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Exhibit 10(i)
Exhibit 10(i) Line of Credit Note dated March 27, 1998 by and between X.
Xxxxxxxxx'x Corporation, X. Xxxxxxxxx'x Restaurants, Inc. and
NationsBank of Tennessee, N.A.
LINE OF CREDIT NOTE
$20,000,000.00 Nashville, Tennessee March 27, 1998
FOR VALUE RECEIVED, X. XXXXXXXXX'X CORPORATION (f/k/a VOLUNTEER CAPITAL
CORPORATION) and X. XXXXXXXXX'X RESTAURANTS, INC. (f/k/a TOTAL QUALITY
MANAGEMENT, INC.), Tennessee corporations (the "Maker"), jointly and severally
promise to pay to the order of NATIONSBANK OF TENNESSEE, N.A. ("Payee" or
"NationsBank"), the sum of Twenty Million and No/100 Dollars ($20,000,000.00),
or as much thereof as may be outstanding from time to time, together with
interest thereon as set forth below.
Advances under this Note shall be governed by that certain Loan
Agreement dated August 29, 1995, as amended by that Amendment to Loan Agreement
of even date herewith ("Loan Agreement"). Subject to the provisions of the Loan
Agreement, Maker may borrow, repay and reborrow and there is no limit on the
number of advances against this Note as long as the total unpaid principal
balance at any time outstanding does not exceed Twenty Million and No/100
Dollars ($20,000,000.00).
From the date hereof until December 31, 1998, interest shall accrue at
the LIBOR Rate plus a spread of 3.0%. Beginning on January 1, 1999 until the
stated maturity of this Note, interest shall accrue at, for any given period of
30 days (a "LIBOR Period") the LIBOR Rate plus a spread of 2.0%, 2.25%, 2.5% or
3.0% depending on the Senior Debt Coverage Ratio ("SDCR") as further provided in
the Loan Agreement.
From the date hereof until December 31, 1998, a non-usage fee of .50%
will be paid quarterly in arrears. Beginning on January 1, 1999 until the stated
maturity of this Note, a non-usage fee of either .25%, .35% or .50% based upon
the daily average unused amount and based on the SDCR will be paid quarterly in
arrears. If the SDCR is less than or equal to 2.75 but greater than 2.5, the fee
will be .50%; if the SDCR is less than or equal to 2.5 but greater than 2.25,
the fee will be .35%; if the SDCR is less than or equal to 2.25, the fee will be
.25%.
Interest in arrears shall be due and payable on the first (1st) day of
each month beginning on April 1, 1998. All remaining principal and interest
shall become due on July 1, 2000 under the three year revolver, or July 1, 2007
if the option to convert to an additional seven (7) year term loan is exercised.
Subject to the provisions contained herein, Maker has the option to
convert this Line of Credit Note to a Term Note. Providing that Borrower is not
then in default hereunder, Borrower may make a written election to convert the
Line of Credit Note to a Term Note any time prior to July 1, 2000. The written
election must be delivered to Payee at least thirty (30) days prior to the
conversion date. After receipt of the election, Payee has sole discretion to
determine what collateral will be required of Maker to provide security for the
term loan. Payee will notify Maker whether or in what manner the term loan shall
be securitized within fifteen (15) days after receiving the election. Upon
conversion, there will be a conversion fee equal to one-quarter (1/4) of one
percent (1%) of the then outstanding principal balance. The unpaid principal
balance will then be repayable in eighty-four (84) equal monthly installments of
principal with the first principal payment due thirty (30) days following the
conversion date. Interest will continue to be paid monthly at the same time as
the principal payment is due. Interest shall accrue on the Term Note at the
NationsBank Prime Rate, as it may change from time to time or the LIBOR Rate
discussed above (subject to the
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restriction on the number of LIBOR borrowings discussed above) or at a fixed
rate to be determined by Payee at the time of receiving the written election.
Maker shall specify the interest rate option (Prime Rate, LIBOR Rate or fixed)
to be used in the conversion election.
As used herein, the term "NationsBank Prime Rate" shall mean the
fluctuating rate of interest established by NationsBank from time to time as its
"Prime Rate", whether or not such rate shall be otherwise published. Such Prime
Rate is established by NationsBank as an index or base rate and may or may not
at any time be the best or lowest rate charged by NationsBank on any loan. If at
any time or from time to time the Prime Rate increases or decreases, then the
rate of interest hereunder shall be correspondingly increased or decreased
effective on the day on which any such increase or decrease of the Prime Rate
changes, unless otherwise herein provided. In the event that NationsBank, during
the term hereof, shall abolish or abandon the practice of establishing a Prime
Rate, or should the same become unascertainable, NationsBank shall designate a
comparable reference rate which shall be deemed to be the Prime Rate for
purposes hereof.
For purposes hereof, the "LIBOR Rate" shall mean the rate per annum
announced by NationsBank as its LIBOR Rate for a period equal to the length of
such LIBOR Period and in an amount comparable to the then aggregate unpaid
principal balance hereunder (or will be outstanding by the commencement of the
LIBOR Period requested by Maker) as adjusted to reflect NationsBank's reserve
requirements, all as calculated and announced from time to time by Payee, whose
announcement shall be binding absent manifest error.
Interest hereunder shall be calculated based upon a 360 day year and
actual days elapsed. The interest rate required hereby shall not exceed the
maximum rate permissible under applicable law, and any amounts paid in excess of
such rate shall be applied to reduce the principal amount hereof or shall be
refunded to Maker, at the option of the holder of this Note.
All amounts due under this Note are payable at par in lawful money of
the United States of America, at the principal place of business of Payee in
Nashville, Tennessee, or at such other address as the Payee or other holder
hereof (herein "Holder") may direct.
Any payment not made within fifteen (15) days of its due date will be
subject to assessment of a late charge equal to five percent (5%) of such
payment. Holder's right to impose a late charge does not evidence a grace period
for the making of payments hereunder.
The occurrence of any of the following shall constitute an event of
default under this Note: (a) the failure of Maker to timely pay any amount due
Holder under this Note or any other obligation to Holder if such failure
continues for ten (10) days after notice of nonpayment from Holder to Maker
provided, however, that should Holder give Maker a notice of nonpayment, then
for the twelve month period following such notice of nonpayment, Holder shall
not be required to give Maker notice of nonpayment and Maker will be in default
if it fails to make a monetary payment within ten (10) days of the due date; (b)
the institution of proceedings by Maker under any state insolvency law or under
any federal bankruptcy law; (c) the institution of proceedings against Maker
under any state insolvency law or under any federal bankruptcy law, if such
proceedings are not dismissed within sixty (60) days; (d) Maker's becoming
insolvent or generally failing to pay its debts as they become due; (e) the
discovery by Holder that Maker has made a material misrepresentation of
financial condition in any written statement made to any present or previous
Holder which remains uncured for thirty (30) days; (f) the instigation of legal
proceedings against Maker for the violation of a material criminal statute; (g)
the issuance of an attachment against property of Maker unless removed, by bond
or otherwise, within ten (10) days; (h) the entry of a
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judgment against Maker that remains unsatisfied for thirty (30) days after
execution may first issue; (i) Maker's liquidation or cessation of business; (j)
the occurrence of a default under the terms of any loan agreement, security
agreement, deed of trust, or similar document to which Maker is a party or to
which any property securing this Note is subject which results in the
acceleration of an indebtedness of One Hundred Thousand and 00/100 Dollars
($100,000.00) or more; or (k) the occurrence of any of the foregoing with regard
to any surety, guarantor, endorser, or other person or entity primarily or
secondarily liable for the payment of the indebtedness evidenced by this Note.
Upon the occurrence of an event of default, as defined above, Holder
may, at its option and without notice, terminate any obligation to advance funds
under this Note, declare all principal and interest provided for under this
Note, and any other obligations of Maker to Holder; to be presently due and
payable, and Holder may enforce any remedies available to Holder under any
documents securing or evidencing debts of Maker to Holder. Holder may waive any
default before or after it occurs and may restore this Note in full effect
without impairing the right to declare it due for a subsequent default, this
right being a continuing one. Upon default, at Holder's election, the remaining
unpaid principal balance of the indebtedness evidenced hereby and all expenses
due Holder shall bear interest at the interest rate in effect immediately before
the default plus three percent (3%).
All amounts received for payment of this Note shall be first applied to
any expenses due Holder under this Note or under any other documents evidencing
or securing obligations of Maker to Holder, then to accrued interest, and
finally to the reduction of principal. Prepayment of principal or accrued
interest may be made, in whole or in part, at any time without penalty. Any
prepayment(s) shall reduce the final payment(s) and shall not reduce or defer
installments next due.
This Note may be freely transferred by Holder.
Maker and all sureties, guarantors, endorsers and other parties to this
instrument hereby consent to any and all renewals, waivers, modifications, or
extensions of time (of any duration) that may be granted by Holder with respect
to this Note and severally waive demand, presentment, protest, notice of
dishonor, and all other notices that might otherwise be required by law. All
parties hereto waive the defense of impairment of collateral and all other
defenses of suretyship.
Maker's performance under this Note is unsecured. There will be a
negative pledge on existing unencumbered assets, as further described in the
Loan Agreement.
Maker and all sureties, guarantors, endorsers and other parties hereto
agree to pay reasonable attorneys' fees and all court and other costs that
Holder may incur in the course of efforts to collect the debt evidenced hereby
or to protect Holder's interest in any collateral securing the same.
The validity and construction of this Note shall be determined
according to the laws of Tennessee applicable to contracts executed and
performed within that state. If any provision of this Note should for any reason
be invalid or unenforceable, the remaining provisions hereof shall remain in
full effect.
The provisions of this Note may be amended or waived only by instrument
in writing signed by the Holder and Maker and attached to this Note.
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Any controversy or claim between or among the parties to this Note or
any related loan or collateral agreements or instruments (collectively, "Loan
Documents"), including any claim based on or arising from an alleged tort, shall
be determined by binding arbitration in accordance with the Federal Arbitration
Act (or if not applicable, the applicable state law), the Rules of Practice and
Procedure for the arbitration of commercial disputes of Judicial Arbitration and
Mediation Services, Inc. (J.A.M.S.), and the "special rules" set forth below. In
the event of any inconsistency, the special rules shall control. Judgment upon
any arbitration award may be entered in any court having jurisdiction. Any party
to the Loan Documents may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
agreement applies in any court having jurisdiction over such action.
The following "Special Rules" shall apply. The arbitration shall be
conducted in Nashville, Tennessee and administered by J.A.M.S. who will appoint
an arbitrator; if J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within 90 days of the demand for
arbitration; further, the arbitrator shall only, upon a showing of cause, be
permitted to extend the commencement of such hearing for up to an additional 60
days.
Nothing in foregoing arbitration shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of limitation or repose and
any waivers contained in the Loan Documents; or (ii) be a waiver by NationsBank
of the protection afforded to it by 12 U.S.C. Sec. 91 or any substantially
equivalent state law; or (iii) limit the rights of NationsBank under the Loan
Documents (a) to exercise self help remedies such as (but not limited to)
set-off, or (b) to foreclose against any real or personal property collateral,
or (c) to obtain from a court provisional or ancillary remedies such as (but not
limited to) injunctive relief, possession of collateral or the appointment of a
receiver. NationsBank may exercise such self help rights, foreclose upon such
property, or obtain such provisional or ancillary remedies before, during or
after the pendency of any arbitration proceeding brought pursuant to the Loan
Documents. At NationsBank's option, foreclosure under a deed of trust or
mortgage may be accomplished by any of the following: the exercise of a power of
sale under the deed of trust or mortgage, or by judicial sale under the deed of
trust or mortgage, or by judicial foreclosure. Neither this exercise or self
help remedies nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
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Words used herein indicating gender or number shall be read as context may
require.
X. XXXXXXXXX'X CORPORATION
(f/k/a VOLUNTEER CAPITAL CORPORATION)
By: /s/ R. Xxxxxxx Xxxxx
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Title: Vice President and Chief
Financial Officer
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X. XXXXXXXXX'X RESTAURANTS, INC.
(f/k/a TOTAL QUALITY MANAGEMENT, INC.)
By: /s/ R. Xxxxxxx Xxxxx
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Title: Vice President -- Finance
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