REVOLVING PROMISSORY NOTE
$________________________ Date:_________________
1. FOR VALUE RECEIVED, ___________________, a ________ corporation (the
"Company"), promises to pay to the order of Harvest Restaurants, Inc., a Texas
corporation ("Harvest"), at 0000 X.X. Loop 000, Xxxxx 000, Xxx Xxxxxxx, Xxxxx
00000 or at such place as Harvest may from time to time designate in writing, in
lawful money of the United States of America and in immediately available funds,
the principal sum of ___________________Dollars ($____________) and any interest
thereon.
2. It is contemplated that there will be advances and payment on this Note
from time to time, but no advances or payments on this Note (including the total
payment of the unpaid balance of principal prior to maturity) shall affect or
impair the validity or enforceability of this Note as to any future advances
hereunder. At no time shall outstanding advances exceed the sum of
$________________. Harvest shall have the right to approve or disapprove
requests for advances from time to time in Harvest's sole discretion.
3. Interest shall accrue on the aggregate outstanding principal balance at
a per annum rate equal to the rate announced by the Frost National Bank, or its
successor in interest (the "Bank"), from time to time as its "Prime Rate" in
effect at its office in San Antonio, Texas, plus four percent (4%). The interest
rate shall be adjusted, from time to time, on the same day on which the Bank
adjusts its "Prime Rate." As of the date of this Agreement, the Bank's Prime
Rate is _____%. Interest on the outstanding principal amount of the Loan shall
be payable on the dates set forth herein and at maturity (whether at stated
maturity, by acceleration or otherwise). Interest shall be computed on the basis
of a 360-day year and the actual number of days elapsed.
4. Interest accruing hereunder shall be due and payable in monthly
installments, payable on the first day of each Retail Period (hereinafter
defined), commencing on the first day of the Retail Period immediately following
the Retail Period in which the Company initially draws on this Note and
continuing regularly thereafter until _________________, at which time the
entire amount of unpaid principal and interest remaining unpaid will be payable.
Each payment will be credited first to the accrued interest and then to
reduction of principal. As used in this Note, the term "Retail Period" shall
mean a four-week period which is one of Harvest's thirteen (13) consecutive
four-week accounting periods used for accounting purposes.
5. Any principal payment due under this Note not paid when due, whether at
stated maturity, by notice of repayment, by acceleration or otherwise, shall, to
the extent permitted by applicable law, thereafter bear interest at the maximum
rate allowed by law until such unpaid amount has been paid in full (whether
before or after judgment).
6. The Company may prepay all or any part of the principal of this Note at
any time before maturity without penalty ,and interest shall immediately cease
to accrue on any amount so prepaid. e without the prior written consent of
Harvest, which consent may be withheld in its sole discretion. All payments made
hereunder shall be applied first to interest and then to outstanding principal.
REVOLVING PROMISSORY NOTE PAGE 1
7. If payment hereunder becomes due and payable on a Saturday, Sunday or
legal holiday, the due date thereof shall be extended to the next succeeding
business day.
8. Payment of this Note is secured by a Security Agreement of even date
executed by the Company covering the rights and properties more fully described
therein. However, the lien securing this Note shall remain subordinate to the
lien, as renewed, extended, re-amortized, or otherwise adjusted from time to
time, securing that other certain Secured Loan Agreement and related Convertible
Secured Note, both from the Company to Harvest and both dated effective
___________, 199___ in the original principal amount of ____________________
Dollars ($----------).
9. Harvest, in its sole discretion and without obligation on Harvest to do
so, may advance and pay sums on behalf and for the benefit of the Company for
costs necessary for the protection and preservation of the collateral described
in the Security Agreement securing this Note and other costs that may be
appropriate, in Harvest's sole discretion, including but not limited to,
insurance premiums, ad valorem taxes, and attorneys' fees. Any sums which may be
so paid out by Harvest including all sums paid for insurance premiums, or costs,
expenses, and attorneys' fees paid in any suit affecting the collateral when
necessary to protect the lien hereof shall bear interest from the dates of such
payments at the interest rate applied to the matured and past due principal
balance of this Note and shall be paid by Company to Harvest upon demand, at the
same place at which this Note is payable, and shall be deemed a part of the debt
and recoverable as such in all aspects.
10. Any assumption by any other person, partnership, corporation, limited
liability company, organization or any other entity of the obligations of the
Company shall only be effective upon the written consent of Harvest and any such
assumption with Harvest's consent shall not release the liability of the Company
for payment of the Note unless expressly released by Harvest.
11. Company and all sureties, endorsers, guarantors and any other party now
or hereafter liable for the payment of this Note in whole or in party, hereby
severally: (i) expressly waive all demands for payment, presentations for
payment, notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, notices of protest, diligence, notice of dishonor and all of
the notice, filing of suit and diligence in collecting this Note or enforcing
any of the security herefor, (ii) agree to any substitution, subordination,
exchange or release of any such security or the release of any party primarily
or secondarily liable hereon, (iii) agree that Harvest shall not be required to
first institute suit or exhaust its remedies hereon against the Company or other
liable or to become liable hereon or to enforce its rights against them or any
security herefor, and (iv) consent to any extension or postponement of time of
payment of this Note and to any other indulgence with respect hereto without
notice to any of them.
REVOLVING PROMISSORY NOTE PAGE 2
12. In the event all or any part of the Collateral secured by this Note or
all or any part of the stock or partnership interests or other ownership
interests in the Company are sold, conveyed, or otherwise disposed of without
the prior written consent of Harvest, the maturity of this Note, at the option
of Harvest, shall be accelerated and Harvest may immediately demand payment of
the then outstanding principal sum together with all accrued and unpaid interest
due thereon.
13. If default is made in the payment of any installment hereof, either
principal or interest, or in the payment of any other sum due hereunder,
promptly when the same shall be due and payable hereunder, or if there is any
default under any instrument which secures the payment of this Note or which is
executed in connection with the Loan evidenced by this Note, then Harvest, in
addition to its other remedies hereunder or the Security Agreement or any other
instrument which secures the payment of this Note or at law or in equity, shall
have the right and option, without notice or demand, to declare the unpaid
balance of principal and interest and all other sums owing on this Note at once
due and payable. If this Note is not paid at its maturity, regardless of how
such maturity may be brought about, Harvest may foreclose the liens and security
interests securing payment hereof or exercise any of its other rights hereunder
or the Loan Agreement or under any instrument which securest the payment of this
Note, or at law or in equity. Failure to exercise any such rights upon default
shall not constitute a waiver of the right to exercise any of them at any time.
14. If there is any default under this Note, and this Note is placed in the
hands of an attorney for collection, or is collected through any court,
including any bankruptcy court, the Company and all parties now or hereafter
liable hereon agree to and promise to pay to the order of the holder hereof such
holder's reasonable attorneys' fees and court costs incurred in collecting or
attempting to collect or securing or attempting to secure this Note or enforcing
the holder's rights with respect to the Collateral to the extent allowed by the
laws of the State of Texas or any state in which any Collateral is situated,
including reasonable attorneys' fees of not less than 10% of the unpaid amounts
and all other costs incurred by Harvest.
15. THE COMPANY AND ANY GUARANTOR AGREE TO GIVE HARVEST WRITTEN NOTICE OF
ANY ACTION OR INACTION BY HARVEST OR ANY AGENT OR ATTORNEY OF HARVEST IN
CONNECTION WITH THIS NOTE THAT MAY BE ACTIONABLE AGAINST HARVEST OR ANY AGENT OR
ATTORNEY OF HARVEST OF A DEFENSE TO PAYMENT OF THIS NOTE FOR ANY REASON,
INCLUDING, BUT NOT LIMITED TO, COMMISSION OF A TORT OF VIOLATION OF ANY
CONTRACTUAL DUTY OR DUTY IMPLIED BY LAW. THE COMPANY AGREES THAT UNLESS SUCH
NOTICE IS DULY GIVEN AS PROMPTLY AS POSSIBLE (AND IN ANY EVENT WITHIN TEN (10)
CALENDAR DAYS) AFTER THE COMPANY AND/OR GUARANTOR HAS KNOWLEDGE OR WITH THE
EXERCISE OF REASONABLE DILIGENCE SHOULD HAVE HAD KNOWLEDGE OF ANY SUCH ACTION OR
INACTION, THE COMPANY AND GUARANTOR SHALL NOT ASSERT, AND THE COMPANY AND
GUARANTOR SHALL BE DEEMED TO HAVE WAIVED, ANY CLAIM OR DEFENSE ARISING
THEREFROM.
16. This Note shall be governed by and construed in accordance with Texas
law and applicable federal law. The parties hereto intend to conform strictly to
the applicable usury laws. In no event, whether by reason of acceleration of the
REVOLVING PROMISSORY NOTE PAGE 3
maturity hereof or otherwise, shall the amount paid or agreed to be paid to
Harvest for the use, forbearance or detention of money hereunder or otherwise
exceed the maximum amount permissible under applicable law. If fulfillment of
any provision hereof or of any note or other document now or hereafter
evidencing, securing or pertaining to the indebtedness evidenced hereby, at the
time performance of such provision shall be due, would involve transcending the
limit of validity prescribed by law, then the obligation to be fulfilled shall
be reduced automatically to the limit of such validity. If Harvest shall ever
receive anything of value deemed interest under applicable law which would
exceed interest at the highest lawful rate, an amount equal to any amount which
would have been excessive interest shall be applied to the reduction of the
unpaid principal amount owing hereunder in the inverse order of its maturity and
not to the payment of interest, or if such amount which would have been
excessive interest exceeds the unpaid balance of principal hereof, such excess
shall be refunded to the Company. All sums paid or agreed to be paid to Harvest
for the use, forbearance or detention of the indebtedness of Company to Harvest
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of such indebtedness so
that the amount of interest on account of such indebtedness does not exceed the
maximum permitted by applicable law. The provisions of this paragraph shall
control all existing and future agreements between the Company and Harvest.
17. THIS NOTE HAS BEEN DELIVERED IN, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS
THEREOF. IN THE EVENT ANY ITEM, TERMS OR PROVISIONS CONTAINED IN THIS INSTRUMENT
ARE IN CONFLICT WITH THE LAWS OF THE STATE OF TEXAS, OR FEDERAL LAW, THIS
INSTRUMENT SHALL BE AFFECTED ONLY AS TO ITS APPLICATION TO SUCH ITEM, TERMS OR
PROVISIONS, AND SHALL IN ALL OTHER RESPECTS REMAIN IN FULL FORCE AND EFFECT.
18. The Company and Harvest further agree as follows:
18.1 Any and all controversies between the parties shall be settled by
arbitration, in accordance with the commercial arbitration rules, then
obtaining, of the American Arbitration Association. Any arbitration hereunder
shall be before at least three arbitrators associated with the American
Arbitration Association and selected in accordance with the commercial
arbitration rules of the American Arbitration Association. The award of the
arbitrators, or of a majority of them, shall be final, and judgment upon the
award rendered may be entered in any court, state or federal, having
jurisdiction.
18.2 Arbitrable Disputes include any and all controversies or claims
between the parties, of whatsoever type or manner, including any claim based on
contract, tort, or statute, and including without limitation, any claim arising
out of or relating to this agreement or any other proposed or actual loan, all
past, present, and/or future agreements involving the parties, any transactions
between or involving the parties and/or any aspect of the past, present or
future relationship of the parties, whether related to lending funds or
otherwise, specifically including any alleged tort committed by either party.
REVOLVING PROMISSORY NOTE PAGE 4
18.3 Depositions may be taken and other discovery obtained in any
arbitration under this agreement. Within thirty (30) days of the date a
responsive pleading is filed in any arbitration proceeding hereunder, all
parties shall serve on all other parties in initial disclosure as would be
required by rule 26, federal rules of civil procedure.
18.4 For purposes of this provision, "the parties" means the Company,
Harvest, any guarantor, beneficiary, trustee, successor or assigns, all persons
and entities signing this or any other agreements, security instruments, and/or
guarantees, executed heretofore or contemporaneously with and as part of the
same transaction with this agreement. "The parties" shall also include
individual partners, shareholders, officers, directors, employees, agents and/or
representatives of any party of those documents, and shall include any other
owner and holder of the loan documents.
18.5 The parties shall have the right to invoke self-help remedies
(such as set-off, notification of account debtors, seizure and/or foreclosure of
collateral, and non-judicial sale of personal property and real property
collateral) before, during or after any arbitration and/or to request ancillary
or provisional judicial remedies (such as garnishment, attachment, specific
performance, receiver, injunction or restraining order, and sequestration)
before or after any arbitration. The parties need not await the outcome of the
arbitration before using self-help remedies. Use of self-help or ancillary
and/or provisional remedies shall not operate as a waiver of either party's
right to compel arbitration.
18.6 The parties agree that any action regarding any controversy
between the parties shall either be brought by arbitration, as described herein,
or by judicial proceedings, but shall not be pursued simultaneously in different
or alternative forums. This provision shall not operate to limit the parties
from the pursuing self-help remedies before, during or after any arbitration is
described in paragraph 21.5 above. A timely written notice of intent to
arbitrate pursuant to this agreement stays and/or abates all action in a trial
court, save and except a hearing on a motion to compel arbitration and/or the
entry of an order compelling arbitration and staying and/or abating the
litigation pending the filing of the final award of the arbitrators.
18.7 Any aggrieved party shall serve a written notice of intent to
arbitrate to any and all opposing parties within 360 days after dispute has
arisen. A dispute is defined to have arisen only upon receipt of service of
judicial process or of a complaint in arbitration. Failure to serve a written
notice of intent to arbitrate within the time specified above shall be deemed. A
waiver of the aggrieved party's right to compel arbitration of such claim. The
issue of waiver pursuant to this agreement is an arbitrable dispute.
18.8 Active participation in pending litigation during the 360 day
notice period, whether as plaintiff or defendant, is not a waiver of the right
to compel arbitration. All discovery obtained in the pending litigation may be
used in any subsequent arbitration proceeding.
18.9 Any arbitrator selected shall be knowledgeable in the subject
matter of the dispute. Qualified retired judges shall be selected whenever
possible through panels maintained by the american arbitration association. Each
of the parties shall pay an equal share of the arbitration costs, fees, and
expenses, and of the arbitrators' costs, fees, and expenses.
REVOLVING PROMISSORY NOTE PAGE 5
18.10 All statutes of limitations which would otherwise be applicable
shall apply to any arbitration proceeding hereunder and the commencement of any
arbitration proceeding tolls such limitations.
18.11 In any arbitration proceedings subject to these provisions, the
arbitrators, or a majority of them, are specifically empowered to decided (by
documents only, or with a hearing, at the arbitrators' sole discretion)
pre-hearing motions which are substantially similar to pre- hearing motions to
dismiss and motions for summary adjudication.
18.12 The provisions of this section shall survive any termination,
amendment, or expiration of the agreement in which this section is contained,
unless all the parties otherwise expressly agree in writing.
18.13 The parties acknowledge that this agreement evidences a
transaction involving interstate commerce in that funds which may be advanced or
committed under this agreement are derived from interstate and/or international
financial markets. The federal arbitration act shall govern the interpretation,
enforcement, and proceedings pursuant to the arbitration clause in this
agreement.
18.14 The arbitrators, or a majority of them, shall award attorney's
fees and costs to the prevailing party pursuant to the terms of this agreement.
18.15 Venue of any arbitration proceeding hereunder will be in Bexar
County, Texas.
19. If there is a default by the Company under that one certain Secured
Loan Agreement ("Loan Agreement") or related Convertible Secured Note
("Convertible Note"), both from the Company to Harvest and both dated effective
___________, 199___ in the original principal amount of ____________________
Dollars ($__________), or any of the instruments securing such Loan Agreement or
Convertible Note, shall constitute a default hereunder and the debt evidenced by
this Note shall immediately become payable at the option of Payee. The Company
further agrees that a default under this Note shall be a default under the Loan
Agreement and Convertible Note.
20. THIS NOTE IS PAYABLE IN FULL ON __________________. ON ______________,
THE COMPANY MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND UNPAID
INTEREST THEN DUE. HARVEST IS UNDER NO OBLIGATION TO REFINANCE THIS NOTE AT THAT
TIME. COMPANY WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS
THE COMPANY MAY OWN, OR COMPANY WILL HAVE TO FIND A LENDER, WHICH MAY BE
HARVEST, WILLING TO LEND COMPANY THE MONEY. IF COMPANY REFINANCES THIS NOTE AT
MATURITY, COMPANY MAY HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY
ASSOCIATES WITH A NEW LOAN EVEN IF THE COMPANY OBTAINS REFINANCING FROM HARVEST.
REVOLVING PROMISSORY NOTE PAGE 6
IN WITNESS WHEREOF, the Company has caused this Note to be executed in its
corporate name by its undersigned duly authorized officer on _________________
to be effective
By:_____________________________________
Name: ______________________________
Title:______________________________
GUARANTY OF THIS NOTE
For value received, ____(I or we)____, _____(names)___________________,
__(jointly and severally)________, absolutely and unconditionally guarantee
payment of this Note according to its terms to the same extent as if ______(I or
we)___, were the maker(s) of this Note, ___(I or we)___ (jointly and
severally)_________ waive all demand and all notices, including notice of
intention to accelerate the maturity, notice of acceleration of maturity, notice
of nonpayment, presentment for payment, protest, notice of protest, suit and
diligence. _____(I or we)____ also (____(jointly and severally)_____ waive any
notice of and defense based on the extension of time of payment or change in
methods of payment and consent to all renewals, extensions, and other
adjustments in the manner of payment of this Note. This is a guaranty of payment
and performance, not of collection, and it is an agreement of guaranty, not of
suretyship. ____(I or We)____ (___(jointly and severally)____ waive all
requirements of law, if any, to require that any collection efforts be made
against the Company or that any action be brought against the Company before
resorting to this guaranty.
Date: ________________ _____________________________
Printed Name: _____________________________
REVOLVING PROMISSORY NOTE PAGE 7
