Exhibit 10.15
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$15,000,000
LOAN AGREEMENT
Dated as of September 1, 1998
Between
THE NEW YORK RESTAURANT GROUP, INC.
and
FLEET BANK, N.A.
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS .................................................. 1
1.1 Defined Terms ................................................ 1
1.2 Accounting Terms; UCC Terms .................................. 12
1.3 Certain Matters of Construction .............................. 12
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOAN COMMITMENT
AND TERM LOAN ................................................ 12
2.1 Revolving Loan Commitment .................................... 12
2.2 Revolving Loan Note .......................................... 12
2.3 Procedure for Requesting Advances ............................ 13
2.4 Interest on the Revolving Loan Note .......................... 14
2.5 Restrictions with Respect to Working Capital Advances ........ 14
2.6 Term Loan .................................................... 14
2.7 Term Note .................................................... 14
2.8 Interest on the Term Note .................................... 14
2.9 Prepayment ................................................... 15
2.10 Interest Payments; Default Rate; Manner of Payments .......... 15
2.11 Additional Provisions regarding LIBOR Loans .................. 17
2.12 Indemnities .................................................. 19
2.13 Increased Costs .............................................. 20
2.14 [INTENTIONALLY OMITTED] ...................................... 20
2.15 Taxes ........................................................ 20
2.16 Use of Proceeds .............................................. 22
2.17 Letters of Credit ............................................ 22
SECTION 3. REPRESENTATIONS AND WARRANTIES ............................... 23
3.1 Financial Condition .......................................... 23
3.2 Due Existence and Authority; Compliance with Law ............. 23
3.3 Power and Authority; Authorization; Enforceable Obligations .. 24
3.4 Legal Bar .................................................... 24
3.5 No Material Litigation ....................................... 24
3.6 No Default ................................................... 25
3.7 No Burdensome Restrictions ................................... 25
3.8 Taxes ........................................................ 25
3.9 Federal Regulations .......................................... 25
3.10 Liens on Properties .......................................... 25
3.11 Security Interest ............................................ 25
3.12 Ownership, Leasehold Interests and Liens ..................... 26
3.13 Information .................................................. 26
3.14 Tradenames ................................................... 26
3.15 Solvency ..................................................... 26
3.16 Brokers ...................................................... 26
3.17 Management Agreements ........................................ 26
3.18 Consents of Restaurant Owners ................................ 27
3.19 Leases ....................................................... 27
3.20 Environmental Compliance ..................................... 27
3.21 No Material Adverse Change ................................... 28
3.22 No Default under Revolving Loan .............................. 29
3.23 Leases ....................................................... 29
3.24 Year 2000 Compliance ......................................... 29
SECTION 4. CONDITIONS PRECEDENT ......................................... 30
4.1 Conditions to Initial Advance ................................ 30
4.2 Conditions to All Extensions of Credit ....................... 33
SECTION 5. AFFIRMATIVE COVENANTS ........................................ 34
5.1 Compliance with Laws, Etc .................................... 34
5.2 Preservation of Existence .................................... 34
5.3 Financial Information and Compliance Certificates ............ 34
5.4 Defaults ..................................................... 35
5.5 Insurance .................................................... 35
5.6 Preservation of Properties ................................... 35
5.7 Taxes ........................................................ 35
5.8 Notice of Litigation ......................................... 36
5.9 Xxxx Xxxxxxxx ................................................ 36
5.10 Security Agreement and Projects .............................. 36
5.11 New Restaurants .............................................. 36
SECTION 6. FINANCIAL COVENANTS .......................................... 36
6.1 Covenants .................................................... 36
6.2 Financial Covenants related to Affiliates .................... 37
SECTION 7. NEGATIVE COVENANTS ........................................... 37
7.1 Indebtedness for Borrowed Money .............................. 37
7.2 Mergers and Sales of Assets .................................. 38
7.3 Loans; Investments ........................................... 38
7.4 Liens ........................................................ 38
7.5 Contingent Liabilities ....................................... 38
7.6 Sales of Receivables; Sale - Leasebacks ...................... 38
7.7 INTENTIONALLY OMITTED ........................................ 39
7.8 Nature of Business ........................................... 39
7.9 Accounting Changes ........................................... 39
7.10 Transactions with Affiliates ................................. 39
7.11 Operating Loss ............................................... 39
7.12 Dividends and Distributions .................................. 39
SECTION 8. EVENTS OF DEFAULT ............................................ 40
SECTION 9. MISCELLANEOUS ................................................ 42
9.1 Notices ...................................................... 42
9.2 No Waiver; Cumulative Remedies ............................... 43
9.3 Survival of Representations and Warranties ................... 43
9.4 Payment of Expenses; Examination ............................. 43
9.5 Waiver of Jury Trial, Setoff and Counterclaim ................ 44
9.6 Waiver of Automatic Stay ..................................... 44
9.7 Modification and Waiver ...................................... 45
9.8 Severability ................................................. 45
9.9 Successors and Assigns ....................................... 45
9.10 Governing Law; Consent to Jurisdiction ....................... 45
9.11 Entire Agreement ............................................. 45
9.12 Interest Adjustment .......................................... 45
9.13 Rates ........................................................ 46
9.14 Section Titles ............................................... 46
9.15 Counterparts ................................................. 46
9.16 Taxes ........................................................ 46
9.17 Tax Treatment ................................................ 47
LOAN AGREEMENT, dated as of September 1, 1998, between THE NEW YORK
RESTAURANT GROUP, INC., a Delaware corporation (the "Borrower"), with its chief
place of business at 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and FLEET
BANK, N.A., a national banking association (the "Bank"), with a place of
business at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
In consideration of the mutual covenants hereinafter contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. In addition to the defined terms appearing above or
defined in subsequent Sections of this Agreement, as used herein the following
terms shall have the following meanings:
"Adjusted LIBOR Rate" shall mean, the LIBOR Rate, adjusted for any
increases in the LIBOR Reserve Percentage, plus the Applicable Margin with
respect to any LIBOR Interest Period.
"Adjusted Net Income" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the aggregate income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period, which shall be an amount equal to revenues and other proper items of
income, less the aggregate for the Borrower and its Subsidiaries on a
consolidated basis of any and all items that are treated as expenses under GAAP
(including, without limitation, Federal, state and local income taxes).
"Adjusted Prime Rate" shall mean a per annum rate equal to 5/8 of one
percent in excess of the Prime Rate.
"Advance" shall mean an advance of funds made by the Bank to the Borrower
subject to and in accordance with the terms of Sections 2.1 and 4.2.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall mean this Loan Agreement, as the same from time to time
may be amended, supplemented or modified, and any appendices, exhibits or
schedules hereto.
"Agreement Regarding Fees" shall mean the Agreement Regarding Fees dated
of even date herewith between the Bank and the Borrower.
"Applicable Margin" shall mean three hundred twenty-five (325) basis
points.
"Appraisal" shall mean an MAI appraisal of the value of a parcel of
Mortgaged Property, determined on an "as-is" fair market value basis or the
prospective fee simple or leasehold estimate, as the case may be, of market
value assuming completion per plans and specifications, performed by an
independent appraiser selected by the Bank who is not an employee of the
Borrower or any of its Subsidiaries, the form and substance of such appraisal
and the identity of the appraiser to be in accordance with regulatory laws and
policies (both regulatory and internal) applicable to the Bank, including,
without limitation, FIRREA, and otherwise acceptable to the Bank.
"Appraised Value" shall mean the fair market value of a parcel of
Mortgaged Property, determined by the most recent Appraisal of such parcel,
subject, however, to such changes or adjustments to the value determined thereby
as may be required by the appraisal department of the Bank in its good faith
business judgment.
"Availability" shall mean the amount, computed on a daily basis, by which
the Commitment exceeds the sum of the outstanding principal of the Loans and the
face amount of any outstanding Letters of Credit.
"Borrowing Notice" shall mean a written notice by the Borrower of any
requested Advance hereunder, substantially in the form attached hereto as
Exhibit A and as set forth in Section 2.3.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in New York are required or permitted by law to remain
closed, and on which the Bank's offices are open for business as usual.
"Capital Expenditures" shall mean for any period, the aggregate amount of
all payments made by any Person, directly or indirectly, for the purpose of
acquiring, constructing or maintaining fixed assets, real property or equipment
which, in accordance with GAAP, would be added as a debit to the fixed asset
account of such Person, including, without limitation, but without duplication,
all amounts paid or payable with respect to Capitalized Lease Obligations and
interest under Capitalized Leases which are required to be capitalized in
accordance with GAAP.
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"Capitalized Lease" shall mean any lease the obligations to pay rent or
other amounts under which constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CERCLA" shall have the meaning given in Section 3.19.
"Charges" shall have the meaning given in Section 9.12.
"Closing Date" shall mean the date of this Agreement.
"Commencement Date" shall have the meaning given in Section 2.12.
"Commitment" shall mean the obligation of the Bank to make the Revolving
Loan to the Borrower during the Commitment Period pursuant to the terms hereof
as such Commitment is described in Section 2.1, subject to increase or reduction
in accordance with the terms hereof.
"Commitment Letter" shall mean the letter agreement between the Borrower
and the Bank, dated as of August 7, 1998, as it may be amended from time to
time.
"Commitment Period" shall mean the period from and including the date
hereof to and including the Termination Date or such earlier date as the
Commitment shall terminate as provided in Section 8 or otherwise.
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio of (a)(i)
consolidated earnings, including management fee income generated by restaurants
managed, but not owned, by the Borrower or its Subsidiaries, before interest,
taxes, depreciation and amortization of the Borrower and its Subsidiaries, plus
(ii) any non-cash extraordinary or non-recurring charges, less (iii) Capital
Expenditures not funded by any external financing source, including, without
duplication, payments under any Capitalized Lease, computed in accordance with
GAAP, less (iv) income taxes paid less (v) dividends paid or declared, to (b)
the sum of (i) current payments on long-term debt, plus (ii) consolidated
interest.
"Construction Budget" shall mean the complete and detailed budget of all
direct and indirect costs which will be incurred in connection with construction
of the Improvements with respect to the Projects, which Construction Budget has
been approved by the Bank, in its sole discretion.
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"Construction Consultant" shall mean any outside construction consultant
engaged by the Bank at Borrower's cost and expense, which Construction
Consultant shall (i) verify that Improvements can be completed for the amount
available for such Project in the Construction Budget; (ii) advise the Bank as
to whether the final plans and specifications for a Project are satisfactory for
the completion of the Improvements; (iii) make monthly inspections and certify
that Improvements are being completed in accordance with the approved plans and
specifications; and (iv) review and approve construction contracts to be entered
into by the Borrower or any Subsidiary in connection with construction of any
Projects.
"Contractual Obligations" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Conversion Date" shall mean the date of conversion of the Advances with
respect to a Project to a Term Loan pursuant to Section 2.6.
"Cost of Funds" shall mean the Bank's cost of funds as determined by the
Bank in its sole discretion.
"Default" shall mean the occurrence of any of the events specified in this
Agreement which would give rise to an "Event of Default", whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Designated Subsidiary" means a Subsidiary designated as such by the
Borrower and as to which the Bank has agreed in writing to, and not revoked,
such designation. As of the Closing Date, the Designated Subsidiaries are listed
on Schedule 2.
"Disputed Taxes" shall mean taxes the validity and amount of which are
being contested in good faith, and as to which no executable lien has been
entered, or if such a lien has been entered, the Borrower has established
segregated reserves reasonably satisfactory to the Bank with respect thereto.
"Dollars" and "$2" shall mean dollars in lawful currency of the United
States of America.
"EBITDA" shall mean, with respect to the Borrower and its Subsidiaries on
a consolidated basis for any period, the sum of (a) Adjusted Net Income, plus
(b) Interest Expense, plus (c) depreciation and amortization, plus (d) any
non-cash extraordinary or non-recurring charges, plus (e) Federal, state and
local income taxes, computed in accordance with GAAP.
"Environmental Engineer" shall mean a firm of independent professional
engineers or other scientists generally recognized as expert in the detection,
analysis and remediation of Hazardous Substances and related environmental
matters and reasonably acceptable to the Bank.
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"Environmental Laws" shall have the meaning given in Section 3.19(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall mean any of the events specified in this
Agreement under "Events of Default"; provided, that, any requirement for the
giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Fixed Rate Loan" shall mean a Term Loan bearing interest at a rate equal
to the Cost of Funds plus three and one quarter percent (3.25%) per annum.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a consistent basis.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"Guarantee" of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness,
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit, in either case in the
ordinary course of business.
"Hazardous Substances" shall have the meaning given in Section 3.19(b).
"Improvements" shall mean capital, base building and/or tenant
improvements consisting of rehabilitation, refurbishment, replacement and
improvements to the Mortgaged Property to be performed by the Borrower or any
Subsidiary in connection with any Project.
"Indebtedness" shall mean, with respect to any Person, (a) all obligations
of such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) except items in dispute, all obligations of
such Person for the deferred purchase price of property or services, except
current accounts payable arising in the ordinary course of business and not
overdue beyond 120 days, (d) all obligations of such Person under conditional
sale or other title retention
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agreements relating to property purchased by such Person, (e) all payment
obligations of such Person with respect to interest rate or currency protection
agreements, (f) all obligations of such Person as an account party under any
letter of credit or in respect of bankers' acceptances, (g) all obligations of
any third party secured by property or assets of such Person (regardless of
whether or not such Person is liable for repayment of such obligations), (h) all
Guarantees of such Person, and (i) all obligations of such Person upon which
interest charges are customarily paid.
"Indemnity Agreement" shall mean the Indemnity Agreement Regarding
Hazardous Materials made by the Borrower and each Subsidiary in favor of the
Bank, pursuant to which such parties agree to indemnify the Bank with respect to
Hazardous Substances and Environmental Laws, such Indemnity Agreement to be in
form and substance satisfactory to the Bank.
"Indemnity Period" shall have the meaning given in Section 2.12.
"Installment Payment Date" shall mean any date on which all or any
portion of the principal amount and the interest accrued on a Term Loan is due
and payable, as set forth in Section 2.7.
"Interest Expense" shall mean, with respect to the Borrower and its
Subsidiaries for the applicable period of determination thereof, the interest
expense of the Borrower and its Subsidiaries during such period determined on a
consolidated basis in accordance with GAAP, and shall in any event include,
without limitation, (a) the amortization of debt discounts, (b) the amortization
of all fees payable in connection with the incurrence of Indebtedness to the
extent required to be included in interest expense in accordance with GAAP, and
(c) the portion of any Capitalized Lease Obligation allocable to interest
expense.
"Interest Rate" shall mean, with respect to each Note, the applicable
rate of interest such Note shall bear from time to time pursuant to Sections
2.4, 2.8 and 2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code, as amended
and regulations and rulings promulgated thereunder.
"Las Vegas Mortgage" shall have the meaning assigned to such term in
Section 4.1(j).
"Las Vegas Property" shall mean the leasehold interest in the Real
Property more particularly described on Schedule 2(A) as the "Las Vegas
Property".
"Leases" shall mean the leases, licenses and agreements, whether written
or oral, relating to the use or occupancy of the space in or on the Mortgaged
Property, which Leases have been approved by the Bank, in its sole discretion.
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"Letter of Credit" shall mean any Letter of Credit issued by the Bank for
the account the Borrower in accordance with Section 2.17, as the same may be
amended, supplemented or extended in accordance with its terms.
"LIBOR Interest Period" shall mean a certain period of 1, 2, 3, 4 or 6
months, selected by the Borrower, in connection with requesting an Adjusted
LIBOR Rate for a particular LIBOR Loan.
"LIBOR Loan" shall mean a Loan as to which the Borrower has requested and
the Bank has agreed, will bear interest at an Adjusted LIBOR Rate for an
applicable LIBOR Interest Period.
"LIBOR Rate" shall mean the per annum rate of interest quoted by the Bank
at approximately 9:00 a.m. New York time two (2) Business Days prior to the
first day of the relevant LIBOR Interest Period for the offering to leading
banks in the London interbank market of United States dollar deposits for such
LIBOR Interest Period in an amount similar to the principal amount of the
portion of the Loan selected by the Borrower to bear interest at such rate for
such LIBOR Interest Period.
"LIBOR Reserve Percentage" shall mean, with respect to any LIBOR Interest
Period, that percentage (expressed as a decimal) which is in effect on the day
the Adjusted LIBOR Rate is determined, as prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve System in New York
City with deposits exceeding one billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of the Bank to United States
residents). With respect to increases in the LIBOR Reserve Percentage, the
Adjusted LIBOR Rate shall be adjusted automatically on and as of the effective
date of any such increase.
"Lien" shall mean any mortgage, pledge, security interest, hypothecation,
assignment, deposit arrangement, encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the UCC or
comparable law of any jurisdiction), except for protective filings of financing
statements under the UCC or comparable law of any jurisdiction with respect to
any true leases of property by the Borrower or any of its Subsidiaries.
"Loan" or "Loans" shall mean any loan made by the Bank to the Borrower
hereunder, including an Advance under the Revolving Loan or a Term Loan.
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"Loan Documents" shall mean this Agreement and each document, agreement
and instrument executed in connection herewith or pursuant hereto, including,
without limitation, the Notes, the Subsidiaries' Guarantees, the Security
Agreement, the Indemnity Agreement, the Agreement Regarding Fees and the
Mortgages.
"Maturity Date" shall mean the date that all or a portion of the
outstanding principal balance of a Loan is due and payable pursuant to the terms
hereof, which shall include without limitation (a) with respect to the Revolving
Loan, the Termination Date, and (b) with respect to the Term Loan, the
Installment Payment Date and the final Maturity Date of the Term Loan.
"Maximum Rate" shall have the meaning given in Section 9.12.
"Mortgages" shall mean, collectively, the mortgages, deeds of trust and
other security agreement now or hereafter given from the Borrower or any
Subsidiary to the Bank encumbering the Real Properties and securing the Loan,
including, without limitation, the Las Vegas Mortgage, the New Orleans Mortgage,
and the Washington Mortgage, as the same may be modified, amended, extended,
replaced, consolidated or otherwise supplemented from time to time.
"Mortgaged Property" shall mean, collectively, the New Orleans Property,
the Las Vegas Property and the Washington Property, which is conveyed to and
accepted by the Bank as security for the Obligations in connection with the
Loans.
"Net Worth" shall mean the shareholders' equity, including preferred
stock, as reflected on the Borrower's balance sheet, less all intangibles (i.e.,
good will and other similar items), computed in accordance with GAAP.
"New Orleans Mortgage" shall have the meaning assigned to such term in
Section 4.1(j).
"New Orleans Property" shall mean the Real Property more particularly
described on Schedule 2(B) as the "New Orleans Property".
"Notes" shall mean collectively the Revolving Loan Note and the Term Note.
"Obligations" shall mean any and all sums owing under the Loan Documents
and all other obligations of the Borrower, direct or indirect, absolute or
contingent, joint, several or independent, now or hereafter existing, due or to
become due to, or held or to be held by the Bank, whether created directly or
acquired by assignment or otherwise.
"Offering" shall mean a public offering whereby securities of the Borrower
are sold to an underwriter for reoffering to the public pursuant to an effective
registration statement under the Securities Act.
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"Original Loan" shall mean that certain loan, made by the Bank to the
Borrower (formerly The New York Restaurant Group, L.L.C.) in the aggregate
principal amount of $8,000,000.00, pursuant to that certain Loan Agreement,
dated as of March 19, 1997, between the Borrower and the Bank.
"Other Taxes" shall have the meaning given in Section 2.15.
"Permitted Liens" shall mean (a) liens for taxes not yet due and payable,
and tax liens relating to taxes due and payable, the validity and amount of
which are being diligently contested in good faith and as to which the Borrower
has segregated adequate reserves to the reasonable satisfaction of the Bank;
provided, that, any liens for any amount in excess of $100,000 arising from the
failure of the Borrower or any Subsidiary to pay or withhold any employment
related tax obligations shall not be "Permitted Liens", (b) mechanic's,
worker's, materialmen's or other liens arising in the ordinary course of
business, (c) liens arising in connection with purchase money obligations;
provided such obligations arise in the ordinary course of business on ordinary
and customary terms, (d) those certain liens described in Schedule 1, (e) liens
existing on the personal property of any Subsidiary prior to it becoming a
Subsidiary of the Borrower, and (f) liens and encumbrances in favor of any one
or more landlord covering the machinery, equipment, furniture, furnishings,
fixtures, tools and motor vehicles related to the specific restaurant leased
from such landlord, but which liens and encumbrances do not cover any wine
inventory or art of the Borrower or any Subsidiary; provided, that, in no event
shall the sum of all such Permitted Liens described in clauses (a), (b), (c) and
(e) above exceed an aggregate of $1,000,000.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or any
other juridical entity, or a government or state or any agency or political
subdivision thereof.
"Plan" shall mean any plan of a type described in Section 4021(a) of
ERISA, and/or such other Sections of ERISA applicable to entities of a type such
as the Borrower, in respect of which the Borrower is an "employer" as defined in
Section 3(5) of ERISA, and/or such other Sections of ERISA applicable to the
Borrower.
"Post Default Rate" shall mean at any time a rate of interest equal to the
Prime Rate plus two percent (2%) per annum.
"Prime Loan" shall mean a Loan bearing interest at the Adjusted Prime
Rate.
"Prime Rate" shall mean the floating rate of interest per annum
established from time to time by the Bank as its "prime rate", which rate shall
not necessarily be the lowest rate offered by the Bank for commercial or other
types of loans.
"Project(s)" shall mean the development and construction of new
restaurants by the Borrower and/or its Subsidiaries in New Orleans, Louisiana
and Las Vegas, Nevada. New
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restaurant development and construction by the Borrower and/or its Subsidiaries
in Washington, D.C. is subject to (i) the Borrower maintaining its consolidated
earnings as set forth in Section 6.1(c) for the third and fourth fiscal quarters
of 1998 and (ii) the completion of the development, construction and opening of
the new restaurants in New Orleans, Louisiana and Las Vegas, Nevada.
"Project Availability" shall mean 90% of the Construction Budget with
respect to a specific Project, less the face amount of any Letter of Credit
issued with respect to such Project.
"Project Costs" shall mean, with respect to any Project, the acquisition,
development and start-up costs payable to third parties not affiliated with the
Borrower with respect to such Project (including, without limitation, lease
acquisition costs, the cost of leasehold improvements, trademarks, tradenames,
liquor and other licenses, wine, art and management contracts).
"Rate Determination Day" shall have the meaning given in Section 2.8(b).
"Real Properties" shall mean the real properties listed on Schedule 2(D)
and all other real property and interests in real property now owned or
hereafter acquired by the Borrower or the Subsidiaries. Real Property shall
include, without limitation, (i) land, (ii) any and all rights, easements,
licenses and privileges appurtenant thereto, (iii) any and all improvements from
time to time located thereon, (iv) any and all fixtures, equipment, machinery,
appliances, furniture, furnishings and other tangible personal property now or
hereafter attached thereto, installed therein or used or intended to be used in
connection therewith (other than personal property of tenants) and (v) in the
case of a Real Property held in whole or in part pursuant to a ground lease,
such leasehold estate.
"Release" shall have the meaning given in Section 3.19(c)(iii).
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Requirements of Law" shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Revolving Loan" shall mean the Advances made during the Commitment Period
pursuant to Section 2.1. The Revolving Loan may include one or more LIBOR Loans
from time to time.
"Revolving Loan Note" shall mean the Note referred to in Section 2.2,
substantially in the form attached hereto as Exhibit B.
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"Sale" shall mean the sale or sales of (i) all or substantially all of the
assets of the Borrower or (ii) in excess of 50% of the voting securities of the
Borrower to an individual or other legal entity.
"Securities Act" shall mean the Securities Act of 1933, as amended and
regulations and rulings promulgated thereunder.
"Security Agreement" shall mean the Amended and Restated Security
Agreement, dated as of the date hereof, by the Borrower and its Subsidiaries
which are parties thereto, substantially in the form attached hereto as Exhibit
C.
"Stepdown Default" shall have the meaning given in Section 2.10.
"Subsidiaries' Guaranty" shall mean the unconditional Guaranty by the
Borrower's Subsidiaries which are parties thereto of the Borrower's obligations
with respect to the Loans, substantially in the form attached hereto as Exhibit
D.
"Subsidiary" shall mean as of any date each of the Borrower's then
existing, direct or indirect, corporate, limited liability company or
partnership subsidiaries. A list of the Borrower's current Subsidiaries is
attached hereto as Schedule 2.
"Tax Credit" shall have the meaning given in Section 2.15.
"Taxes" shall have the meaning given in Section 2.15.
"Termination Date" shall mean July 31, 1999 or, if such date is not a
Business Day, the Business Day next succeeding such date.
"Term Loan" shall mean a Loan made pursuant to Section 2.6. A Term Loan
may be a Prime Loan or a Fixed Rate Loan.
"Term Note" shall have the meaning given in Section 2.7.
"UCC" shall mean the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
"Washington Mortgage" shall have the meaning assigned to such term in
Section 4.1(j).
"Washington Property" shall mean the leasehold interest in the Real
Property more particularly described on Schedule 2(C) as the "Washington
Property".
"Working Capital Advances" means Advances borrowed by the Borrower for use
by the Borrower or its Subsidiaries for working capital purposes.
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"Working Capital Sublimit" shall mean $1,000,000 of the aggregate
principal amount available to the Borrower for Working Capital Advances.
1.2 Accounting Terms; UCC Terms. As used herein and in any certificate or
other document made or delivered pursuant hereto, accounting terms not
specifically defined herein shall have the respective meanings given to them
under GAAP. All other undefined terms contained in this Agreement shall, unless
the context indicates otherwise, have the meanings provided for by the UCC as in
effect in the State of New York, to the extent the same are used or defined
therein.
1.3 Certain Matters of Construction. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, including the Exhibits and Schedules hereto, as the same may from time to
time be amended, modified or supplemented, and not to any particular section,
subsection or clause contained in this Agreement. Any reference to a "Section",
"Exhibit" or "Schedule" shall refer to the relevant Section of, or Exhibit or
Schedule to, this Agreement, unless specifically indicated to the contrary.
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. The term "including" shall not be limiting or
exclusive, unless specifically indicated to the contrary.
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOAN COMMITMENT AND TERM LOAN.
2.1 Revolving Loan Commitment. Subject to the terms and conditions and
relying on the representations and warranties set forth herein, the Bank will
make available Advances to the Borrower from time to time during the Commitment
Period. Each Advance may be in an amount not to exceed the Availability as of
the date of such Advance. The aggregate principal amount at any one time
outstanding shall not exceed the lower of (i) $15,000,000 or (ii) 75% of the
Appraised Value of the Mortgaged Property (the "Commitment") less the sum of (i)
the aggregate initial principal amount of the Term Loan and (ii) the aggregate
face amount of all outstanding Letters of Credit. During the Commitment Period,
the Borrower may use the Commitment for obtaining Loans by borrowing, paying,
prepaying in whole or in part and reborrowing on a revolving basis, all in
accordance with the terms and conditions hereof.
2.2 Revolving Loan Note. Advances made by the Bank to the Borrower
pursuant to Section 2.1 shall be evidenced by that certain Revolving Loan Note
in the form attached hereto as Exhibit B (the "Revolving Loan Note"), payable to
the order of the Bank and representing the obligation of the Borrower to pay the
aggregate unpaid principal amount of all Advances made by the Bank to the
Borrower, with interest thereon as hereinafter described. The Revolving Loan
Note shall (i) be dated the date hereof, and (ii) mature on the Termination
Date. The Borrower
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hereby expressly authorizes the Bank to record on the schedule attached to the
Revolving Loan Note the amount and date of each Advance and drawing under a
Letter of Credit, the date and amount of each payment of principal and the
unpaid principal balance; provided, however, that the failure of the Bank to
make any such notation shall not in any manner affect the obligation of the
Borrower to repay any Loan in accordance with the terms hereof. All such
notations shall be deemed to be correct absent manifest error.
2.3 Procedure for Requesting Advances. The Borrower may borrow during the
Commitment Period on any Business Day by giving the Bank irrevocable notice of a
request for an Advance hereunder at least three (3) Business Days before a
proposed borrowing, (the "Borrowing Notice"). Such Borrowing Notice shall (a)
identify the Project to which such proposed borrowing relates or identify such
proposed borrowing as a Working Capital Advance, and (b) state whether the
Borrower requests the Advance to bear interest at the Adjusted LIBOR Rate, and
if so, for what LIBOR Interest Period. Notwithstanding the foregoing, the Bank
agrees that the initial Advance to be made on the date hereof shall be in the
amount of $5,936,784.93 and shall be used solely for the following purposes: (i)
to repay all interest and principal outstanding under the Original Loan; and
(ii) to repay that certain mortgage currently encumbering the New Orleans
Property. In no event shall any Advance exceed the Availability as of the date
of such Advance. Any Borrowing Notice relating to a specific Project shall
include a certification by the chief executive officer or chief financial
officer of the Borrower that the advanced sum will be used only for Project
Costs incurred in connection with such Project and that the conditions set forth
in Sections 4.2(a) - (f) have been satisfied. Such Borrowing Notice shall set
forth the actual amounts of such costs certified by the Borrower's chief
financial officer and shall be accompanied by certificates from the Construction
Consultant certifying that (i) the Improvement can be completed for the amount
available for construction from the construction budget approved by Bank, and
(ii) the final plans and specifications are satisfactory for the completion of
the Improvements. The Borrowing Notice shall also be accompanied by lien waivers
from the general contractor and all material subcontractors engaged in the
performance of the work being funded by such Advance. The Borrowing Notice and
certifications required pursuant to the Revolver Loan shall be substantially in
the forms attached as Exhibit A. In no event may the amount of Advances with
respect to any Project exceed the Project Availability. A Borrowing Notice shall
be submitted in writing (including, without limitation, via facsimile
transmission) and shall be sufficient if received by 1:00 p.m. New York time on
the date on which such Notice is to be given. If any such Borrowing Notice is
sent by facsimile it shall be confirmed in writing sent by the Borrower to the
Bank within one (1) Business Day thereafter. Unless notification is otherwise
furnished by the Borrower to the Bank (in a manner consistent with the
requirements of this Section), Advances will be made by credits to the
Borrower's demand deposit account maintained with the Bank. Any request by the
Borrower for an Advance shall constitute a representation and warranty by the
Borrower, as more particularly set forth in Section 4.2. If Borrower fails to
request that an Advance under the Revolving Loan be a LIBOR Loan, or if the
Adjusted LIBOR Rate is not available in the Bank's sole discretion, such Advance
shall bear interest at the Adjusted Prime Rate.
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2.4 Interest on the Revolving Loan Note. Until the earlier of (a) the date
upon which it is repaid in full, or (b) the occurrence of the Conversion Date
relating thereto, each Advance made during the Commitment Period shall bear
interest, at: (i) the Adjusted Prime Rate, or (ii) subject to availability and
at the Borrower's request, the Adjusted LIBOR Rate.
2.5 Restrictions with Respect to Working Capital Advances. Each Advance or
portion of an Advance designated by the Borrower as a Working Capital Advance
shall be repaid in full, together with all interest thereon, no later than 90
days after the date of such Advance, subject to renewal.
2.6 Term Loan. On July 31, 1999, all sums advanced under the Revolving
Loan to fund each Project and which are then outstanding (up to an aggregate
amount not to exceed $12,200,000.00) will be converted to a term loan (a "Term
Loan"). The date of conversion of such Advances shall be referred to as the
"Conversion Date."
2.7 Term Note. The Term Loan shall be evidenced by a Term Note dated as of
the applicable Conversion Date (the "Term Note"), payable to the order of the
Bank and representing the obligation of the Borrower to repay the principal
amount of the Term Loan. The Term Loan shall be repaid in 36 equal monthly
installments of principal together with accrued interest, based on a fifteen
(15) year straight-line amortization schedule, payable commencing on the last
business day of the month following the Conversion Date, and on the last
business day of each month thereafter (each an "Installment Payment Date"), with
the balance due on July 31, 2002.
2.8 Interest on the Term Note. (a) Interest on the Term Note shall be
calculated, at the Borrower's option, in one or more of the following manners:
(i) a variable Interest Rate equal to the Adjusted Prime Rate or (ii) a fixed
Interest Rate to be determined as provided in Section 2.8(b).
(b) At any time, commencing 30 days prior to the Conversion Date for
the Term Loan and continuing during the term of the Term Loan, the Borrower may,
by written notice to the Bank, request no later than 10:00 a.m. New York time on
a Business Day (the "Rate Determination Day") that the Bank provide a quotation
for a fixed interest rate to apply to the Term Loan for the remainder of its
term. The Bank shall, by 12:00 p.m. New York time on the Rate Determination Day,
advise the Borrower by telephone notice of the proposed Term Loan fixed rate,
which shall be the Cost of Funds for the remaining term of the Term Loan plus
three and one quarter percent (3.25%) per annum. The Borrower shall accept or
reject the proposed rate by telephone notice to the Bank no later than 3:00 p.m.
New York time on the Rate Determination Day. If the Borrower accepts such rate,
then commencing on the first Business Day following the Rate Determination Day,
the Term Loan shall bear interest at such agreed rate, provided, that in no
event shall such rate take effect during a LIBOR Interest Period. If the
Borrower rejects the quoted rate or fails to accept such rate within such time
period, then, unless the Borrower and the Bank otherwise agree or the Borrower
makes an additional request for a quotation for a fixed interest rate pursuant
to this Section 2.8(b), the Term Loan shall continue to
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bear interest at a variable rate determined in accordance with clause 2.8(a)(i)
above. The Borrower may request a fixed rate quotation with respect to the Term
Loan no more frequently than once every six (6) months; provided, that once a
fixed rate has been accepted, such rate shall apply to the remainder of the term
of the Term Loan.
2.9 Prepayment.
(a) Voluntary. The Borrower may prepay any Loan bearing a variable
rate of interest in whole or in part without premium or penalty; provided,
however, that (i) in the event of any prepayment of a LIBOR Loan, the Borrower
will be required to indemnify the Bank to the extent set forth in Sections 2.11
and 2.12, and (ii) in the event of any prepayment of the Term Loan, the Bank
shall have received not less than five (5) Business Days' irrevocable notice of
the intended prepayment. The Borrower may prepay the Term Loan bearing a fixed
rate of interest; provided, that, such prepayment shall be accompanied by
payment of such amounts as the Bank shall determine in its sole discretion
pursuant to Section 2.12. All prepayments shall be accompanied by payment of
accrued interest on the amount being prepaid through the date of prepayment. Any
amount prepaid on account of a Revolving Loan may be reborrowed in accordance
with and subject to the provisions of Section 2.1. Any partial prepayment of the
Term Loan shall be applied to the last maturing installments in inverse order of
its respective maturities. Except as set forth in the preceding sentence, no
partial prepayment of the Term Loan shall affect the regular installments of
principal and interest due thereunder.
(b) Mandatory. (i) The entire outstanding principal amount of the
Loans, together with any accrued and unpaid interest, shall be due and payable
without further notice or demand upon the consummation of any Offering or Sale.
(ii) No later than 120 days after the end of each fiscal year
of the Borrower, the Borrower shall make a mandatory prepayment, to be applied
against the outstanding principal balance of the Loans, in an amount equal to
twenty-five percent (25.0%) of the amount by which (A) the sum of(i) the
Adjusted Net Income for such year, plus (ii) all non-cash items of the Borrower
and its Subsidiaries on a consolidated basis for such year; less (B) Capital
Expenditures actually paid by the Borrower during such year from any source
other than directly or indirectly by borrowings hereunder, exceeds $3,500,000.
Such payments shall be applied first against the Revolving Loan, next against
the outstanding Term Loan.
2.10 Interest Payments: Default Rate: Manner of Payments.
(a) Interest accrued on each Loan shall be due and payable, without
duplication, at the following times:
(i) with respect to Advances under the Revolving Loan, and
subject to the provisions of Section 2.4, in arrears commencing on the first day
of the first month following such Advance and on the first day of each and every
month thereafter up to and
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including the first to occur of (A) the final Conversion Date, or (B) repayment
in full of all Advances and interest thereon;
(ii) with respect to the Term Loan, in arrears commencing on
the first day of the first month following the Conversion Date of the Term Loan
and on the first day of each and every month thereafter up to and including the
final Maturity Date of the Term Loan; and
(iii) with respect to any portion of any Loan repaid or
prepaid pursuant to this Agreement (other than prepayments pursuant to Section
2.9(b)(iii)), on the date of such repayment or prepayment, as the case may be.
(b) All interest hereunder shall be computed on a 360-day year
calculated on the actual number of days elapsed (365/360) on the outstanding
principal amount of such Loan determined at the close of each day.
(c) If any payment of principal or interest becomes due on a day on
which banks in the City, County and State of New York are required or permitted
by law to remain closed, such payment shall be made on the next succeeding
Business Day and, to the extent permitted by applicable law, interest thereon
shall be payable at the then applicable rate during such extension; provided,
however, that if the result of any such extension would be to extend the date of
the maturity of any LIBOR Loan into another calendar month, the payment shall be
made on the immediately preceding Business Day. No LIBOR Interest Period may
expire after the Conversion Date with respect to the related Advance.
(d) Subject to Section 2.15, all payments (including prepayments) to
be made by the Borrower on account of principal or interest with respect to any
Loan or on account of fees or any other obligations of the Borrower to the Bank
hereunder shall be made to the Bank by automatic deductions from an account of
the Borrower established at the Bank no later than the date of the initial
Advance (and the Borrower hereby authorizes and directs the Bank to charge any
such account of the Borrower for any such payments) or, if directed by the Bank,
by the wiring of immediately available Federal Funds to the Bank, into such
account or accounts as the Bank may designate.
(e) Any payment, whether of principal, interest, fees, expenses or
otherwise, due from the Borrower to the Bank under this Agreement or any other
Loan Document, shall, if not received by the tenth day after the due date
therefor, include a late charge of two percent (2%) of the amount not paid. In
addition, if all or a portion of the principal or interest of any Loan shall not
be received within ten (10) days after the due date therefor (whether at the
stated or any accelerated maturity of such Loan) or if any fee or other amount
due hereunder shall not be paid when due, or upon the occurrence of any other
Event of Default, then all Loans, and all installments of interest, fees,
expenses or other amounts then due or thereafter coming due hereunder, to the
extent permitted by applicable law, shall bear interest (payable on
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demand, and in any event on the last day of each month, and computed daily on
the basis of a 360-day year for actual days elapsed) at the Post Default Rate
until the earlier to occur of (i) the date such amount is paid, and (ii) if the
Post Default Rate has become payable solely as a result of an Event of Default
(a "Stepdown Default") other than a payment default or a default under Section
8(f), the date such Stepdown Default has been cured. In no event, however, shall
interest payable hereunder be in excess of the maximum rate of interest
permitted under applicable law. The obligation to so pay any interest and/or
late charges shall not be construed so as to waive the requirement for payment
on the same date that payment is to be made to the Bank as set forth in this
Agreement, nor shall acceptance of payment of such sums be deemed a waiver of
any Default or Event of Default.
2.11 Additional Provisions regarding LIBOR Loans. Notwithstanding anything
contained herein to the contrary, if the Bank determines, in its reasonable
discretion, that it is unable for any reason to quote or determine a rate based
upon a LIBOR Rate, the Borrower shall not be entitled to elect an Adjusted LIBOR
Rate until such time as the Bank shall quote or determine such rates.
Subject to the preceding paragraph, at any time that the Borrower elects
an Adjusted LIBOR Rate as the interest rate to be paid with respect to any Loan,
that election shall be irrevocable and the Bank's record of such election of the
Adjusted LIBOR Rate and/or of the associated LIBOR Interest Period shall be
conclusive upon the Borrower.
If the Borrower has not timely and effectively elected an Adjusted LIBOR
Rate as the Interest Rate to be paid by it with respect to any Loan, then the
Interest Rate shall be the Adjusted Prime Rate until such an election is made.
Notwithstanding anything contained herein to the contrary, if the Bank
shall have determined (which determination shall be conclusive and binding upon
the Borrower) that:
(y) the LIBOR Rate does not accurately reflect the cost to the Bank
of making or maintaining a LIBOR Loan, and/or
(z) if by reason of circumstances affecting the interbank market,
funds are not available to the Bank to make or maintain loans hereunder
based upon the LIBOR Rate or that adequate and reasonable means do not
exist for ascertaining the LIBOR Rate with respect to a proposed LIBOR
Loan,
then the Bank shall give notice of such inability and/or determination to the
Borrower at least one day prior to the first day of the proposed LIBOR Interest
Period. If such notice is given, until such notice has been withdrawn by the
Bank, no further LIBOR Loans shall be made. The Borrower, in such event, shall,
at the Borrower's option, on the last day of any LIBOR Interest Period either
prepay such LIBOR Loan or convert such LIBOR Loan into a Prime Loan.
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If during the term of any LIBOR Loan there occurs a change in law or
regulation or in the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof, and such change has
made it unlawful for the Bank to make a LIBOR Loan or to maintain any
then-extant LIBOR Loan, then the right of the Borrower to request a LIBOR Loan
shall be suspended and, as to any then-extant LIBOR Loan, the Borrower shall,
upon demand from the Bank, either prepay such LIBOR Loan or convert such LIBOR
Loan to a Prime Loan, as elected by the Borrower and will reimburse the Bank for
any losses sustained or costs incurred as provided in the prepayment indemnity
provisions set forth below, unless the Borrower may lawfully continue to
maintain the Loan (or any portion thereof) then bearing interest at the Adjusted
LIBOR Rate to the end of the current interest period at which time the interest
rate shall convert to the Adjusted Prime Rate.
Immediately upon the termination of the condition which led to the
suspension of the right of the Borrower to elect a LIBOR Rate, the Bank will so
notify the Borrower and the right to such election shall be reinstated.
In the event that any time or from time to time any domestic or foreign
requirement of law, regulation, order or decree or any change therein or in the
interpretation or application thereof or compliance by the Bank with any request
or directive (whether or not having the force of law) from any central bank or
monetary authority or other governmental authority:
(a) does or shall impose, modify or hold applicable or change any
reserve (including, without limitation, basic, supplemental, marginal and
emergency reserves), special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by (including, without limitation, all
eurocurrency funding by and all "Eurocurrency liabilities" as defined in
Regulation D of the Board of Governors of the Federal Reserve System of),
any office of the Bank; or
(b) does or shall impose on the Bank any other condition, or change
therein;
and the Bank determines that the result of any of the foregoing (a) and (b) is
to increase the cost to the Bank of utilizing a LIBOR Interest Period hereunder,
or to reduce the amount of any payment (whether of principal, interest or
otherwise) receivable by the Bank pursuant to a Note or to require the Bank to
make any payment on or calculated by reference to the gross amount of any sum
received by it pursuant to a Note, then the Bank shall promptly give notice to
the Borrower of such event and determination and in any such case the Borrower
shall pay to the Bank, on demand, from time to time as specified by the Bank,
such additional amount or amounts as will compensate and indemnify the Bank for
such additional cost, reduction or payment. A certificate of the Bank as to the
additional amounts payable pursuant to this paragraph delivered to the Borrower,
shall be final, conclusive and binding on the Borrower absent manifest error, if
made reasonably and in good faith. In such event, at the option of the
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Borrower and upon ten (10) Business Days' prior notice given by the Borrower to
the Bank, the obligation of the Bank to make LIBOR Loans hereunder shall
forthwith terminate and LIBOR Loans then outstanding, if any, shall be prepaid
or converted into a Prime Loan subject to subparagraphs (a) and (b) of the
prepayment indemnity provisions set forth below. The protection of this
paragraph shall be available to the Bank regardless of any possible contention
of invalidity or inapplicability of the law, regulation or condition which has
been imposed.
2.12 Indemnities. The Borrower hereby indemnifies and agrees to hold
harmless the Bank and its officers, directors, employees and agents against and
from any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including reasonable attorneys' fees and expenses)
which may be instituted or asserted against or incurred by such indemnified
Person arising out of, in any way connected with, or as a consequence of any of
the following:
(a) the use of any proceeds of any of the Loans; or
(b) this Agreement, any of the other Loan Documents, the performance
by the parties hereto and thereto of their respective obligations hereunder and
thereunder, and consummation of the transactions contemplated hereby and
thereby; or
(c) default in payment of the principal amount of any Loan or any
part thereof or interest accrued thereon, or any other amount due in connection
with any of the Loan Documents; or
(d) the occurrence of any other Default or Event of Default under
this Agreement; or
(e) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not such indemnified Person is a party thereto;
or
(f) the failure of the Borrower to borrow a LIBOR Loan after
agreement shall have been reached on the amount, interest rate, and the Interest
Period thereof; or
(g) the receipt or recovery by the Bank, whether by voluntary
prepayment, acceleration or otherwise, of all or any part of a LIBOR Loan or a
Fixed Rate Loan prior to the last day of an Interest Period or Maturity Date, as
the case may be, applicable thereto; or
(h) the conversion, prior to the last day of an applicable Interest
Period, of a LIBOR Loan to a Prime Loan or a Fixed Rate Loan.
Without limiting the effect of the foregoing, the amount to be paid by the
Borrower to the Bank in order to indemnify the Bank for any loss occasioned by
any of the events described in the preceding clauses (f), (g) and (h), and as
liquidated damages therefor (and regardless of whether same are reasonable),
shall be equal to the excess, discounted to its present value as of
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the date so received or recovered by the Bank, of (i) the amount of interest
which otherwise would have accrued on the principal amount so received or
recovered at the rate of interest applicable to the principal amount of the Loan
(prior to default) during the period (the "Indemnity Period") which shall
commence on the date of such receipt or recovery (the "Commencement Date"), and
shall end, as to the whole or each part of the principal amount so received or
recovered, on the date or dates determined by applying such amount to the last
maturing installments thereof in inverse order of their respective maturities
over (ii) the amount of interest which would be earned by the Bank during the
Indemnity Period if it invested the whole or each part of the principal amount
so received or recovered (as the case may be) on the Commencement Date at the
rate per annum determined by the Bank as the rate it would bid in the London
interbank market for a deposit of Eurodollars in an amount approximately equal
to such principal amount (or part thereof) for a period of time comparable to
the Indemnity Period.
A certificate as to any additional amounts payable pursuant to this
Section setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank or such
other indemnified Person set forth therein if made reasonably and in good faith.
The Borrower shall pay any amounts so certified to it by the Bank or such other
indemnified Person within ten (10) days of receipt of any such certificate. The
provisions of this Section 2.12 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any or
all of the Obligations, the invalidity or unenforceability of any term of this
Agreement or any of the other Loan Documents, or any investigation made by or on
behalf of the Bank or any other indemnified Person.
2.13 Increased Costs. If the Bank determines that the effect of any
applicable law or government regulation, guideline or order or the
interpretation thereof by any Governmental Authority charged with the
administration thereof (such as, for example, a change in official reserve
requirements which the Bank is required to maintain in respect of loans or
deposits or other funds procured for funding such loans) is to increase the cost
to the Bank of making or continuing any of the Loans hereunder or to reduce the
amount of any payment of principal or interest receivable by the Bank thereon,
then the Borrower will pay to the Bank on demand such additional amounts as the
Bank may determine to be required to compensate the Bank for such additional
costs or reduction. Any additional payment under this Section will be computed
from the effective date at which such additional costs have to be borne by the
Bank. A certificate as to any additional amounts payable pursuant to this
Section setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank set forth
therein if made reasonably and in good faith. The Borrower shall pay any amounts
so certified to them by the Bank within ten (10) days of receipt of any such
certificate.
2.14 [INTENTIONALLY OMITTED]
2.15 Taxes. (i) Subject to the other provisions of this Section 2.15 and
Sections 9.16 and 9.17, any and all payments by the Borrower under this
Agreement and any other Loan
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Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
imposed on (or measured by) the net income, total receipts, or capital of the
Bank and franchise taxes imposed on the Bank; and (ii) all taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect
thereto imposed on the Bank by the United States by means of withholding taxes
if and to the extent that such withholding taxes (x) shall be in effect and
shall be applicable under applicable laws and regulations (including judicial
and administrative interpretations thereof) to the Bank on the Closing Date, or
on the effective date of an assignment in the case of an assignee, or, if such
withholding taxes result therefrom, changes any other office from which the Bank
makes or maintains any other extension of credit under this Agreement, or (y)
result from the failure of the Bank to comply with Section 2.15(e) or (f) (all
such nonexcluded 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 to the Bank, (i) the sum payable shall be increased by the amount
necessary so that after making all required deduction (including deductions
applicable to additional sums payable under this Section 2.15), the Bank shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(a) Notwithstanding anything to the contrary set forth herein, the
Borrower agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document ("Other
Taxes").
(b) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to the Bank, the
Borrower will furnish to the Bank, at its address referred to in Section 9.1,
the original or a certified copy of a receipt or other evidence reasonably
satisfactory to the Bank.
(c) If the Bank shall receive a credit or refund from a taxing
authority with respect to, and actually resulting from, an amount of Taxes or
Other Taxes actually paid to or on behalf of the Bank, by the Borrower (a "Tax
Credit"), the Bank shall promptly notify the Borrower of such Tax Credit. If in
the reasonable opinion of the Borrower, any amount has been paid to or on behalf
of the Bank pursuant to subsection (a) or (b) of this Section with respect to
Taxes or Other Taxes which are not correctly or legally asserted, the Bank will
cooperate with the Borrower (such cooperation to be without expense or liability
to the Bank) in seeking to obtain a refund of such amount. If such Tax Credit is
received by the Bank, in the form of cash, the Bank shall as soon as practicable
pay to the Borrower the amount so received with respect to the Tax Credit. If
such Tax Credit is not received by the Bank in the form of cash, the Bank shall
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pay the Borrower an amount equal to the amount of such Tax Credit not later than
the time prescribed by applicable law for filing the return (including
extensions of time) for the Bank's taxable period which includes the period in
which the Bank receives the economic benefit of such Tax Credit. In any event,
the amount of any Tax Credit payable by the Bank to the Borrower pursuant to
this subsection (d) shall not exceed the actual amount of cash refunded to, or
credits received and usable by, the Bank from a taxing authority. In determining
the amount of any Tax Credit, the Bank may use such apportionment and
attribution rules as the Bank customarily employs in allocating taxes among its
various operations and income sources and such determination shall be conclusive
absent manifest error. The Borrower further agrees promptly to return to the
Bank the amount paid to the Borrower with respect to a Tax Credit by the Bank if
such Bank is required to repay, or is determined to be ineligible for, a Tax
Credit for such amount.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreement and obligations of the Borrower contained in
this Section shall survive the payment in full of the obligations hereunder for
a period expiring concurrently with the expiration of the statute of limitations
applicable to claims made by the taxing authorities to collect Taxes or Other
Taxes.
(e) The Bank agrees that it will cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section; provided, however,
that the Bank shall not be obligated by reason of this subsection (g) to
disclose any information regarding its tax affairs or tax computations or to
reorder its tax or other affairs or tax or other planning or to take any action
which, in the sole judgment of the Bank, would result in any tax, cost or
expense to such Bank or would otherwise be disadvantageous to the Bank, or
relocate its office.
(f) Notwithstanding anything in this Agreement to the contrary, tax
matters shall be governed solely by this Section 2.15, Sections 9.16 and 9.17;
other sections, including Sections 2.11, 2.13 and 9.4, shall not apply to any
taxes.
2.16 Use of Proceeds. The proceeds of the Loans shall be used by the
Borrower to fund the Projects of the Borrower or its Subsidiaries and, subject
to the sublimit restrictions in Section 2.5, to meet working capital needs.
2.17 Letters of Credit. At the request of the Borrower and subject
to the Availability, during the Commitment Period, the Bank may issue for the
account of the Borrower one or more letters of credit (each a "Letter of
Credit") to secure lease obligations of the Borrower and its Subsidiaries. The
principal amount of any outstanding Letters of Credit shall reduce the
Availability pursuant to this Agreement, and any drawings under a Letter of
Credit shall be deemed to be an Advance under the Revolving Loan pursuant to
Sections 2.1 and 4.2. In addition to the fees set forth herein, the Borrower
agrees to pay a letter of credit fee to be determined by the Bank and any and
all usual and customary charges imposed by the Bank with respect to any such
Letters of Credit. Borrower further agrees to execute and deliver and to cause
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the Subsidiaries to execute and deliver any customer documentation reasonably
required by the Bank in connection with the issuance of any such Letter of
Credit. Notwithstanding the foregoing, in no event shall the expiration date of
any Letter of Credit be later than the last business day prior to the
Termination Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
In order to induce the Bank to enter into this Agreement and to make the
financial accommodations herein provided for, the Borrower hereby covenants,
represents and warrants to the Bank that:
3.1 Financial Condition. The Borrower has previously furnished to the Bank
true and complete copies of the combined balance sheets as at December 30, 1996
and December 29, 1997 and the related combined statements of income and owners'
equity for the fifty-two-week period ended December 30, 1996 and December 29,
1997, respectively, of the Borrower and its Subsidiaries, certified, with
respect to the December 30, 1996 financial statements, by Xxxxxxxxx Xxxxx
Xxxxxxx & Company, P.C., and with respect to the December 29, 1997 financial
statements, a draft has been provided by an independent accounting firm
acceptable to the Bank. The Borrower also has furnished to the Bank certain
unaudited financial statements of the Borrower as follows: a consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as of June 30,
1998, and consolidated and consolidating statements of operations of the
Borrower and its Subsidiaries for the six month period then ended (collectively,
the "June Financial Statements"). Except as set forth in Schedule 3.1(A), the
June Financial Statements fairly present in all material respects, in accordance
with GAAP, the financial position and results of operations of the Borrower and
its Subsidiaries as of the date and for the fiscal period shown therein on a
basis consistent with prior periods, subject to year-end audit adjustments.
Except as provided in Schedule 3.1(A) and the other Schedules to this Agreement,
none of the Borrower or its Subsidiaries have any material contingent
obligations, contingent liabilities or liabilities for taxes, long-term leases
or unusual forward or long-term commitments, which are not reflected in the
foregoing statements or in the notes thereto. Since the date of the
aforementioned financial statements, there has been no material adverse change
in the business, operations, assets or financial or other condition of the
Borrower and its Subsidiaries, considered as a whole, except as disclosed in
Schedule 3.1(B) attached hereto.
3.2 Due Existence and Authority; Compliance with Law. The Borrower and its
Subsidiaries (other than any Designated Subsidiary) (a) are duly organized,
validly existing and in good standing under the laws of the jurisdiction of
their formation, (b) have the power and authority and the legal right to own and
operate their property, and to conduct the business in which they are currently
engaged, (c) are duly qualified as a foreign entity and in good standing under
the laws of each jurisdiction where their ownership or operation of property or
the conduct of their business require such qualification, and (d) are in
compliance with all Requirements of Law, except to the extent that the failure
to so qualify as a foreign entity as required by clause (c) of this Section or
to comply with all Requirements of Law as required by clause (d) of this
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Section could not, in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property or financial or other
condition of the Borrower or its Subsidiaries (other than any Designated
Subsidiary), considered individually and as a whole, and could not materially
adversely affect the ability of the Borrower or any of its Subsidiaries to
perform their obligations under this Agreement or any of the other Loan
Documents.
3.3 Power and Authority; Authorization; Enforceable Obligations. The
Borrower and its Subsidiaries have the power and authority and the legal right
to make, execute, deliver and perform their obligations under this Agreement and
the other Loan Documents to which they are a party, and to borrow hereunder, and
have taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the other Loan Documents to which they are a
party, and to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents to which they are a party. No consent or
authorization of, filing with, or other act by or in respect of any other Person
(including stockholders and creditors of the Borrower or any of its
Subsidiaries) or any Governmental Authority is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents. This
Agreement and the other Loan Documents will be duly executed and delivered on
behalf of the Borrower and each of its Subsidiaries which is a party thereto,
and this Agreement and the other Loan Documents, when executed and delivered,
will each constitute the legal, valid and binding obligations of the Borrower
and each of its Subsidiaries which is a party thereto, enforceable against the
Borrower and its Subsidiaries in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
3.4 Legal Bar. The execution, delivery and performance of this Agreement
and the other Loan Documents, and the borrowings hereunder and the use of the
proceeds thereof by the Borrower or its Subsidiaries, will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries, and will not result in, or require, the creation or imposition of
any Lien on any properties or revenues of the Borrower or any of its
Subsidiaries pursuant to any Requirement of Law or Contractual Obligation,
except those in favor of the Bank provided herein.
3.5 No Material Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending by or against the
Borrower or any of its Subsidiaries (other than any Designated Subsidiary) or
against any of their respective properties or revenues (a) with respect to this
Agreement, any of the other Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which, if adversely determined, would
have a material adverse effect on the business, operations, property or
financial or other condition of the Borrower or its Subsidiaries (other than any
Designated Subsidiary), considered individually and as a whole.
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3.6 No Default. Neither the Borrower nor any of its Subsidiaries (other
than any Designated Subsidiary) is in default under or with respect to any
Contractual Obligation in any respect which could reasonably be expected to be
materially adverse to the business, operations, property or financial or other
condition of the Borrower or its Subsidiaries (other than any Designated
Subsidiary), considered individually and as a whole, or which could materially
and adversely affect the ability of the Borrower or its Subsidiaries to perform
their respective obligations under this Agreement or any of the other Loan
Documents. No Default or Event of Default has occurred and is continuing.
3.7 No Burdensome Restrictions. No Contractual Obligation of the Borrower
or any of its Subsidiaries (other than any Designated Subsidiary) and no
Requirement of Law materially adversely affects, or insofar as the Borrower may
reasonably foresee could reasonably be expected to materially adversely affect,
the business, operations, property or financial or other condition of the
Borrower or its Subsidiaries (other than any Designated Subsidiary), considered
individually and as a whole.
3.8 Taxes. The Borrower and its Subsidiaries have filed or caused to be
filed all tax returns which, to the knowledge of the Borrower and its
Subsidiaries, are required to be filed by the Borrower or any of its
Subsidiaries, and have paid all taxes shown to be due and payable by the
Borrower or any of its Subsidiaries on said returns or on any assessments made
against them or any of their property, except for Disputed Taxes.
3.9 Federal Regulations. Neither the Borrower nor any of its Subsidiaries
is engaged nor will they engage, principally or as one of their important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (as such terms are defined in Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect). No part of the proceeds of any Loans hereunder will
be used for "purchasing" or "carrying" "margin stock" (as so defined) or for any
purpose which violates the provisions of the Regulations of such Board of
Governors.
3.10 Liens on Properties. There are no Liens of any nature whatsoever on
any Real Property, property or asset of the Borrower or any of its Subsidiaries,
except for Liens in favor of the Bank or Permitted Liens. The Borrower is not a
party to any contract, agreement, lease or instrument (other than this Agreement
and the other Loan Documents) the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of any
Lien on the property or assets of the Borrower or any of its Subsidiaries or
otherwise result in a violation of any Loan Document, except for Permitted
Liens.
3.11 Security Interest. Upon execution and delivery of the Security
Agreement and filing of the Forms UCC-1 and compliance with the provisions of
the Security Agreement, the Security Agreement will have created in favor of the
Bank a valid and perfected, first priority security interest in that portion of
the Collateral which is of a type in which a security interest is perfected by
filing of a financing statement under the UCC.
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3.12 Ownership, Leasehold Interests and Liens. The Borrower and/or its
Subsidiaries has good, marketable and insurable fee simple title (or good,
marketable and insurable leasehold interest in the case of any leasehold
properties), and good title (or valid leasehold interests in the case of any
leasehold properties) in all of the Real Property, and none of such Real
Properties is subject to any Lien, except for Permitted Liens.
3.13 Information. No report (if prepared by the Borrower, any of its
Affiliates, or, if not prepared by the Borrower or its Affiliates, to the extent
that information contained therein was supplied by the Borrower or any of its
Affiliates), information, exhibit, any financial statement, document, book or
record furnished or to be furnished by the Borrower or any of its Affiliates
(other than projections as set forth below) to the Bank pursuant to the
Commitment Letter, this Agreement or any other Loan Document is inaccurate in
any material respect as of the date it is or will be dated or (except as
otherwise disclosed to the Bank, as the case may be, at such time) as of the
date so furnished, contains any material misstatement of fact, or omits to state
a material fact or any fact necessary to make the statements contained therein
not materially misleading in the light of the circumstances under which they
were made, in each case, considered in light of all of the information furnished
to the Bank at or prior to such time. Any financial projections furnished to the
Bank are, or will have been, based on good faith projections of, and assumptions
believed to be reasonable by, the management of the Borrower as of the date such
statements were prepared.
3.14 Tradenames. The Borrower has no tradenames, fictitious names, assumed
names or "doing business as" names, except as set forth on Schedule 3.13.
3.15 Solvency. Both before and after giving effect to the transactions
contemplated by this Agreement: (i) the Borrower will not have an unreasonably
small amount of capital for the operation of the business in which it is engaged
and is proposed to be engaged, and (ii) the Borrower anticipates that it will be
able to pay its Indebtedness as it or any part thereof becomes due.
3.16 Brokers. No broker or finder has acted on behalf of the Borrower or
its Subsidiaries to obtain, make or close the Commitment Letter, this Agreement
or any of the Loans, and the Borrower has no obligations to any Person in
respect of any finder's or brokerage fees or commissions in connection with any
of the foregoing. The Borrower and its Subsidiaries indemnify and agree to hold
harmless the Bank against and from any and all claims by any Person for any such
fees or commissions.
3.17 Management Agreements. Neither the Borrower nor any of its
Subsidiaries is a party to any management, consulting or similar agreement with
any other Person with respect to the business, operations or other assets of the
Borrower or any of its Subsidiaries, except for the management agreements listed
on Schedule 3.16.
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3.18 Consents of Restaurant Owners. The Borrower shall seek, with respect
to those management agreements noted on Schedule 3.16 which require the consent
of the respective restaurant owner, the consent of such restaurant owners to the
assignment to the Bank of the Borrower's and its Subsidiaries' right, title and
interest under such management agreements.
3.19 Leases. Neither the Borrower nor any of its Subsidiaries is a party
to any real property leases, except for the leases listed on Schedule 3.18.
3.20 Environmental Compliance. The Borrower or an affiliate or agent
thereof has conducted or caused to be conducted Phase I environmental site
assessments with respect to the past usage and condition of the Mortgaged
Property and the operations conducted thereon, and is familiar with the present
condition and usage of the Mortgaged Property and the operations conducted
thereon and, based upon such reports and knowledge, makes the following
representations and warranties:
(a) With respect to the Mortgaged Property, none of the Borrower, or
any operator of the Mortgaged Property, or any operations thereon is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including, without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to the environment (hereinafter
"Environmental Laws"), which violation involves the Mortgaged Property, and
would have a material adverse effect on the environment or the business, assets
or financial condition of any such Person.
(b) The Borrower has not received any notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part 000
Xxxxxxxx X (1986); (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.9601(5), any hazardous substances as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that such Person conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
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(c) With respect to the Mortgaged Property, except as specifically
set forth in the environmental site assessment reports for the Mortgaged
Property, each of which has been provided to the Bank on or before the date
hereof: (i) no portion of the Mortgaged Property has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws, and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Mortgaged Property; (ii) in the course of any activities conducted by the
Borrower or the operators of its properties, no Hazardous Substances have been
generated or are being used on the Mortgaged Property except in the ordinary
course of business and in accordance with applicable Environmental Laws; (iii)
there has been no past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Substances on, upon,
into or from the Mortgaged Property, or, to the best of the Borrower's
knowledge, on, upon, into or from the other properties of Borrower, which
Release would have a material adverse effect on the value of any of the
Mortgaged Property or adjacent properties or the environment; (iv) to the best
of the Borrower's knowledge, there have been no Releases on, upon, from or into
any real property in the vicinity of any of the Mortgaged Property which,
through soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, the Mortgaged
Property; and (v) to the best of Borrower's knowledge and belief, any Hazardous
Substances that have been generated on any of the Mortgaged Property have been
transported off-site only by carriers having an identification number issued by
the EPA or approved by a state or local environmental regulatory authority
having jurisdiction regarding the transportation of such substance and, to the
best knowledge of the Borrower without independent investigation, treated or
disposed of only by treatment or disposal facilities maintaining valid permits
as required under all applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrower's knowledge, operating
in compliance with such permits and applicable Environmental Laws.
(d) Neither the Borrower nor Mortgaged Property is required by any
applicable Environmental Law to perform Hazardous Substances site assessments,
or remove or remediate Hazardous Substances, or give notice to any governmental
agency or to record or deliver to other Persons an environmental disclosure
document or statement by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the recording of the Mortgages or to
the effectiveness of any other transactions contemplated hereby.
3.21 No Material Adverse Change. Except as set forth on Schedule 3.20
since December 29, 1997, there has occurred no materially adverse change in the
financial condition or business of the Borrower and its Subsidiaries taken as a
whole, as shown on or reflected in the balance sheet of the Borrower and its
Subsidiaries, as of December 29, 1997, or its consolidated statement of
operations or cash flows for the fiscal year then ended, other than changes in
the ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Borrower or its Subsidiaries taken as a whole.
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3.22 No Default under Revolving Loan. There has been no payment default by
the Borrower or any Subsidiary under the Revolving Loan.
3.23 Leases. The Borrower has delivered to the Bank true copies of the
Leases and any amendments thereto relating to the Mortgaged Property.
3.24 Year 2000 Compliance. (a) All of the Internal MIS Systems of the
Borrower and its Subsidiaries will be Year 2000 Compliant on or before June 30,
1999.
(b)(i) To the Borrower's knowledge, all vendors of products or
services to the Borrower, its Subsidiaries and their respective products,
services and operations, are Year 2000 Compliant, except for vendors whose
failure to be Year 2000 Compliant would not have a material adverse effect on
the business, operations, property or financial or other condition of the
Borrower or its Subsidiaries ("Immaterial Vendors"). To the knowledge of
Borrower after a reasonably diligent investigation, each such vendor will
continue to furnish its products or services to the Borrower, without
interruption or material delay, on and after January 1, 2000.
(ii) The Borrower and its Subsidiaries agree to enter into
appropriate agreements with each of their vendors (other than Immaterial
Vendors) certifying that all hardware, software or firmware, and any other
products and services furnished by such vendor, including any and all
enhancements, upgrades, customization, modifications, maintenance and the like
are Year 2000 Compliant. All such vendor agreements shall include appropriate
indemnification by the vendor or its products, services or operations fail to be
Year 2000 Compliant or if the products, services or operations fail to conform
to or meet the terms of the vendor warranties, representations or other
contractual terms.
(d) Borrower and its Subsidiaries agree to furnish the Bank with a
true, correct and complete copy of any internal investigations, memoranda,
budget plans, forecasts or reports concerning the Year 2000 Compliance of the
products, services, operations, systems, supplies and facilities of the
Borrower, its Subsidiaries and their vendors.
(e) For purposes of this Section 3.24, the following terms shall
have the meanings specified below:
"Internal MIS Systems" means any computer software and systems (including
hardware, firmware, operating system software, utilities and applications
software) used in the ordinary course of the business of the Borrower and
its Subsidiaries by or on behalf of the Borrower and its Subsidiaries,
including payroll, accounting, billing/receivables, inventory, asset
tracking, customer service, human resources and e-mail systems of the
Borrower and its Subsidiaries.
"Year 2000 Compliant" means that (1) the products, services or other
item(s) at issue accurately process, provide and/or receive all date/time
data (including calculating,
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comparing, sequencing, processing and outputting) within, from, into and
between centuries (including leap year calculations), and (2) neither the
performance nor the functionality nor the provision by the Borrower and
its Subsidiaries of products, services and other item(s) will be affected
by any dates/times prior to, on, after or spanning January 1, 2000. The
design of the products, services and other item(s) at issue to ensure
compliance with the foregoing warranties and representations includes
proper date/time data century recognition and recognition of 1999 and
2000, calculations that accommodate single century and multi-century
formulae and date/time values before, on, after and spanning January 1,
2000, and date/time data interface values that reflect the century, 1999
and 2000. In particular, but without limitation, (i) no value for current
date/time will cause any error, interruption, or decreased performance in
or for such product(s), service(s) and other item(s), (ii) all
manipulations of date and time related data (including calculating,
comparing, sequencing, processing and outputting) will produce correct
results for all valid dates and times when used independently or in
combination with other products, services, and/or items, (iii) date/time
elements in interfaces and data storage will specify the century to
eliminate date ambiguity without human intervention, including leap year
calculations, (iv) where any date/time element is represented without a
century, the correct century will be unambiguous for all manipulations
involving that element, (v) authorization codes, passwords and zaps (purge
functions) will function normally and in the same manner during, prior to,
on and after January 1, 2000, including the manner in which they function
with respect to expiration dates and CPU serial numbers, and (vi) the
Borrower's supply of the product(s), service(s) and other item(s) will not
be interrupted, delayed, decreased or otherwise affected by the advent of
the year 2000.
SECTION 4. CONDITIONS PRECEDENT.
4.1 Conditions to Initial Advance. The obligation of the Bank to make the
initial Advance to the Borrower hereunder is subject to the satisfaction of the
following conditions precedent:
(a) Note. The Bank shall have received the Revolving Loan Note,
conforming to the requirements hereof and duly executed by the Borrower,
evidencing the Borrower's obligation to pay all Advances.
(b) Subsidiaries' Guaranty. The Bank shall have received the
Subsidiaries' Guaranty, duly executed by each of its Subsidiaries which is a
party thereto.
(c) Security Agreement. The Bank shall have received the Security
Agreement, duly executed by the Borrower and each of its Subsidiaries which is a
party thereto, together with UCC-1 financing statements executed by each such
entity in favor of the Bank and evidence satisfactory to the Bank and its
counsel of filing of such financing statements and perfection of the security
interests relating thereto.
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(d) Indemnity Agreement. The Bank shall have received the Indemnity
Agreement, duly executed, acknowledged and delivered by the Borrower and each of
its Subsidiaries which is a party thereto.
(e) Assignment of Insurance. The Bank shall have received a valid
and enforceable assignment of the life insurance policy described in Section
5.9.
(f) Legal Opinion. The Bank shall have received a favorable opinion
of counsel to the Borrower, in form and substance reasonably acceptable to the
Bank and its counsel, which form of opinion is attached hereto as Exhibit G.
(g) Certificates and Resolutions. The Bank shall have received (i)
copies of the resolutions of the manager of the Borrower and of the members or
other appropriate authority of its Subsidiaries authorizing the execution,
delivery and performance of this Agreement and the other Loan Documents,
certified by the Secretary or an Assistant Secretary of each such entity; and
(ii) a certificate of the Secretary or an Assistant Secretary of the Borrower
and its Subsidiaries certifying the names and true signatures of the officers
and authorized signatories of each such entity authorized to sign any and all
documents to be delivered by each such entity or as required or contemplated
hereunder.
(h) Commitment Letter. The Borrower shall have satisfied all the
terms and conditions of the Commitment Letter, and no default shall have
occurred thereunder, except as waived by the Bank.
(i) Assignments of Management Agreement. The Bank shall have
received confirmation that the assignment, duly executed by Restaurant Group
Management Services, L.L.C., of such Subsidiary's right, title and interest in
and to the Management Agreement, dated April 18, 1996, by and between 00 Xxxx
00xx Xxxxxx Corporation and Restaurant Group Management Services, L.L.C., is
still in full force and effect.
(j) Mortgages. The Bank shall have received evidence that the
Mortgages have been recorded, creating a valid first priority Lien on the Las
Vegas Property (the "Las Vegas Mortgage"), the New Orleans Property (the "New
Orleans Mortgage"), and the Washington Property (the "Washington Mortgage")
which Mortgages shall be in the form of Exhibit E (with such changes as are
necessary or appropriate so as to conform to the law and practice of the state
in which each Mortgaged Property is located).
(k) Environmental Reports. The Bank shall have received
environmental site assessment reports for the Mortgage Property prepared by the
Environmental Engineer, which indicate the condition of the Mortgaged Property
and such other properties and any buildings thereon and which set forth no
qualifications except those that are acceptable to the Bank in its sole
discretion, and disclosing that each piece of Mortgage Property and any building
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thereon is free of oil, underground storage, asbestos or asbestos-containing
material, lead paint and other Hazardous Substances (except to the extent
acceptable to the Bank in its sole discretion), and which reports are otherwise
in form and substance satisfactory to the Bank.
(l) Appraisals. The Bank shall have received Appraisals of the
Mortgaged Property in form and substance satisfactory to the Bank prior to the
date hereof.
(m) Building Permit. The Bank shall have received evidence
satisfactory to it, in its sole discretion, that the plans and specifications
for the Projects have been approved by all appropriate governmental entities,
and that Improvements, if constructed in accordance with the approved plans and
specifications, will comply with all applicable laws, including, without
limitation, all zoning laws and building codes, rules and regulations.
(n) Plans. The Bank shall have received the final plans and
specifications for the construction of the Improvements certified by the
Borrower's Construction Consultant and reviewed by an independent engineer
engaged by the Bank, which plans shall comply with all federal, state and local
governmental requirements.
(o) Estoppel Certificates. The Bank shall have received an estoppel
certificate in form and substance satisfactory to the Bank, in its sole
discretion, from the landlord under any lease entered into by the Borrower or
any Subsidiary in respect of the Las Vegas Property and the Washington Property.
(p) Operating Accounts. The Borrower shall have transferred to
accounts at the Bank all of its cash management, cash concentration and
operating accounts, except for such operating accounts as may be required to be
maintained by Borrower in jurisdictions where the Bank does not conduct banking
operations.
(q) Title Insurance. Borrower shall have delivered to the Bank a
title insurance policy or a title binder or a certificate of title of Title
Serv, as agent for a nationally recognized title insurance company, containing
the agreement of the Title Company to issue its policy of title insurance
insuring the lien of the Mortgage, which title insurance policy shall be in an
amount specified by the Banks and in no event less than the principal amount of
the Loan. The title insurance policy shall contain such endorsements and
affirmative insurance as the Banks may require, including, without limitation, a
revolving credit endorsement.
(r) Survey. Borrower shall have delivered to the Bank an ALTA/ACSM
survey for each Real Property showing a state of facts satisfactory to the Bank
in all respects.
(s) Construction Budgets. The Bank shall have received budgets that
shall set forth the aggregate amount of funds to be expended to make the
Improvements on the Projects, and which budgets are in form and substance
satisfactory to the Bank.
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(t) Certificates, Permits, etc. Borrower shall deliver to the Bank
copies of all necessary certificates, authorizations, permits and licenses
required to permit the construction, completion and contemplated use of the
applicable Mortgaged Property, as issued by the appropriate governmental
authorities (and, to the extent assignable, Borrower hereby assigns all such
certificates, authorizations, permits and licenses to the Bank as additional
security for the repayment of the Loans and the obligations of Borrower pursuant
to the Loan Documents).
(u) Assignment of Management Agreement. The Bank shall have received
an assignment, in form and substance acceptable to the Bank, duly executed by
Restaurant Group Management Services, L.L.C., of such Subsidiary's right, title
and interest in and to the Management Agreement, dated April 18, 1996, by and
Between 00 Xxxx 00xx Xxxxxx Corporation and Restaurant Group Management
Services, L.L.C.
(v) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Bank and its counsel.
4.2 Conditions to All Extensions of Credit. The obligation of the Bank to
make any Loan to be made by it hereunder or to convert any Advance to the Term
Loan is subject to the satisfaction of the following conditions precedent at the
time of such requested Advance or conversion:
(a) Representations and Warranties. The representations and
warranties made by the Borrower herein, in the other Loan Documents or which are
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith, shall be correct on and as of the
borrowing date for such extension of credit as if made on and as of such date,
except to the extent expressly made with respect to another date.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on the date an extension of credit is to
be made or after giving effect to the extension of credit to be made on such
date.
(c) Lien Waivers, etc. Borrower shall have delivered to Lender (i)
such waivers of lien from contractors, subcontractors and materialmen as may be
requested or required by the Bank, or as may be required by Title Serv, as agent
for a nationally recognized title insurance company, in order to induce Title
Serv, as agent for a nationally recognized title insurance company, to insure
each advance of the Loan against all mechanic's or materialmen's liens for labor
furnished and materials supplied, and (ii) a general contractor's and major
subcontractors' letter in form and substance satisfactory to Bank, providing
that such general contractor and/or major subcontractor will complete work in
connection with such Project in the event Borrower Defaults;
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(d) Title Continuation. Prior to each advance of a Loan, the Title
Company shall have issued a written continuation of title showing no exceptions
to title other than those exceptions previously approved by the Bank in writing;
(e) Evidence of Payment. Prior to each advance of a Loan, Borrower
shall, upon request of the Bank, furnish the Bank with evidence satisfactory to
the Bank showing payment of all bills and charges for which advances of a Loan
have been made pursuant to this Agreement.
(f) Compliance with Laws, Contracts. Borrower shall at all times be
in compliance with all applicable laws, rules, restrictions, orders and
regulations, and shall not be in default pursuant to any agreement in connection
with the Loan or any Project.
Each borrowing and requested borrowing by the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of each
such borrowing and requested borrowing that the conditions in clauses (a)
through (f) of this Section have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrower hereby agrees that, so long as any of the Obligations remain
outstanding and unpaid, or the Commitment remains in effect, the Borrower will:
5.1 Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders with respect to its business and
properties (including, without limitation, any fiscal and accounting rules and
regulations) and maintain all licenses, permits, charters and registrations
which are material to the conduct of its business.
5.2 Preservation of Existence. Observe in all material respects all
procedures required to preserve and maintain its legal existence, and all
rights, franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified to do business and in good standing in each
jurisdiction where the nature of its business requires it to do so, except where
the failure to be so qualified and in good standing would not have a material
adverse effect on the financial condition of the Borrower or its ability to
perform its obligations under this Agreement or any other Loan Document to which
it is a party.
5.3 Financial Information and Compliance Certificates.
(a) Keep their books of account in accordance with good accounting
practices and furnish to the Bank, within 120 days after the last day of each
fiscal year, consolidated balance sheets of the Borrower and its Subsidiaries as
at such last day of the fiscal year and statements of income and retained
earnings and cash flows for such fiscal year each prepared in accordance with
GAAP and certified by a firm of independent certified public accountants
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reasonably satisfactory to the Bank; and, within 45 days after the close of each
of the first three quarters of each fiscal year, consolidated and consolidating
balance sheets, statements of income and retained earnings and cash flows of the
Borrower and its Subsidiaries as of the last day of and for such quarter and for
the period of the fiscal year ended as of the close of the particular quarter,
all such quarterly statements to be in reasonable detail and certified by the
chief financial or accounting officer of the Borrower as having been prepared in
accordance with GAAP (subject to year-end adjustments). The Borrower will also
furnish, within forty-five days after the end of a calendar month, monthly
profit and loss statements of each existing and new restaurant owned or managed
by the Borrower or any of its Subsidiaries, internally prepared and certified by
the chief financial officer of the Borrower. The Borrower will, with reasonable
promptness, furnish such other data as may be reasonably requested by the Bank,
including, without limitation, copies of all material contracts and agreements,
and will at all times and from time to time permit the Bank by or through any of
its officers, agents, employees, attorneys or accountants to inspect and make
extracts from the books and records of the Borrower.
(b) At the same time as it delivers the financial statements called
for by Section 5.3(a), the Borrower shall deliver a certificate of the chief
executive officer and the chief financial or accounting officer of the Borrower
evidencing a computation of compliance with the provisions of Section 6 and
stating that in each case except as disclosed in such certificate, the person
making such certificate has no knowledge of any Default or Event of Default.
Together with their delivery of annual certified financial statements, the
Borrower's certified public accountants shall also deliver a certificate stating
that such accountants have no knowledge of any Default or Event of Default,
which shall be addressed to the Borrower and the Bank.
5.4 Defaults. Promptly notify the Bank of any Default or Event of Default,
setting forth the details of such Default or Event of Default and the actions
which the Borrower is taking or proposes to be taken with respect thereto.
5.5 Insurance. Maintain policies of hazard, general liability insurance,
business interruption insurance and other insurance as the Bank may reasonably
request (including, without limitation, the insurance more particularly
described in the Security Agreement) with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower operates and naming the Bank as
an additional insured and loss payee thereon as its interest may appear. All
such insurance shall be reasonably satisfactory to the Bank and its counsel as
to form, amount and insurer.
5.6 Preservation of Properties. Maintain and preserve all of their
respective properties which are used or which are useful in the conduct of their
respective businesses in good working order and condition, ordinary wear and
tear excepted.
5.7 Taxes. Duly pay and discharge all taxes or other claims which might
become a Lien upon any of their respective properties, except to the extent that
any thereof are being in
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good faith appropriately contested with adequate reserves provided therefor, and
so long as the failure to pay such taxes would not give rise to a Lien which is
not a Permitted Lien.
5.8 Notice of Litigation. Promptly notify the Bank of any litigation,
legal proceeding or dispute affecting the Borrower or any of its Subsidiaries
(other than (i) disputes in the ordinary course of business involving amounts
less than $100,000 or (ii) litigation arising in the ordinary course of business
which the Borrower reasonably believes to be covered by insurance and not
reasonably likely, even if adversely determined, to have a material adverse
effect on the Borrower or any Subsidiary (other than any Designated Subsidiary))
whether or not fully covered by insurance, and regardless of the subject matter
thereof (excluding, however, any actions relating to workers' compensation
claims or negligence claims relating to use of motor vehicles, if fully covered
by insurance, subject to deductibles).
5.9 Xxxx Xxxxxxxx. Employ and continue to employ Xxxx Xxxxxxxx as a key
officer of the Borrower and maintain in force a $5,000,000 life insurance policy
on the life of Xxxx Xxxxxxxx, which life insurance shall be assigned to the Bank
free and clear of any other liens, claims or assignments. Notwithstanding the
foregoing, in the event of the death or disability of Xxxx Xxxxxxxx, the
Borrower shall have 60 days in which to obtain the consent of the Bank to
replacement senior management reasonably satisfactory to the Bank.
5.10 Security Agreement and Projects. Cause each future Subsidiary of the
Borrower (other than a Designated Subsidiary) to execute and deliver a
counterpart of the Subsidiaries' Guaranty and the Security Agreement promptly
upon the formation of such Subsidiary and cause each contractor providing
services in connection with a Project to submit a contractor's final affidavit
upon the completion of the Improvements at a specific Project in form and
substance satisfactory to Bank.
5.11 New Restaurants. Each new restaurant established by Borrower or its
Subsidiaries shall have a positive monthly EBITDA for at least one full month no
later than the twelfth month after such new restaurant's opening, such positive
EBITDA to be demonstrated by the new restaurant's monthly profit and loss
statement provided to the Bank in accordance with Section 5.3 above.
SECTION 6. FINANCIAL COVENANTS.
6.1 Covenants. The Borrower hereby agrees that, so long as any of the
Obligations remain outstanding and unpaid, or the Commitment remains in effect
(whichever is later):
(a) Consolidated Fixed Charge Coverage Ratio. The Borrower and its
Subsidiaries on a consolidated basis will maintain a Consolidated Fixed Charge
Coverage Ratio, calculated on a rolling four-quarter basis, of not less than
1.25 to 1.0 from January 1, 1999 through September 30, 1999; and of 1.50 to 1.0
thereafter.
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(b) Consolidated EBITDA. The Consolidated EBITDA of the Borrower and
its Subsidiaries shall be not less than: a loss of ($12,000) for the third
fiscal quarter of 1998; $406,000 for the fourth fiscal quarter of 1998;
$2,063,000 for the first fiscal quarter of 1999; $2,336,000 for the second
fiscal quarter of 1999, $982,000 for the third fiscal quarter of 1999;
$4,303,000 for the fourth fiscal quarter of 1999, $2,991,000 for the first
fiscal quarter of 2000; $3,179,000 for the second fiscal quarter of 2000;
$2,079,000 for the third fiscal quarter of 2000; and $4,952,000 for the fourth
fiscal quarter of 2000.
6.2 Financial Covenants related to Affiliates. Manhattan Ocean Club
Associates, L.L.C., La Cite Associates, L.L.C. and Atlantic & Pacific Grill
Associates, L.L.C., on a combined basis, shall achieve and maintain a combined
EBITDA before management fees paid to the Borrower of at least $2,650,000 as of
December 31, 1997; $2,950,000 as of December 31, 1998; $3,070,000 as of December
31, 1999; provided, that such management fees are eliminated upon consolidation.
SECTION 7. NEGATIVE COVENANTS.
The Borrower hereby agrees that, so long as any of the Obligations remain
outstanding and unpaid, or the Commitment remains in effect, neither the
Borrower nor any Subsidiary will:
7.1 Indebtedness for Borrowed Money. Incur, or permit to exist, any
Indebtedness for borrowed money, except:
(a) Indebtedness incurred pursuant to borrowings hereunder and under
any other loans made by the Bank in its discretion to the Borrower;
(b) Indebtedness which existed on the date of this Agreement and is
set forth on Schedule 7.1(b);
(c) the letters of credit identified on Schedule 7.1(c) or any
replacement thereof, which secure lease obligations of the Borrower or any of
its Subsidiaries; and
(d) subordinated debt; provided, that, (i) immediately prior to and
after assuming such debt, the Borrower is in compliance with all of the
financial covenants set forth in Sections 6.1 and 6.2, and (ii) the Borrower is
not in default under this Agreement or any other Loan Document, and (iii) the
creditor of such debt agrees to subordinate its position pursuant to a
subordination agreement acceptable to the Bank;
provided, however, that in no event may the Borrower incur any Indebtedness
otherwise permitted under clause (c) above if such Indebtedness would cause the
Borrower to violate any other covenant herein and in no event shall the
aggregate amount of Indebtedness permitted under clause (c) above exceed
$10,000,000 (including the debt related to the contemplated Projects, each as
described on Schedule 1).
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7.2 Mergers and Sales of Assets. Enter into any merger or consolidation or
liquidate, wind up or dissolve the Borrower or any Subsidiary or sell, transfer
or lease or otherwise dispose of all or any substantial part of their respective
assets (other than sales of inventory and obsolete equipment in the ordinary
course of business) or acquire by purchase or otherwise the business or assets
of, or stock of, another business entity.
7.3 Loans; Investments. Lend or advance money, credit or property to or
invest in (by capital contribution, loan, purchase or otherwise) any firm,
corporation, or other Person, except (a) investments in United States Government
obligations, certificates of deposit or money market funds of any banking
institution with combined capital and surplus of at least $200,000,000, (b)
capital contributions or loans or advances to Subsidiaries, (c) reasonable loans
to any employee of the Borrower or its Subsidiaries not exceeding $75,000 per
employee and not exceeding in the aggregate $250,000 outstanding at any time,
and (d) reasonable and customary expense advances made to employees of the
Borrower and its Subsidiaries in the ordinary course of their business.
7.4 Liens. Except as specifically contemplated by the Loan Documents,
create, incur, assume or permit to exist any Lien (other than Permitted Liens)
which is prior to or equal in priority to the Liens created by the Loan
Documents on any property or assets (including stock or other securities of any
Person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof.
7.5 Contingent Liabilities. Assume, endorse, be or become liable for or
guarantee any obligation of (a) any Person which is not an Affiliate of the
Borrower and a member of the Borrower's consolidated group for financial
reporting purposes, excluding, however, the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, or (b)
an Affiliate of the Borrower which is a member of the Borrower's consolidated
group for financial reporting purposes, without the prior written consent of the
Bank, which consent will not be unreasonably withheld so long as such proposed
action would not (i) result in a violation by the Borrower of any financial
covenant set forth in this Agreement or any of the other Loan Documents, or (ii)
otherwise result in any Default or Event of Default. Notwithstanding the
foregoing, so long as such guarantee does not cause the Borrower to violate any
financial covenant contained in the Loan Documents, the Borrower or any of its
Subsidiaries may (i) guarantee the lease obligations of any of its wholly-owned
Subsidiaries in connection with the acquisition or development of a Project;
provided, that, any such lease is at a market rate rental and with a third-party
landlord or (ii) guarantee Indebtedness that is otherwise permissible under
Section 7.1(c) or (d).
7.6 Sales of Receivables; Sale - Leasebacks. Sell, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to the
Borrower, with or without recourse, except for the purpose of collection in the
ordinary course of business; or sell any asset pursuant to an arrangement to
thereafter lease such asset from the purchaser thereof.
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7.7 INTENTIONALLY OMITTED.
7.8 Nature of Business. Materially alter the nature of their business.
7.9 Accounting Changes. Make any change in their accounting treatment or
financial reporting practices, except as required or permitted by GAAP.
7.10 Transactions with Affiliates. Except as otherwise specifically set
forth in this Agreement, directly or indirectly purchase, acquire or lease any
property or assets from, or sell, transfer or lease any property or assets to,
or enter into any other transaction with, any Affiliate, except that as long as
no Event of Default shall have occurred and be continuing, the Borrower or any
Subsidiary may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
it than those which would have been obtained in an arm's-length transaction with
a non-affiliated third party.
7.11 Operating Loss. Suffer or permit any of its Subsidiaries to suffer
any aggregate operating loss for two consecutive fiscal quarters which exceeds
$400,000; provided, however, that (a) for purposes of determining whether the
Borrower and its Subsidiaries have suffered such a loss, any Project Costs
incurred by the Borrower or its Subsidiaries shall be excluded, (b) any non-cash
extraordinary or non-recurring charges (not to exceed $1,000,000 in the
aggregate) shall be excluded, and (c) the results of operations of any
Subsidiary established for purposes of opening a new restaurant shall be
excluded from any calculation related to compliance with this Section 7.11 for
any fiscal quarter which includes at least one full month of the first twelve
calendar months following the commencement of operations of the new restaurant
operated by such Subsidiary.
7.12 Dividends and Distributions. Declare or pay or cause its Subsidiaries
to declare or pay, directly or indirectly, any dividend or distribution to any
shareholder, member or partner, except that (a) with respect to any fiscal year
in which the Borrower is a limited liability company, the Borrower may declare
and pay dividends or distributions to its members in an amount equal to the
income tax liability the Borrower would have had for such year if the Borrower
were an individual subject to federal, State of New York and City of New York
income tax at the highest applicable marginal tax rate in effect in each such
jurisdiction for such year; and (b) direct and indirect wholly-owned and
consolidated Subsidiaries of the Borrower may declare and pay dividends and
distributions to their respective shareholders, partners or members.
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SECTION 8. EVENTS OF DEFAULT.
Upon and after the occurrence of any of the following events (each an
Event of Default):
(a) The Borrower shall fail to pay any interest on or principal of
any of the Notes when due, or shall fail to pay any other amount payable
hereunder or under any other Loan Document; or
(b) Any representation or warranty made or deemed made by the
Borrower herein or in any of the other Loan Documents or which is contained in
any certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement or any of the other Loan Documents
shall prove to have been false in any material respect on or as of the date made
or deemed made; or
(c) The Borrower shall have failed to repay any Working Capital
Advance within the time period set forth in Section 2.5; or
(d) The Borrower shall breach any other covenant or default in the
observance or performance of any other provision contained in this Agreement or
any other Loan Document; provided, however, that, except for a breach of the
covenants set forth in Sections 7.2, 7.4, 7.8, 7.11 or 7.12 of this Agreement,
if such breach or default is susceptible of cure, such breach or default shall
not constitute an Event of Default unless such default shall continue unremedied
for a period of 30 days after written notice thereof is given to the Borrower by
the Bank; provided, further, that if such default is susceptible of cure, and
the Borrower is diligently proceeding to effectuate such cure, but such cure can
not be completed within such 30 day period, such period may be extended, at the
reasonable discretion of the Bank, for such reasonable period (not to exceed an
aggregate of 120 days) as the Bank may permit so long as the Borrower continues
to diligently pursue such cure; or
(e) At any time after the date hereof, the Bank shall not have a
valid prior perfected first Lien and security interest in the Mortgaged
Properties and the other collateral intended to be covered by the Security
Agreement; or
(f)(i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
of its Subsidiaries shall make a general assignment for the benefit of its
creditors; or
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(ii) there shall be commenced against the Borrower or any of
its Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment and (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of
its Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall have not been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) of this
Section 8(f); or
(v) the Borrower or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g)(i) The Borrower or any of its Subsidiaries shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Internal Revenue Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Plan, which
Reportable Event or institution of proceedings is, in the reasonable opinion of
the Bank, likely to result in the termination of such Plan for purposes of Title
IV of ERISA, and, in the case of a Reportable Event, such Reportable Event shall
continue unremedied for ten days after notice of such Reportable Event pursuant
to Section 4043(a), (c) or (d) of ERISA is given or such proceedings shall
continue for ten days after commencement thereof, as the case may be, (iv) any
Plan shall terminate for purposes of Title IV of ERISA, and in each case in
clauses (i) - (iv) above, such event or condition could reasonably be expected
to subject the Borrower and any of its Subsidiaries to any tax, penalty or other
liabilities in the aggregate material in relation to the business, operations or
property of the Borrower and its Subsidiaries, considered as a whole; or
(h) The rendition by any court of a final judgment against the
Borrower or any of its Subsidiaries which shall not be satisfactorily stayed,
discharged, vacated, bonded or set aside within 60 days of the making thereof;
or the attachment of any property of the Borrower or any of its Subsidiaries
which has not been released or provided for to the reasonable satisfaction of
the Bank within 60 days after the making thereof; or
(i) The Subsidiaries' Guaranty shall cease to be in full force and
effect as to any Subsidiary which is a party thereto; or
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(j) Xxxx Xxxxxxxx and/or his wife shall fail to control, directly
or indirectly, at least 22% of the voting interests or stock of the Borrower; or
(k) The Borrower or any Subsidiary shall breach or default in its
obligations under any Indebtedness with respect to which the damages for such
breach or default might reasonably be expected to exceed $100,000; or
(l) The Borrower or any Subsidiary shall fail to pay any due and
unpaid taxes, except for Disputed Taxes the existence of which does not cause
the Borrower to violate any other covenant in this Agreement;
then, in any such event, any or all of the following actions may be taken: (x)
the Bank may, at its option and without giving any prior notice to the Borrower,
declare the Commitment to be terminated forthwith, whereupon the Commitment and
all obligations of the Bank to make Revolving Loans or convert any Advances into
the Term Loan shall immediately terminate; and (y) the Bank may, at its option
and without giving any prior notice to the Borrower, declare the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable and the same, and all interest accrued
thereon, shall forthwith become due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby waived, anything
contained herein or in any instrument evidencing the Loans to the contrary
notwithstanding.
SECTION 9. MISCELLANEOUS.
9.1 Notices. All notices, requests and demands to or upon the respective
parties hereto shall be in writing (unless otherwise expressly provided herein)
and shall be deemed to have been duly given or made when delivered by hand, or
by telecopy, receipt acknowledged, or five (5) calendar days after having been
deposited in the mail addressed as follows, or to such address as may be
hereafter notified in writing by the respective parties hereto and any future
holders of any Note:
The Borrower: The New York Restaurant Group, Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx X. Xxxxxx, Executive Vice
President
with a copy to: Xxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxx, Esq.
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The Bank: Fleet Bank, N.A.
1185 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Xxxxxxx, Vice President
with a copy to: Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
9.2 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Bank, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right.
9.3 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.
9.4 Payment of Expenses; Examination.
(a) In addition to the reasonable fees, costs and expenses payable
to the Bank pursuant to Section 2.11 of this Agreement, and pursuant to any of
the other Loan Documents or otherwise, the Borrower agrees to pay or reimburse
the Bank promptly for all its reasonable out-of-pocket costs and expenses
incurred in connection with (i) the preparation of, or any amendment,
modification or waiver of, or consent with respect to, or any payment under or
termination of, any or all of the Loan Documents, including, without limitation,
the reasonable fees and disbursements of attorneys for the Bank, (ii) the
enforcement or preservation of any rights under this Agreement, any Note, any of
the other Loan Documents or any other instrument or agreement entered into in
connection herewith or therewith, including, without limitation, the reasonable
fees and disbursements of attorneys for the Bank, (iii) any claim or action
threatened, made or brought against the Bank arising out of or relating to any
extent to this Agreement, any Note, any of the other Loan Documents or any
instrument or agreement entered into in connection with the transactions
contemplated hereby or thereby, including, without limitation, the reasonable
fees and disbursements of attorneys for the Bank, and (iv) the transactions
contemplated hereby, including, without limitation, search fees, recording and
filing fees and fees and costs of appraisers, engineers, or other experts
retained by the Bank.
(b) The Borrower agrees that (i) at any time but not exceeding once
in a calendar year or (ii) after an Event of Default has occurred, at any time
and from time to time, the
-43-
Bank may conduct, at the Borrower's expense, (A) an examination of the
Borrower's books and records, and (B) field examinations with respect to any
Project. The obligations set forth in this Section 9.4 shall be in addition to
any other obligations or liabilities of the Borrower to the Bank hereunder or at
common law or otherwise. The provisions of this Section 9.4 shall survive the
payment of the Notes and the termination of this Agreement.
9.5 Waiver of Jury Trial, Setoff and Counterclaim. THE BORROWER AND THE
BANK IN ANY LITIGATION (WHETHER OR NOT ARISING OUT OF OR RELATING TO THIS
AGREEMENT) IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE THE RIGHT OF TRIAL BY
JURY AND THE BORROWER WAIVES THE RIGHT TO INTERPOSE ANY SETOFF OR COUNTERCLAIM
OF ANY KIND OR DESCRIPTION IN ANY SUCH LITIGATION.
9.6 Waiver of Automatic Stay. THE BORROWER AGREES THAT, IN THE EVENT THAT
THE BORROWER SHALL (i) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT JURISDICTION
OR BE THE SUBJECT OF ANY PETITION UNDER TITLE 11 OF THE U.S. CODE, AS AMENDED
("BANKRUPTCY CODE"), (ii) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER
THE BANKRUPTCY CODE, (iii) FILE OR BE THE SUBJECT OF ANY PETITION SEEKING ANY
REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT
OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS, (iv)
HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY TRUSTEE,
RECEIVER, CONSERVATOR, OR LIQUIDATOR, OR (v) BE THE SUBJECT OF ANY ORDER,
JUDGMENT, OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING A
PETITION FILED AGAINST SUCH PARTY FOR ANY REORGANIZATION, ARRANGEMENT,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY
PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY,
INSOLVENCY, OR RELIEF FOR DEBTORS, THE BANK SHALL THEREUPON BE ENTITLED AND THE
BORROWER IRREVOCABLY CONSENTS TO IMMEDIATE AND UNCONDITIONAL RELIEF FROM ANY
AUTOMATIC STAY IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR OTHERWISE, ON
OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO THE
BANK AS PROVIDED FOR HEREIN, IN ANY NOTE, OR ANY OTHER LOAN DOCUMENTS DELIVERED
IN CONNECTION HEREWITH AND AS OTHERWISE PROVIDED BY LAW, AND THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO OBJECT TO SUCH RELIEF AND WILL NOT CONTEST ANY
MOTION BY THE BANK SEEKING RELIEF FROM THE AUTOMATIC STAY AND THE BORROWER WILL
COOPERATE WITH THE BANK, IN ANY MANNER REQUESTED BY THE BANK, IN ITS EFFORTS TO
OBTAIN RELIEF FROM ANY SUCH STAY OR OTHER PROHIBITION.
-44-
9.7 Modification and Waiver. No modification or waiver of, or with respect
to, any provision of this Agreement or any document or instrument delivered in
connection therewith shall be effective unless and until it shall be in writing
and signed by the Bank and the Borrower, and then such modification or waiver
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Borrower in any case shall, of itself,
entitle it to any other or further notice or demand in similar or other
circumstances.
9.8 Severability. In the event any one or more of the provisions contained
in this Agreement or in any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
9.9 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Bank, all future holders of the Notes and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights under this Agreement without the prior written
consent of the Bank, and any attempt at such assignment without such consent
shall be void, and at the option of the Bank, be deemed a default under this
Agreement. The term "Bank" as used in this Agreement shall be deemed to include
the Bank and its successors, endorsees and assigns, and any Loan connected with
or contemplated by this transaction may be assigned, serviced and/or
participated in (either in whole or in part) by the Bank and/or its successors
and assigns.
9.10 Governing Law; Consent to Jurisdiction. This Agreement, the Notes and
any documents and instruments delivered in connection herewith and therewith and
the rights and duties of the parties hereunder and thereunder shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York, and the Borrower consents to the jurisdiction of the courts of the
State of New York in any action brought to enforce any rights of the Bank under
this Agreement, the Notes and any document and instrument related hereto.
9.11 Entire Agreement. This Agreement and any other agreements, documents
and instruments executed and delivered pursuant to or in connection with the
Obligations contain the entire agreement between the parties relating to the
subject matter hereof and thereof. The Borrower expressly acknowledges that the
Bank has not made and the Borrower is not relying on any oral representations,
agreements or commitments of the Bank or any officer, employee, agent or
representative thereof.
9.12 Interest Adjustment. Notwithstanding anything to the contrary
contained in this Agreement or in the Notes, if at any time the applicable rate
of interest payable on any Note, together with all fees and charges which are
treated as interest under applicable law (collectively, the "Charges"), as
provided for in this Agreement, the Notes or in any other document executed
-45-
in connection herewith or therewith, or otherwise contracted for, charged,
received, taken or reserved by the Bank, shall exceed the maximum lawful rate
(the "Maximum Rate") which may be contracted for, charged, taken, received or
reserved by the Bank in accordance with applicable law, the rate of interest
payable under the Notes held by the Bank, together with all Charges payable to
the Bank, shall be limited to the Maximum Rate. The Borrower hereby agrees to
give the Bank prior written notice in the event that any interest payment made
to the Bank with respect to any Note will cause the total interest payments
collected in any one year to be illegal under applicable law. In the event that
the interest referred to hereunder or the Note would be illegal in the Bank's
opinion, the Bank reserves the right to reduce the interest payable by the
Borrower or apply any sum in excess of the maximum collectible interest in
reduction of principal.
9.13 Rates. The Borrower hereby acknowledges that neither the Prime Rate
nor the LIBOR Rate is necessarily the lowest rate charged by the Bank for
commercial or other types of loans, it being understood that the Prime Rate and
the LIBOR Rate are only two of the bases for computing interest on loans made by
the Bank, and that by computing interest at the Prime Rate or the LIBOR Rate,
the Bank is not committed to charge, and the Borrower has not in any way
bargained for, interest based on a lower or the lowest rate at which the Bank
may now or in the future make loans to other borrowers.
9.14 Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever, and
are not a part of the agreement among the parties hereto.
9.15 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
9.16 Taxes. With respect to an assignee of the Loan to whom Section
2.15(e) applies or any participant, the Borrower shall not be required to pay
any amount pursuant to Section 2.15 that is greater than the amount which it
would have been required to pay had no interest in this Agreement or any other
Loan Document been transferred (including for these purposes through
participation). The transferor of such interest shall be obligated to indemnify
and hold harmless the Borrower from and against any taxes, penalties, interest
or other costs or losses (including, without limitation, reasonably attorneys'
fees and expenses) incurred or payable by the Borrower as a result of the
failure of the Borrower to comply with its obligations to deduct or withhold any
Taxes from any payments made pursuant to this Agreement or any other Loan
Document, which Taxes would not have been incurred or payable if such transferee
had delivered to the Borrower, and did in fact so deliver, duly completed and
valid forms or other documentation entitling such participant to receive payment
under this Agreement or any other Loan Document without deduction or withholding
of any Taxes.
-46-
9.17 Tax Treatment. Without limiting the application of any other
provision of this Agreement, if any interest in any Loan Document is transferred
by the Bank to any transferee, the transferor shall use its reasonable best
efforts to cause such transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.15(e).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
THE NEW YORK RESTAURANT GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
FLEET BANK, N.A.
By: /s/ Judah Zweiter
--------------------------------------
Name: Judah Zweiter
Title: Vice President
EXHIBIT A
Borrowing Notice
[SEE ATTACHED]
FORM OF BORROWING NOTICE
[Date]
Fleet Bank, N.A.
1185 Avenue of the Americas
Xxx Xxxx, XX 00000
Attention: Judah Zweiter
Dear Sirs:
The undersigned, The New York Restaurant Group, Inc. (the "Borrower"),
refers to the Loan Agreement, dated as of September 1, 1998 (as it may hereafter
be amended, modified, extended or restated from time to time, the "Loan
Agreement"), between the Borrower and Fleet Bank, N.A. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Loan Agreement. The Borrower hereby gives you notice pursuant to
Section 2.3 of the Loan Agreement that it requests an Advance under the Loan
Agreement, and in that connection sets forth below the terms on which such
Advance is requested to be made:
(A) Identify Project
or state for working capital(1) _________________
(B) If for a Project, total
Project Costs _________________
Amount Requested (if for a Project,
not to exceed 90% of actual
Project Costs) _________________
(C) Interest
(i) Adjusted LIBOR Rate _________________
Applicable LIBOR Interest Period ___________months
(ii) Adjusted Prime Rate _________________
----------
(1) If for working capital, subject to Working Capital Sublimit.
[If the advance under the particular Borrowing Notice is to fund a
particular Project, the following certification by the chief executive officer
or the chief financial officer of the Borrower must be included.]
The sum requested under this Borrowing Notice will be used only for
Improvements in connection with the Project identified herein and that the
conditions set forth in Sections 4.2(a) - (f) have been satisfied.
The undersigned is the Chief Financial Officer or Chief Executive Officer
of The New York Restaurant Group, Inc., and hereby certifies pursuant to Section
2.3 of the Loan Agreement that the total cost identified in (B) above, to my
knowledge, reflects actual Project Costs incurred for the particular Project
identified herein.
Attached hereto and made part of this Borrowing Notice are (A)
certificates from the Construction Consultant certifying that (i) the
Improvement can be completed for the amount available for construction from the
construction budget approved by Bank, and (ii) the final plans and
specifications are satisfactory for the completion of the Improvements; and (B)
lien waivers from the general contractor and all material subcontractors engaged
in the performance of the work being funded by such Advance
Upon acceptance of any or all of the Loans made by the Bank in response to
this request, the Borrower shall be deemed to have represented and warranted
that the conditions to lending specified in Section 4.2 of the Loan Agreement
have been satisfied.
Very truly yours,
THE NEW YORK RESTAURANT GROUP, INC
By:
--------------------------------------
Name:
Title:
REVOLVING LOAN NOTE
$15,000,000.00
New York, New York
September 1, 1998
THE NEW YORK RESTAURANT GROUP, INC., a Delaware corporation
(the "Borrower"), for value received, hereby promises to pay to the order of
FLEET BANK, N.A. (the "Bank") on July 31, 1999, at the office of the Bank
specified in Section 9.1 of the Loan Agreement, dated as of even date herewith,
between the Borrower and the Bank, as amended from time to time (as so amended,
the "Agreement"; terms defined in the Agreement shall have their defined
meanings when used in this Note), in lawful money of the United States of
America and in immediately available funds, the principal amount of FIFTEEN
MILLION AND 00/100 DOLLARS ($15,000,000.00) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Bank to
the Borrower pursuant to Section 2.1 of the Agreement. The Borrower further
promises to pay interest in like money on the unpaid principal balance of this
Note from time to time outstanding at (i) the Adjusted Prime Rate, or (ii)
subject to availability and at the Borrower's request, the Adjusted LIBOR Rate.
Interest shall be computed on the basis of a 360-day year for actual days
elapsed and shall be payable in arrears commencing on the first day of the first
month following any Loan made by the Bank to the Borrower pursuant to Section
2.1 of the Agreement, and on the first day of each and every month thereafter,
as more particularly set forth in, and subject to the terms and conditions of,
the Agreement. All Loans made by the Bank pursuant to Section 2.1 of the
Agreement and all payments of the principal thereon may be endorsed by the
holder of this Note on the schedule annexed hereto, to which the holder may add
additional pages. The aggregate net unpaid amount of Loans set forth in such
schedule shall be presumed to be the principal balance hereof. After the stated
or any accelerated maturity hereof, and after the occurrence of any Event of
Default, this Note shall bear interest at the Post Default Rate, and in the
event that any amount payable hereunder or in connection herewith remains unpaid
for a period of 10 days after its due date, the Borrower shall also be subject
to a late charge of two percent (2%) of the amount not paid when due, all as
more particularly set forth in Section 2.10(e) of the Agreement, and all of such
interest and late charges shall be payable on demand, but in no event in excess
of the maximum rate of interest permitted under applicable law.
This Note is the Revolving Loan Note referred to in the Agreement,
and is entitled to the benefits thereof and may be prepaid, and is required to
be prepaid, in whole or in part (subject to the indemnity provided in the
Agreement), as provided therein.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Note shall
be, or may be declared to be, immediately due and payable, in each case as
provided in the Agreement. This Note is secured
by the Mortgages, the collateral described in the Security Agreement and by
the Subsidiaries' Guaranty.
The Borrower, for itself and its legal representatives, successors
and assigns, and all endorsers, guarantors or any others who may at any time
become liable for payment hereunder, hereby (i) consents to any and all
extensions of time, renewals, waivers, or modifications or substitutions or
releases of security that may be granted or consented to by the Bank or the
holder hereof with regard to the time of payment hereunder, the security held
for payment hereunder, or any other provision hereof, and (ii) waives
presentment, demand, protest and notice of protest, notice of dishonor, notice
of non-payment, notice of maturity, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption of
insolvency laws, and all other notices applicable hereto, and agrees to pay, to
the extent permitted by law, all fees, costs and expenses incurred by or on
behalf of the Bank or the holder hereof in the collection hereof, including
legal costs and reasonable attorneys' fees and expenses.
This Note has been issued pursuant to the terms of the Agreement,
and is subject to all of the terms and conditions thereof.
This Note shall be construed in accordance with and governed by the
laws of the State of New York. The Borrower consents to the jurisdiction of the
courts of the State of New York in any action brought to enforce any rights of
the Bank or any holder under this Note, and the Borrower waives the right of
trial by jury and the right to interpose any setoff or counterclaim of any kind
or description with respect to any such action.
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.
THE NEW YORK RESTAURANT
GROUP, INC.
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
SCHEDULE TO REVOLVING LOAN NOTE
DATED SEPTEMBER 1, 1998
BY
THE NEW YORK RESTAURANT GROUP, INC.
TO
FLEET BANK, N.A.
Advances and Payments of Principal and Interest
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Amount of Amount of Principal Amount of Unpaid Principal Notation
Date Advance Paid or Prepaid Interest Paid Balance of Advances Made By
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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of September, 1998, before me personally came Xxxx X.
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Executive Vice President of The New York Restaurant Group, Inc., the
corporation described in, and which executed, the foregoing instrument; and that
he signed his name thereto by order of the directors of said corporation.
-----------------------------
Notary Public
SECURITY AGREEMENT
FOR VALUE RECEIVED, and to induce FLEET BANK, N.A., a national
banking association having an office at 1185 Avenue of the Americas, Xxx Xxxx,
Xxx Xxxx 00000 (hereinafter referred to as "Secured Party"), to extend credit
and other financial accommodations to THE NEW YORK RESTAURANT GROUP, INC., a
Delaware corporation having its chief place of business at 0000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Borrower"), the Borrower, The Manhattan Ocean
Club Associates, L.L.C., a New York limited liability company, La Cite
Associates, L.L.C., a Delaware limited liability company, Atlantic & Pacific
Grill Associates, L.L.C., a New York limited liability company, Xxx. Xxxxx Sub,
LLC, a Delaware limited liability company, New York RGI Sub, LLC, a Delaware
limited liability company, Restaurant Group Management Service, LLC, a New York
limited liability company, S & W Chicago, LLC, a Delaware limited liability
company, S & W of Miami, L.L.C., a Delaware limited liability company, MOC D.C.,
L.L.C., a Delaware limited liability company, S & W Las Vegas, L.L.C., a
Delaware limited liability company, S & W New Orleans, L.L.C., a Delaware
limited liability company, S & W D.C., L.L.C., a Delaware limited liability
company, Manhattan Ocean Holdings, Inc., a Delaware corporation, Cite Holdings,
Inc., a Delaware corporation, Atlantic & Pacific Grill Holdings, Inc., a
Delaware corporation, MPM Holdings, Inc., a Delaware corporation, NYRGI
Holdings, Inc., a Delaware corporation, Restaurant Group Management Holdings,
Inc., a New York corporation, S & W Chicago Holdings, Inc., a Delaware
corporation, MOC D.C. Holdings, Inc., a Delaware corporation, S & W New Orleans
Holdings, Inc., a Delaware corporation, and S & W D.C. Holdings, Inc., a
Delaware corporation (the twenty-two (22) foregoing entities referred to herein
as the "Subsidiaries") (the Borrower and the Subsidiaries collectively referred
to as "Debtor") hereby agree that Secured Party shall have the rights, remedies
and benefits hereinafter set forth.
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Collateral" shall mean all of Debtor's now existing and hereafter
arising interests in and to all of the following, whether now existing or owned
or hereafter created or acquired, wherever located, including substitutions,
accessions, additions and replacements thereto and thereof:
(a) all accounts, contract rights, chattel paper, documents,
instruments, notes, acceptances, drafts and general intangibles
(including, but not limited to, all of Debtor's now existing and hereafter
arising choses in action and tax and duty refunds, all now owned and
hereafter acquired franchises, licenses, permits, patents, patent
applications, trademarks, tradenames and copyrights, and all rights
thereunder and registrations thereof); Debtor's
interest in the goods represented thereby and all returned, reclaimed and
repossessed goods with respect thereto; all of Debtor's rights as an
unpaid vendor (including stoppage in transit,
replevin, reclamation and resale), all additional amounts due to Debtor from any
account debtor irrespective of whether such additional amounts have been
specifically assigned to Secured Party; all guaranties, letters of credit and
other agreements or property securing or relating to any of the items referred
to above; all monies, deposits (general or special), securities, instruments,
credits and other property of Debtor now or hereafter actually or constructively
held or received by, or in transit in any manner to or from, Secured Party or
any entity which at any time participates in Secured Party's financing of
Debtor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, or placed in any safe deposit box leased by Secured Party or such
other entity to Debtor; and all rights and remedies of Debtor under or in
connection with all of the foregoing;
(b) all inventory, including raw materials, wine inventory and all
other goods, all right, title and interest of Debtor therein and thereto;
(c) all machinery, equipment, furniture, furnishings, fixtures, and
all attachments, components, accessories and parts therefor or installed
thereon or affixed thereto;
(d) all of Debtor's leasehold interests in equipment, premises or
facilities leased from third parties;
(e) all of Debtor's books, records, ledger sheets, ledgers, files,
orders, invoices and shipping receipts (including, without limitation,
computer programs, tapes and related electronic data processing software)
relating to all of the foregoing;
(f) all of the Borrower's interest in the stock identified on
Schedule B hereto or membership interests in the Subsidiaries that are
limited liability companies;
(g) all works of art owned by the Debtor; and
(h) any and all products and proceeds of the foregoing in any form,
whether from the voluntary or involuntary disposition thereof, including,
without limitation, accounts, contract rights, general intangibles,
chattel paper, documents, instruments, inventory, equipment, fixtures, all
insurance proceeds and all claims by Debtor against third parties for
damage to or loss or destruction of any or all of the foregoing;
provided, however, that Collateral shall not include (i) those leases identified
on Schedule 3.18 of the Loan Agreement, and (ii) liquor and other licenses and
permits which are not transferable without the consent of the applicable
regulatory authority. Notwithstanding the foregoing, "Collateral" shall not
include any general intangibles or other rights arising under any contracts,
instruments, licenses or other documents as to which the grant of a security
interest would constitute a violation of a valid and enforceable restriction in
favor of a third party on such grant, unless and until any required consents
shall have been obtained. Debtor agrees to use commercially reasonable efforts
to obtain any such required consent with respect to any material items of such
Collateral.
-2-
"Event of Default" shall have the meaning assigned to such term in
the Loan Agreement.
"Financing Agreements" shall mean this Agreement, the Loan
Agreement, the Note, the Term Note and all other "Loan Documents" (as said term
is defined in the Loan Agreement), and all present and future related
agreements, documents and instruments, as now existing and as hereafter amended,
modified or supplemented.
"Guarantor" shall mean any person or entity who or which at any time
guarantees to Secured Party the payment or performance of all or any portion of
the Obligations.
"Loan Agreement" shall mean that certain Loan Agreement, dated as of
September 1, 1998, between the Borrower and Secured Party.
"Note" shall mean that certain Revolving Loan Note of even date
herewith in the principal face amount of $15,000,000.00 executed by the Borrower
in favor of Secured Party.
"Obligations" shall mean all present and future indebtedness,
obligations, covenants, duties and liabilities of any kind or nature of Debtor
to Secured Party, now or hereafter existing, arising directly between Debtor and
Secured Party or acquired outright, conditionally or as collateral security from
another by Secured Party, absolute or contingent, joint and/or several, secured
or unsecured, due or not due, contractual or tortuous, liquidated or
unliquidated, arising by operation of law or otherwise, direct or indirect,
whether or not evidenced by any note, agreement or other instrument, including,
but without limiting the generality of the foregoing, indebtedness, obligations,
covenants, duties and liabilities of Debtor to Secured Party pursuant to the
Financing Agreements and, to the extent not otherwise included, all
"Obligations" described and defined in the Loan Agreement.
"Term Note" shall have the meaning assigned to such term in the Loan
Agreement.
All other terms defined in the preamble or the recitals hereto shall
have the respective meanings ascribed to them therein. Unless the context
otherwise indicates, all terms used without definition in this Agreement shall
have the meanings ascribed to them in the Uniform Commercial Code of the State
of New York as presently in effect, to the extent the same are used or defined
therein.
-3-
ARTICLE 2
SECURITY
2.1 Grant of Security Interest. As security for the payment and
performance of the Obligations, Debtor hereby grants to Secured Party a
continuing security interest in and a general lien upon the Collateral.
ARTICLE 3
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF DEBTOR
Debtor hereby represents and warrants to, and covenants and agrees
with, Secured Party that:
3.1 Performance of Obligations. The Borrower and its Subsidiaries
will pay and perform all of the Obligations according to their terms.
3.2 Locations of Offices and Collateral. The Schedule A annexed
hereto accurately and completely sets forth the mailing addresses of the chief
executive office of the Borrower, the principal and other places of business of
the Borrower, the office where the Debtor keeps their books and records
concerning the Collateral (including accounts and contract rights) and the
locations where any of the Collateral is or may hereafter be located, and the
Debtor will not change any of the same, nor open or make use of any new place of
business or location of Collateral or books and records, without thirty (30)
days' prior written notice to Secured Party.
3.3 Further Assurances; Financing Statements. Upon request of
Secured Party, at any time and from time to time, Debtor will, at its own cost
and expense, execute and deliver to Secured Party one or more financing
statements pursuant to the Uniform Commercial Code, or amendments or
continuations thereof, and any other documents required by Secured Party to
further evidence, effect or perfect the security interest granted herein or to
otherwise effectuate the purposes of this Agreement, and, to the extent
permitted by applicable law, Debtor hereby authorizes Secured Party to execute
and file at any time or times one or more financing statements pursuant to the
Uniform Commercial Code with respect to any or all of the Collateral, signed
only by Secured Party. Debtor hereby agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement shall be sufficient
as a financing statement.
3.4 Title to Collateral. The Collateral is, and shall at all times
be, owned by Debtor free and clear of any security interests, liens or
encumbrances, except for such security interests, liens or encumbrances which
are Permitted Liens (as said term is defined in the Loan Agreement).
3.5 Disposition of Collateral. Except for sales of inventory or
equipment in the ordinary course of Debtor's business, Debtor will not sell,
exchange or otherwise dispose of any of
-4-
the Collateral, or any rights thereto, without having obtained Secured Party's
prior written consent in each instance.
3.6 Discharge of Liens. Debtor shall immediately pay and cause the
discharge of any liens, taxes or assessments which may be levied upon the
Collateral, except for the Permitted Liens.
3.7 Insurance. Debtor, at its own cost and expense, will insure the
Collateral at all times against all hazards specified by Secured Party,
including, but not limited to, fire, theft and risks covered by extended
coverage insurance, and such policies shall be payable to Secured Party as its
interest may appear. Said policies of insurance shall be satisfactory to Secured
Party as to form, amount and insurer. At Secured Party's request, Debtor shall
furnish certificates, policies or endorsements to Secured Party as proof of such
insurance, and if it fails to do so Secured Party is authorized, but not
required, to obtain such insurance at Debtor's expense. All policies shall
provide for at least thirty (30) days' prior written notice of cancellation to
Secured Party. Upon and after the occurrence of an Event of Default, Secured
Party may act as attorney-in-fact for Debtor in making, adjusting and settling
any claims under any such insurance policies. Debtor hereby assigns to Secured
Party all of its right, title and interest in and to any insurance policies
insuring the Collateral, including all rights to receive the proceeds of
insurance, and directs all insurers to pay all such proceeds directly to Secured
Party and authorizes Secured Party to endorse Debtor's name on any instrument
for such payment. Notwithstanding the foregoing, so long as no Default or Event
of Default exists under the Loan Agreement, upon the Borrower's written request
Secured Party shall hold such proceeds, without interest (except that insurance
proceeds in excess of $10,000 for any occurrence shall be held by Secured Party
at the prevailing rate of interest as determined by Secured Party in its sole
discretion), and make such proceeds available to the Borrower to replace or
repair the Collateral in question, upon such terms and conditions as Secured
Party may reasonably require.
3.8 Condition of Collateral. Debtor will keep the Collateral in good
condition and repair, reasonable wear and tear excepted, and will furnish all
required parts and servicing (including any contract service necessary to
maintain the benefit of any warranty of the manufacturer). Debtor will promptly
notify Secured Party of any destruction of or any substantial damage to any of
the Collateral.
3.9 Actions by Secured Party. Secured Party may, in its sole
discretion and at any time, for the account and expense of Debtor, pay any
amount or do any act required of Debtor hereunder or reasonably requested by
Secured Party to preserve, protect, maintain or enforce the Obligations, the
Collateral or the security interest granted herein, and which Debtor fails to do
or pay after notice from Secured Party, including, without limitation, payment
of any judgment against Debtor, any insurance premium, any warehouse charge and
any lien, claim or encumbrance upon or with respect to the Collateral, and any
such payment shall be added to the Obligations and shall be payable upon demand.
3.10 Adverse Changes. Debtor shall promptly notify Secured Party in
writing of any material adverse change in Debtor's financial condition or any
event which materially adversely
-5-
affects the value of the Collateral or the rights or remedies of Secured Party
in relation to any Debtor or any Collateral.
3.11 Inspection of Collateral. Debtor will at all times during
normal business hours allow Secured Party or its agents to examine and inspect
the Collateral as well as Debtor's books and records pertaining thereto, and to
make extracts and copies thereof.
3.12 Reports. Debtor will report, in form satisfactory to Secured
Party, such information as Secured Party may request from time to time regarding
the Collateral.
3.13 Changes in Structure. Debtor shall not become a party to any
consolidation, merger, liquidation or dissolution, except as permitted by the
Loan Agreement.
3.14 Name Changes. Debtor will notify Secured Party of any intended
change in Debtor's name, and will notify Secured Party when such change becomes
effective.
3.15 Former or Fictitious Names. Schedule A annexed hereto
accurately and completely sets forth all corporate or fictitious names, and
tradenames used by Debtor or by which Debtor has been known during the preceding
five (5) years, and Debtor will give Secured Party prior written notice of
Debtor's use of any fictitious name or tradename not listed on the annexed
Schedule A.
3.16 Required Consents. No consent or approval of any governmental
body or regulatory authority or of any other person, corporation or entity is or
will be necessary or required for the execution, delivery and performance of
this Agreement, or for the grant of a security interest in the Collateral to
Secured Party, or the exercise by Secured Party of any rights with respect to
the Collateral, except for such consents as have heretofore been obtained and
delivered to Secured Party.
3.17 No Litigation. There are no pending or threatened actions or
proceedings before any court, judicial body, administrative agency or arbitrator
which, if adversely determined, could reasonably be expected to materially
adversely affect (a) the financial condition or operations of Debtor, (b) the
Collateral, or (c) the ability of Debtor to perform hereunder.
3.18 Delivery and Marking of Certain Collateral. Debtor will, upon
the reasonable request of the Secured Party (a) deliver and pledge to Secured
Party, duly endorsed and/or accompanied by such instruments of assignment and
transfer in such form and substance as Secured Party may request, any and all
instruments, documents, securities and chattel paper which are included in the
Collateral, (b) cause the issuance of a document in the name of Secured Party in
respect of any goods in the possession of a bailee (other than a bailee who has
issued a negotiable document therefor), and (c) keep and stamp or otherwise xxxx
any and all documents and chattel paper, and its individual books and records
relating to inventory, accounts, chattel paper, securities and contract rights,
in such manner as Secured Party may reasonably require.
3.19 No Filing Required. No action of, or filing with, any
governmental or public body or authority (other than the filing and recording of
Uniform Commercial Code financing
-6-
statements and other instruments typically required to perfect security
interests in the types of property constituting Collateral) is required in
connection with the execution, delivery and performance of this Agreement, the
other Financing Agreements or any of the instruments or documents to be
delivered pursuant hereto or thereto.
3.20 Licenses and Approvals. Debtor has obtained all necessary
licenses and approvals and is in compliance in all material respects with all
applicable state and federal laws and regulations relating to the conduct of its
business as presently conducted or contemplated.
3.21 Preservation of Corporate Existence, Etc. Debtor will at all
times preserve and keep in full force and effect its existence, licenses,
permits, rights and franchises, except as permitted by the Loan Agreement.
ARTICLE 4
RIGHTS AND REMEDIES UPON DEFAULT
Upon and after the occurrence of an Event of Default, Secured Party
shall have all of the following rights and remedies, in addition to those
available to it under other sections of this Agreement, under the other
Financing Agreements, by applicable law or otherwise:
4.1 Acceleration of Obligations. All or any portion of the
Obligations shall, at the option of Secured Party and without notice, demand or
legal process, become immediately due and payable.
4.2 Rights Under Uniform Commercial Code. Secured Party shall have
all of the rights and remedies of a secured party under the Uniform Commercial
Code of the State of New York and of any state in which Collateral is located
from time to time.
4.3 Possession of Collateral. Secured Party shall have the right:
(a) to enter upon the premises of Debtor or any other place or places where the
Collateral is located and kept through self-help and without judicial process
without first obtaining a final judgment or giving Debtor notice and opportunity
for a hearing on the validity of Secured Party's claim and without any
obligation to pay rent; (b) to prepare, assemble or process the Collateral for
sale, lease, or other disposition; (c) to remove the Collateral to the premises
of Secured Party or any agent of Secured Party, for such time as Secured Party
may desire, in order to collect or dispose of the Collateral; and (d) to require
Debtor to assemble the Collateral and make it available to Secured Party at a
place to be designated by Secured Party.
4.4 Action Pending Disposition. Until Secured Party is able to
effect a sale or other disposition of the Collateral, Secured Party shall have
the right to use or take such action with respect to the Collateral, or any part
thereof, as it deems appropriate for the purpose of preserving the Collateral or
its value or for any other purpose deemed appropriate by Secured Party. Secured
Party shall have no obligation to Debtor to maintain or preserve the rights of
Debtor as against third
-7-
parties with respect to the Collateral while the Collateral is in the possession
of Secured Party. Secured Party may, if it so elects, seek the appointment of a
receiver or keeper to take possession of the Collateral and to enforce any of
Secured Party's remedies with respect to such appointment without prior notice
or hearing.
4.5 Disposition of Collateral. Secured Party shall have the right to
sell or otherwise dispose of all or any of the Collateral, at public or private
sale or sales, in lots or in bulk, for cash or on credit, all as Secured Party,
in its sole discretion, may deem advisable. Secured Party will give Debtor
notice of the time and place of any public sale of the Collateral, or of the
time after which any private sale or any other intended disposition thereof is
to be made, by sending notice, as provided in Section 6.2 below, at least five
(5) days before the time of the sale or disposition, which provisions for notice
Debtor and Secured Party agree are reasonable; provided, however, that no such
notice need be given by Secured Party with respect to Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market. Such sales may be adjourned and continued from time
to time with or without notice. Secured Party shall have the right to conduct
such sales on Debtor's premises or elsewhere and shall have the right to use
Debtor's premises without charge for such sales for such time or times as
Secured Party deems necessary or advisable. To enable Secured Party to effect
any such sale, assignment and/or transfer, Debtor hereby makes, constitutes and
appoints Secured Party as its true and lawful attorney, in its name, place and
stead, and for its account and risk, to make, execute and deliver any and all
assignments or other instruments which Secured Party may deem necessary or
proper to effectuate the authority hereby conferred by signing Debtor's name
only or by signing the same as its attorney-in-fact, as may be deemed by Secured
Party to be necessary or proper in connection with any sale, assignment or
transfer of all or any part of the Collateral. The foregoing power of attorney
is coupled with an interest and shall be a continuing one and irrevocable so
long as any portion of the Obligations remains unpaid in whole or in part.
Secured Party may purchase all or any part of the Collateral at
public sale or, if permitted by law, private sale, and in lieu of actual payment
of such purchase price, may set off the amount of such price against the
Obligations. Except as otherwise provided by law, the proceeds realized from the
sale of any of the Collateral may be applied by Secured Party first to the
reasonable costs, expenses and attorneys' fees and expenses incurred by Secured
Party for collection and for acquisition, completion, protection, removal,
storage, sale and delivery of the Collateral, and then to any of the Obligations
in such order and manner as Secured Party, in its sole discretion, deems
advisable. If any deficiency shall arise, Debtor shall remain liable to Secured
Party therefor.
4.6 Waiver of Bond. In connection with the foregoing remedies,
Debtor hereby waives the posting of any bond which might otherwise be required.
4.7 Remedies Cumulative. All rights and remedies of Secured Party
arising under this Agreement, the other Financing Agreements, or any other
agreement with Debtor or by operation of law shall be cumulative and
non-exclusive, to the fullest extent permitted by law.
-8-
4.8. Special Louisiana Provisions. The following provisions of this
section 4.8 govern Secured Party's rights and remedies upon an Event of Default
to the extent Louisiana law is applicable and are in addition to all other
rights and remedies of Secured Party under this Agreement.
Upon the occurrence of an Event of Default, Secured Party shall have
all the rights and remedies of a secured party under Chapter 9 of the Louisiana
Commercial Laws, Title 10 of the Louisiana Revised Statutes of 1950, as the same
may be amended.
Debtor hereby acknowledges the indebtedness owed under the
Obligations and, for the purposes of Louisiana executory process procedures,
confesses judgment in favor of Secured Party for the full amount of the
Obligations, consenting that judgment be rendered and signed whether during the
court's term or during vacation, in favor of Secured Party for the full amount
of the Obligations in principal, interest, and attorneys' fees, together with
all charges and expenses whatsoever, as mentioned in this Agreement or in any
document, instrument, agreement, or other writing evidencing the Obligations.
Upon the occurrence of an Event of Default, Debtor declares that it
shall be lawful for, and it does hereby authorize, Secured Party to cause all or
any part of the Collateral to be seized and sold, under executory process or
under writ of fieri facias issued in execution of an ordinary judgment obtained
on the Obligations, without appraisement to the highest bidder, for cash or on
such terms as are acceptable to Secured Party. Debtor waives all and every
appraisement of the Collateral and waives and renounces the benefit of
appraisement and the benefit of all laws relative to the appraisement of the
Collateral seized and sold under executory or other legal process. Debtor agrees
to waive, and does hereby specifically waive:
(i) the benefit of appraisement provided for in Articles 2332, 2336,
2723, and 2724, Louisiana Code of Civil Procedure, and all other laws conferring
such benefits;
(ii) the demand and three (3) days delay accorded by Articles 2639
and 2721, Louisiana Code of Civil Procedure;
(iii) the notice of seizure required by Articles 2293 and 2721,
Louisiana Code of Civil Procedure;
(iv) the three (3) days delay provided by Articles 2331 and 2722,
Louisiana Code of Civil Procedure;
(v) the benefit of the other provisions of Articles 2331,2722, and
2723, Louisiana Code of Civil Procedure;
(vi) the benefit of the provisions of any other articles of the
Louisiana Code of Civil Procedure not specifically mentioned above; and
(vii) all rights of division and discussion with respect to all
Obligations.
-9-
Pursuant to the authority contained in La. R.S. 9:5136 through
9:5140.1 (La. Act. No. 315 of 1976), Debtor and Secured Party do hereby
expressly designate, at this time, Secured Party or its designee to be keeper or
receiver for the benefit of Secured Party or any assignee of Secured Party, at
its option, to take effect immediately upon any seizure of the Collateral under
writ of executory process or under writ of sequestration or fieri facias as an
incident to an action brought by Secured Party. The fees of the keeper or
receiver shall be secured by the security interest in the Collateral granted in
this Agreement.
ARTICLE 5
SECURED PARTY'S EXPENSES AND ATTORNEYS' FEES
5.1 Debtor's Liability for Secured Party's Expenses. Debtor will be
liable to Secured Party for any and all sums, costs and expenses which Secured
Party may pay or incur pursuant to the provisions of this Agreement or in
defending, protecting or enforcing the security interest granted herein or in
enforcing payment of the Obligations or otherwise in connection with the
provisions hereof, including without limitation all search, filing and recording
fees, appraisal fees, taxes, levies and reasonable attorneys' and accountants'
fees and expenses, all fees and expenses for the service and filing of papers,
fees of marshals, sheriffs, custodians, auctioneers and others, travel expenses,
court costs and collection charges, all expenditures in connection with the
repossession, holding, preparation for sale and sale of the Collateral, and all
such liabilities shall be part of the Obligations and shall be payable upon
demand.
ARTICLE 6
MISCELLANEOUS
6.1 Waivers. Any failure or delay by Secured Party to require strict
performance by Debtor of any of the provisions, warranties, terms or conditions
contained herein or in any of the other Financing Agreements shall not affect
Secured Party's right to demand strict compliance therewith and performance
thereof, and any waiver of any default shall not waive or affect any other
default, whether prior or subsequent thereto, and whether of the same or of a
different type. None of the warranties, conditions, provisions and terms
contained herein or in any other agreement, document or instrument shall be
deemed to have been waived by any act or knowledge of Secured Party, its agents,
officers, stockholders or employees, but only by an instrument in writing,
signed by an appropriate officer of Secured Party and directed to Debtor,
specifying such waiver.
-10-
6.2 Notices.
(a) Any notice, demand, consent, approval, disapproval or
statement (collectively, "Notices") required or permitted to be given by the
terms and provisions of this Agreement, or by any law or governmental
regulation, shall be in writing and, unless otherwise required by such law or
regulation, shall be personally delivered or sent by United States mail, postage
prepaid, as registered or certified mail or by nationally recognized overnight
courier service. Any Notice to Debtor shall be addressed to such party at its
address hereinabove set forth, Attention: Xx. Xxxx X. Xxxxxx, with a copy to
Xxxxxxxx, Xxxxxxx & Xxxxxxx, Attention: Xxxxxxxxx X. Xxxxxxx, Esq. Any Notice to
Secured Party shall be addressed to such party at its address hereinabove set
forth, Attention: Xx. Xxxxx Xxxxxxx, with a copy to Xxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx & Xxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Esq. By giving the other party at least ten (10)
days' prior written notice, any party may, by Notice given as above provided,
designate a different address or addresses for Notices.
(b) Any Notice shall be deemed given as of the date of
delivery, with receipt acknowledged or as indicated by affidavit, in the case of
personal delivery; in the case of mailing, any Notice shall be deemed given on
the fifth business day after mailing; in the case of delivery by nationally
recognized overnight courier service, any Notice shall be deemed given on the
next business day after dispatch.
6.3 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in a manner so as to be effective and valid under
applicable law. If any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such provision and the remaining provisions of
this Agreement shall remain unaffected and in full force and effect.
6.4 Successors and Assigns. This Agreement shall be binding upon and
for the benefit of the parties hereto and their respective legal
representatives, successors and assigns.
6.5 Governing Law; Consent to Jurisdiction; Venue Waiver; Waiver of
Jury Trial. The validity, interpretation and effect of this Agreement shall be
governed by the laws of the State of New York. Debtor hereby consents to the
nonexclusive jurisdiction of all courts in said State and hereby waives all
right to trial by jury in any action, suit or proceeding brought to enforce or
defend any rights or remedies under this Agreement.
6.6 Articles and Section Titles. The titles of articles and sections
contained in this Agreement are merely for convenience and shall be without
substantive meaning or content.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original but all of which
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
September 1, 1998.
THE NEW YORK RESTAURANT GROUP, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
THE MANHATTAN OCEAN CLUB
ASSOCIATES, L.L.C., a New York limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LA CITE ASSOCIATES, L.L.C.,
a Delaware limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
-12-
ATLANTIC & PACIFIC GRILL
ASSOCIATES, L.L.C., a New York
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
XXX. XXXXX SUB, LLC, a Delaware limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NEW YORK RGI SUB, INC., a Delaware limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
SERVICE, LLC, a New York,
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W Chicago, L.L.C., a Delaware limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W OF MIAMI, L.L.C., a Delaware limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
-14-
MOC D.C., L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W LAS VEGAS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
-15-
S & W D.C., LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MANHATTAN OCEAN HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
CITE HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MPM HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NYRGI HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
HOLDINGS, INC., a New York corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W CHICAGO HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C. HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C. HOLDINGS, INC., a Delaware
corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
FLEET BANK, N.A., a national banking
association
By:
--------------------------------------
Name: Judah Zweiter
Title: Vice President
-00-
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the day ___ of September, 1998, before me personally came Xxxx X.
Xxxxxx, to me known who, being by me duly sworn, did depose and say that he is
employed by The New York Restaurant Group, Inc. at 0000 Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000; that he is an Executive Vice President of The New York Restaurant
Group, Inc., the Manager of The Manhattan Ocean Club Associates, L.L.C., La Cite
Associates, L.L.C., Atlantic & Pacific Grill Associates, L.L.C., Xxx. Xxxxx Sub,
LLC, New York RGI Sub, LLC, Restaurant Group Management Service, LLC, S & W
Chicago, L.L.C., S & W of Miami, L.L.C., MOC D.C., L.L.C., S & W Las Vegas,
L.L.C., S & W New Orleans, L.L.C. and S & W D.C., L.L.C.; and he is the
Executive Vice President of Manhattan Ocean Holdings, Inc., Cite Holdings, Inc.,
Atlantic & Pacific Grill Holdings, Inc., MPM Holdings, Inc., NYRGI Holdings,
Inc., Restaurant Group Management Holdings, Inc., S & W Chicago Holdings, Inc.,
MOC D.C. Holdings, Inc., S & W New Orleans, Inc. and S & W D.C., Inc., the
entities described in, and which executed, the foregoing instrument; and that he
signed his name thereto by order of the members of said limited liability
companies.
---------------------------------
Notary Public
SCHEDULE A TO SECURITY AGREEMENT
Address of the Borrower's Chief Executive 0000 Xxxxx Xxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
Address of the Borrower's Principal Place of 0000 Xxxxx Xxxxxx
Xxxxxxxx: Xxx Xxxx, XX 00000
Other Places of Business:
Office Where Books and Records 0000 Xxxxx Xxxxxx
re: Collateral Are Kept: Xxx Xxxx, XX 00000
Locations of Collateral:
(Except for Wine Inventory)
Locations of Wine Inventory:
Former Names, Fictitious
Names, Tradenames and
Tradestyles:
SCHEDULE B TO THE SECURITY AGREEMENT
Issuer Certificate No. No. Of Shares % of Issued Shares
------ --------------- ------------- ------------------
Cite Holdings, Inc.
Atlantic & Pacific
Grill Holdings, Inc.
Manhattan Ocean
Holdings, Inc.
MPM Holdings, Inc.
NYRGI Holdings, Inc.
Restaurant Group Management
Holdings, Inc.
S&W Chicago Holdings, Inc.
S&W D.C. Holdings, Inc.
MOC D.C. Holdings, Inc.
S&W New Orleans
Holdings, Inc.
GUARANTY
GUARANTY (this "Guaranty"), dated as of September 1, 1998, by The
Manhattan Ocean Club Associates, L.L.C., a New York limited liability company,
La Cite Associates, L.L.C., a Delaware limited liability company, Atlantic &
Pacific Grill Associates, L.L.C., a New York limited liability company, Xxx.
Xxxxx Sub, LLC, a Delaware limited liability company, New York RGI Sub, LLC, a
Delaware limited liability company, Restaurant Group Management Service, LLC, a
New York limited liability company, S & W Chicago, LLC, a Delaware limited
liability company, S & W of Miami, L.L.C., a Delaware limited liability company,
MOC D.C., L.L.C., a Delaware limited liability company, S & W Las Vegas, L.L.C.,
a Delaware limited liability company, S & W New Orleans, L.L.C., a Delaware
limited liability company, S & W D.C., L.L.C., a Delaware limited liability
company, Manhattan Ocean Holdings, Inc., a Delaware corporation, Cite Holdings,
Inc., a Delaware corporation, and Atlantic & Pacific Grill Holdings, Inc., a
Delaware corporation, MPM Holdings, Inc., a Delaware corporation, NYRGI
Holdings, Inc., a Delaware corporation, Restaurant Group Management Holdings,
Inc., a New York corporation, S & W Chicago Holdings, Inc., a Delaware
corporation, MOC D.C. Holdings, Inc., a Delaware corporation, S & W New Orleans
Holdings, Inc., a Delaware corporation, and S & W D.C. Holdings, Inc., a
Delaware corporation (each of the twenty-two (22) foregoing entities is referred
to herein as a "Guarantor and collectively as the "Guarantors") in favor of
FLEET BANK, N.A., a national banking association organized and existing under
and by virtue of the laws of the United States of America, having an office at
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Bank").
W I T N E S S E T H:
WHEREAS, the Bank has agreed to make available to The New York
Restaurant Group, Inc., a Delaware corporation (the "Borrower"), a senior
secured revolving credit and term loan facility in the principal amount of up to
$15,000,000 (the "Facility");
WHEREAS, in connection with making available such Facility to the
Borrower, the Bank and the Borrower have entered into a Loan Agreement of even
date herewith (the "Loan Agreement");
WHEREAS, the terms of the Loan Agreement include certain affirmative
and negative covenants applicable to the Guarantors;
WHEREAS, each Guarantor is an affiliated entity of the Borrower and
will derive substantial benefit as a result of the accommodations to be granted
by the Bank pursuant to the Loan Documents (as hereinafter defined);
WHEREAS, the Bank requires, as a condition to the execution by it of
the Loan Documents, that the Guarantors execute and deliver this Guaranty; and
WHEREAS, each Guarantor desires to execute and deliver to the Bank
this Guaranty, to induce the Bank to execute and deliver the Loan Documents and
to make available the Facility.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the Guarantors hereby agree with the Bank as follows:
SECTION 1. Defined Terms.
As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" of a Person means any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person.
"Bank" has the meaning specified in the preamble.
"Borrower" has the meaning specified in the recitals.
"Cite Holdings" has the meaning specified in the recitals.
"Collateral" has the meaning specified in the Security Agreement.
"Grill Holdings" has the meaning specified in the recitals.
"Guarantor" and "Guarantors" have the meanings specified in the
preamble.
"Letter of Credit" has the meaning specified in the Loan Agreement.
"Loan Documents" has the meaning specified in the Loan Agreement.
"MO Holdings" has the meaning specified in the recitals.
"Mortgage" has the meaning specified in the Loan Agreement.
"Obligations" has the meaning specified in Section 2 hereof.
"Notes" has the meaning specified in the Loan Agreement.
"Person" has the meaning specified in the Loan Agreement.
-2-
"Post Default Rate" has the meaning specified in the Loan Agreement.
"Security Agreement" has the meaning specified in the Loan
Agreement.
SECTION 2. Guaranty.
The Guarantors hereby jointly and severally irrevocably, absolutely
and unconditionally guarantee the prompt payment by the Borrower, as and when
due and payable (whether by scheduled maturity, acceleration, demand or
otherwise), of the following:
a. all principal amounts of the Notes;
b. all interest, fees, late charges and penalties, if any,
reasonable attorneys' fees, costs and disbursements, and other charges payable
under the terms of the Loan Documents; and
c. if issued in accordance with the Loan Agreement, all
principal amounts drawn under each Letter of Credit.
Without limiting the generality of subparagraph (b) above, such
obligations shall include the payment of any and all interest due under the Loan
Documents (including interest calculated at any applicable default or
post-maturity rate) including, without limitation, (i) any and all interest due
after the occurrence of a default and the acceleration by the Bank of its rights
and remedies under the Loan Agreement; and (ii) any and all interest due on the
principal portion of any deficiency between the obligations under the Loan
Agreement and the amount realized in foreclosure of any Collateral.
The foregoing obligations described in this Section 2 are referred to herein as
the "Obligations."
SECTION 3. Obligations of Guarantors Unconditional.
(a) The Guarantors hereby jointly and severally guarantee that
the Obligations will be paid strictly in accordance with the terms of the Loan
Documents regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Bank with
respect thereto. The obligations of the Guarantors hereunder shall be absolute
and unconditional irrespective of: (i) the validity, regularity or
enforceability of the Loan Documents or any other instrument or document
executed or delivered in connection therewith; (ii) any alteration, amendment,
modification, release, termination or cancellation of any Loan Document, or any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the obligations of the Borrower contained in any of
the Loan Documents; (iii) any waiver of, or consent to any departure from, any
of the provisions of any Loan Document; (iv) any exchange, addition,
subordination or release of, or non-perfection of any lien on or security
interest
-3-
in, any collateral under the Loan Documents; (v) any alteration, modification,
amendment, release, termination or cancellation of or waiver of or consent to
any departure from, any other indemnity or guaranty given in connection with the
Loan Documents; (vi) any negligence by the Bank in the administration or
enforcement of the Obligations or any delay in enforcing the Obligations or in
realizing on any collateral for the Obligations or any extension of the term of
the Notes and any Letter of Credit, if issued; (vii) the insolvency or
bankruptcy of the Borrower or any of the signatories of this Guaranty; (viii)
any failure by the Bank to advise any Guarantor of adverse changes in the
financial condition of the Borrower, any Project (as defined in the Loan
Agreement) or any matters relating to any Letter of Credit, if issued; (ix) any
sale, transfer, grant, conveyance or assignment of the Borrower's interest in
any Project or any part thereof; or (x) any other circumstance which might
otherwise constitute a defense (legal, equitable or otherwise) available to, or
a discharge of, the Borrower with respect to any or all of the Obligations of
the Guarantors in respect hereof. The Guarantors agree that any exculpatory
language contained in any of the Loan Documents shall in no event apply to this
Guaranty, and will not prevent the Bank from proceeding against the Guarantors
to enforce this Guaranty, except with respect to any exculpation from, defense
to or discharge of any of the Obligations based solely on the actual gross
negligence or willful misconduct of the Bank.
(b) This Guaranty (i) is a guaranty of payment and not of
collection, (ii) is a continuing guaranty and shall remain in full force and
effect until the satisfaction in full of all of the Obligations and the payment
in full of all amounts, if any, which become payable pursuant to Section 4
hereof, and (iii) notwithstanding clause (ii) above, shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
of any of the Obligations (to the extent payable in money) is rescinded or must
otherwise be returned by the Bank to the Borrower or any Guarantor or to any
guarantor, trustee, receiver or other representative of any of them, upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
SECTION 4. Indemnity.
Without limiting the generality of Section 2 hereof, the Guarantors
shall, jointly and severally, indemnify, defend (with counsel reasonably
acceptable to the Bank) and save harmless the Bank from and against all damages,
losses, liabilities, obligations, penalties, claims, demands, defenses,
judgments, suits, proceedings, penalties, expenditures, costs, disbursements and
expenses (including, without limitation, court costs and attorneys' and experts'
fees and expenses) of any kind or nature whatsoever which may, at any time or
from time to time, be imposed upon, incurred by or asserted or awarded against
the Bank by reason of, or arising from or out of, the Bank's enforcement (or
attempted enforcement) of this Guaranty or any of the other Loan Documents.
SECTION 5. Waiver.
Each Guarantor hereby waives (i) promptness and diligence; (ii)
notice of acceptance and notice of the incurrence of any obligation by the
Borrower; (iii) notice of any actions taken by
-4-
the Bank, the Borrower or any interested party under any Loan Document or any
other agreement or instrument relating thereto; (iv) all other notices, demands
and protests, and all other formalities of every kind in connection with the
enforcement of the Obligations or of the obligations of such Guarantor
hereunder, the omission of or delay in which, but for the provisions of this
Section 5, might constitute grounds for relieving such Guarantor of its
obligations hereunder; (v) the right to a trial by jury of any dispute arising
under, or relating to, this Guaranty or the Loan Documents; (vi) any right or
claim of right to cause a marshalling of the Borrower's assets or to cause the
Bank to proceed against any security for the obligations under the Loan
Documents before proceeding against such Guarantor; and (vii) any requirement
that the Bank protect, secure, perfect or insure any security interest or lien
in or on any property subject thereto or exhaust any right or take any action
against the Borrower or any other Person or any collateral as a precondition to
the Bank's right to enforce this Guaranty in accordance with its terms. Without
limiting the generality of the foregoing, each Guarantor hereby waives any
defense which may arise by reason of (A) the incapacity, lack of authority,
death or disability of, or revocation hereof by, any Person, (B) the failure of
the Bank to file or enforce any claim against the estate (in probate, bankruptcy
or any other proceedings) of any Person, or (C) any defense based upon an
election of remedies by the Bank.
SECTION 6. Subrogation; Subordination.
(a) No Guarantor shall exercise any rights which it may
acquire by way of subrogation hereunder, by any payment made by it hereunder or
otherwise, until such date on which all of the Obligations and other obligations
then due and payable, arising under this Guaranty including, without limitation,
the obligations arising under Section 4 hereof, shall have been satisfied in
full. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations and all such other
obligations then due and payable shall not have been paid in full, such amount
shall be held in trust for the benefit of the Bank, shall be segregated from the
other funds of such Guarantor and shall forthwith be paid over to the Bank to be
applied in whole or in part by the Bank against the Obligations and all such
other obligations then due and payable, whether matured or unmatured. If (i) the
Guarantors shall make payment to the Bank of all or any portion of the
Obligations and/or such other obligations then due and payable and (ii) all of
the Obligations and all such other obligations then due and payable shall be
paid in full, the Bank shall, at the request of the Guarantors, execute and
deliver to the Guarantors (without recourse, representation or warranty)
appropriate documents necessary to evidence the transfer by subrogation to any
Guarantor of an interest in the Obligations resulting from such payment by such
Guarantor, such subrogation to be fully subject and subordinate, however, to the
collection by the Bank of all amounts due to the Bank by the Borrower under the
Loan Documents and any other guaranties or indemnities executed in connection
with the Notes and any Letter of Credit, if issued.
(b) If, upon or after the occurrence of an Event of Default,
any Guarantor shall advance or become obligated to pay any sums toward the
construction, completion or equipment of or on any Project, or in the event that
for any reason whatsoever the Borrower or any subsequent owner or user of all or
any portion of any Project is now, or shall hereafter become, indebted to any
Guarantor, or in the event any Guarantor shall become entitled to cash flow from
all
-5-
or any portion of any Project, such Guarantor agrees that the amount of such
sums and of such indebtedness, together with all interest thereon, shall at all
times be fully subordinate as to lien (if any), time and right of payment,
rights against the collateral therefor (if any) and in all the respects, to all
sums, including principal, interest and all fees and other amounts, at any time
owing to the Bank under the Loan Agreement or any of the other Loan Documents
and that such Guarantor shall not be entitled to enforce or receive payment
thereof until all such sums then owing or contingently owed to the Bank have
been paid in full. If, upon or after the occurrence of an Event of Default, any
amounts shall be paid to any Guarantor on account of any claim set forth at any
time when all of the Obligations under the Loan Documents shall not have been
satisfied in full, such amount shall be held in trust by such Guarantor, and
shall forthwith be paid over to the Bank, to be held or applied, in whole or in
part, by the Bank against the Obligations, whether matured or unmatured. Nothing
herein contained is intended or shall be construed to give to the Guarantors any
right of subrogation in or under the Loan Agreement or any of the Loan Documents
or any right to participate in any way therein or in the right, title or
interest of the Bank in or to all or any portion of any Project, any
improvements on all or any portion of any Project, notwithstanding any payments
made by the Guarantors to or toward the construction, completion or equipment of
any Project or any payment relating thereto or with respect to the Notes, any
Letter of Credit, if issued, or any payments made by the Guarantors under this
Guaranty, all such rights of subrogation and participation being hereby
expressly waived and released by the Guarantors until all Obligations under the
Loan Documents have been satisfied in full.
(c) Notwithstanding any other provision in this Agreement, if any
Guarantor is or at any time becomes an "insider" of the Borrower as such term is
defined in ss.101 of the Federal Bankruptcy Code, such Guarantor hereby
irrevocably waives any and all rights to which it may be entitled by operation
of law or otherwise, upon making any payment hereunder, to be subrogated to the
rights of the Bank against the Borrower with respect to such payment, or
otherwise to be reimbursed, indemnified or exonerated by the Borrower in respect
thereof.
SECTION 7. Events of Default; Remedies.
a. Each of the following events shall constitute an Event of Default
under this Guaranty:
(i) If any "Event of Default" as defined in the Loan Agreement shall
occur;
(ii) If any representation or warranty by any Guarantor herein or in
any writing furnished in connection with or pursuant to this Guaranty shall be
false in any material respect with respect to such Guarantor on the date as of
which made; or
(iii) If any Guarantor defaults in the performance or observance of
any agreement, covenant, term or condition contained in this Guaranty or in the
performance or observance of any agreement, covenant, term or condition
contained in the Loan Agreement or in any other Loan Document to which it is a
party.
-6-
b. Upon the occurrence of an Event of Default, the Bank, at its
option, may declare all sums guaranteed hereunder to be and become forthwith due
and payable by the Guarantors, jointly and severally, under the terms of and
with the effect provided in this Guaranty, regardless of whether (i) an Event of
Default by or with respect to the Borrower shall have occurred under the Loan
Agreement or (ii) the Bank shall have exercised any of its rights or remedies
under any of the Loan Documents.
SECTION 8. Representations and Warranties.
The Guarantors represent and warrant, jointly and severally, to the
Bank as follows:
(a) Ocean Club is a duly organized and validly existing limited
liability company under the laws of the State of New York. La Cite is a duly
organized and validly existing limited liability company under the laws of the
State of Delaware. Atlantic & Pacific is a duly organized and validly existing
limited liability company under the laws of the State of New York. MO Holdings
is a duly organized and validly existing corporation under the laws of the State
of Delaware. Cite is a duly organized and validly existing corporation under the
laws of the State of Delaware. Grill is a duly organized and validly existing
corporation under the laws of the State of Delaware. Each Guarantor has full
power and authority (i) to own its properties and to carry on its business as
now conducted and as contemplated to be conducted in connection with the
execution, delivery and performance of its obligations under this Guaranty, and
(ii) to execute, deliver, perform and secure its obligations under this
Guaranty. [S&W Las Vegas, New Orleans and D.C.]
(b) The execution, delivery and performance of this Guaranty, and
the performance of its obligations hereunder, (i) have been duly authorized by
all necessary action on the part of each Guarantor, (ii) do not and will not
conflict with, or result in a violation of, any provision of law or any order,
writ, rule or regulation of any court or governmental or regulatory agency,
authority or instrumentality binding upon or applicable to such Guarantor and
(iii) do not and will not conflict with, result in a violation of, or constitute
a default under, any order, resolution, agreement or instrument to which such
Guarantor is a party or by which such Guarantor or any of its property is bound.
(c) This Guaranty, when executed by the parties hereto, will be a
valid and binding obligation of each Guarantor, enforceable in accordance with
its terms, except to the extent, if any, that the enforceability thereof may be
limited by (i) any applicable bankruptcy, insolvency or other similar law or
enactment affecting the enforcement of creditors' rights generally and (ii) the
fact that specific performance and other equitable remedies are granted only in
the discretion of a court.
(d) No consent, approval, permit, authorization or order of, or
registration or filing with, any court or governmental agency, authority or
other instrumentality not already obtained, given or made is required on the
part of any Guarantor for the execution, delivery and performance by such
Guarantor of this Guaranty.
-7-
(e) There is no action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, arbitrator, governmental or other
board, body or official, pending or, to the best knowledge of any Guarantor,
threatened against or affecting such Guarantor, questioning the validity of any
proceeding taken or to be taken by such Guarantor in connection with the
execution, delivery and performance by such Guarantor of this Guaranty, or
seeking to prohibit, restrain or enjoin the execution, delivery or performance
by such Guarantor of any of the foregoing, nor, to the best knowledge of such
Guarantor, is there any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the validity or enforceability of, or the
authority or ability of such Guarantor to perform its obligations, under this
Guaranty.
The Guarantors hereby jointly and severally affirm each representation and
warranty made by the Borrower to the Bank with respect to the Guarantors in the
Loan Agreement.
SECTION 9. Application of Payments by Borrower.
For the purposes of this Guaranty, all amounts paid by the Borrower
in respect of the Loan Documents, whether such amounts are paid as required to
be paid under the Loan Documents, voluntary prepayments, or on acceleration or
as the proceeds of a foreclosure under the terms of the Security Agreement or
any Mortgage, shall be applied to the Obligations in such manner as the Bank may
determine.
SECTION 10. Right of Setoff.
Each Guarantor hereby (a) pledges and grants to the Bank a security
interest in and to any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Bank or any Affiliate thereof to or for the credit or account of such
Guarantor (collectively, "Deposits"), and (b) irrevocably authorizes and directs
the Bank or any Affiliate thereof, at any time and from time to time upon the
occurrence of a default hereunder by such Guarantor, without notice to such
Guarantor (any such notice being expressly waived by such Guarantor) and to the
fullest extent permitted by law, to setoff and apply any such Deposits against
any and all Obligations of such Guarantor now or hereafter existing under the
Loan Documents, or to hold such Deposits for future application against
obligations thereafter arising under any of the Loan Documents, irrespective of
whether or not the Bank shall have made any demand under the Loan Documents and
although such obligations maybe contingent or unmatured. From and after the date
of the occurrence of any Event of Default under any of the Loan Documents, the
Bank shall have dominion and control over such Deposits and shall have the sole
ability to make withdrawals with respect to such Deposits. The Bank agrees to
promptly notify such Guarantor after any such application made by the Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such application. The rights of the Bank under this Section 10 are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Bank may have hereunder or under applicable law.
SECTION 11. Notices, Etc.
-8-
All notices or other communications required or permitted hereunder
shall be in writing and shall be personally delivered, transmitted by
telecopier, delivered by overnight courier, or mailed by registered or certified
mail, postage prepaid, with return receipt requested and addressed as follows:
If to any Guarantor:
The New York Restaurant Group, Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Executive Vice President
Copies of any notice to any Guarantor
shall be delivered to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxxx, Esq.
if to the Bank:
Fleet Bank, N.A.
1185 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Judah Zweiter
Vice President
with a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Any party may change the person or address to whom or which notices are given
hereunder; provided, however, that any such notice shall be deemed to have been
given hereunder only when actually received by the party to which it is
addressed. Any notice or other communication given hereunder shall be deemed to
have been given or delivered: if personally delivered, upon delivery, if
transmitted by telecopier, upon transmission thereof as indicated on the
transmission receipts, if sent by overnight courier, on the first (1st) business
day of the Bank after being sent, and if sent by mail, on the third (3rd)
business day of the Bank after mailing. Each party shall be entitled to rely
-9-
on all communications which purport to be given on behalf of any other party
hereto and purport to be signed by an authorized signatory of such party or the
above-indicated attorneys.
SECTION 12. Payments Free and Clear of Taxes, Etc.
All payments by the Guarantors under this Guaranty shall be made
without setoff, counterclaim or other defense. All such payments shall be made
free and clear of and without deduction for any present or future stamp or other
taxes, levies, imposts, deductions, charges, fees, withholdings, liabilities,
restrictions or conditions of any nature whatsoever now or hereafter imposed,
levied, collected, assessed or withheld by any jurisdiction or by any political
subdivision or taxing authority thereof or therein (whether pursuant to United
States federal, state or local law or foreign law), and all interest, penalties
or similar liabilities, but excluding any and all taxes on the Bank's overall
net income (all such non-excluded taxes, levies, imposts, deductions, charges,
fees, withholdings, liabilities, restrictions and conditions hereinafter
referred to as "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Guarantors hereunder is required in respect of any
Taxes pursuant to any applicable law, rule, or regulation, then the Guarantors
will, jointly and severally:
(a) pay to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment to such
authority; and
(c) pay to the Bank such additional amount as is necessary to
ensure that the net amount actually received by the Bank after such withholding
or deduction (including withholdings or deductions on amounts payable under this
subsection (c) of this Section) will equal the full amount the Bank would have
received had no such withholding or deduction been required. If the Guarantors
fail to perform their obligations under subsections (a) and (b) above, the
Guarantors shall, jointly and severally, indemnify, defend (with counsel
reasonably acceptable to the Bank) and save harmless the Bank from and against
any incremental taxes, interest or penalties that may become payable as a result
to any such failure.
SECTION 13. Waiver of Automatic Bankruptcy Stay.
Each Guarantor hereby waives any provisions applicable in connection
with any voluntary or involuntary insolvency, bankruptcy, reorganization,
fraudulent conveyance or similar proceeding involving the Borrower (or otherwise
affecting any Project) under any state or federal law regarding creditors'
rights or debtors' obligations imposing against the Bank, or otherwise providing
for, an automatic stay under Section 362 (a) of the Bankruptcy Code or any other
prohibition against the Bank's commencing, maintaining, completing any
proceedings in connection with or the exercise or enforcement of any of the
Bank's rights under the Loan Documents or any applicable law. In furtherance
thereof, each Guarantor agrees (i) that, in the event of the imposition of any
such stay or other prohibition, the Bank may seek to lift any such stay or other
prohibition or
-10-
seek exemption therefrom, (ii) not to contest any motion made by the Bank for
the lifting thereof or for exemption therefrom and (iii) to cooperate with the
Bank, in any manner requested by the Bank, in its efforts to obtain relief from
any such stay or other prohibition.
SECTION 14. Miscellaneous.
(a) The Guarantors shall make any payment required to be made
hereunder in lawful money of the United States of America and in immediately
available funds to the Bank at its address specified in Section 11 hereof.
(b) In the event that any amount payable hereunder by the
Guarantors to the Bank is not paid when due, the Guarantors shall pay interest
on such amount at an annual rate equal to the Post Default Rate, calculated on
the basis of a 360-day year, until such time as such amount, together with any
accrued interest thereon, shall have been paid in full to the Bank.
(c) No provision of this Guaranty may be waived, changed,
amended, modified or discharged without an agreement in writing and signed by
the Guarantors and the Bank, and no waiver of, or consent to any departure by
any Guarantor from, any provision of this Guaranty shall be effective unless it
is in writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given and, notwithstanding anything contained to the contrary herein, all such
waivers and modifications may be given or withheld in the sole judgment of the
Bank. The Guarantors hereby irrevocably waive any right to claim that any
provision of this Guaranty, including the provisions set forth in this
subsection, have been waived orally or by the acts or omissions of the Bank.
(d) The Bank may take or release other security for the
payment of the Obligations, may release any party primarily or secondarily
liable therefor and may apply any other security held by it to the reduction or
satisfaction of the Obligations without prejudice to any of its rights under
this Guaranty.
(e) No failure on the part of the Bank to exercise, and no
delay in exercising, any right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Bank provided herein and in the Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Bank under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by the Bank to exercise any of its rights under any other Loan Document
against such party or against any other person or entity or collateral.
(f) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction or prohibited or unenforceable as to any
person or entity shall, as to such jurisdiction or person or entity, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction or as to any other
person or entity.
-11-
(g) This Guaranty shall (i) be binding upon each Guarantor and
its successors and assigns, and (ii) inure, together with all rights and
remedies of the Bank hereunder, to the benefit of the Bank and its successors,
transferees and assigns. Without limiting the generality of clause (ii) of the
immediately preceding sentence, the Bank may assign or otherwise transfer all or
any portion of its rights and obligations under any Loan Document, to the extent
provided in and subject to the terms of the Loan Agreement, to any other Person,
and such other Person shall thereupon become vested with all of the rights and
obligations in respect thereof granted to the Bank herein or otherwise. None of
the rights or obligations of the Guarantors hereunder may be assigned or
otherwise transferred without the prior written consent of the Bank.
(h) Without limiting the generality of clause (g) above, the
Guarantors hereby acknowledge that the Bank may sell, grant or assign
participation interest(s) in the Notes, any Letter of Credit, if issued, and the
Loan Agreement and in the Bank's rights and obligations in respect of the Loan
Documents, including, without limitation, this Guaranty, to one or more lending
institutions satisfactory to the Bank, on terms satisfactory to the Bank. In the
event the Bank shall sell, grant or assign participation interest(s) in the
Notes, any Letter of Credit, if issued, and in the Bank's rights and obligations
in respect of the Loan Documents, (i) the Bank may, in its sole discretion,
disclose financial and other information to prospective participant(s) with
respect to the Guarantors, (ii) the Guarantors shall cooperate with the Bank in
connection with any such participation and shall execute any and all documents
which may be required or desirable, in the Bank's or such participants'
judgment, to effectuate any such participation(s), and (iii) each representation
and agreement made by the Guarantors in this Guaranty or in the other Loan
Documents shall run to, and each reference to the Bank shall be deemed to refer
to, the Bank and all of its participant(s).
(i) Each Guarantor hereby irrevocably and unconditionally (i)
submits for itself and its property in any legal action or proceeding relating
to this Guaranty or any other Loan Document to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the exclusive
general jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts thereof, (ii) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court, including, without
limitation, any objection that such action or proceeding was brought in an
inconvenient court and agrees not be plead or claim the same, (iii) agrees not
to commence any legal action or proceeding relating to this Guaranty in any
jurisdiction other than those set forth in clause (i) above, (iv) agrees to
service of any and all process in any such action or proceeding to the address
set forth in Section 11 hereof, (v) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction and (vi) agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(j) Each Guarantor hereby acknowledges that this Guaranty is
an instrument for the payment of money only and hereby agrees that in any action
brought by the Bank in order to enforce the terms of this Guaranty, the Bank may
serve with the summons a notice of
-12-
motion for summary judgment in lieu of a complaint in accordance with the
provisions of Section 3213 of the New York Civil Practice Law and Rules.
(k) The title of this document and the captions used herein
are inserted only as a matter of convenience and for reference and shall in no
way define, limit or describe the scope or the intent of this Guaranty or any of
the provisions hereof.
(l) The obligations of the signatories to this Guaranty shall
be joint and several.
(m) This Guaranty shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.
-13-
IN WITNESS WHEREOF, the Guarantors have duly executed this Guaranty
as of the date first written above.
THE MANHATTAN OCEAN CLUB
ASSOCIATES, L.L.C., a New York limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LA CITE ASSOCIATES, L.L.C.,
a Delaware limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL
ASSOCIATES, L.L.C., a New York
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
XXX. XXXXX SUB, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NEW YORK RGI SUB, INC., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
SERVICE, LLC, a New York,
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W Chicago, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W OF MIAMI, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C., L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W LAS VEGAS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C., LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MANHATTAN OCEAN HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
CITE HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MPM HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NYRGI HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
HOLDINGS, INC., a New York corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W CHICAGO HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C. HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS HOLDINGS, INC.,
a Delaware corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C. HOLDINGS, INC., a Delaware
corporation
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
FLEET BANK, N.A., a national banking
association
By:
----------------------------------------
Name: Judah Zweiter
Title: Vice President
EXHIBIT E
Form of Mortgage
[SEE ATTACHED]
ACT OF MORTGAGE * UNITED STATES OF AMERICA
AND SECURITY AGREEMENT *
* STATE OF NEW YORK
BY *
* COUNTY OF NEW YORK
S&W NEW ORLEANS, L.L.C. *
*
IN FAVOR OF *
*
FLEET BANK, N.A. *
*
BE IT KNOWN, that on this ____ day of September, 1998, before me,
the undersigned Notary Public, duly commissioned and qualified for the State of
Louisiana, and in the presence of the witnesses hereinafter named and
undersigned, personally came and appeared:
S&W NEW ORLEANS, L.L.C., a Delaware limited liability company (the
"Mortgagor"), domiciled at Wilmington, Delaware, organized pursuant
to Certificate of Formation dated February 4, 1997, filed in the
office of the Secretary of State, State of Delaware, on February 4,
1997, and Limited Liability Company Agreement dated February 12,
1997, for which a Certificate of Authority was issued by the
Secretary of State, State of Louisiana, on March 12, 1997; appearing
herein through its members, duly authorized pursuant to written
authorization annexed hereto; and whose tax identification number is
00-0000000, and mailing address is 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000;
WITNESSETH:
WHEREAS, FLEET BANK, N.A., a national banking association organized
under the laws of the United States having an address at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Mortgagee") are parties to a Loan
Agreement dated as of September __, 1998 (as modified, supplemented and in
effect from time to time, the "Loan Agreement") providing for revolving credit
and term loans to be made to the Company in an aggregate principal or face
amount of up to $15,000,000 to be evidenced by, and repayable with, interest
thereon in accordance with various promissory notes (collectively, the "Notes")
to be executed and delivered by the Company to the Mortgagee; and
WHEREAS, Mortgagor has executed and delivered to the Mortgagee its
Subsidiary Guarantee, dated as of the date hereof (the "Subsidiary Guarantee"),
pursuant to which Mortgagor, together with the other Subsidiaries (as defined in
the Loan Agreement) of the Company agreed to jointly and severally guarantee
(the "Guarantee Obligations") the prompt payment in full of the obligations of
the Company to the Mortgagee under the Loan Agreement; and
WHEREAS, it is a condition to the obligation of the Mortgagee to
extend credit to the Company pursuant to the Loan Agreement that the Mortgagor
execute and deliver this Deed of Trust.
NOW, THEREFORE, to secure the following (collectively, the
"Obligations"): (i) the payment of all obligations evidenced by the Notes and
any and all reborrowings, future advances and readvances under the Loan
Agreement (each of which reborrowings, future advances and readvances shall
enjoy the same priority as the initial advances evidenced by the Notes); (ii)
the obligations of the Mortgagor to the Mortgagee constituting Guarantee
Obligations; (iii) the performance and payment of the covenants and agreements
hereinafter contained; and (iv) the payment of all other obligations of the
Mortgagor to the Mortgagee under the Subsidiary, the Mortgagor does hereby
specially, affect and hypothecate unto the Mortgagee, the lands and premises
described in Schedule A;
TOGETHER with the appurtenances and all the estate and rights of
Mortgagor in and to said premises, together with all of the servitudes, rights,
ways, privileges, and appurtenances now or hereafter thereunto belonging or in
any way appertaining; and the buildings and other improvements thereon; and all
fixtures now or hereafter used or intended to be used in connection with said
premises, which fixtures are now or hereafter owned by the Mortgagor; and all
the right, title and interest of Mortgagor in and to all streets, alleys, roads,
waterways and public places adjoining the said premises and all easements,
servitudes and rights of way, now or hereafter used or existing in connection
therewith; and all the proceeds of the insurance required to be maintained
hereunder and all awards made for any taking by eminent domain or in any
condemnation proceeding including any awards for changes of the grades of
streets, or for consequential damages on account thereof, which awards are
hereby assigned to the Mortgagee with power to collect, receive and apply the
same to the Obligations, whether or not then due and payable, but such
application shall not affect the obligation to continue making payments in
accordance with the terms of the Loan Agreement and the Notes or any other
obligation evidencing the Obligations. All of said premises, property, rights
and interests, however denominated, are herein called the "Premises."
THE PREMISES TO REMAIN SO SPECIALLY MORTGAGED, AFFECTED AND
HYPOTHECATED UNTO AND) IN FAVOR OF THE MORTGAGEE AND) ANY FUTURE HOLDER OR
HOLDERS OF THE OBLIGATIONS SECURED HEREBY UNTIL THE FULL AND FINAL PAYMENT
THEREOF, MORTGAGOR BEING HEREBY OBLIGATED NOT TO SELL, ALIENATE, DETERIORATE OR
OTHERWISE ENCUMBER THE PREMISES TO THE PREJUDICE OF THIS ACT, AND NOT TO PERMIT
OR SUFFER THE SAME TO BE SO SOLD, ALIENATED, DETERIORATED OR ENCUMBERED.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE MAXIMUM AMOUNT
OF THE OBLIGATIONS THAT MAY BE OUTSTANDING AT ANY TIME AND FROM TIME TO TIME
THAT THIS MORTGAGE SECURES, INCLUDING WITHOUT LIMITATION AS A MORTGAGE, AS A
SECURITY AGREEMENT AND AS AN ASSIGNMENT OF LEASES AND RENTS, INCLUDING ALL
PRINCIPAL, INTEREST AND ANY EXPENSES INCURRED BY MORTGAGEE AND ALL OTHER AMOUNTS
INCLUDED WITHIN THE OBLIGATIONS, IS FIFTEEN MILLION DOLLARS ($15,000,000). IT IS
AGREED THAT THIS MORTGAGE SHALL BE ENTITLED TO THE CONTINUING PREFERENCE AND
PRIORITY
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PROVIDED BY LOUISIANA CIVIL CODE ARTICLE 3298 AND ALL OBLIGATIONS ARISING AFTER
THE DATE HEREOF SHALL BE EQUALLY SECURED BY THIS MORTGAGE AND SHALL HAVE THE
SAME PRIORITY AS TO ALL OBLIGATIONS EXISTING AS OF THE DATE HEREOF AND SHALL BE
SUBJECT TO ALL OF THE TERMS AND PROVISIONS OF THIS MORTGAGE.
AND MORTGAGOR covenants and agrees with and represents to the
Mortgagee as follows:
1. Mortgagor will pay the Obligations in accordance with the terms
thereof, and Mortgagor will pay all taxes or payments in lieu of taxes,
assessments or water rates (collectively herein called "Taxes"), and in default
thereof, the Mortgagee may pay the same. The making of such payments by the
Mortgagee shall not be deemed a waiver of any of its rights under this Mortgage,
the Notes, the Loan Agreement, or any other agreements, instruments and
documents executed pursuant hereto or thereto. Mortgagor will, upon demand,
exhibit to the Mortgagee, receipts for the payment of any Taxes.
2. (a) Mortgagor will keep the Premises insured for the benefit of,
and by insurers reasonably acceptable to, the Mortgagee against such hazards and
in such form and amount as the Mortgagee may reasonably require with responsible
and reputable insurance companies covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties and naming
Mortgagee as loss payee and additional insured as its interest may appear.
Mortgagor will assign and deliver the certificates as to such insurance to the
Mortgagee. Acceptance of any certificate of insurance shall not constitute
approval by the Mortgagee of the insurer, coverage, form, amount or sufficiency
of the insurance. Mortgagor will give immediate notice to the Mortgagee of any
damage by fire or other casualty to the Premises.
(b) The proceeds of any insurance on the Premises received by
Mortgagee shall be applied, at Mortgagee's election, to the prepayment of the
Obligations, without premium or penalty; provided, that so long as (i) no
Default (as hereafter defined) has occurred and is continuing and (ii) the cost
to restore the improvements to the Premises in the reasonable judgment of the
Mortgagee does not exceed Three Hundred and Fifty Thousand ($350,000) Dollars,
the Mortgagee shall make the insurance proceeds available to reimburse Mortgagor
for cost and expenses incurred by Mortgagor to restore the improvements to the
Premises.
(c) If the Mortgagee shall apply any insurance proceeds to the
restoration, repair or replacement of the improvements, then the Mortgagor shall
restore, repair or replace the same promptly and with all reasonable speed so
that the improvements when restored, repaired or replaced shall be at least
equal in quality and value to the improvements immediately prior to the damage
or destruction, in a good and workmanlike manner, free and clear of all
mortgages, liens, charges and encumbrances. The insurance proceeds shall be
disbursed by the Mortgagee from time to time as the work progresses, such
disbursements to be made upon request by the Mortgagor and upon compliance by
the Mortgagor with such conditions as the Mortgagee shall reasonably require to
effect the result referred to in the preceding sentence.
-3-
3. Mortgagor within five days upon request in person or within ten
days upon request by mail will furnish a written statement duly acknowledged of
the amount due on this Mortgage and whether any offsets or defenses exist
against the Obligations.
4. All notices, demands, consents, statements, requests, approvals
and other communications hereunder (collectively, "notices") shall be in
writing. All notices shall be deemed properly given when delivered, or, if
mailed registered or certified mail, return receipt requested, five calendar
days thereafter, addressed to the parties hereto at their respective addresses
set forth above. Any party may by notice to the other designate a new address to
which all notices shall thereafter be delivered or mailed.
5. (a) No building or fixture of the Premises will be removed,
demolished or altered without written consent of the Mortgagee. The foregoing
shall not be applicable to minor, interior non-structural alterations or to
fixtures constituting machinery and equipment used specifically for the
Mortgagor's distribution business. The Mortgagee shall have the right to enter
and inspect the Premises at any reasonable time and from time to time, upon
prior written notice (except in an emergency) and during normal business hours.
6. Mortgagor warrants the title of Mortgagor to the Premises subject
to the matters set forth in the title insurance policy insuring the Mortgagee's
interest therein and warrants that this Mortgage is and will be maintained as a
valid perfected first lien upon the Premises.
7. Mortgagee may take such action as the Mortgagee deems appropriate
to protect the Premises or the status or priority of the lien of this Mortgage
thereon including, but not limited to, entry upon the Premises to protect them
from deterioration or damage or to cause the Premises to be put in compliance
with any governmental, insurance rating or contract requirements; payments of
amounts due on liens having priority over this Mortgage; payment of any tax or
charge for purposes of assuring the priority or enforceability of this Mortgage;
obtaining insurance on the Premises or commencement or defense of any legal
action or proceeding to assert or protect the validity or priority of the lien
of this Mortgage. Mortgagor shall reimburse the Mortgagee for all expenses in
taking any such action, on demand, with interest at the rate equal to the
default rate applicable to the loans evidenced by the Notes, but in no event
more than the highest rate permitted under the applicable usury law, and the
amount thereof shall be secured by this Mortgage.
8. (a) The Mortgagor hereby assigns, transfers and sets over to the
Mortgagee all of its right, title and interest in, to and under all present and
future leases, occupancy agreements and rents arising out of the Premises as
further security for the payment of this Mortgage and the Mortgagee shall have
the right to enter upon the Premises for the purpose of collecting the same and
to let and operate the Premises or any part thereof and to apply the rents,
issues and profits, either in whole or in part, as the Mortgagee elects, to the
payment of all charges and expenses of the Premises or in reduction of any part
of the Obligations. This assignment and grant shall continue in effect until the
Obligations secured by this Mortgage are paid in full. The Mortgagee hereby
waives the right to enter upon the Premises for the purpose of collecting said
rents, issues and profits, and the Mortgagor
-4-
shall have a license to collect and receive said rents, issues and profits until
a Default occurs hereunder, but such license of the Mortgagor may be revoked by
the Mortgagee upon a Default. Upon the occurrence of a Default hereunder, the
Mortgagor will pay monthly in advance to the Mortgagee, or to any receiver
appointed to collect said rents, issues and profits, the fair and reasonable
rental value for the use and occupation of the Premises, or of such part thereof
as may be in the possession of the Mortgagor, and upon default in such payments
will vacate and surrender the possession of the Premises to the Mortgagee or
such receiver.
(b) The Mortgagor shall not, without the consent of the
Mortgagee, lease the Premises or any part thereof, modify or cancel any new
lease ("New Lease") of the Premises or any part thereof, accept prepayments of
installments of the rent under any existing or New Lease for a period of more
than one (1) month in advance or further assign the whole or any part of the
rents under any existing lease or New Lease.
9. Defaults. If any Event of Default (herein a "Default") under the
Loan Agreement shall occur and be continuing then, as more particularly provided
in the Loan Agreement, the principal of and accrued interest on the Notes and
all other Obligations under the Loan Agreement may be declared, or may become,
due and payable, without presentment, demand, protest or other formalities of
any kind, all of which have been waived pursuant to the Loan Agreement.
10. If Mortgagee institutes foreclosure proceedings, Mortgagee at
its option may have a keeper appointed by the court to take possession of the
Property to manage, operate and conserve the value and to collect its rents,
issues and profits. The right to take possession of the Property, to manage,
operate and conserve the Property and to collect the rents, issues and profits,
shall be in addition to all other rights or remedies of Mortgagee. After paying
costs of collection and any other expenses incurred, the proceeds shall be
applied to the payment of the Obligations in any order as Mortgagee shall elect.
Mortgagee shall not be liable to account to Mortgagor for any of these actions
other than to account for any rents actually received by Mortgagee. Mortgagee
shall have the option, at its discretion, of appointing itself or its agent as
keeper of the Property pursuant to the provisions of La. R.S. 9:5131 et seq. and
9:5136 et seq. If the Mortgagee avails himself of this right, the keeper named
shall be Mortgagee, or an agent appointed by him. The method by which the agent,
if any, is to be selected is as follows:
(a) The agent chosen by Mortgagee shall be a person, an
individual, a partnership, a corporation or an unincorporated association;
(b) The agent shall be one who, according to the discretion of
Mortgagee, is properly knowledgeable and equipped to keep the Property and
manage it;
(c) The reasons for appointing the agent named, pursuant to
the criteria set forth above, shall also be set forth in the petition to the
court requesting the agent be appointed as keeper; and
-5-
(d) No notice of the choosing of the agent need be given to
Mortgagor, and Mortgagor expressly waives any right to receive such
notification.
The keeper appointed pursuant to these provisions shall have all the
powers, duties and compensation provided for in La. R.S. 9:5133 and R.S. 9:5138,
and shall not be required to provide any bond otherwise than as required by law
in such proceedings, pursuant to La. R.S. 9:5134 and R.S. 9:5139. Such keeper
shall be entitled to reimbursement for all reasonable out-of-pocket expenses and
for a reasonable fee for its services equal to four (4%) percent of the revenues
received. This clause shall be expressly governed by the provisions of La. R.S.
9:5131 et seq. and 9:5136 et seq.
11. If any action or proceeding be commenced to foreclose this
Mortgage or to collect the Obligations, or in which it becomes necessary to
defend or uphold the lien of this Mortgage, Mortgagor agrees to pay to the
Mortgagee its reasonable attorney's fees in connection with such action or
proceeding, which fees may be collected in such action or proceeding and shall,
to the extent permitted by law, be a lien on the Premises prior to any interest
in, or claim upon the Premises arising subsequent to the lien hereof.
12. Upon the occurrence of a Default, the Mortgagee may, in addition
to any rights or remedies available to it hereunder or elsewhere, take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against the Mortgagor and in and to the Premises, including, but not
limited to, the following actions, each of which may be pursued, to the extent
permitted by applicable law, concurrently or otherwise, at such time and in such
order as the Mortgagee may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of the Mortgagee: (A) enter
into or upon the Premises, either personally or by its agents, nominees or
attorneys, and dispossess the Mortgagor and its agents and servants therefrom,
and thereupon the Mortgagee may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Premises and conduct the business thereat; (ii) complete any construction on the
Premises in such manner and form as the Mortgagee deems advisable; (iii) make
alterations, additions, renewals, replacements and improvements to or on the
Premises; (iv) exercise all rights and powers of the Mortgagor with respect to
the Premises, whether in the name of the Mortgagor or otherwise, including,
without limitation, the right to make, cancel, enforce or modify leases, obtain
and evict tenants, and demand, xxx for, collect and receive all earnings,
revenues, rents, issues, profits and other income of the Premises and every part
thereof; and (v) apply the receipts from the Premises to the payment of the
Obligations after deducting therefrom all expenses (including reasonable
attorneys' fees) incurred in connection with the aforesaid operations and all
amounts necessary to pay the taxes, payments in lieu of taxes, assessments,
insurance and other charges in connection with the Premises as well as just and
reasonable compensation for the services of the Mortgagee, its counsel, agents
and employees; or (B) with or without entry, institute proceedings for the
foreclosure of this Mortgage for the portion of the Obligations then due and
payable, subject to the continuing lien of this Mortgage for the balance of the
Obligations then due and payable, and subject to the continuing lien of this
Mortgage for the balance of the Obligations not then due; or (C) institute
proceedings to foreclose the lien of this Mortgage against all or, from time to
time, against any part of the Premises and to have the same sold under the
judgment or decree of a court of competent jurisdiction; or (D) sell, assign or
transfer the Premises or any part thereof and all estate, claim, demand, right,
title and interest of the Mortgagor therein and right of redemption thereof,
pursuant to
-6-
power of sale or otherwise, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law for such price and
form of consideration as the Mortgagee may determine or as may be required by
law; or (E) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein; or (F)
apply for the appointment of a trustee, receiver, liquidator or conservator of
the Premises, without regard for the adequacy of the security for the
Obligations and without regard for the solvency of any person, firm or other
entity liable for the payment of the Obligations; or (G) pursue such other
remedies as the Mortgagee may have under applicable law.
13. Upon the occurrence of a Default and at the option of the
Mortgagee the Premises may be seized and sold under executory process issued by
any court of competent jurisdiction, with or without appraisement, to the
highest bidder, for cash or Mortgagee may, at its option, proceed to enforce
this Mortgage in any other manner provided by law.
14. For the purpose of Louisiana executory process procedures, the
Mortgagor expressly confesses judgment in favor of the Mortgagee and any future
holder(s) of the Obligations in the full amount of the Obligations. The
Mortgagor hereby expressly waives the benefit of appraisement, as provided in
Articles 2332, 2336, 2723, and 2724 of the Louisiana Code of Civil Procedure,
and all other laws conferring the same; time being of the essence, the Mortgagor
further expressly waives demand, putting in default, citation and all notices
and delays, including the three-day notice provided by Article 2639 of the
Louisiana Code of Civil Procedure. The Mortgagor further expressly consents to
the use of executory process to enforce the Obligations and this Mortgage.
15. The Mortgagee may, pursuant to the terms and conditions of the
Loan Agreement, and without affecting the lien hereof or the Mortgagor's
obligations hereunder, renew, extend, accelerate or otherwise change the terms
of payment of the Obligations, grant waivers of the provisions thereof or other
indulgences, release any person liable, or collateral held as security, for
payment of the Obligations, and upon any default in payment of any of the
Obligations, pursue, take or refrain from pursuing any remedy for the collection
of the Obligations, including the enforcement of the lien of this Mortgage. No
act or failure to act by the Mortgagee, including acceptance of any partial
payment on the Obligations, shall constitute or be construed as a waiver of the
Mortgagee's right to pursue each and every right and remedy hereunder. This
Mortgage may be modified or discharged only by a written agreement executed by
the party against whom such modification or discharge is sought to be enforced.
16. In case of a sale in foreclosure, the Premises and the rights
and interests of the Mortgagor may be sold in one or more parcels and in one or
more transactions. The Mortgagor hereby waives for itself and all who may claim
through or under it, and to the full extent the Mortgagor may do so under
applicable law, any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage or granted under any statute now existing
or hereafter enacted.
17. Should Mortgagor, without the consent in writing of Mortgagee,
voluntarily, involuntarily or otherwise, lease, sell, transfer, or convey any
interest in the Premises or any part thereof, or if by operation of law the
Premises be sold, transferred or pledged, then the Mortgagee may, at its option,
declare all sums secured hereby immediately due and payable. Consent to one such
-7-
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions. A transfer or disposition of the
Premises or any part thereof or interest therein shall include, without
limitation, execution of any lease for space in the Premises for purposes other
than occupancy by the lessee named therein, any lease of space in the Premises
containing an option to purchase, a right of first refusal or offer or similar
right, or any direct or indirect sale, assignment, conveyance, transfer
(including a transfer as a result of or in lieu of a condemnation) or other
alienation of all or any part of the Premises or any interest therein, and
including any assignment, pledge, grant of security interest in, conditional
sale, or the execution of a title retention agreement with regard to the
Premises. Any transfer or other disposition (whether by operation of law or
otherwise) of (i) the Majority Member interest in the Grantor, other than as
expressly permitted under the Loan Agreement, or (ii) more than 49% of the
outstanding voting stock of the Mortgagor shall also constitute a transfer of
the Premises, whether made directly or through an intermediary and whether made
in a single transaction or in a series of transactions.
18. All remedies provided in this Mortgage are distinct and
cumulative to any other right or remedy under this Mortgage, the Notes, the Loan
Agreement, any guaranty of the Obligations secured hereby or any other
agreement, if any, between the Mortgagor and the Mortgagee executed
simultaneously or in connection herewith, or afforded by law or equity, and may
be exercised concurrently, independently or successively. Wherever in this
Mortgage the prior consent of the Mortgagee is required, the consent of the
Mortgagee given as to one such transaction shall not be deemed to be a waiver of
the right to require such consent to future or successive transactions. Any such
consents shall be in writing.
19. Any forbearance by the Mortgagee in exercising any right or
remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver
of or preclude the exercise of any such right or remedy. The procurement of
insurance or the payment of taxes or other liens or charges by the Mortgagee
shall not be a waiver of the Mortgagee's right to accelerate the maturity of the
Obligations secured hereby.
20. The covenants, agreements and options herein contained shall
bind and inure to the benefit of the successors and assigns of the parties
hereto.
21. The Mortgagee is hereby granted the right, at its option, to
cure all defaults claimed by it to have occurred hereunder and all sums
reasonably expended by the Mortgagee in furtherance of its rights hereunder
shall be secured hereby and shall bear interest at the default rate applicable
to the loan evidenced by the Notes. Such sums and interest shall be payable by
Mortgagor on demand by Mortgagee or, if not earlier demanded, at the date set
forth for final payment of all sums secured hereby.
22. The execution of this Mortgage has been duly authorized by the
Mortgagor.
23. If Mortgagor shall receive any notice of (i) the happening of
any event involving the use, spill, discharge or clean-up of any hazardous or
toxic substance or waste or any oil or pesticide on or about any property of
Mortgagor or caused by the Mortgagor (a "Hazardous Discharge") or (ii) any
complaint, order, citation or notice with regard to air emissions, water
discharges, noise emissions
-8-
or any other environmental, health or safety matter affecting Mortgagor, or the
Premises or its operations (an "Environmental Complaint") from any governmental
or regulatory entity, including without limitation the Department of
Environmental Protection of the State in which the Premises is located ("DEP"),
the United States Environmental Protection Agency ("EPA"), the United States
Army Corps of Engineers (the "Corps"), or the United States Coast Guard (the
"Coast Guard"), then Mortgagor shall give written notice of the same to
Mortgagee within ten (10) days of receipt thereof and shall promptly comply with
its obligations under law with regard to such Hazardous Discharge or
Environmental Complaint at the sole cost and expense of the Mortgagor.
24. Without limitation of Mortgagee's rights under this Mortgage, to
the extent permitted by applicable law, Mortgagee shall have the right, but not
the obligation, to exercise any of its rights to cure as provided in this
Mortgage or to enter onto the Premises or to take such other actions as it deems
necessary or advisable, to cleanup, remove, resolve or minimize the impact of,
or otherwise deal with, any such Hazardous Discharge or Environmental Complaint
upon its receipt of any notice from any governmental or regulatory entity,
including without limitation the DEP, the EPA, the Corps or the Coast Guard,
asserting the happening of a Hazardous Discharge or Environmental Complaint
which, if true, could result in any order, suit or other action against
Mortgagor and/or any part of the Premises by any governmental or regulatory
entity or otherwise which, in the sole opinion of Mortgagee, could jeopardize
its collateral security under this Mortgage. All reasonable costs and expenses
incurred and paid by Mortgagee in the exercise of any such rights shall be
secured by this Mortgage and all other collateral granted to Mortgagee and shall
be payable by Mortgagor upon demand.
25. In addition to those Events of Default specified in the Loan
Agreement, the occurrence of any of the following events shall constitute a
Default under this Mortgage and the Loan Agreement, entitling Mortgagee to all
rights and remedies provided therefor:
(a) If Mortgagor shall fail to comply with provisions of
Paragraph 22 hereof, and, in each such case, such failure is not cured by
Mortgagor within 30 days after receipt by Mortgagor of notice of such failure
from Mortgagee; or
(b) If the DEP, EPA or any other state or federal agency
imposes a lien upon any or all of the Premises by reason of the occurrence of a
Hazardous Discharge or Environmental Complaint or otherwise, and such lien is
not discharged or bonded over within 90 days after the earlier of (i) the date
upon which Mortgagor has actual notice of such lien and (ii) the date Mortgagor
receives notice of such lien from Mortgagee; or
(c) If the DEP, EPA or any other state or federal agency
asserts a claim against Mortgagor, the Premises or Mortgagee for damages or
cleanup costs related to a Hazardous Discharge or Environmental Complaint;
provided, however, such claim shall not constitute a default if, within thirty
(30) business days of Mortgagor's receipt of notice of same:
(1) The Mortgagor can prove to Mortgagee's satisfaction
that Mortgagor has commenced and is diligently pursuing either: (A) a cure or
correction of the event which constitutes the basis for the claim, and Mortgagor
is continuing diligently to pursue such cure
-9-
or correction to completion, or (B) proceedings for injunction, a restraining
order or other appropriate emergency relief to prevent such agency or agencies
from asserting such claim, which relief is granted within sixty (60) days of the
assertion of the claim and the injunction, order or emergency relief is not
thereafter dissolved or reversed on appeal; and
(2) In either of the foregoing events, Mortgagor has
posted a bond, letter of credit or other security, at the sole cost and expense
of the Mortgagor, satisfactory in form, substance and amount to both Mortgagee
and the agency or entity asserting the claim to secure the proper and complete
cure or correction of the event which constitutes the basis for the claim.
26. (a) Mortgagor shall comply (should same become appropriate),
with the provisions of the federal Occupational Safety and Health Act and all
environmental, health and safety laws governing Mortgagor, Mortgagor's business,
and/or the Premises, and all rules and regulations thereunder and all similar
state and local laws, rules and regulations. To the best of Mortgagor's
knowledge, there are not now any outstanding citations, notices or orders of
violation or noncompliance issued to Mortgagor or relating to Mortgagor's
business assets, property or leaseholds under any such laws, rules or
regulations, nor any conditions which, if known by the proper authorities, could
result in any of the foregoing.
(b) Mortgagor has, and will continue to have, all necessary
federal, state and local licenses, certificates and permits relating to
Mortgagor and Mortgagor's facilities, business, Premises and leaseholds and, to
the best of Mortgagor's knowledge, the foregoing are in compliance with all
applicable federal, state and local laws, rules and regulations relating to air
emissions, water discharges, noise emissions, solid or liquid storage and
disposal, hazardous or toxic waste or substances and other environmental, health
and safety matters.
(c) Upon written request, Mortgagor shall provide to Mortgagee
the following information pertaining to all operations conducted in or on the
Premises:
(1) Copies of any and all permits obtained from any
local, state or federal agency.
(2) Material safety data sheets for any and all
chemicals in use at, manufactured at, imported to or stored at the Premises.
(3) Copies of any and all materials filed with Federal
Occupational Safety and Health Agency under the OSHA Hazard Communication
Standard and all materials filed with the Department of Health, Department of
Environmental Protection or any other federal, state or local agency or entity.
(d) Maps, diagrams and site plans showing the, location of all
storage areas and storage tanks for hazardous substances and wastes and the
location of processes using any of them, including details as to the amounts
stored or used, if any.
(e) Any other information which Mortgagee may reasonably
require.
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27. The parties hereto acknowledge that this Mortgage is being
delivered to the Mortgagee as a condition of the Loan Agreement and the making
of the loans provided for therein.
28. The Mortgagor hereby grants to the Mortgagee a security interest
in all property, whether intangible or intangible, including without limitation
all fixtures, accounts, equipment, inventory and general intangibles now or
hereafter located on, included in, arising out of or related to the Premises, to
which a security interest can attach under the Uniform Commercial Code, as in
effect from time to time, in the state in which the Premises are located (the
"U.C.C.") in order to secure the Obligations. The Mortgagee shall have, in
addition to all other rights and remedies provided herein, in any other document
executed in connection with the transactions contemplated hereby, in law, at
equity or otherwise, all rights and remedies of a secured party under the U.C.C.
This Mortgage shall constitute a security agreement as such term is used in the
U.C.C., and information concerning the security interest created hereby may be
obtained by application to the Mortgagee (secured party) at the address
specified in the introduction hereto. The mailing address of the Mortgagor is
also set forth in the introduction hereto. The Mortgagor irrevocably authorizes
the Mortgagee, without the signature of the Mortgagor, to execute and file any
financing or continuation statement which the Mortgagee deems necessary or
advisable to perfect or continue the perfection of the security interest granted
hereby, or to preserve and maintain the priority of the lien hereof, and the
Mortgagor, upon demand, shall pay, or shall reimburse the Mortgagee for paying,
any and all costs and expenses from time to time incurred in connection with the
preparation, execution and filing of any such statements, and all payments made
by the Mortgagee shall be a lien on the Premises and shall be deemed secured by
this Mortgage. The filing of such statements shall under no circumstance be
construed as impairing either the Mortgagee's remedies or the priority of the
mortgage lien granted hereby, and the Mortgagor agrees that all items of
personal property included within the Premises are, and at all times, for all
purposes and in all proceedings (both legal and equitable) shall be, at the
election of the Mortgagee, regarded as part of the real estate covered by this
Mortgage.
28. THE PROVISIONS OF THIS MORTGAGE WHICH RELATE TO THE REALIZATION
UPON THE SECURITY COVERED BY THIS MORTGAGE SHALL BE GOVERNED BY THE STATE IN
WHICH THE PREMISES IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT
PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL
GOVERN THE VALIDITY AND ENFORCEABILITY OF THIS MORTGAGE, AND THE OBLIGATIONS
ARISING HEREUNDER. IF ANY PROVISION OF THIS MORTGAGE SHALL BE PROHIBITED BY OR
INVALID UNDER THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS MORTGAGE.
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THUS DONE AND PASSED, on the day, month and year first written
above, in the presence of the undersigned Notary and the undersigned competent
witnesses, who hereunto sign their names with Mortgagor after reading of the
whole.
MORTGAGOR:
WITNESSES:
S & W NEW ORLEANS, L.L.C., a Delaware
limited liability company
------------------------------- BY: THE NEW YORK RESTAURANT
GROUP, INC., a Delaware corporation,
Majority Member
-------------------------------
By:
-------------------------------------
Name:
Title:
BY: S&W NEW ORLEANS HOLDINGS,
INC., a Delaware corporation, Member
By:
-------------------------------------
Name:
Title:
-------------------------------
NOTARY PUBLIC
-12-
SCHEDULE A
DESCRIPTION OF PREMISES
-13-
INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS
INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS (this "Agreement")
made as of the 1st day of September, 1998 by THE NEW YORK RESTAURANT GROUP,
INC., a Delaware corporation having its chief place of business at 0000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Borrower"), the Borrower, The Manhattan
Ocean Club Associates, L.L.C., a New York limited liability company, La Cite
Associates, L.L.C., a Delaware limited liability company, Atlantic & Pacific
Grill Associates, L.L.C., a New York limited liability company, Xxx. Xxxxx Sub,
LLC, a Delaware limited liability company, New York RGI Sub, LLC, a Delaware
limited liability company, Restaurant Group Management Service, LLC, a New York
limited liability company, S & W Chicago, LLC, a Delaware limited liability
company, S & W of Miami, L.L.C., a Delaware limited liability company, MOC D.C.,
L.L.C., a Delaware limited liability company, S & W Las Vegas, L.L.C., a
Delaware limited liability company, S & W New Orleans, L.L.C., a Delaware
limited liability company, S & W D.C., L.L.C., a Delaware limited liability
company, Manhattan Ocean Holdings, Inc., a Delaware corporation, Cite Holdings,
Inc., a Delaware corporation, Atlantic & Pacific Grill Holdings, Inc., a
Delaware corporation, MPM Holdings, Inc., a Delaware corporation, NYRGI
Holdings, Inc., a Delaware corporation, Restaurant Group Management Holdings,
Inc., a New York corporation, S & W Chicago Holdings, Inc., a Delaware
corporation, MOC D.C. Holdings, Inc., a Delaware corporation, S & W New Orleans
Holdings, Inc., a Delaware corporation, and S & W D.C. Holdings, Inc., a
Delaware corporation (the twenty-two (22) foregoing entities referred to herein
as the "Subsidiaries") (the Borrower and the Subsidiaries collectively referred
to as "Indemnitor") in favor of FLEET BANK, N.A., a national banking association
("Indemnitee") and other Indemnified Parties (defined below).
RECITALS:
A. Indemnitee has agreed to make a senior secured revolving credit
and term loan facility (the "Loan") to Borrower in the aggregate principal
amount of $15,000,000 pursuant to a Loan Agreement dated as of the date hereof
between Indemnitor and Indemnitee (as same may be amended, supplemented,
restated or otherwise modified from time to time, the "Loan Agreement"). Unless
otherwise defined herein, all capitalized terms shall have the meanings given
them in the Loan Agreement.
B. The Loan is evidenced by a Note issued by the Indemnitor in favor
of the Indemnitee, dated the date hereof in the amount of the Loan, and secured
by, among other things, the Mortgages between Lender and certain Subsidiaries,
as described on Schedule A hereto (as the same may be amended, restated,
supplemented, extended, renewed, split, modified, assigned or replaced from time
to time), respectively encumbering such Subsidiary's interest, as a fee owner in
the land and improvements commonly known as 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxx and 0000-0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx
(collectively, the "Property").
C. Indemnitee is unwilling to make the Loan unless Indemnitor agrees
to provide the indemnification, representations, warranties, and covenants and
other matters described in this Agreement for the benefit of Indemnitee.
D. Indemnitor enters into this Agreement to induce Indemnitee to
make the Loan.
AGREEMENT:
NOW THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby
represents, warrants, covenants and agrees for the benefit of Indemnified
Parties as follows:
1. Environmental Representations and Warranties. To the best of
Indemnitor's knowledge, based upon the Environmental Reports (as hereinafter
defined) and after due inquiry, (a) there are no Hazardous Substances (defined
below) or underground storage tanks in, on, or under the Property, except those
that are both (i) in compliance with all Environmental Laws (defined below) and
with permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in
writing pursuant to the written reports described on Schedule B hereto resulting
from the environmental assessments of the Property delivered to Indemnitee (the
"Environmental Reports"); (b) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property
except as described in the Environmental Reports; (c) there is no threat of any
Release of Hazardous Substances migrating to the Property except as described in
the Environmental Reports; (d) there is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in connection with
the Property, except as described in the Environmental Reports; (e) Indemnitor
does not know of, and has not received, any written or oral notice or other
communication from any person or entity (including, but not limited to, a
governmental entity) relating to Hazardous Substances or Remediation (defined
below) thereof, of liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with any of the foregoing; and (f) Indemnitor has truthfully and
fully provided to Indemnitee, in writing, any and all information relating to
conditions in, on, under or from the Property that is known to Indemnitor and
that is contained in files and records of Indemnitor, including, but not limited
to, any reports relating to Hazardous Substances in, on, under or from the
Property and/or to the environmental condition of the Property.
2. Environmental Covenants. Indemnitor covenants and agrees that:
(a) all uses and operations on or of the Property, whether by Indemnitor or any
other Person, shall be in compliance with all Environmental Laws and permits
issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances
in, on, under or from the Property; (c) there shall be no Hazardous Substances
in, on, or under the Property, except those that are both (i) in compliance with
all Environmental Laws and permits issued pursuant thereto, and (ii) fully
disclosed to Indemnitee in writing or are required for cleaning and/or the
customary day-to-day operation of the Property; (d) Indemnitor shall keep the
Property free and clear of all Liens imposed pursuant to any Environmental Law,
whether due to any act or omission of Indemnitor or any other Person
(collectively, the "Environmental Liens"); (e) Indemnitor shall, at its sole
cost and expense,
-2-
perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Indemnitee (including, but not limited to,
sampling, testing and analysis of soil, water, air, building materials, and
other materials and substances whether solid, liquid or gas), and share with
Indemnitee the reports and other results thereof, and Indemnitee and other
Indemnified Parties shall be entitled to rely on such reports and other results
thereof; (f) Indemnitor shall, at its sole cost and expense, comply with all
reasonable written requests of Indemnitee to (i) effectuate Remediation of any
condition (including, but not limited to, a Release of a Hazardous Substance)
in, on, under or from the Property; (ii) comply with any Environmental Law;
(iii) comply with any directive from any Governmental Authority; and (iv) take
any other reasonable action necessary or appropriate for protection of human
health or the environment; (g) Indemnitor shall not do or allow any tenant or
other user of the Property to do any act that materially increases the dangers
to human health or the environment, poses an unreasonable risk of harm to any
person or entity, impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property in connection with any environmental matter
applicable to the Property; and (h) Indemnitor upon obtaining knowledge thereof
shall immediately notify Indemnitee in writing of (A) any presence or Releases
or threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws related
in any way to the Property; (C) any actual or potential Environmental Lien; (D)
any required or proposed Remediation of environmental conditions relating to the
Property; and (E) any written or oral notice or other communication of which
Indemnitor becomes aware from any source whatsoever (including, but not limited
to, a governmental entity) relating in any way to Hazardous Substances or
Remediation thereof, possible liability of any Person pursuant to any
Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Agreement.
3. Indemnified Parties' Rights/Cooperation and Access. Indemnified
Parties and any other Person designated by Indemnified Parties (including, but
not limited to, any receiver, any representative of a governmental entity and
any environmental consultant), shall have the right but not the obligation to
enter upon the Property at all reasonable times to assess any and all aspects of
the environmental condition of the Property and its use, including, but not
limited to, conducting any environmental assessment or audit (the scope of which
shall be determined in Indemnitee's sole and absolute discretion) and taking
samples of soil, groundwater or other water, air or building materials, and
conducting other invasive testing, it being understood and agreed that
Indemnitor shall use good faith efforts to cooperate with and provide access to
Indemnified Parties and any such Person designated by Indemnified Parties.
4. Indemnification. Indemnitor covenants and agrees at its sole cost
and expense, to protect, defend, indemnify, release and hold Indemnified Parties
harmless from and against any and all Losses (defined below), except for Losses
arising from the willful misconduct or gross negligence of any of the
Indemnified Parties, imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following (a) any presence of any Hazardous
Substances in, on, above, or under the Property; (b) any past, present or
threatened Release of Hazardous Substances in, on, above,
-3-
under or from the Property; (c) any activity by any Indemnitor, any Person
affiliated with any Indemnitor, and any tenant or other user of the Property in
connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Property of any Hazardous
Substances at any time located in, under, on or above the Property; (d) any
activity by Indemnitor or any Affiliate or Subsidiary of Indemnitor, and any
tenant or other user of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or
above the Property, whether or not such Remediation is voluntary or pursuant to
court or administrative order, including, but not limited to any removal,
remedial or corrective action; (e) any past, or present non-compliance or
violations of any Environmental Laws (or permits issued pursuant to any
Environmental Law) in connection with the Property or operations thereon,
including, but not limited to, any failure by Indemnitor, any Affiliate or
Subsidiary of Indemnitor, and any tenant or other user of the Property to comply
with any order of any Governmental Authority in connection with any
Environmental Laws; (f) the imposition, recording or filing of any Environmental
Lien encumbering the Property; (g) any administrative processes or proceedings
or judicial proceedings in any way connected with any matter addressed in this
Agreement; (h) any acts of Indemnitor, any Affiliate or Subsidiary of
Indemnitor, and any other user of the Property in arranging for disposal or
treatment, or arranging with a transporter for transport for disposal or
treatment, of Hazardous Substances owned or possessed by Indemnitor or such
other user at any facility or incineration vessel owned or operated by another
Person containing such or similar Hazardous Substances; (i) any acts of
Indemnitor, any Affiliate or Subsidiary of Indemnitor, and any other user of the
Property in accepting any Hazardous Substances for transport to disposal or
treatment facilities, incineration vessels or sites selected by Indemnitor or
such other user from which there is a Release, or a threatened Release of any
Hazardous Substance which causes the incurrence of costs for Remediation; (j)
any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory, including, but not limited to,
damages assessed for private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (k) any material
misrepresentation or material inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to this Agreement or the Mortgages except the indemnity provided in
this Section 4 shall not inure to the benefit of any third-party purchaser of
any of the Property. Notwithstanding the foregoing provisions of this Section 4,
if Indemnitee or any of its affiliates take possession of all or any part of the
Property (the "Possession") the indemnity provided in this Section 4 shall not
apply to the extent that any Losses incurred by any of the Indemnified Parties
that is the result of a Release or placement upon the Property of Hazardous
Substances (x) caused by the affirmative act or gross negligence of Indemnitee
or such affiliate or (y) occurring after the date of Possession.
5. Duty to Defend and Attorneys and Other Fees and Expenses. Upon
written request by any Indemnified Party, Indemnitor shall defend same (if
requested by any Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals approved by the Indemnified Parties.
-4-
6. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
The term "Hazardous Substances" includes, but is not limited
to, any and all substances (whether solid, liquid or gas) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives.
The term "Environmental Law" means any present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened danger to human
health or the environment. The term "Environmental Law" includes, but is not
limited to, the following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource Conservation and Recovery Act (including, but
not limited to, Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide
and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. The term "Environmental
Law" also includes, but is not limited to, any present and future federal, state
and local laws, statutes, ordinances, rules, regulations and the like, as well
as common law: conditioning transfer of the Property upon a negative declaration
or other approval of a governmental authority of the environmental condition of
the Property; requiring notification or disclosure of Releases of Hazardous
Substances or other environmental condition of the Property to any governmental
authority or other Person, whether or not in connection with transfer of title
to or interest in the Property; imposing conditions or requirements in
connection with permits or other authorization for lawful activity; relating to
nuisance, trespass or other causes of action related to the Property; and
relating to wrongful death, personal injury, or property or other damage in
connection with any physical condition or use of the Property.
The term "Release" with respect to any Hazardous Substance
includes, but is not limited to, any release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Substances.
The term "Remediation" includes, but is not limited to, any
response, remedial, removal, or corrective action; any activity to clean up,
detoxify, decontaminate, contain
-5-
or otherwise remediate any Hazardous Substance; any actions to prevent, cure or
mitigate any Release of any Hazardous Substance; any action to comply with any
Environmental Laws or with any permits issued pursuant thereto; any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances.
The term "Legal Action" means any claim, suit or proceeding,
whether administrative or judicial in nature.
The term "Indemnified Parties" includes Indemnitee, any Person
who is or will have been involved in the origination of the Loan, any Person who
is or will have been involved in the servicing of the Loan, any Person in whose
name the Lien created by the Mortgages is or will have been recorded, Persons
who may hold or acquire or will have held a full or partial interest in the
Loan, as well as custodians, trustees and other fiduciaries who hold or have
held a full or partial interest in the Loan for the benefit of third parties) as
well as the respective directors, officers, shareholders, partners, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including, but not limited to, any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan
or the Property, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Indemnitee's assets and banking business).
The term "Losses" includes any losses, damages, costs, fees,
expenses, claims, suits, judgments, awards, liabilities (including, but not
limited to, strict liabilities), obligations, debts, diminutions in value,
fines, penalties, charges, costs of Remediation (whether or not performed
voluntarily), amounts paid in settlement, litigation costs, reasonable
attorneys' fees and expenses, engineers' and environmental consultants' fees and
expenses, and investigation costs and expenses (including, but not limited to,
costs and expenses for sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether solid, liquid or
gas), of whatever kind or nature, and whether or not incurred in connection with
any judicial or administrative proceedings, actions, claims, suits, judgments or
awards.
7. Unimpaired Liability. The liability of Indemnitor under this
Agreement shall in no way be limited or impaired by, and Indemnitor hereby
consents to and agrees to be bound by, any amendment or modification of the
provisions of the Term Note, the Mortgages or any other Loan Document to or with
Indemnitee by Indemnitor or any Person who succeeds Indemnitor or any Person as
owner of the Property. In addition, subject to Section 4 hereof, the liability
of Indemnitor under this Agreement shall in no way be limited or impaired by (i)
any extensions of time for performance required by the Term Note, the Mortgages
or any of other Loan Document, (ii) except as provided herein, any sale or
transfer of all or part of the Property, (iii) except as provided herein, any
exculpatory provision in the Term Note, the Mortgages, or any of other Loan
Document limiting Indemnitee's recourse to the Property or to any other security
for the Term Note, or limiting Indemnitee's rights to a deficiency judgment
against Indemnitor, (iv) the accuracy or inaccuracy of the representations and
warranties made by Indemnitor under the Term Note, the Mortgages or any
-6-
other Loan Document or herein, (v) the release of Indemnitor or any other Person
from performance or observance of any of the agreements, covenants, terms or
condition contained in any of the Loan Documents by operation of law,
Indemnitee's voluntary act, or otherwise, (vi) the release or substitution in
whole or in part of any security for the Term Note, or (vii) Indemnitee's
failure to record the Mortgages or file any UCC financing statements (or
Indemnitee's improper recording or filing of any thereof) or to otherwise
perfect, protect, secure or insure any Lien given as security for the Term Note;
and, in any such case, whether with or without notice to Indemnitor and with or
without consideration.
8. Enforcement. Indemnified Parties may enforce the obligations of
Indemnitor without first resorting to or exhausting any security or collateral
or without first having recourse to the Term Note, the Mortgages, or any other
Loan Document or any of the Property, through foreclosure proceedings or
otherwise; provided, however, that nothing herein shall inhibit or prevent
Indemnitee from suing on the Term Note, foreclosing, or exercising any power of
sale under the Mortgages, or exercising any other rights and remedies
thereunder. This Agreement is not collateral or security for the debt of
Indemnitor pursuant to the Loan, unless Indemnitee expressly elects in writing
to make this Agreement additional collateral or security for such debt, which
Indemnitee is entitled to do in its sole and absolute discretion.
Notwithstanding any provision of any of the Mortgages, the obligations pursuant
to this Agreement are exceptions to any non-recourse or exculpation provision of
any of the Mortgages, Indemnitor is fully and personally liable for such
obligations, and its liability is not limited to the original or amortized
principal balance of the Loan or the value of the Property.
9. Survival. The obligations and liabilities of Indemnitor under
this Indemnity shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any
power of sale, or delivery of a deed in lieu of foreclosure of the Mortgages.
This Agreement shall not inure to the benefit of any third-party purchaser of
the Property other than an affiliate of Lender.
10. Interest. Any amounts payable to any Indemnified Parties under
this Agreement shall become immediately due and payable on demand and, if not
paid within thirty (30) days of such demand therefor, shall bear interest at a
per annum rate equal to the lesser of (a) the Past Default Rate (as defined in
the Loan Agreement) or (b) the maximum interest rate which Indemnitor may by law
pay or Indemnified Parties may charge and collect, from the date payment was
due.
11. Waivers. (a) Indemnitor hereby waives (i) any right or claim of
right to cause a marshalling of Indemnitor's assets or to cause Indemnitee or
other Indemnified Parties to proceed against any of the security for the Loan
before proceeding under this Agreement against Indemnitor; (ii) and relinquishes
all rights and remedies accorded by applicable law to indemnitors or guarantors,
except any rights of subrogation which Indemnitor may have, provided that the
indemnity provided for hereunder shall neither be contingent upon the existence
of any such rights of subrogation nor subject to any claims or defenses
whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim
that such subrogation rights were abrogated by any acts of Indemnitee or other
Indemnified Parties; (iii) the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim,
-7-
in any action or proceeding brought against or by Indemnitee or other
Indemnified Parties; (iv) notice of acceptance hereof and of any action taken or
omitted in reliance hereon; (v) presentment for payment, demand of payment,
protest or notice of nonpayment or failure to perform or observe, or other
proof, or notice or demand; and (vi) all homestead exemption rights against the
obligations hereunder and the benefits of any statutes of limitations or repose.
Notwithstanding anything to the contrary contained herein, Indemnitor hereby
agrees to postpone the exercise of any rights of subrogation with respect to any
collateral securing the Loan until the Loan shall have been paid in full.
(b) INDEMNITOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE
LOAN AGREEMENT, THE TERM NOTE, THE MORTGAGES, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION
THEREWITH.
12. Subrogation. Indemnified Parties shall be and hereby are
subrogated to all of Indemnitor's rights now or hereafter in such claims.
13. Indemnitor's Representations and Warranties. Indemnitor hereby
affirms each representation and warranty made by Indemnitor to Indemnitee in
respect of this Agreement in the Loan Agreement as if such representation or
warranty were stated in its entirety in this Agreement.
14. No Waiver. No delay by any Indemnified Party in exercising any
right, power or privilege under this Agreement shall operate as a waiver of any
such privilege, power or right.
15. Notice of Legal Actions. Each party hereto shall, within five
(5) business days of receipt thereof, give written notice to the other party
hereto of (i) any notice, advice or other communication from any Governmental
Authority or other source with respect to Hazardous Substances on, from or
affecting the Property, and (ii) any Legal Action brought against such party or
related to the Property, with respect to which Indemnitor may have liability
under this Agreement. Such notice shall comply with the provisions of Section 16
hereof
16. Notices. All notices or other written communications hereunder
shall be given in accordance with Section 9.1 of the Loan Agreement to the
address set forth therein.
17. Submission to Jurisdiction. With respect to any claim or action
arising hereunder, Indemnitor (a) irrevocably submits to the nonexclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York, New York and
appellate courts from any thereof, and (b) irrevocably waives any objection
which it may have at any time to the laying on venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any such
court, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
-8-
18. No Third-Party Beneficiary. The terms of this Agreement are for
the sole and exclusive protection and use of Indemnified Parties. No party shall
be a third party beneficiary hereunder, and no provision hereof shall operate or
inure to the use and benefit of any such third party. It is agreed that those
persons and entities included in the definition of Indemnified Parties are not
such excluded third party beneficiaries.
19. Duplicate Originals: Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
20. No Oral Change. This Agreement, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Indemnitor or any
Indemnified Party, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
21. Headings, etc. The headings and captions of various paragraphs
of this Agreement are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
22. Number and Gender/Successors and Assigns. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may
require. Without limiting the effect of specific references in any provision of
this Agreement, the term "Indemnitor" shall be deemed to refer to each and every
Person comprising an Indemnitor from time to time, as the sense of a particular
provision may require, and to include the heirs, executors, administrators,
legal representatives, successors and assigns of Indemnitor, all of whom shall
be bound by the provisions of this Agreement, provided that no obligation of any
Indemnitor may be assigned except with the written consent of Indemnitee. Each
reference herein to Indemnitee shall be deemed to include its successors and
assigns. This Agreement shall inure to the benefit of Indemnified Parties and
their respective successors and assigns forever.
23. Rights Cumulative. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which Indemnitee has
under the Loan Agreement, Mortgages or other Loan Documents or would otherwise
have at law or in equity.
24. Inapplicable Provisions. If any term, condition or covenant of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, this Agreement shall be construed without such provision.
-9-
25. Governing Law. This Agreement shall be deemed to be governed,
construed, applied and enforced in accordance with the laws of the State of New
York without regard to principles of conflicts of law.
IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor
and is effective as of the day and year first above written.
THE NEW YORK RESTAURANT GROUP, INC.,
a Delaware corporation
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
THE MANHATTAN OCEAN CLUB
ASSOCIATES, L.L.C., a New York limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LA CITE ASSOCIATES, L.L.C.,
a Delaware limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL
ASSOCIATES, L.L.C., a New York
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
XXX. XXXXX SUB, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NEW YORK RGI SUB, INC., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
SERVICE, LLC, a New York,
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W Chicago, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W OF MIAMI, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C., L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W LAS VEGAS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C., LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MANHATTAN OCEAN HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
CITE HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MPM HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NYRGI HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
HOLDINGS, INC., a New York corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W CHICAGO HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C. HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C. HOLDINGS, INC., a Delaware
corporation
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
FLEET BANK, N.A., a national banking
association
By:
--------------------------------------
Name: Judah Zweiter
Title: Vice President
SCHEDULE A
Act of Mortgage and Security Agreement by S & W New Orleans, L.L.C. in favor of
Fleet Bank, N.A., dated September 1, 1998.
Deed of Trust, Assignment of Leases and Rents and Security Agreement by S & W of
Las Vegas, L.L.C. for the benefit of Fleet Bank, N.A., dated September 1, 1998.
[LETTERHEAD OF XXXXXXXX, XXXXXXX & XXXXXXX]
September 1, 1998
Fleet Bank, N.A.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: The New York Restaurant Group. Inc.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.1(f) of the
Loan Agreement between your bank and The New York Restaurant Group, Inc., a
Delaware corporation ("Borrower") dated as of September 1, 1998 (the "Loan
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Loan Agreement.
We have acted as counsel to Borrower and its subsidiaries listed on
Schedule I hereto (the "Subsidiaries") in connection with the preparation,
execution and delivery of the Loan Agreement and the transactions contemplated
therein. In connection with such representation, we have examined originals, or
copies identified to our satisfaction as being true copies, of the following:
(1) The Loan Agreement;
(2) The Notes;
(3) The Security Agreement;
(4) The Indemnity Agreement;
(5) The Subsidiaries' Guarantees;
(6) Agreement Regarding Fees;
(7) Mortgages of S & W of Las Vegas, L.L.C. and S & W New Orleans,
L.L.C.:
(8) Collateral Assignment of Management Agreement;
(9) Agreement Regarding Post-Closing Items;
(10) Financing statements prepared for filing with the filings offices
listed in Schedule II hereto (the "Filing Offices"); and
(11) Certificates of the Secretary of State of the states listed on
Schedule I hereto as to the legal existence of each Loan Party.
The agreements, documents and instruments referred to in clauses (1)
through (9) above are referred to in this opinion as the "Loan Documents," the
financing statements referred to in clause (10) are referred to in this opinion
as the "Financing Statements," and the Borrower and the Subsidiaries that is a
signatory to any Loan Document are referred to in this letter collectively as
the "Loan Parties."
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such agreements and instruments, corporate
records, certificates of public officials and of officers of the Loan Parties,
and such other documents and records and such matters of law as we have deemed
necessary as a basis for the opinions set forth below. As to questions of fact
material to such opinions, we have relied, without independent verification,
upon certificates of public officials and of officers of the Loan Parties,
copies of which have been delivered to you, and the factual accuracy and
completeness of all the representations and warranties made by the parties to
the Loan Documents and the other documents executed by Borrower in connection
with the transactions contemplated by the Loan Documents. The opinions expressed
herein as to the valid existence of each Loan Party are as of the date of the
certificates referred to in clause (11) above and are based solely on such
certificates.
As used in this opinion and unless otherwise specified herein, the phrases
"to our knowledge," "known to us" and the like refer to the actual present
knowledge of lawyers currently in this firm who have performed substantive legal
services on behalf of Borrower in connection with the transactions referred to
herein, without any independent investigation or file or docket review.
For purposes of this opinion, we have assumed, with your permission and
without independent verification, (a) the genuineness of all signatures, (b) the
legal capacity of all [ILLEGIBLE] persons who have signed documents examined by
us, (c) the authenticity of all documents [ILLEGIBLE] submitted to us as
originals and the conformity to original documents of all documents [ILLEGIBLE]
to us as certified or photostatic copies, (d) that the parties to the Loan
Documents other [ILLEGIBLE] Loan Parties have each duly authorized, executed and
delivered such Loan Documents [ILLEGIBLE] other relevant documents and
instruments, and (e) that each of the parties to the Loan Documents other than
the Loan Parties has all requisite power and authority to enter into and perform
its respective obligations in connection with the transactions described in the
Loan Documents [ILLEGIBLE] which it is a party.
-2-
We call your attention to the fact that we have not previously represented
certain of the Loan Parties, and we have not represented any of the Loan Parties
prior to 1996. In addition, our representation of the Loan Parties has been
limited to certain specified matters, and we understand that the Loan Parties
use other counsel.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the General Corporation Law of
the State of Delaware. We call to your attention that the Loan Documents provide
that they are to be governed by and construed in accordance with the laws of the
State of New York, as to which we have no knowledge, have made no independent
investigation and express no opinion. Accordingly, our opinion is based on the
assumption, with your consent, that the laws of New York relating to the
enforceability of the Loan Documents are substantially similar to the laws of
The Commonwealth of Massachusetts. With respect to our opinions set forth in
paragraphs 7 and 8 below as they relate to the creation or perfection of
security interests in any Collateral located in jurisdictions other than
Massachusetts, our opinion is based solely upon our review of a compilation of
the Uniform Commercial Code ("UCC") as in effect in such jurisdictions as set
forth in the Uniform Commercial Code Reporting Service, Xxxxx Xxxxxxxx Xxxxxxxxx
(as supplemented 1998) and not upon any special expertise in or independent
review of the laws of such jurisdictions.
Based upon the foregoing and in reliance thereon and subject to the
assumptions, limitations, qualifications and exceptions set forth below, we are
of the opinion that:
1. Each Loan Party is validly existing under the laws of its jurisdiction
of formation. Each Loan Party has all requisite power and authority to own and
operate its properties and to carry on its business as to our knowledge it is
presently conducted, and to enter into and perform its obligations under each
Loan Document to which it is a party.
2. The execution and delivery by each Loan Party and the performance by
each Loan Party of its obligations under each Loan Document to which it is a
party have been duly authorized by all requisite action by each Loan Party. Each
Loan Document to which each Loan Party is a party has been duly executed and
delivered by such Loan Party and each such Loan Document constitutes the valid
and binding obligation of such Loan Party, enforceable against such Loan Party
in accordance with its terms.
3. The execution and delivery by each Loan Party and the performance by
each Loan Party of its obligations under each Loan Document to which it is a
party and the consummation of the transactions pursuant thereto do not violate
the organizational documents of such Loan Party or violate any of the terms of
(a) any existing statute, rule or regulation binding on any Loan Party, (b) to
our knowledge, any order of any court or governmental agency specifically naming
any Loan Party, or (c) to our knowledge, constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under, or give
to others any right of termination, amendment, acceleration or cancellation of
any agreement, indenture or instrument to which any Loan Party is a party.
-3-
4. No governmental consents, approvals, authorizations, registrations,
declarations or filings (other than such of the foregoing as (a) are
specifically referred to or disclosed in the Loan Documents, (b) which have been
obtained or completed prior to the closing of the transactions contemplated by
the Loan Documents or (c) are filings required to perfect security interests)
are required by any Loan Party in connection with the execution, delivery and
performance by any Loan Party of the Loan Documents.
5. The issuance of the Notes on the date hereof and the application of the
proceeds thereof by Borrower, as provided in the Loan Agreement, do not violate
Regulation G (12 CFR Part 207), Regulation T (12 CFR Part 220), Regulation U (12
CFR Part 221) or Regulation X (12 CFR Part 224) of the Board of Governors of the
Federal Reserve System.
6. No Loan Party is (a) an "investment company" or a company "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended, (b) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or an "affiliate" of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Act of 1935, or (c) subject to any statute or regulation that
limits its ability in any material respect to incur indebtedness for money
borrowed as contemplated by the Loan Documents.
7. The Security Agreement creates in favor of the Bank a valid security
interest in the Collateral described therein. Assuming the delivery to and
possession by the Bank of the shares owned by the Borrower in Atlantic & Pacific
Grill Holdings, Inc., Manhattan Ocean Holdings, Inc., Cite Holdings, Inc. S&W
New Orleans Holdings, Inc., MOC D.C. Holdings, Inc., S&W D.C. Holdings, Inc.,
Restaurant Group Management Holdings, Inc., NYRGI Holdings, Inc. and MPM
Holdings, Inc. duly endorsed or accompanied by an assignment separate from the
certificates evidencing the same duly executed by the Borrower, such security
interest will be perfected under the UCC.
8. Upon the due filing of the Financing Statements duly executed by
Borrower in the Filing Offices, a security interest will be perfected in that
portion of the Collateral in which a security interest may be perfected by the
filing of financing statements under the UCC.
9. There are to our knowledge no actions, suits, or proceedings pending or
overtly threatened against any Loan Party seeking to enjoin or prevent the
transactions contemplated by the Loan Agreement.
The opinions contained herein are subject to the following conditions and
qualifications:
(A) We express no opinion as to the application of any fraudulent
conveyance, fraudulent transfer, fraudulent obligation or similar laws.
(B) We express no opinion as to any provision of the Loan Agreement to the
extent it
-4-
provides that the Lender may set off and apply any deposits at any time held, or
any other indebtedness at any time owing, by such Lender or participant to or
for the account of any Loan Party.
(C) Our opinions in paragraph 2 above, with respect to the validity,
binding effect and enforceability of the agreements or provisions thereof
referred to in such paragraphs, are subject to the following: (i) bankruptcy,
insolvency, reorganization, moratorium, receivership and other laws now or
hereafter in effect relating to or affecting the enforcement of creditors'
rights, (ii) the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance or injunctive
relief, whether considered in a proceeding in equity or at law, and to the
discretion of the court before which any such proceeding may be brought and
(iii) public policy considerations or court decisions which may limit the rights
of any party to obtain certain remedies and to indemnification, including
indemnification for tortious or criminal acts or violations of law.
(D) Our opinion in paragraph 3 above as to compliance with certain
statutes, rules and regulations is limited to those that, in our experience, are
normally applicable to transactions of the type contemplated by the Loan
Documents.
(E) Our opinions set forth in paragraphs 7 and 8 above are limited to
Articles 8 and 9 of the UCC; accordingly, those opinion paragraphs do not
address (i) laws other than Articles 8 and 9 of the UCC, (ii) collateral of a
type not subject to Articles 8 or 9 of the UCC, and (iii) under ss.9-103 of the
UCC, what law governs perfection of the security interests granted in the
Collateral covered by this opinion letter.
The opinions set forth in this letter are limited to the specific issues
addressed herein and to statutes, regulations, rules, decisions, decrees and
facts existing on the date hereof. In rendering such opinions, we disclaim any
obligation to advise any party to whom this opinion is addressed of any change
in any of these sources of law or of any subsequent legal or factual
developments which might affect any matters addressed or opinions set forth
herein.
The opinions set forth herein are rendered solely to Bank, are solely for
the use of [ILLEGIBLE] Bank in connection with the transactions contemplated by
the Loan Agreement, and may relied upon by the Bank for any other purpose. This
letter is not to be quoted in whole or [ILLEGIBLE] or otherwise referred to in
any financial statements or other public releases, nor is it to be filed
-5-
with any governmental agency or other person or entity, without the prior
written consent of this firm. This letter may not be delivered to or relied upon
by any other person or entity for any purpose without the prior written consent
of this firm.
Very truly yours,
/s/ Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
-6-
Schedule I
Subsidiaries
Atlantic & Pacific Grill Holdings, Inc.
Cite Holdings, Inc.
S&W of Las Vegas, L.L.C.
S&W D.C., L.L.C.
S&W New Orleans, L.L.C.
La Cite Associates, LLC
New York RGI Sub, LLC
Xxx. Xxxxx Sub, LLC
Manhattan Ocean Holdings, Inc.
Atlantic & Pacific Grill Holdings, Inc.
Cite Holdings, Inc.
NYRGI Holdings, Inc.
MPM Holdings, Inc.
S&W of Miami, L.L.C.
S&W Chicago, L.L.C.
MOC D.C., L.L.C.
S&W Chicago Holdings Inc.
S&W New Orleans Holdings, Inc.
S&W D.C. Holdings, Inc.
MOC D.C. Holdings, Inc.
-7-
Schedule II
Filing Offices
Subsidiary Filing Offices
---------- --------------
Atlantic & Pacific Grill Holdings, Inc. Secretary of State, New York
City Register, Manhattan
Atlantic & Pacific Associates, LLC Secretary of State, New York
City Register, Manhattan
Cite Holdings. Inc. Secretary of State, New York
City Register, Manhattan
La Cite Associates, LLC Secretary of State, New York
City Register, Manhattan
S&W of Las Vegas, L.L.C. Secretary of State, Nevada
Recorder of Deeds, Clark County
S&W D.C., L.L.C. Recorder of Deeds, District of Columbia
S&W D.C., Holdings, Inc. Recorder of Deeds, District of Columbia
MOC D.C., L.L.C. Recorder of Deeds, District of Columbia
MOC D.C. Holdings, Inc. Recorder of Deeds, District of Columbia
S&W New Orleans, L.L.C. Parish of Orleans, Louisiana
S&W New Orleans Holdings, Inc. Parish of Orleans, Louisiana
S&W Chicago, L.L.C. Secretary of State Illinois
Xxxx County Recorder of Deeds
S&W Chicago Holdings, Inc. Secretary of State Illinois
Xxxx County Recorder of Deeds
Xxx. Xxxxx Sub, LLC Secretary of State Illinois
Xxxx County Recorder of Deeds
MPM Holdings, Inc. Secretary of State Illinois
Xxxx County Recorder of Deeds
New York RGI Sub, LLC Secretary of State, New York
City Register, Manhattan
NYRGI Holdings, Inc. Secretary of State, New York
City Register, Manhattan
Manhattan Ocean Holdings, Inc. Secretary of State, New York
City Register, Manhattan
The Manhattan Ocean Club Associates, LLC Secretary of State, New York
City Register, Manhattan
Restaurant Group Management Service, LLC Secretary of State, New York
City Register, Manhattan
Restaurant Group Management Holdings, Inc. Secretary of State, New York
City Register, Manhattan
S&W of Miami, L.L.C. Secretary of State, Florida
Dade County Recorder
SCHEDULES
TO
LOAN AGREEMENT
BETWEEN
THE NEW YORK RESTAURANT GROUP, INC.
AND
FLEET BANK, N.A.
Unless otherwise defined in these Schedules, all capitalized terms used
herein shall have the meanings ascribed to them in the Loan Agreement, dated as
of September 1, 1998 (the "Loan Agreement"), between The New York Restaurant
Group, Inc. (the "Borrower") and Fleet Bank, N.A. (the "Bank").
Matters reflected in the Schedules are not necessarily limited to matters
required to be reflected in the Schedules. Such additional matters are set forth
solely for informational purposes.
Scheduled references are for convenience only and matters disclosed on one
Schedule are deemed disclosed for the purposes of all of the Schedules.
The Schedules supersede and replace any other disclosure schedules or
documents previously provided to the Bank in connection with the Loan Agreement.
Any such earlier disclosure schedule or document has no force or effect.
Schedule 1
Permitted Liens
1. S&W of Miami, L.L.C. ("S&W Miami"), a Subsidiary of the Borrower, funded
the joint chapter 11 plan of reorganization (the "Plan") of South Pointe
Hospitality, Inc. ("South Point") and 0 Xxxxxxxxxx Xxxxxx Xxxxxxxxxxx ("0
Xxxxxxxxxx") (collectively, the "Debtors"). Upon consummation of the Plan,
S&W Miami acquired 100% of the newly issued shares of common stock of each
of the Debtors, as reorganized, and the existing equity interests in the
Debtors were cancelled. As consideration for S&W Miami's acquisition of
the new common stock, S&W Miami provided funding for distributions under
the Plan in the form of cash and the assumption, by the reorganized
Debtors, of certain existing liabilities. Following consummation of the
Plan, the Debtors are obligated under the agreements described below,
which obligations are secured by substantially all of the assets of the
Debtors.
a. The Ocean Bank Loan Agreement
Pursuant to a Leasehold First Mortgage and Security Agreement, dated as of
April 12, 1994, by and between the Debtors and Ocean Bank (the
"Mortgage"), the Debtors gave Ocean Bank a mortgage in a lease and a
ground lease and purchase option, and on fixtures, subleases, rents and
personal property. The Mortgage secured a claim held by Ocean Bank in the
amount of $1.2 million claim. Under the Plan, and in full settlement of
the Ocean Bank claim, the reorganized Debtors assumed such obligations to
Ocean Bank (with certain modifications), and S&W Miami and the Borrower
guaranteed such obligations.
b. SBA
Pursuant to a Loan Agreement, dated April 12, 1994, by and between the
Debtors and the United States Small Business Administration (the "SBA"),
the SBA loaned South Pointe $1,000,000. Such loan is secured by a second
lien on a portion of the collateral for the Ocean Bank Mortgage. The SBA
asserted a $970,000 claim against the Debtors. The reorganized Debtors
assumed the SBA loan, and S&W Miami and the Borrower guaranteed such loan.
2. S&W New Orleans, L.L.C.: Mortgage in favor of First Bank & Trust on
property located at 0000-0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx.
Schedule 2
Subsidiaries of the Borrower
The Manhattan Ocean Club Associates, LLC
Manhattan Ocean Holdings, Inc.
La Cite Associates, L.L.C.
Cite Holdings, Inc.
Atlantic & Pacific Grill Associates, L.L.C.
Atlantic & Pacific Holdings, Inc.
Xxx. Xxxxx Sub, LLC
MPM Holdings, Inc.
New York RGI Sub, LLC
NYRGI Holdings, Inc.
Restaurant Group Management Service, LLC
Restaurant Group Management Holdings, Inc.
S&W Chicago, L.L.C.
S&W Chicago Holdings, Inc.
S&W of Miami, L.L.C.
S&W of Las Vegas, L.L.C.
S&W D.C., L.L.C.
S&W D.C. Holdings, Inc.
MOC D.C., L.L.C.
MOC D.C. Holdings, Inc.
S&W New Orleans, L.L.C.
S&W New Orleans Holdings Inc.
Schedule 2(A)
Description of Las Vegas Property
The South 120 feet of the West Half of the Northwest Quarter of the
Southwest Quarter and the North 10 feet of the West One-Half of the Southwest
Quarter of Section 21, Township 21 South, Range 61 East, M.D.B & M.
Excepting therefrom all State and County roads and highways.
Assessor's Parcel no. 162-21-301-014.
Schedule 2(B)
Description of New Orleans Property
A certain piece or portion of ground, together with all the buildings and
improvements thereon, and all rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise appertaining,
situated in the First District of the City of New Orleans, State of Louisiana,
in the square bounded by Poydras, Rampart, Dryades and Perdido Streets, which
said lots are designated by the nos. 7 and 8, square 270, and measure together
forty-six feet front on Poydras Street by a depth of sixty-four feet. Said lots
are designated nos. 5 and 6 on the assessment rolls of the City of New Orleans.
Schedule 2(C)
Description of D.C. Property
0000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. (Lot 877, square 117).
Schedules 3.1(A)
June 30, 1998 Financial Statements
None.
Schedule 3.1(B)
Material Adverse Changes in Financial Condition
None.
Schedule 3.13
Tradenames
1. The Borrower and its Subsidiaries use the following tradenames and/or
"doing business as" names:
a. "Cite"
b. "Cite Grill"
c. "Xxxxxxx & Xxxxxxxx"
d. "Mrs. Park's Tavern"
e. "Park Avenue Cafe"
f. "Manhattan Ocean Club"
2. Pursuant to the License Agreement, dated August 16, 1996, between the
Borrower and St. Xxxxx Associates, L.P., the Borrower licensed the right
to use the trademark "Xxxxx & Wollensky" and related marks in certain
geographic areas.
Schedule 3.16
Management Agreements
1. Restaurant Management Agreement, dated January 24, 1993, among Xxxxx
Xxxxxxxxx and Xxxxx Xxxxxxxxx and The New York Restaurant Group, Inc., as
amended by First Amendment to Restaurant management Agreement, dated
December 6, 1994, between Post House Investors, L.P. and The New York
Restaurant Group, Inc. and Second Amendment to Restaurant Management
Agreement, dated October 29, 1996, between Post House Investors, L.P. and
The New York Restaurant Group, L.L.C.
2. Restaurant Management Agreement, dated April 18, 1996, between 00 Xxxx
00xx Xxxxxx Corp. and Restaurant Group Management Services, L.L.C.
3. Submanagement Agreement dated June 9, 1995, between Doubletree Partners
and Xxx. Xxxxx Management Company, L.L.C.
4. Management Agreement, dated as of January 1, 1996, between Xxxxxx X. Xxx
Capital, LLC and The New York Restaurant Group, L.L.C., as amended.
Schedules 3.18
Leases
1. Agreement of Lease, dated as of November 1, 1991, between Xxxxxxx Tenants
Corporation and White & Xxxxxxxxx, Inc., for space at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, as modified by Letter Agreement, dated November 21, 1991,
between Xxxxxxx Tenants Corporation and White & Xxxxxxxxx, Inc. and
Assignment and Assumption of Lease, dated September 9, 1992, between White
& Xxxxxxxxx, Inc., as assignor, and Atlantic & Pacific Grill Associates,
L.P., as assignee.
2. Agreement of Lease, dated as of August 31, 1983, between Holrod Associates
and Thursday's Supper Pub, Inc., for space at 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, as modified by Supplemental Agreement and First Amendment
to Lease, dated as of May 3, 1993, among Holrod Associates, Manhattan
Ocean Club Associates and Thursday's Supper Pub, Inc., Second Amendment to
Lease, dated as of April 1, 1995, between Holrod Associates and Manhattan
Ocean Club Associates and Letter of Consent, dated January 10, 1996,
between Thursday's Supper Pub, Inc. and Holrod Associates.
3. Lease, dated June 21, 1988, between Rockefeller Center North, Inc. and
White & Xxxxxxxxx, Inc., for space at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, as modified by Assignment and Assumption of Lease, dated as of June
7, 1990, among La Cite, Inc. (formerly White & Xxxxxxxxx, Inc.), as
assignor, La Cite Associates, L.P., as assignee, and Rockefeller Center
North, Inc., as landlord, Supplemental Indenture, dated as of January 1,
1991, between Rockefeller Center North, Inc. and La Cite Associates, L.P.
and Supplemental Indenture, dated as of January 1, 1992, between
Rockefeller Center North, Inc. and La Cite Associates, L.P.
4. Lease, dated October 19, 1988, between First 61 Partners and The New York
Restaurant Group, Inc., for 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx, as amended by Agreement, dated May 1, 1992, between First 61
Partners and The New York Restaurant Group, Inc. and Assignment and
Assumption of Lease, dated January 10, 1996, between The New York
Restaurant Group, L.L.C., as assignor, and New York RGI Sub, L.L.C., as
assignee.
5. Lease, dated May, 1997, between Marina City Hotel Enterprises, L.L.C. and
S&W Chicago, L.L.C., for space at Marina City, Chicago, Illinois.
6. Lease With an Option to Purchase dated February 9, 1998 between S&W of Las
Vegas, L.L.C. and The Xxxxxxxx Limited Partnership for space located at
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx.
7. Lease between S&W D.C., L.L.C. and 0000 Xxxxxxxxxx Xxxxxx Associates for
space located at 0000 Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
Schedule 7.1(b)
Indebtedness
1. In 1995, the IRS agreed with the Borrower and its Subsidiaries and their
employees that all employees will report all the tips they receive. The
IRS has stated separately that, so long as employees start reporting their
tips accurately, the IRS will not make further assessments on the Borrower
and its Subsidiaries with respect to FICA relating to underreported tips
for prior periods. However, as of December 30, 1996, employees of the
Borrower and its Subsidiaries were still underreporting their tips, and
the Borrower continues to accrue 7.65% of the underreported amount (the
amount of FICA tax the Borrower and its Subsidiaries would owe on those
amounts). The Borrower accrued $134,000, in the aggregate, for 1995 and
expects to accrue an additional $120,000, in the aggregate, for 1996.
2. Obligations assumed by S&W of Miami, L.L.C.:
a. One Washington Avenue Corporation:
i. Dade County 1995 and 1996 property taxes.
ii. Xxxxxx Group
iii. Ocean Bank loan described in Schedule 1.
iv. SBA loan described in Schedule 1.
b. South Pointe Hospitality, Inc.
i. Florida state taxes
ii. Federal taxes
iii. Miscellaneous obligations to trade creditors.
3. S&W New Orleans, L.L.C.: Mortgage loan by First Bank & Trust described in
Schedule 1.
Schedule 7.1(d)
Permitted Letters of Credit
1. Letter of Credit No. PB-284294, dated March 7, 1994, issued by Xxxxxx
Guaranty Trust Company of New York in favor of Xxxxxxx Tenants Corporation
for the account of Atlantic & Pacific Grill Associates, L.P., for up to an
aggregate amount of $50,000, as amended.
2. Letter of Credit No. PB-283538, dated September 14, 1988, issued by Xxxxxx
Guaranty Trust Company of New York in favor of Rockefeller Center North,
Inc. for the account of La Cite, Inc. (formerly for the account of White &
Xxxxxxxxx, Inc.) for up to an aggregate amount of $169,125, as amended.
3. Letter of Credit to be issued by Xxxxxx Guaranty Trust Company of New York
in favor of First 61 Partners for the account of The New York Restaurant
Group, L.L.C. for up to an aggregate amount of $25,000.
SECOND AMENDMENT
TO
LOAN AGREEMENT
among
THE NEW YORK RESTAURANT GROUP, INC.
as Borrower,
the GUARANTORS
that are a party hereto,
and
FLEET BANK, N.A.
as Lender
Dated as of June 29, 1999
SECOND AMENDMENT TO LOAN AGREEMENT
SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of
June 29, 1999, is entered into by and among THE NEW YORK RESTAURANT GROUP, INC.,
a Delaware corporation (the "Borrower"), The Manhattan Ocean Club Associates,
L.L.C., a Delaware limited liability company, La Cite Associates, L.L.C., a
Delaware limited liability company. Atlantic & Pacific Grill Associates, L.L.C.,
a Delaware limited liability company, Xxx. Xxxxx Sub, LLC, a Delaware limited
liability company, New York RGI Sub, LLC, a Delaware limited liability company,
Restaurant Group Management Service, LLC, a Delaware limited liability company,
S & W Chicago, LLC, a Delaware limited liability company, S & W of Miami,
L.L.C., a Delaware limited liability company, MOC D.C., L.L.C., a Delaware
limited liability company, S & W Las Vegas, L.L.C., a Delaware limited liability
company, S & W New Orleans, L.L.C., a Delaware limited liability company, S & W
D.C., L.L.C., a Delaware limited liability company, and MOC of Miami, L.L.C., a
Delaware limited liability company (each of the thirteen (13) foregoing entities
is referred to herein as a "Guarantor and collectively as the "Guarantors") and
FLEET BANK, N.A., a national banking association organized under the laws of the
United States (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower entered into a senior secured revolving credit
facility for up to an aggregate principal amount not to exceed $15,000,000 (the
"Original Commitment") with the Lender pursuant to that certain Loan Agreement
dated as of September 1, 1998, and the First Amendment to Loan Agreement dated
as of June 8, 1999, which inter alia temporarily increased the Original
Commitment to $16,500,000 (the "Revised Commitment") (together the "Agreement");
(all capitalized terms used herein and not defined herein shall have the
meanings ascribed respectively thereto in the Agreement);
WHEREAS, pursuant to Borrower's request, Lender has agreed to
decrease the Revised Commitment to $15,000,000 and modify the Agreement and the
other Loan Documents, as more particularly hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Agreement and the other Loan
Documents are hereby modified as follows:
1. Commitment. The term "Commitment", as defined in Section 2.1 of
the Agreement, is hereby amended to mean S 15,000,000.
2. Conversion Date. The term "Conversion Date", as defined in
Section 2.6 of the Agreement is hereby amended to mean January 15, 2000.
3. EBITDA. The definition of EBITDA in Section 1.1 of the Agreement
is hereby amended in its entirety to read as follows:
"'EBITDA' shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the sum of (a)
Adjusted Net Income, plus (b) Interest Expense, plus (c)
depreciation and amortization, plus (d) any non-cash extraordinary
or nonrecurring charges, plus (e) deferred rent, plus (f) Federal,
state and local income taxes, computed in accordance with GAAP."
4. Termination Date. The term "Termination Date", as defined in
Section 1.1 of the Agreement is hereby amended to mean January 15, 2000.
5. Final Term Loan Maturity Date. The final Maturity Date of the
Term Loan as set forth in Section 27 of the Agreement is hereby amended to mean
January 15, 2003.
6. Rolling Four Quarter EBITDA. Section 1.1 is hereby amended to add
the following definition after the definition of Revolving Loan Note:
"'Rolling Four Quarter EBITDA' shall mean the EBITDA for the prior
four consecutive fiscal quarters ending with the most recent fiscal
quarter:"
7. Working Capital Sublimit. The definition of the term "Working
Capital Sublimit" in Section 1.1 of the Agreement, is hereby deleted.
8. Working Capital Advances. Sections 2.5 and 8(c) are hereby
deleted in their entirety.
9. Procedure for Requesting Advances. The second sentence of Section
2.3 of the Agreement is hereby amended in its entirety to read as follows:
"Such Borrowing Notice shall (a) identify the Project to which such
proposed borrowing relates or identify such proposed borrowing as a
Working Capital Advance, (b) state whether the Borrower requests the
Advance to bear interest at the Adjusted LIBOR Rate, and if so, for
what LIBOR Interest Period, and (e) provide certification from the
Chief Financial Officer of the Borrower that taking into account the
proposed borrowing, the Borrower will be in compliance with the
covenants in Sections 6 and 7 on a pro forma basis."
10. Amendments to Financial Ratios.
(a) Section 6.1(a) of the Agreement is hereby amended in its
entirety to read as follows:
"(a) Consolidated Fixed Charge Coverage Ratio. Borrower and its
Subsidiaries on a consolidated basis will maintain a Consolidated
Fixed Charge Coverage Ratio, calculated on a rolling four quarter
basis, of not less than 1.50 to 1.0 from the last day of the 1999
fiscal year end and thereafter."
-2-
(b) Section 6.1(b) of the Agreement is hereby amended in its
entirety to read as follows:
"(b) Consolidated EBITDA. The Consolidated EBITDA of the Borrower
and its Subsidiaries shall be not less than: $1,500,000 for the
second fiscal quarter of 1999, $O for the third fiscal quarter of
1999; $2,750,000 for the fourth fiscal quarter of 1999, $2,750,000
for the first fiscal quarter of 2000; $2,350,000 for the second
fiscal quarter of 2000; $1,000,000 for the third fiscal quarter of
2000; and $4,400.000 for the fourth fiscal quarter of 2000 and
thereafter."
(c) Minimum Rolling Four Quarter EBITDA. Section 6.1 of the
Agreement is hereby amended to add the following Section 6.1(c) to read as
follows:
"(c) Minimum Rolling Four Quarter EBITDA. The Minimum Rolling Four
Quarter EBITDA of the Borrower and its Subsidiaries shall be not
less than: $5,850,000 for the fourth fiscal quarter of 1999,
$7,125,000 for the first fiscal quarter of 2000; $7,900,000 for the
second fiscal quarter of 2000; $8,900,000 for the third fiscal
quarter of 2000; and $10,500,000 for the fourth fiscal quarter of
2000 and thereafter."
11. Fees. In consideration of the Lender agreeing to enter into this
Amendment, and granting the waivers set forth in paragraph 15 below, the
Borrower hereby agrees to pay to Lender a Loan Fee of $50,000 on the date hereof
(the "Closing Date").
12. Effect of Amendment. All references in the Loan Documents to the
"Loan Agreement" shall be deemed to refer to the Agreement as modified pursuant
to the terms hereof. All references in any one of the Loan Documents to any of
the other Loan Documents shall be deemed to refer to such other Loan Documents
as modified pursuant to the terms hereof. In the event of any inconsistency or
conflict between the terms and provisions of any of the Loan Documents and the
terms and provisions of this Amendment, the terms and provisions of this
Amendment shall control and be binding, it being the agreement and intent of the
Borrower, Guarantors and the Lender that the terms and provisions contained or
referred to in the Loan Documents shall hereby be and be deemed to be amended
and modified to the extent, but only to the extent, necessary to give effect to
the terms and provisions of this Amendment.
13. Consent of Borrower and Guarantor. By execution of this
Amendment, Borrower and Guarantors hereby expressly consent to the modification
and amendments relating to the Loan Agreement as set forth herein, and
Guarantors and Borrower hereby acknowledge, represent and agree that the
Guaranty, the Revolving Note, the Security Agreement and the other Loan
Documents to which each is a party remain in full force and effect and
constitute the valid and legally binding obligation of Guarantors and Borrowers,
enforceable against such Person in accordance with its terms, that the Guaranty,
the Revolving Note, the Security Agreement and the other Loan Documents extend
to and apply to the Loan Agreement as modified and amended, and that the
execution and deliver of this Amendment does not constitute and shall not be
deemed to
-3-
constitute, a release, waiver or satisfaction of Guarantors' or Borrowers'
obligations under the Guaranty, the Revolving Note, the Security Agreement or
other Loan Documents.
14. Borrower's Representations, Warranties and Covenants. Borrower
and Guarantors hereby certify that the following statements are true on the
date hereof:
(a) No Default or Event of Default has occurred and is continuing;
(b) All representations and warranties contained in the Agreement
and the other Loan Documents, before and after giving affect to this
Amendment, are true and correct in all material respects with the same
effect as though such representations and warranties are being made as of
the date hereof.
(c) Except with respect to compliance with Sections 5.3 and 6.1, the
Borrower, before and after giving effect to this Amendment is in
compliance in all material respects with all covenants in Sections 5, 6
and 7 of the Loan Agreement and all other covenants and agreements
contained in the Agreement and the other Loan Documents;
(d) There has been no material adverse change in the financial
condition or business of the Borrower and Guarantors;
(e) Except as expressly modified hereby, the Agreement and other
Loan Documents remain unmodified and in full force and effect and are
hereby ratified and confirmed in all respects; and
(f) The Borrower has no offsets, counterclaims or defenses to the
enforcement of, or otherwise with respect to, the Agreement and/or other
Loan Documents as hereby modified.
15. Limited Waiver. (a) The Lender hereby waives the failure of
Borrower to have provided the timely annual audited financial statements and the
financial covenant compliance letter and calculation for the year ending
December 28, 1998, provided that the consolidated audited financial statements
of the Borrower for the fiscal year ended December 28, 1998, as required by
Section 5.3(a) of the Agreement to be audited by KPMG Peat Marwick shall be
received by the Lender on or before July 1, 1999, in form and substance
satisfactory to the Lender.
(b) Lender waives compliance by Borrower of the covenants set forth
in Sections 6.1(a) and (b) for the fiscal quarter ending March 29, 1999.
(c) Except as specifically set forth in this paragraph 15, Lender
has not waived any covenant of Borrower or any Guarantor contained in any of the
Loan Documents.
16. New Covenant. Section 7 of the Agreement is amended by adding a
Section 7.13 to read as follows:
"7.13 New Construction. Borrowers agrees that so long as any of the
Loans arc outstanding, Borrower and its Subsidiaries shall not
-4-
commence construction, conversion or development of any new
restaurant without the consent of the Lender, which may be withheld
or conditioned in its sole discretion. This section 7.13 shall not
apply to Xxxxx & Wollensky in Washington. D.C. or to Xxxxxxx &
Xxxxxxxx in Washington, D.C."
17. Subordinated Debt Transaction. Simultaneously with the closing
of this Amendment, Borrower shall have entered into a subordinated debt
transaction with Magnetite Asset Investors, LLC on terms and conditions
satisfactory to Lender.
18. Execution in Counterparts. This Amendment may be executed in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
19. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York.
20. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
THE NEW YORK RESTAURANT, INC., a Delaware corporation
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
THE MANHATTAN OCEAN CLUB
ASSOCIATES, L.L.C., a Delaware Limited
liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LA CITE ASSOCIATES, L.L.C.,
a Delaware limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ATLANTIC & PACIFIC GRILL
ASSOCIATES, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
XXX. XXXXX SUB, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
NEW YORK RGI SUB, LLC., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
RESTAURANT GROUP MANAGEMENT
SERVICE, LLC, a Delaware, limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W Chicago, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W OF MIAMI, L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC D.C., L.L.C., a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W LAS VEGAS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W NEW ORLEANS, LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
S & W D.C., LLC, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
MOC of MIAMI, L.L.C, a Delaware
limited liability company
By: The New York Restaurant Group, Inc.,
its Manager
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
FLEET BANK, N.A.
By:
-------------------------------------------
Name:
Title: Vice President
