SECURITY AGREEMENT
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THIS SECURITY AGREEMENT (this "Agreement") is made as of the 31st day
of October, 1997, by and between STACEY'S BUFFET, INC., a Florida corporation
(the "Borrower") and STAR BUFFET, INC., a Delaware corporation ("Lender").
Terms defined in the Credit Agreement shall have the same meaning under this
assignment except as otherwise provided.
RECITALS:
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A. Concurrently herewith, the Borrower and the Lender executed and
delivered that certain Credit Agreement, dated as of even date herewith (as
amended, supplemented or otherwise modified from time to time hereafter,
the "Credit Agreement") pursuant to which the Lender from time to time will
make certain loans to Borrower.
B. As a condition, among others, to the Lender executing and
delivering the Credit Agreement, the Borrower has agreed to execute and
deliver this Agreement in order to secure its obligations to Lender.
AGREEMENTS:
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NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which the
parties hereto acknowledge, the parties hereto agree as follows:
DEFINITIONS
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As used in this Agreement, the terms defined in the Preamble and
Recitals hereto shall have the respective meanings specified therein, and
the following terms shall have the following meanings (capitalized terms
not otherwise defined herein shall have the meaning set forth therefor in
the Credit Agreement):
"Account" individually and "Accounts" collectively mean all of
the Borrower's right, title and interest in and to all presently existing
or hereafter acquired or created accounts, accounts receivable, contract
rights, documents of title, notes, drafts, instruments, acceptances,
chattel paper, securities, leases and writings evidencing a monetary
obligation or a security interest in or a lease of goods; all rights to
receive the payment of money or other consideration under present or future
contracts (including, without limitation, all rights to receive payments
under presently existing or hereafter acquired or created letters of
credit), or by virtue of merchandise sold or leased, services rendered,
loans and advances made or other considerations given, by or set forth in
or arising out of any present or future chattel paper, note, draft, lease,
acceptance, writing, bond, insurance policy, instrument, document or
general intangible, and all extensions and renewals of any thereof; all
rights under or arising out of present or future contracts, agreements or
general interests in merchandise which gave rise to any or all of the
foregoing, including all goods; all claims or causes of action now existing
or hereafter arising in connection with or under any agreement or document
or by operation of law or otherwise; all collateral security of any kind
(including real property) given by any person with respect to any of the
foregoing; all returned, rejected or repossessed goods, the sale or lease
of which shall have given or shall give rise to an any of the foregoing and
all cash and non-cash proceeds and products of all such goods; and all
proceeds (cash and non-cash) of the foregoing.
"Collateral" shall mean all of the Borrower's Accounts,
Equipment, General Intangibles, Inventory and other personal property, all
whether now owned or existing or hereafter acquired or created, together
with any and all cash and non-cash proceeds (including, without limitation,
insurance proceeds) and products thereof.
"Default Rate" has the meaning set forth therefor in the Credit
Agreement.
"Enforcement Costs" mean all reasonable expenses, charges, costs
and fees whatsoever (including, without limitation, reasonable attorney's
fees and expenses) of any nature whatsoever paid or incurred by or on
behalf of the Agent in connection with (a) the collection or enforcement of
any or all of the Obligations or this Agreement (including, without
limitation, attorneys fees incurred prior to the institution of any suit or
other proceeding), (b) the creation, perfection, collection, maintenance,
preservation, defense, protection, realization upon, disposition, sale or
enforcement of all or any part of the Collateral, (c) the monitoring,
inspection, administration, processing, servicing of any or all of the
Obligations and/or the Collateral, (d) the preparation of this Agreement
and the preparation and review of lien and record searches, reports,
certificates, appraisals, environmental surveys, and/or other documents or
information relating from time to time to the taking, perfection,
inspection, preservation, protection and/or release of a Lien on the
Collateral, the value of the Collateral, or otherwise relating to the
Agent's rights and remedies under this Agreement or with respect to the
Collateral, and (e) all filing and/or recording taxes or fees and all stamp
and other taxes and fees payable or determined to be payable in connection
with the execution and delivery of this Agreement and any and all
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes or fees, the Borrower hereby agreeing to
indemnify and save the Agent harmless from and against such liabilities.
"Equipment" shall mean all of the Borrower's right, title and
interest in and to all equipment, machinery, computers, chattels, tools,
parts, machine tools, moveable restaurant buildings and all related
equipment and moveable site improvements, furniture, furnishings, fixtures
and supplies of every nature, presently existing or hereafter acquired or
created and wherever located, together with all accessions, additions,
fittings, accessories, special tools, and improvements thereto and
substitutions therefor and all parts and equipment which may be attached to
or which are necessary for the operation and use of such personal property,
whether or not the same shall be deemed to be affixed to real property, and
all rights under or arising out of present or future contracts relating to
the foregoing and all proceeds (cash and non-cash) of the foregoing.
"Event of Default" has the meaning described in Article 4.
"Franchise Agreements" means the license agreements and the
franchise agreements of the Borrower as licensor or franchisor (as the case
may be), with the licensees or franchisees (as the case may be), all as
described on Exhibit A attached hereto and made a part hereof and any such
additional franchise or license agreements executed from time to time.
"Franchise Rights of Payment" means all rights of payment the
Borrower may have from time to time under all of its Franchise Agreements
in effect from time to time.
"General Intangibles" shall mean all of the Borrower's right,
title and interest in and to all general intangibles, of every nature,
whether presently existing or hereafter acquired or created, including,
without limitation, all of the Franchise Agreements, all of the Franchise
Rights of Payment, all books, correspondence, credit files, records,
computer programs, computer tapes, cards and other papers and documents in
the possession or control of the Borrower, claims (including without
limitation all claims for income tax and other refunds), choses in action,
judgments, patents, patent licenses, trademarks, trademark licenses,
licensing agreements, rights in intellectual property, goodwill (including
all goodwill of the Borrower's business symbolized by and associated with
any and all trademarks, trademark licenses, copyrights and/or service
marks), franchises, royalty payments, contractual rights, literary rights,
copyrights, service names, service marks, logos, trade secrets, all amounts
received as an award in or settlement of a suit in damages, deposit
accounts, interests in joint ventures or general or limited partnerships,
and all proceeds (cash and non-cash) of the foregoing.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Inventory" means all of the Borrower's right, title and interest
in and to all now owned and hereafter acquired inventory, goods,
merchandise and other personal property furnished under any contract of
service or intended for sale or lease, including, without limitation, all
raw materials, work-in-progress, finished goods and materials and supplies
of any kind, nature or description which are used or consumed in the
Borrower's business or are or might be used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such
goods, merchandise and other personal property and all documents of title
or documents representing the same and all proceeds, (cash and non-cash) of
the foregoing.
"Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs, or decrees of any Governmental Authority or
political subdivision or agency thereof, or any court or similar entity
established by any thereof.
"Lien" means any mortgage, deed of trust, deed to secure debt,
grant, pledge, security interest, assignment, encumbrance, judgment,
financing statement, lien or charge of any kind, whether perfected or
unperfected, avoidable or unavoidable, consensual or non-consensual
including, without limitation, any conditional sale or other title
retention agreement, filed or unfiled tax liens, any lease in the nature
thereof, and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction, excluding the
precautionary filing of any financing statement by any lessor in a true
lease transaction, by any xxxxxx in a true bailment transaction or by any
consignor in a true consignment transaction under the Uniform Commercial
Code of any jurisdiction or the agreement to give any financing statement
by any lessee in a true lease transaction, by any bailee in a true bailment
transaction or by any consignee in a true consignment transaction.
"Loan Documents" has the meaning set forth in the Credit
Agreement and, as used herein, shall include the Credit Agreement.
"Obligations" means all debts, obligations, and liabilities of
the Borrower to the Lender of any nature whatsoever and whenever arising
(whether now or hereafter existing and whether before or after the
commencement of a proceeding under the Bankruptcy Code) relating to the
Loan and pursuant to the Loan Documents, regardless of whether such debts,
obligations and liabilities be direct, indirect, primary, secondary, joint,
several, joint and several, fixed or contingent; and any and all renewals,
restatements, amendments, replacements, extensions and rearrangements of
any such debts, obligations and liabilities including, without limitation,
the principal of, and interest on, loans and advances and on the Note.
"Person" shall mean and include an individual, a corporation, a
partnership, a joint venture, a trust, an unincorporated association, a
government or political subdivision or agency thereof or any other entity.
ARTICLE I
COLLATERAL
Section 1.1. GRANT OF SECURITY INTEREST. As security for the
Obligations, the Borrower hereby assigns, pledges and grants to the Lender,
and agrees that the Lender shall have a perfected and continuing security
interest in, all of the Borrower's Collateral, whether now owned or
existing or hereafter acquired or arising, together with any and all cash
and non-cash proceeds and products thereof. The Borrower further agrees
that the Lender shall have in respect thereof all of the rights and
remedies of a secured party under the Uniform Commercial Code of the State
of Utah as well as those provided in this Agreement.
Section 1.2. RELEASE. The Lender shall have no obligation to
release and/or terminate this Agreement, except upon both the performance
of this Agreement and the payment and/or performance of all Obligations and
the expiration and termination of any and all commitments or obligations
(whether or not conditional) of the Lender, to re-advance amounts or
otherwise allow Obligations which would be secured thereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Lender, and shall be deemed to represent and
warrant at the time each of the Obligations not existing on the date of
this Agreement is requested and again at the time each of those Obligations
is incurred, as follows:
2.1.1 PLACE(S) OF BUSINESS AND LOCATION OF COLLATERAL.
The Borrower warrants that the address of the Borrower's chief executive
offices and the address of all other locations of the Collateral are set
forth on Exhibit B attached hereto and made a part hereof.
2.1.2 BUSINESS NAMES AND ADDRESSES. The Borrower has
not conducted business under any name other than "STACEY'S BUFFET, INC".
2.1.3 GOOD STANDING. The Borrower is a corporation,
duly organized and existing, in good standing, under the laws of the
jurisdiction of its incorporation, and has the corporate power to own its
property and to carry on its business as now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary,
except where the failure to so qualify would not have a material adverse
effect on Borrower.
2.1.4 CORPORATE AUTHORITY. The Borrower has full power
and authority to enter into and to perform its obligations under this
Agreement, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of shareholders of, or
lenders to, the Borrower and no consent, approval, filing or registration
with or notice to any Governmental Authority on the part of the Borrower is
required as a condition to the validity of this Agreement or the
performance by the Borrower of its obligations under this Agreement.
2.1.5 BINDING AGREEMENTS. This Agreement constitutes
the valid and legally binding agreement of the Borrower and is enforceable
against the Borrower in accordance with its terms, PROVIDED that the
enforceability hereof is subject to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of
creditors' rights generally, and to standards of good faith and commercial
reasonableness.
2.1.6 NO CONFLICTS. There is no statute, regulation,
rule, order or judgment, no charter, by-law or preference stock provision
of the Borrower, and except for permitted liens under the Credit Agreement,
no provision of any mortgage, indenture, contract or other agreement
binding on the Borrower or affecting its properties, which would prohibit,
or cause a default under or in any way prevent the execution, delivery, or
carrying out of the terms of this Agreement.
2.1.7 TITLE TO COLLATERAL. The Borrower has good and
marketable title to its properties and assets which are included among the
Collateral. Such properties and assets are subject to no Lien of any kind,
except for the Liens in existence as of the date of this Agreement, Liens
of the Lender pursuant to this Agreement or as may be permitted otherwise
by the Credit Agreement, and the Borrower has legal, enforceable and
uncontested rights to use freely such property and assets.
Section 2.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in or made under or in connection
with this Agreement shall survive the execution of this Agreement and the
incurring of any particular Obligation.
ARTICLE III
COVENANTS AND AGREEMENTS OF THE BORROWER
Section 3.1. COVENANTS. So long as any of the Obligations (or
commitments therefor) shall be outstanding hereunder, the Borrower agrees
with the Lender as follows:
3.1.1 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE,
COMPLIANCE WITH LAWS, ETC. The Borrower will (i) do or cause to be done
all things necessary to preserve and to keep in full force and effect its
corporate existence and material rights and its franchises, trade names,
patents, trademarks and permits which are necessary for the continuance of
its business, and (ii) comply with all applicable Laws and observe the
valid requirements of Governmental Authorities, the noncompliance with or
the nonobservance of which might materially interfere with the performance
of its obligations hereunder, or with the Lender's interest in the
Collateral.
3.1.2 CERTAIN NOTICES. The Borrower will notify the
Lender not less than thirty (30) days PRIOR to (i) any change in the name
or corporate structure under which the Borrower conducts its business the
opening of any new place of business or the closing of any existing place
of business; and (ii) any change in the location of the places where the
Collateral, or any part thereof, or the books and records concerning the
Collateral, or any part thereof, are kept.
3.1.3 MAINTENANCE OF THE COLLATERAL; INSURANCE. The
Borrower will maintain the Collateral in good working order, saving and
excepting ordinary wear and tear, and will not permit anything to be done
to the Collateral which may materially impair the value thereof. The
Lender or agents designated by Lender, shall be permitted to enter the
premises of the Borrower and examine, audit and inspect the Collateral at
any reasonable time and from time to time without notice. The Borrower
will promptly furnish to the Lender all such additional information
regarding the Collateral as the Lender may from time to time request in the
exercise of its discretion. With respect to the insurance required to be
obtained by the Borrower under the Credit Agreement, the Borrower will
obtain from such insurers a certificate confirming that the Lender, is an
additional insured with loss payable to the Lender as its respective
interest may appear on the Collateral and with a specific endorsement to
each such insurance policy pursuant to which the insurer agrees to give the
Lender at least thirty (30) days written notice before any alteration or
cancellation of such insurance policy.
3.1.4 DEFENSE OF TITLE AND FURTHER ASSURANCES. At its
expense the Borrower will defend the title to the Collateral (or any part
thereof), and promptly upon request execute, acknowledge and deliver any
financing statement, renewal, affidavit, deed, assignment, continuation
statement, security agreement, certificate, notice to financial
intermediary, or other document the Lender may require in order to perfect,
preserve, maintain, continue, protect and/or extend the Lien or security
interest granted to the Lender under this Agreement and its priority. The
Borrower will from time to time do whatever the Lender may request by way
of obtaining, executing, delivering, and/or filing financing statements,
landlord's or mortgagee's waivers, and other notices and amendments and
renewals thereof and the Borrower will take any and all steps and observe
such formalities as the Lender may request, in order to create and maintain
a valid Lien upon, pledge of, or security interest in, the Collateral
subject to no other liens or claims. The Borrower agrees that a copy of a
fully executed financing statement shall be sufficient to satisfy for all
purposes the requirements of a financing statement as set forth in Article
9 of the applicable Uniform Commercial Code.
3.1.5 SECURITY, ETC. The Borrower agrees that the
Lender may at any time take such steps as the Lender deems reasonably
necessary to protect the Lender's interest in, and to preserve the
Collateral, whether at the business premises of the Borrower or elsewhere.
3.1.6 OTHER LIENS. The Borrower will not permit any
Liens on or with respect to all or any part of the Collateral, other than
those Liens in favor of the Lender, Liens for taxes not yet delinquent, and
Liens permitted by the Credit Agreement.
3.1.7 LOCATION OF COLLATERAL. Except as expressly
permitted elsewhere in this Agreement or except as permitted by the Credit
Agreement, without the prior written consent of the Lender, the Borrower
will not transfer, or permit the transfer, to another location of any of
the Collateral or the books and records related to any of the Collateral.
3.1.8 DISPOSITION OF COLLATERAL. Without the prior
written consent of the Lender or except as permitted by the Credit
Agreement, the Borrower will not sell, discount, allow credits or
allowances, transfer, assign, extend the time for payment on, convey,
lease, assign, transfer or otherwise dispose of the Collateral. Unless,
with respect to any of the foregoing actions which are not permitted (and
not prohibited) by the Credit Agreement, such action is in the ordinary
course of business consistent with past practices.
3.1.9 FRANCHISE AGREEMENTS. Without the prior written
consent of the Lender, the Borrower will not amend or otherwise modify the
Franchise Agreements, other than amendments or modifications made in the
ordinary course of business which would not have a material adverse effect
on the Borrower. The Borrower shall enforce its rights and remedies against
its franchisees in accordance with the terms of the Franchise Agreements in
the ordinary course of business. The Borrower shall maintain at all times
all of its franchises, Franchise Agreements and other General Intangibles
relating thereto in full force and effect.
ARTICLE IV
DEFAULT AND RIGHTS AND REMEDIES
Section 4.1. EVENTS OF DEFAULT. The occurrence of one or more of
the following events shall be "Events of Default" under this Agreement, and
the terms "Event of Default" or "default" shall mean, whenever they are
used in this Agreement, any one or more of the following events:
4.1.1 The Borrower shall fail to make any payment when
due and such failure shall continue beyond any applicable grace period
under any of the Obligations.
4.1.2 Any representation or warranty made herein or in
any report, certificate, opinion (including any opinion of counsel for the
Borrower), financial statement or other instrument furnished in connection
with the Loan Documents or the Obligations, shall prove to have been false
or misleading when made in any material respect.
4.1.3 Other than failure to pay the Obligations as set
forth in 4.1.1 above, the Borrower shall fail to duly and promptly perform,
comply with or observe the terms, covenants, conditions and agreements set
forth in this Agreement (and such failure shall continue uncured for 30
days after notice thereof) or in any of the other Loan Documents, or an
"Event of Default" shall occur under any of the Loan Documents, and such
"Event of Default" is not cured within any applicable grace period provided
therein.
Section 4.2. RIGHTS AND REMEDIES, ETC.
4.2.1 GENERAL RIGHTS AND REMEDIES. If any Event of
Default shall occur hereunder, then in each and every such case, the Lender
may, at its option exercised from time to time, at any time thereafter
while such Event of Default is continuing do any one or more of the
following:
(1) declare without notice to the Borrower the unpaid
principal amount of all or any of the Obligations (with accrued interest
thereon) to be immediately due and payable, whereupon the same shall
forthwith become due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives;
and/or
(2) exercise any rights and remedies available to the
Lender under this Agreement and applicable Laws.
4.2.2 ENFORCEMENT COSTS; APPLICATION OF PROCEEDS.
Borrower agrees to pay to the Lender all Enforcement Costs paid or incurred
by the Lender. All Enforcement Costs which are required to be paid by the
Borrower, together with interest thereon from the date incurred or advanced
until paid in full at a per annum rate of interest equal at all times to
the Default Rate and shall be paid by the Borrower to the Lender whenever
demanded by the Lender.
Any proceeds of the collection of the Obligations or of the sale or
other disposition of the Collateral will be applied by the Lender first to
the payment of the Enforcement Costs, second to the payment of the Loan,
and any balance of such proceeds (if any) will be applied by the Lender to
the payment of the remaining Obligations (whether then due or not), if any,
at such time or times and in such order and manner of application as the
Lender may from time to time in its sole discretion determine. If the sale
or other disposition of the Collateral fails to satisfy all of the
Obligations, the Borrower shall remain liable to the Lender for any
deficiency. Any surplus from the sale or disposition of the Collateral
shall be paid to the Borrower or to any other party entitled thereto or
shall otherwise be paid over in a manner permitted by law, less all
Enforcement Costs related to any such payment.
4.2.3 SPECIFIC RIGHTS WITH REGARD TO COLLATERAL. In
addition to all other rights and remedies provided hereunder or as shall
exist at law or in equity from time to time, during the continuance of an
Event of Default the Lender may without notice to the Borrower (except to
the extent required by applicable Laws) endorse the name of the Borrower
upon any items of payment relating to the Collateral or on any proof of
claim in any bankruptcy proceeding against an account debtor and any other
obligor with respect to the Collateral.
4.2.4 UNIFORM COMMERCIAL CODE AND OTHER REMEDIES. Upon
the occurrence of an Event of Default (and in addition to all of its
rights, powers and remedies under this Agreement), the Lender shall have
all of the rights and remedies of a secured party under the Utah Uniform
Commercial Code and other applicable laws. Upon demand by the Lender, the
Borrower shall assemble the Collateral and make it available to the Lender,
at a place reasonably convenient for such purpose as designated by the
Lender. The Lender or its Lenders may enter upon the Borrower's premises
to take possession of the Collateral, to remove it, to render it unusable,
or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended action
by the Lender with respect to the Collateral which is sent by regular mail,
postage prepaid, to the Borrower at the address set forth for notices
herein, or such other address of the Borrower which may from time to time
be shown on the Lender's records, at least ten (10) days prior to such
sale, disposition or other action, shall constitute reasonable notice to
the Borrower.
ARTICLE V
MISCELLANEOUS
Section 5.1. COURSE OF DEALING; AMENDMENT. No course of dealing
between the Borrower and the Lender shall be effective to amend, modify or
change any provision of this Agreement and this Agreement may not be
amended, modified, or changed in any respect except by an agreement in
writing signed by the Lender and the Borrower. The Lender shall have the
right at all times to enforce the provisions of this Agreement in strict
accordance with the terms hereof and thereof, notwithstanding any conduct
or custom on the part of the Lender in refraining from so doing at any time
or times. The failure or delay of the Lender at any time or times to
enforce its rights under such provisions, strictly in accordance with the
same, shall not be construed as having created a custom in any way or
manner contrary to specific provisions of this Agreement or as having in
any way or manner modified or waived the same.
Section 5.2. WAIVER, CUMULATIVE REMEDIES. The Lender may:
(1) at any time and from time to time, execute and deliver
to the Borrower a written instrument waiving, on such terms and conditions
as the Lender, may specify in such written instrument, any of the
requirements of this Agreement or any Event of Default and its
consequences, provided, that any such waiver shall be for such period and
subject and limited to such conditions as shall be specified in any such
instrument and to the instance for which the waiver is given. In the case
of any such waiver, the Borrower and the Lender, shall be restored to their
former positions prior to such Event of Default and shall have the same
rights as they had hereunder. The rights, powers and remedies provided in
this Agreement are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as the Lender shall
determine, and are in addition to, and not exclusive of, rights, powers and
remedies provided by applicable Laws.
(2) after an Event of Default proceed against the Borrower
and/or the Collateral with or without proceeding against any Person
obligated under any of the Obligations.
(3) after an Event of Default proceed against the Borrower
with or without proceeding under any of the Loan Documents or any other
agreement.
(4) without reducing or impairing the obligation of the
Borrower and without notice, release or compromise with any guarantor or
other Person liable for all or any part of the Obligations.
(5) without reducing or impairing the obligations of the
Borrower and without notice thereof: (i) fail to perfect the Lien in any
or all Collateral or to release any or all of the Collateral or to accept
substitute Collateral, (ii) allow all or any Obligations to arise after the
date of this Agreement, (iii) waive any provision of this Agreement, (iv)
exercise or fail to exercise rights of set-off or other rights, (v) accept
partial payments or extend from time to time the maturity of all or any
part of the Obligations, and (vi) take or fail to take any action under
this Agreement or against any one or more Persons obligated under the
Obligations.
The Borrower hereby waives and releases all claims and defenses
against the Lender with respect to the payment of the or enforcement of the
Obligations and the Lender's rights in the Collateral on account of any of
the foregoing.
Section 5.3. NOTICES. All notices, requests and demands to or upon
the parties to this Agreement shall be deemed to have been given or made
when so given or made in accordance with Section 7.1 of the Credit
Agreement.
Section 5.4. MANAGEMENT AND ADMINISTRATION BY LENDER. The Lender
shall not have any duty to the Borrower to pay for insurance, taxes, or
other charges incurred in the custody, preservation, use or operation of,
or in connection with the management of, any Collateral on which a Lien is
granted in connection with this Agreement; provided, however, that the
Lender may (in its sole discretion) pay such expenses. All such payments
shall part of the Obligations and shall bear interest payable on demand by
the Borrower from the date paid or incurred until paid in full at the
Default Rate.
Section 5.5. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. The
Borrower (a) and each of the Lenders and the Lender irrevocably waives any
and all right to trial by jury in any legal proceeding arising out of this
Agreement to the extent permitted by law, (b) submits to the nonexclusive
personal jurisdiction in the State of Utah, the courts thereof and the
United States District Courts sitting therein, for the enforcement of this
Agreement, (c) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of Utah
for the purpose of litigation to enforce this Agreement, and (d) agrees
that service of process may be made upon it in the manner prescribed in
Section 7.1 of the Credit Agreement for the giving of notice to the
Borrower. Nothing herein contained, however, shall prevent the Lender from
bringing any action or exercising any rights against any security and
against the Borrower personally, and against any assets of the Borrower,
within any other state or jurisdiction.
Section 5.6. SEVERABILITY. In case one or more provisions contained
in this Agreement shall be invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the remaining
provisions contained herein shall remain effective and binding on the
parties thereto and shall not be affected or impaired thereby.
Section 5.7. ASSIGNMENT, ETC. The Lender shall have the right to
divulge to any actual or potential purchaser, assignee, transferee or
participant of the Collateral and/or the Obligations, or any part thereof
all information, reports, financial statements and documents obtained in
connection with this Agreement or otherwise as the same may be permitted
under the Amended and Restated Credit Agreement.
Section 5.8. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender.
Section 5.9. APPLICABLE LAW. THE BORROWER ACKNOWLEDGES AND AGREES
THAT THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF UTAH, AS
IF THIS AGREEMENT HAD EACH BEEN EXECUTED, DELIVERED, ADMINISTERED AND
PERFORMED SOLELY WITHIN THE STATE OF UTAH.
Section 5.10. DEFINITIONAL PROVISIONS. Unless otherwise defined
herein, as used in this Agreement and in any certificate, report or other
document made or delivered pursuant hereto, accounting terms not otherwise
defined herein, and accounting terms only partly defined herein, to the
extent not defined, shall have the respective meanings given to them under
generally accepted United States accounting principles consistently applied
to the Borrower. Unless otherwise defined herein, all terms used herein
which are defined by the Utah Uniform Commercial Code shall have the same
meanings as assigned to them by the Utah Uniform Commercial Code unless and
to the extent varied by this Agreement. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and article, section, subsection, schedule and exhibit
references are references to articles, sections or subsections of, or
schedules or exhibits to, as the case may be, this Agreement unless
otherwise specified. The captions, headings and titles to this Agreement
and its sections, subsections and other parts are only for the convenience
of the parties and are not part of this Agreement. As used herein, the
singular number shall include the plural, the plural the singular and the
use of the masculine, feminine or neuter gender shall include all genders,
as the context may require. Reference to this Agreement or to any one or
more of the instrument, agreement or document previously, simultaneously or
hereafter executed and delivered by the Borrower, any guarantor and/or any
other Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or otherwise in connection with any of the
Obligations and/or in connection with this Agreement shall mean the same as
the foregoing may from time to time be amended, restated, substituted,
extended, renewed, supplemented or otherwise modified.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Agreement under seal as of the day and year first written above.
STAR BUFFET, INC.
By: /s/ Xxxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: V.P. CFO
-------------------------------
STACEY'S BUFFET, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CEO
------------------------------
EXHIBIT A
---------
Franchise Agreements
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EXHIBIT B
---------
The Borrower's chief executive office is located at 000 Xxxx Xxx
Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000.
In addition to the Borrower's chief executive office listed above, the
Collateral is also located at the following addresses:
See Attached Schedule 1.
EXHIBIT A TO FINANCING STATEMENT
Description of Collateral
This Financing Statement covers the following types (or items) of
property of the Debtor, including, without limitation, all proceeds of any
insurance policies covering all or any part of such property (as such terms
are defined below): all of the Debtor's Accounts, Equipment, General
Intangibles, and Inventory, all whether now owned or existing or hereafter
acquired or created, together with any and all cash and non-cash proceeds
(including, without limitation, insurance proceeds) and products thereof.
"Account" individually and "Accounts" collectively mean all of the
Debtor's right, title and interest in and to all presently existing or
hereafter acquired or created accounts, accounts receivable, contract
rights, documents of title, notes, drafts, instruments, acceptances,
chattel paper, securities, leases and writings evidencing a monetary
obligation or a security interest in or a lease of goods; all rights to
receive the payment of money or other consideration under present or future
contracts (including, without limitation, all rights to receive payments
under presently existing or hereafter acquired or created letters of
credit), or by virtue of merchandise sold or leased, services rendered,
loans and advances made or other considerations given, by or set forth in
or arising out of any present or future chattel paper, note, draft, lease,
acceptance, writing, bond, insurance policy, instrument, document or
general intangible, and all extensions and renewals of any thereof; all
rights under or arising out of present or future contracts, agreements or
general interests in merchandise which gave rise to any or all of the
foregoing, including all goods; all claims or causes of action now existing
or hereafter arising in connection with or under any agreement or document
or by operation of law or otherwise; all collateral security of any kind
(including real property) given by any person with respect to any of the
foregoing; all returned, rejected or repossessed goods, the sale or lease
of which shall have given or shall give rise to an any of the foregoing and
all cash and non-cash proceeds and products of all such goods; and all
proceeds (cash and non-cash) of the foregoing.
"Equipment" shall mean all of the Debtor's right, title and interest
in and to all equipment, machinery, computers, chattels, tools, parts,
machine tools, moveable restaurant buildings and all related equipment and
moveable site improvements, furniture, furnishings, fixtures and supplies
of every nature, presently existing or hereafter acquired or created and
wherever located, together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions
therefor and all parts and equipment which may be attached to or which are
necessary for the operation and use of such personal property, whether or
not the same shall be deemed to be affixed to real property, and all rights
under or arising out of present or future contracts relating to the
foregoing and all proceeds (cash and non-cash) of the foregoing.
"Franchise Agreements" means all franchise or license agreements of
the Debtor as franchisor or licensor, as the case may be, with the
franchisees or licensees, as the case may be, executed from time to time.
"Franchise Rights of Payment" means all rights of payment the Debtor
may have from time to time under all of its Franchise Agreements in effect
from time to time.
"General Intangibles" shall mean all of the Debtor's right, title and
interest in and to all general intangibles, of every nature, whether
presently existing or hereafter acquired or created, including, without
limitation, all of the Franchise Agreements, all of the Franchise Rights of
Payment, all books, correspondence, credit files, records, computer
programs, computer tapes, cards and other papers and documents in the
possession or control of the Debtor, claims (including without limitation
all claims for income tax and other refunds), choses in action, judgments,
patents, patent licenses, trademarks, trademark licenses, licensing
agreements, rights in intellectual property, goodwill (including all
goodwill of the Debtor's business symbolized by and associated with any and
all trademarks, trademark licenses, copyrights and/or service marks),
franchises, royalty payments, contractual rights, literary rights,
copyrights, service names, service marks, logos, trade secrets, all amounts
received as an award in or settlement of a suit in damages, deposit
accounts, interests in joint ventures or general or limited partnerships,
and all proceeds (cash and non-cash) of the foregoing.
"Inventory" means all of the Debtor's right, title and interest in and
to all now owned and hereafter acquired inventory, goods, merchandise and
other personal property furnished under any contract of service or intended
for sale or lease, including, without limitation, all raw materials,
work-in-progress, finished goods and materials and supplies of any kind,
nature or description which are used or consumed in the Debtor's business
or are or might be used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise and
other personal property and all documents of title or documents
representing the same and all proceeds, (cash and non-cash) of the
foregoing.
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