured Party at its
request. Each such policy or the certificate with respect thereto shall provide
that such policy shall not be canceled or allowed to lapse unless at least 30
days prior written notice is given to the Secured Party.
Section 14. Lawful Use; Fair Labor Standards Act. The Grantor will use and
keep the Collateral, and will require that others use and keep the Collateral,
only for lawful purposes, without violation of any federal, state or local law,
statute or ordinance. All Inventory of the Grantor as of the date of this
Agreement that was produced by the Grantor or with respect to which the Grantor
performed any manufacturing or assembly process was produced by the Grantor (or
such manufacturing or assembly process was conducted) in compliance in all
material respects with all requirements of the Fair Labor Standards Act, and all
Inventory produced, manufactured or assembled by the Grantor after the date of
this Agreement will be so produced, manufactured or assembled, as the case may
be.
Section 15. Action by the Secured Party. If the Grantor at any time fails
to perform or observe any of the foregoing agreements, the Secured Party shall
have (and the Grantor hereby grants to the Secured Party) the right, power and
authority (but not the duty) to perform or observe such agreement on behalf and
in the name, place and stead of the Grantor (or, at the Secured Party's option,
in the Secured Party's name) and to take any and all other actions which the
Secured Party may reasonably deem necessary to cure or correct such failure
(including, without limitation, the payment of taxes, the satisfaction of Liens,
the procurement and maintenance of insurance, the execution of assignments,
security agreements and Financing Statements, and the indorsement of
instruments); and the Grantor shall thereupon pay to the Secured Party on demand
the amount of all monies reasonably expended and all reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees and legal expenses)
incurred by the Secured Party in connection with or as a result of the
performance or observance of such agreements or the taking of such action by the
Secured Party, together with interest thereon from the date expended or incurred
at the highest lawful rate then applicable to any of the Obligations, and all
such monies expended, costs and expenses and interest thereon shall be part of
the Obligations secured by the Security Interest.
Section 16. Insurance Claims. As additional security for the payment and
performance of the Obligations, the Grantor hereby assigns to the Secured Party
any and all monies (including proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of the Grantor with
respect to, any and all policies of insurance now or at any time hereafter
covering the Collateral or any evidence thereof or any business records or
valuable papers pertaining thereto. At any time, whether before or after the
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occurrence of any Event of Default, the Secured Party may (but need not), in the
Secured Party's name or in Grantor's name, execute and deliver proofs of claim,
receive all such monies, indorse checks and other instruments representing
payment of such monies, and adjust, litigate, compromise or release any claim
against the issuer of any such policy. Notwithstanding any of the foregoing, so
long as no Event of Default exists the Grantor shall be entitled to all
insurance proceeds with respect to Equipment or Inventory provided that such
proceeds are applied to the cost of replacement Equipment or Inventory.
Section 17. The Secured Party's Duties. The powers conferred on the Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. The Secured Party shall
be deemed to have exercised reasonable care in the safekeeping of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to the safekeeping which the Secured Party accords its own property of like
kind. Except for the safekeeping of any Collateral in its possession and the
accounting for monies and for other properties actually received by it
hereunder, the Secured Party shall have no duty, as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any Persons or any
other rights pertaining to any Collateral. The Secured Party will take action in
the nature of exchanges, conversions, redemptions, tenders and the like
requested in writing by the Grantor with respect to the Collateral in the
Secured Party's possession if the Secured Party in its reasonable judgment
determines that such action will not impair the Security Interest or the value
of the Collateral, but a failure of the Secured Party to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.
Section 18. Default. Each of the following occurrences shall constitute an
Event of Default under this Agreement: (a) the Grantor shall fail to comply with
any agreement, covenant or term contained in the last sentence of Section 7, the
second sentence of Section 11, or Section 8(a), 8(c), 9, 10 or 12 of this
Agreement and such failure to comply shall continue for thirty (30) calendar
days after whichever of the following dates is the earliest: (i) the date the
Grantor gives notice of such failure to the Secured Party, (ii) the date the
Grantor should have given notice of such failure to the Secured Party pursuant
to Section 5.1(g) of the Credit Agreement, and (iii) the date the Secured Party
gives notice of such failure to the Grantor; (b) the Grantor shall fail to
observe or perform any covenant or agreement applicable to the Grantor under
this Agreement not specified in clause (a), above; (c) any representation or
warranty made by the Grantor in this Agreement or any schedule, exhibit,
supplement or attachment hereto or in any financial statements, reports or
certificates herewith or at any time hereafter submitted by or on behalf of the
Grantor to the Secured Party pursuant to this Agreement shall prove to have been
false or misleading in any material request when made; or (d) any Event of
Default shall occur under the Credit Agreement.
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Section 19. Remedies on Default. Upon the occurrence of an Event of Default
and at any time thereafter during the continuance thereof:
19(a) The Secured Party may exercise and enforce any and all rights
and remedies available upon default to a secured party under the Uniform
Commercial Code.
19(b) The Secured Party shall have the right to enter upon and into
and take possession of all or such part or parts of the properties of the
Grantor, including lands, plants, buildings, Equipment, Inventory and other
property as may be necessary or appropriate in the judgment of the Secured
Party to permit or enable the Secured Party to manufacture, produce,
process, store or sell or complete the manufacture, production, processing,
storing or sale of all or any part of the Collateral, as the Secured Party
may elect, and to use and operate said properties for said purposes and for
such length of time as the Secured Party may deem necessary or appropriate
for said purposes without the payment of any compensation to Grantor
therefor. The Secured Party may require the Grantor to, and the Grantor
hereby agrees that it will, at its expense and upon request of the Secured
Party forthwith, assemble all or part of the Collateral as directed by the
Secured Party and make it available to the Secured Party at a place or
places to be designated by the Secured Party.
19(c) Any sale of Collateral may be in one or more parcels at public
or private sale, at any of the Secured Party's offices or elsewhere, for
cash, on credit, or for future delivery, and upon such other terms as are
commercially reasonable. The Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given, and
the Secured Party may adjourn any public or private sale from time to time
by announcement made at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned to the extent commercially reasonable.
19(d) The Secured Party is hereby granted a non-exclusive license or
other right to use, without charge, all of the Grantor's property,
including, without limitation, all of the Grantor's labels, trademarks,
copyrights, patents and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale and selling any Collateral, and the Grantor's rights
under all licenses and all franchise agreements shall, subject to the
rights of third parties, inure to the Secured Party's benefit until the
Obligations are paid in full.
19(e) If notice to the Grantor of any intended disposition of
Collateral or any other intended action is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given in
the manner specified for the giving of notice in Section 24 hereof at least
ten calendar days prior to the date of intended disposition or other
action, and the Secured Party may exercise or enforce any and all other
rights or remedies available by law or agreement against the Collateral,
against the Grantor, or against any other Person or property.
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Section 20. Remedies as to Certain Rights to Payment. Upon the occurrence
of an Event of Default and at any time thereafter during the continuance
thereof, the Secured Party may notify any Account Debtor or other Person
obligated on any Accounts or other Collateral that the same have been assigned
or transferred to the Secured Party and that the same should be performed as
requested by, or paid directly to, the Secured Party, as the case may be. The
Grantor shall join in giving such notice, if the Secured Party so requests. Upon
the occurrence of an Event of Default and at any time thereafter during the
continuance thereof, the Secured Party may, in the Secured Party's name or in
the Grantor's name, demand, xxx for, collect or receive any money or property at
any time payable or receivable on account of, or securing, any such Collateral
or grant any extension to, make any compromise or settlement with or otherwise
agree to waive, modify, amend or change the obligation of any such Account
Debtor or other Person. Upon the occurrence and during the continuance of any
Event of Default described in Sections 7.1(f), (g) or (h) of the Credit
Agreement, without notice from the Secured Party, and upon the occurrence and
during the continuance any other Event of Default, upon written notice from the
Secured Party, all payments made with respect to any Collateral and received by
the Grantor shall be held in trust by the Grantor as the property of the Secured
Party and shall not be commingled with any funds or property of the Grantor and
shall be forthwith remitted to the Secured Party for application on the
Obligations.
Section 21. Application of Proceeds. All cash proceeds received by the
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the Secured
Party, be held by the Secured Party as collateral for, or then or at any time
thereafter be applied in whole or in part by the Secured Party against, all or
any part of the Obligations (including, without limitation, any expenses of the
Secured Party payable pursuant to Section 22 hereof).
Section 22. Costs and Expenses; Indemnity. Subject to the limitations set
forth in Section 8.2 of the Credit Agreement, the Grantor will pay or reimburse
the Secured Party on demand for all reasonable out-of-pocket expenses (including
in each case all filing and recording fees and taxes and all reasonable fees and
expenses of counsel and of any experts and agents) incurred by the Secured Party
in connection with the creation, perfection, protection, satisfaction,
foreclosure or enforcement of the Security Interest and the preparation,
administration, continuance, amendment or enforcement of this Agreement, and all
such costs and expenses shall be part of the Obligations secured by the Security
Interest. The Grantor shall indemnify and hold the Secured Party harmless from
and against any and all claims, losses and liabilities (including reasonable
attorneys' fees) growing out of or resulting from this Agreement and the
Security Interest hereby created (including enforcement of this Agreement) or
the Secured Party's actions pursuant hereto, except claims, losses or
liabilities resulting from the Secured Party's gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Any liability of the Grantor to indemnify and hold the Secured
Party harmless pursuant to the preceding sentence shall be part of the
Obligations secured by the Security
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Interest. The obligations of the Grantor under this Section shall survive any
termination of this Agreement.
Section 23. Waivers; Remedies; Marshalling. This Agreement can be waived,
modified, amended, terminated or discharged, and the Security Interest can be
released, only explicitly in a writing signed by the Secured Party (and, in the
case of a modification or amendment, by the Grantor). A waiver so signed shall
be effective only in the specific instance and for the specific purpose given.
Mere delay or failure to act shall not preclude the exercise or enforcement of
any rights and remedies available to the Secured Party. All rights and remedies
of the Secured Party shall be cumulative and may be exercised singly in any
order or sequence, or concurrently, at the Secured Party's option, and the
exercise or enforcement of any such right or remedy shall neither be a condition
to nor bar the exercise or enforcement of any other. The Grantor hereby waives
all requirements of law, if any, relating to the marshalling of assets which
would be applicable in connection with the enforcement by the Secured Party of
its remedies hereunder, absent this waiver.
Section 24. Notices. Any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telefacsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telefacsimile transmission, from the first
business day after the date of sending if sent by overnight courier, or from
four days after the date of mailing if mailed.
Section 25. Grantor Acknowledgments. The Grantor hereby acknowledges that
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement, (b) the Secured Party has no fiduciary relationship to the
Grantor, the relationship being solely that of debtor and creditor, and (c) no
joint venture exists between the Grantor and the Secured Party.
Section 26. Continuing Security Interest; Assignments under Credit
Agreement. This Agreement shall (a) create a continuing security interest in the
Collateral and shall remain in full force and effect until payment in full of
the Obligations and the expiration of the obligations, if any, of the Secured
Party to extend credit accommodations to the Grantor under the Credit Agreement,
(b) be binding upon the Grantor, its successors and assigns, and (c) inure to
the benefit of, and be enforceable by, the Secured Party and its successors,
transferees, and assigns. Without limiting the generality of the foregoing
clause (c), the Secured Party may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement to any other
Persons to the extent and in the manner provided in the Credit Agreement and may
similarly transfer all or any portion of its rights under this Security
Agreement to such Persons.
Section 27. Termination of Security Interest. Upon payment in full of the
Obligations and the expiration of any obligation of the Secured Party to extend
credit
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accommodations to the Grantor under the Credit Agreement, the Security Interest
granted hereby shall terminate. Upon any such termination, the Secured Party
will return to the Grantor such of the Collateral then in the possession of the
Secured Party as shall not have been sold or otherwise applied pursuant to the
terms hereof and execute and deliver to the Grantor such documents as the
Grantor shall reasonably request to evidence such termination. Any reversion or
return of Collateral upon termination of this Agreement and any instruments of
transfer or termination shall be at the expense of the Grantor and shall be
without warranty by, or recourse on, the Secured Party. As used in this Section,
"Grantor" includes any assigns of Grantor, any Person holding a subordinate
security interest in any of the Collateral or whoever else may be lawfully
entitled to any part of the Collateral.
Section 28. Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
MINNESOTA. Whenever possible, each provision of this Agreement and any other
statement, instrument or transaction contemplated hereby or relating hereto
shall be interpreted in such manner as to be effective and valid under such
applicable law, but, if any provision of this Agreement or any other statement,
instrument or transaction contemplated hereby or relating hereto shall be held
to be prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or any other statement, instrument or transaction contemplated hereby
or relating hereto.
Section 29. Consent to Jurisdiction. AT THE OPTION OF THE SECURED PARTY,
THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT
SITTING IN HENNEPIN COUNTY; AND THE GRANTOR CONSENTS TO THE JURISDICTION AND
VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT THE GRANTOR COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE SECURED PARTY AT
ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
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Section 30. Waiver of Notice and Hearing. THE GRANTOR HEREBY WAIVES ALL
RIGHTS TO A JUDICIAL HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE SECURED
PARTY OF ITS RIGHTS TO POSSESSION OF THE COLLATERAL WITHOUT JUDICIAL PROCESS OR
OF ITS RIGHTS TO REPLEVY, ATTACH, OR LEVY UPON THE COLLATERAL WITHOUT PRIOR
NOTICE OR HEARING. THE GRANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL
OF ITS CHOICE WITH RESPECT TO THIS PROVISION AND THIS AGREEMENT.
Section 31. Waiver of Jury Trial. EACH OF THE GRANTOR AND THE SECURED
PARTY, BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Section 33. General. All representations and warranties contained in this
Agreement or in any other agreement between the Grantor and the Secured Party
shall survive the execution, delivery and performance of this Agreement and the
creation and payment of the Obligations. The Grantor waives notice of the
acceptance of this Agreement by the Secured Party. Captions in this Agreement
are for reference and convenience only and shall not affect the interpretation
or meaning of any provision of this Agreement.
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IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
BUCA, INC.
By /s/ Xxxx X. Xxxxx
----------------------------------
Title CFO
-------------------------------
Federal tax identification number: 00-0000000
Address for Grantor:
Attention: Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Address for the Secured Party:
Attention: Xxxxxx X. Xxxxxxxxx MPFP0602
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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