LOAN AGREEMENT
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THIS LOAN AGREEMENT ("Agreement"), dated as of the 22nd day of October,
1996, is made and entered into on the terms and conditions hereinafter set
forth, by and between TRC Acquisition Corporation, a Georgia corporation
("Borrower"), and SIRROM CAPITAL CORPORATION, a Tennessee corporation
("Lender").
RECITALS:
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WHEREAS, Borrower has requested that Lender make available to Borrower a
term loan in the original principal amount of Two Million and No/100ths Dollars
($2,000,000) (the "Loan") on the terms and conditions hereinafter set forth, and
for the purpose(s) hereinafter set forth; and
WHEREAS, in order to induce Lender to make the Loan to Borrower, Borrower
has made certain representations to Lender; and
WHEREAS, Lender, in reliance upon the representations and inducements of
Borrower set forth herein, has agreed to make the Loan upon the terms and
conditions hereinafter set forth.
AGREEMENT:
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NOW, THEREFORE, in consideration of the agreement of Lender to make the
Loan, the mutual covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
ARTICLE 1
THE LOAN
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1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms and
conditions hereof, Lender shall make the Loan to Borrower by wire transfer in
immediately available funds. The Loan shall be advanced to Borrower in two
advances (individually, an "Advance" and collectively, the "Advances"). The
first Advance shall be in the principal amount of $1,000,000 and shall be made
on the date hereof. The second Advance shall be in the principal amount of
$1,000,000 and shall be requested by Borrower and made by Lender on or before
October 31, 1997. Lender's obligation to fund the second Advance shall be
contingent upon Borrower having opened two new restaurants within one year from
the date hereof The Loan shall be evidenced by two Secured Promissory Notes,
each in the original principal amount of the applicable Advance, each
substantially in the form of Exhibit A attached hereto and incorporated herein
by this reference (individually a "Note" and collectively the "Notes"), each
dated as of the date of the applicable Advance, executed by Borrower, in favor
of Lender. The Loan shall be payable in accordance with the terms of the Notes;
provided, however, that all indebtedness evidenced by the Notes shall be due and
payable immediately upon Borrower's successful completion of an offering of
stock of Borrower pursuant to a registration statement filed with and declared
effective by the Securities Exchange Commission pursuant to the Securities Act
of 1933. The Notes, this Agreement and any other instruments and documents
executed by Borrower, any guarantor of Borrower, or any shareholder of Borrower,
now or hereafter evidencing, securing or in any way related to the indebtedness
evidenced by the Notes are herein individually referred to as a "Loan Document"
and collectively referred to as the "Loan Documents."
1.2 Processing Fee. Borrower shall pay a processing fee of $50,000 to
Lender of which $25,000 has been paid and $25,000 shall be paid at closing.
1.3 Purpose(s) of Loan and Use of Proceeds. The purposes of the Loan shall
be (i) to provide working capital to Borrower, (ii) to pay all costs and
expenses incurred by the parties hereto in connection with the making and
documenting of the Loan, including attorneys' fees and expenses, (iii) to
finance the acquisition by Borrower of the stock of certain entities comprising
the business of Xxxxxx'x Rotisserie Chicken, and (iv) to finance new store
expansion by Borrower. The proceeds of the Loan shall not be used for any other
purpose.
1.4 Prepayment. Borrower may prepay the indebtedness evidenced by the Note
in whole or in part at any time and from time to time without premium or
penalty.
ARTICLE 2
REPRESENTATIONS AND WARRANTEES
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2.1 Borrower's Representations. Borrower hereby represents and warrants to
Lender as follows:
(a) Corporate Status. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Georgia and has the corporate power to own and operate its properties, to
carry on its business as now conducted and to enter into and to perform its
obligations under this Agreement and the other Loan Documents to which it
is a party. Borrower is duly qualified to do business and in good standing
in Georgia and each other state in which a failure to be so qualified and
in good standing would have a material adverse effect on Borrower's
financial positions or its ability to conduct its business in the manner
now conducted.
(b) Subsidiaries. Schedule 2.1(b) hereto is a complete list of each
corporation, partnership, joint venture or other business organization (the
"Subsidiary" or, with respect to all such organizations, the
"Subsidiaries") in which Borrower or any Subsidiary owns, directly or
indirectly, any capital stock or other equity interest, or with respect to
which Borrower or any Subsidiary, alone or in combination with others, owns
33% or more of such organization, which list shows the jurisdiction of
incorporation or other organization and the percentage of stock or other
equity interest of each Subsidiary owned by Borrower. Each Subsidiary which
is a corporation is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and is duly
qualified to transact business as a foreign corporation and is in good
standing in the jurisdictions listed in Schedule 2.1(b), which are the only
jurisdictions where the properties owned or leased or the business
transacted by it makes such licensing or qualification to do business as a
foreign corporation necessary, and no other jurisdiction has demanded,
requested or otherwise indicated that (or inquired whether) it is required
so to qualify. Each Subsidiary which is not a corporation is duly organized
and validly existing under the laws of the jurisdiction of its
organization. The outstanding capital stock of each Subsidiary which is a
corporation is validly issued, fully paid and nonassessable. Borrower and
the Subsidiaries have good and valid title to the equity interests in the
Subsidiaries shown as owned by each of them on Schedule 2.1(b), free and
clear of all liens, claims, charges, restrictions, security interests,
equities, proxies, pledges or encumbrances of any kind, except as set forth
on Schedule 2.1(b). Except where otherwise indicated herein or unless the
context otherwise requires, any reference to Borrower herein shall include
Borrower and all of its Subsidiaries.
(c) Authorization. Borrower has full legal right, power and authority
to conduct its business and affairs. Borrower has full legal right, power
and authority to enter into and perform its obligations under the Loan
Documents, without the consent or approval of any other person, firm,
governmental agency or other legal entity. The execution and delivery of
this Agreement, the borrowing hereunder, the execution and delivery of each
Loan Document to which Borrower is a party, and the performance by Borrower
of its obligations thereunder are within the corporate powers of Borrower
and have been duly authorized by all necessary corporate action properly
taken, have received all necessary governmental approvals, if any were
required, and do not and will not contravene or conflict with any provision
of law, any applicable judgment, ordinance, regulation or order of any
court or governmental agency, the articles of incorporation or bylaws of
Borrower, or any agreement binding upon Borrower. The officer(s) executing
this Agreement, the Note and all of the other Loan Documents to which
Borrower is a party are duly authorized to act on behalf of Borrower.
(d) Validity and Binding Effect. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, subject to
limitations imposed by bankruptcy, insolvency, moratorium or other similar
laws affecting the rights of creditors generally or the application of
general equitable principles.
(e) Capitalization. As of the date hereof, the authorized capital
stock of Borrower consists solely of (i) 100,000,000 shares of common
stock, no par value per share ("Common Stock"), of which (A) 2,625,000
shares are issued and outstanding (the "Common Shares"), (B) 375,000 shares
of which shall be reserved for issuance upon exercise of the Stock Purchase
Warrant dated as of the date hereof and issued to Lender (the "Warrant"),
(C) 700,000 shares reserved for issuance upon exercise of stock options,
and (D) 300,000 shares reserved for issuance pursuant to an Incentive Stock
Option Plan to be implemented by Borrower; provided, however, that the
number of shares reserved for issuance upon exercise of the Warrant shall
be increased from time to time in accordance with the terms of the Warrant;
and (ii) 1,000,000 shares of preferred stock, $ 1.00 par value per share
("Preferred Stock") (Common Stock and Preferred Stock are sometimes
referred to herein collectively as the "Stock"), of which 2,000 shares are
designated as Class A Preferred Stock, all of which are issued and
outstanding (the "Preferred Shares") (the Common Shares and the Preferred
Shares are sometimes referred to herein collectively as the "Shares"). As
of the date hereof, Borrower shall not have outstanding any stock or
securities convertible or exchangeable for any shares of its Stock or
containing any profit participation features, ',nor shall it have
outstanding any rights or options to subscribe for or to purchase its Stock
or any stock or securities convertible into or exchangeable for its Stock
or any stock appreciation rights or phantom stock plans, except as set
forth on Schedule 2.1(e) and for the Warrant. Schedule 2.1(e) accurately
sets forth the following with respect to all outstanding options and rights
to acquire the Borrower's Stock from Borrower: (i) the total number of
shares issuable upon exercise of all outstanding options, (ii) the range of
exercise prices for all such outstanding options, (iii) the number of
shares issuable, the exercise price and the expiration date for each such
outstanding option and (iv) with respect to all outstanding options,
warrants and rights to acquire Borrower's capital stock other than the
Warrant, the holder, the number of shares covered, the exercise price and
the expiration date. As of the date hereof, Borrower shall not be subject
to any obligation (contingent or otherwise) to repurchase, redeem, retire
or otherwise acquire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock, except as set forth
in the Warrant or on Schedule 2.1(e). As of the date hereof, all of the
outstanding shares of Borrower's capital stock shall be validly issued,
fully paid and nonassessable. Except as set forth on Schedule 2.1(e), there
are no statutory or contractual preemptive rights, rights of first refusal,
anti-dilution rights or any similar rights, held by stockholders or option
holders of Borrower, with respect to the issuance of the Warrant or the
issuance of the Common Stock upon exercise of the Warrant. All such rights
granted in the documents listed on Schedule 2.1(e) have been effectively
waived with regard to the issuance of the Warrant, the exercise of the
Warrant and the issuance of the Common Stock upon exercise of the Warrant.
Borrower has not violated any applicable federal or state securities laws
in connection with the offer, sale or issuance of any of its capital stock,
and the offer, sale and issuance of the Warrant hereunder do not require
registration under the Securities Act or any applicable state securities
laws. To the best of Borrower's knowledge, there are no agreements among
Borrower's stockholders with respect to any other aspect of Borrower's
affairs, except as set forth on Schedule 2.1(e).
(f) Trademarks, Patents, Etc. Schedule 2.1(f) is an accurate and
complete list of all patents, trademarks, tradenames, trademark
registrations, service names, service marks, copyrights, licenses, formulas
and applications therefor owned by Borrower or used or required by Borrower
in the operation of its business, title to each of which is, except as set
forth in Schedule 2.1(f) hereto, held by Borrower free and clear of all
adverse claims, liens, security agreements, restrictions or other
encumbrances. Except as set forth on Schedule 2.1(f), Borrower has not
received notice of any (and is not otherwise aware of any) infringement
action, lawsuit, claim or complaint which asserts that Borrower's
operations violate or infringe the rights or the trade names, trademarks,
trademark registration, service name, service xxxx or copyright of others
with respect to any apparatus or method of Borrower or any adversely held
trademark, trade name, trademark registration, service name, service xxxx
or copyright, nor is Borrower in any way making use of any confidential
information or trade secrets of any person except with the consent of such
person.
(g) No Conflicts. Consummation of the transactions hereby contemplated
and the performance of the obligations of Borrower under and by virtue of
the Loan Documents will not result in any breach of, or constitute a
default under, any mortgage, security deed or agreement, deed of trust,
lease, bank loan or credit agreement, corporate charter or bylaws,
agreement or certificate of limited partnership, partnership agreement,
license, franchise or any other instrument or agreement to which Borrower
is a party or by which Borrower, or its respective properties may be bound
or affected or to which Borrower has not obtained an effective waiver,
unless such breach or default would not have a material adverse effect on
Borrower's business and operations.
(h) Litigation. Except as set forth on Schedule 2.1(h), Borrower has
not received notice of any (and Borrower is not otherwise aware of any)
actions, suits or proceedings pending, or, to the knowledge of Borrower,
threatened, against or affecting Borrower or involving the validity or
enforceability of any of the Loan Documents at law or in equity, or before
any governmental or administrative agency; and to Borrower's knowledge,
Borrower is not in default with respect to any order, writ, injunction,
decree or demand of any court or any governmental authority.
(i) Financial Statements. The financial statements of Borrower, dated
September 1, 1996, attached hereto as Schedule 2.1(i)(A), are true and
correct in all material respects, and except as otherwise stated therein,
have been prepared on the basis of accounting principles consistently
applied, and fairly present the financial condition of Borrower as of the
date(s) thereof. No material adverse change has occurred in the financial
condition of Borrower since the date(s) thereof, and no additional
borrowings have been made by Borrower since the date(s) thereof other than
as set forth on Schedule 2.1(i)(B).
(j) No Defaults. Borrower is not in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument material to its
business to which it is a party, including but not limited to this
Agreement and the other Loan Documents, and no other default or event has
occurred and is continuing that with notice or the passage of time or both
would constitute a default or event of default under any of same.
(k) Compliance With Law. Borrower has obtained all material licenses,
permits and approvals and authorizations necessary or required in order to
conduct its business and affairs as heretofore conducted and as hereafter
intended to be conducted. To Borrower's knowledge, Borrower is in
compliance with all laws, regulations, decrees and orders applicable to it
(including but not limited to laws, regulations, decrees and orders
relating to environmental, occupational and health standards and controls,
antitrust, monopoly, restraint of trade or unfair competition), except to
the extent that noncompliance, in the aggregate, cannot reasonably be
expected to have a material adverse effect on its business, operations,
property or financial condition and will not materially adversely affect
Borrower's ability to perform its obligations under the Loan Documents.
(l) Debt. Schedule 2.1(l) is a complete and correct list of all credit
agreements, indentures, purchase agreements, promissory notes and other
evidences of indebtedness, guaranties, capital leases and other
instruments, agreements and arrangements presently in effect providing for
or relating to extensions of credit (including agreements and arrangements
for the issuance of letters of credit or for acceptance financing) in
respect of which Borrower, or any of the properties thereof is in any
manner directly or contingently obligated; and the maximum principal or
face amounts of the credit in question that are outstanding and that can be
outstanding are correctly stated, and all liens of any nature given or
agreed to be given as security therefor are correctly described or
indicated in such Schedule.
(m) Taxes. Borrower has filed or caused to be filed all tax returns
that to Borrower's knowledge are required to be filed (except for returns
that have been appropriately extended), and has paid, or will pay when due,
all taxes shown to be due and payable on said returns and all other taxes,
impositions, assessments, fees or other charges imposed on them by any
governmental authority, agency or instrumentality, prior to any delinquency
with respect thereto (other than taxes, impositions, assessments, fees and
charges currently being contested in good faith by appropriate proceedings,
for which appropriate amounts have been reserved). Except as set forth on
Schedule 2.1 (m, to Borrower's knowledge, no tax liens have been filed
against Borrower, or any of the property thereof.
(n) Certain Transactions. Except as set forth on Schedule 2.1(n)
hereto, Borrower is not indebted, directly or indirectly, to any of its
shareholders, officers, or directors or to their respective spouses or
children, in any amount whatsoever; none of said shareholders, officers or
directors or any members of their immediate families, are indebted to
Borrower or have any direct or indirect ownership interest in any firm or
corporation with which Borrower has a business relationship, or any firm or
corporation which competes with Borrower, except that shareholders,
officers and/or directors of Borrower may own no more than 4.9% of
outstanding stock of publicly traded companies which may compete with
Borrower. No officer or director of Borrower or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with Borrower. Borrower is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
(o) Statements Not False or Misleading. No representation or warranty
given as of the date hereof by Borrower contained in this Agreement or any
schedule attached hereto or any statement in any document, certificate or
other instrument furnished or to be furnished by Borrower to Lender
pursuant hereto, taken as a whole, contains or will (as of the time so
furnished) contain any untrue statement of a material fact, or omits or
will (as of the time so furnished) omit to state any material fact which is
necessary in order to make the statements contained therein not misleading.
(p) Margin Regulations. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock. No
proceeds received pursuant to this Agreement will be used to purchase or
carry any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.
(q) Significant Contracts. Schedule 2.1(q) is a complete and correct
list of all contracts, agreements and other documents pursuant to which
Borrower receives revenues in excess of $25,000 per fiscal year. Each such
contract, agreement and other document is in full force and effect as of
the date hereof and Borrower knows of no reason why such contracts,
agreements and other documents would not remain in full force and effect
pursuant to the terms thereof.
(r) Environment. Borrower has duly complied with, and its business,
operations, assets, equipment, property, leaseholds or other facilities are
in compliance with, the provisions of all federal, state and local
environmental, health, and safety laws, codes and ordinances, and all rules
and regulations promulgated thereunder, except to the extent that failure
to do so would not have a material adverse effect on its business. Borrower
has been issued and will maintain all required federal, state and local
permits, licenses, certificates and approvals relating to (1) air
emissions; (2) discharges to surface water or groundwater; (3) noise
emissions; (4) solid or liquid waste disposal; (5) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or
wastes (which shall include any and all such materials listed in any
federal, state or local law, code or ordinance and all rules and
regulations promulgated thereunder as hazardous or potentially hazardous);
or (6) other environmental, health or safety matters, except to the extent
that failure to do so would not have a material adverse effect on its
business. Borrower has not received notice of, and does not know of, any
violations of any federal, state or local environmental, health or safety
laws, codes or ordinances, and any rules or regulations promulgated
thereunder with respect to its businesses, operations, assets, equipment,
property, leaseholds, or other facilities. Except in accordance with a
valid governmental permit, license, certificate or approval, Borrower has
not received notice of, and does not know of any, emission, spill, release
or discharge into or upon (1) the air; (2) soils, or any improvements
located thereon; (3) surface water or groundwater; or (4) the sewer, septic
system or waste treatment, storage or disposal system servicing the
premises, of any toxic or hazardous substances or wastes at or from the
premises. Borrower has not received notice of, and does not know of any,
complaint, order, directive, claim, citation or notice by any governmental
authority or any person or entity with respect to (1) air emissions; (2)
spills, releases or discharges to soils or improvements located thereon,
surface water, groundwater or the sewer, septic system or waste treatment,
storage or disposal systems servicing the premises; (3) noise emissions;
(4) solid or liquid waste disposal; (5) the use, "generation, storage,
transportation or disposal of toxic or hazardous substances or waste; or
(6) other environmental, health or safety matters affecting Borrower or its
business, operations, assets, equipment, property, leaseholds or other
facilities. Borrower has no indebtedness, obligation or liability (absolute
or contingent, matured or not matured), with respect to the storage,
treatment, cleanup or disposal of any solid wastes, hazardous wastes or
other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability ,with respect to any current
regulation, law or statute regarding such storage, treatment, cleanup or
disposal).
(s) Fees; Commissions. Borrower has not agreed to pay any finder's
fee, commission, origination fee (except for the processing fees due
pursuant to Section 1.2) or other fee or charge to any person or entity
with respect to the Loan and investment transactions contemplated
hereunder.
(t) ERISA. Borrower does not have any Plans (as defined in Section
3.11 hereof).
(u) Title to Properties. Borrower has good, indefeasible and insurable
title to, or valid leasehold interests in, all its real properties and good
title to its other assets, free and clear of all liens other than Permitted
Liens (as defined in Section 3.15 hereof).
(v) Material Adverse Effect. No event has occurred which has resulted
or which Borrower reasonably believes could be expected to result in a
material adverse effect on Borrower or Borrower's ability to perform its
obligations under the Loan Documents. No default or event of default under
any other agreement will occur as a result of the transactions contemplated
by this Agreement or by the Warrant.
(w) Financial Solvency. Borrower is not entering into the arrangements
contemplated by this Agreement and the other Loan Documents with actual
intent .to hinder, delay or defraud either present or future creditors. On
and as of the date hereof on a pro forma basis after giving effect to the
transactions contemplated by the Loan Documents and to all debts incurred
or to be created in connection herewith, the present fair salable value of
the assets of Borrower will exceed the amount that will be required to pay
the probable liability of Borrower's existing debts as they become absolute
and mature. For purposes of this Section 2.1(w) "debt" means any liability
on a (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such a right to an equitable remedy is
reduced to judgment, fixed, contingent, unmatured, disputed, undisputed,
secured, or unsecured.
(x) Offering of Note and Warrant. Neither Borrower nor anyone acting
on its behalf has offered the Note, the Warrant or any similar securities
for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof, with, any person
other than Lender and not more than 35 other institutional investors.
Neither Borrower nor anyone acting on its behalf has taken, or will take,
any action which would subject the issuance or sale of the Note and Warrant
to Section 5 of the Securities Act of 1933, as amended, or the registration
or qualification provisions of the blue sky laws of any state.
(y) Registration Rights. Except as described in the Warrant, Borrower
is not under any obligation to register under the Securities Act of 1933,
as amended, or the Trust Indenture Act of 1939, as amended, any of its
presently outstanding securities or any of its securities that may
subsequently be issued.
(z) Employees. Borrower has no current labor problems or disputes
which have resulted or Borrower reasonably believes could be expected to
have a material adverse effect on its business.
(aa) Issuance Taxes. All taxes imposed on Borrower in connection with
the issuance, sale and delivery of the Note, the Warrant and the capital
stock issuable upon exercise of the Warrant have been or will be fully
paid, and all laws imposing such taxes have been or will be fully satisfied
by Borrower.
(bb) List of Deposit Institutions. Schedule 2.1(bb) hereto sets forth
a true and complete list of all deposit institutions at which Borrower has
or maintains an account or deposits of any kind.
(cc) Locations and Names. Borrower has not, during the five years
preceding the date of this Agreement, been known as or used any other
corporate, trade or fictitious name, nor acquired all or substantially all
of the assets, capital stock or operating units of any person. Borrower has
not, during the five years ,preceding the date of this Agreement, had a
business location at any address other than addresses set forth on Schedule
2.1(cc).
ARTICLE 3
COVENANTS AND AGREEMENTS
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Borrower covenants and agrees that during the term of this Agreement:
3.1 Payment of Obligations. Borrower shall pay the indebtedness evidenced
by the Note according to the terms thereof, and shall timely pay or perform, as
the case may be, all of the other obligations of, Borrower to Lender, direct or
contingent, however evidenced or denominated, and however and whenever incurred,
including but not limited to indebtedness incurred pursuant to any present or
future commitment of Lender to Borrower, together with interest thereon, and any
extensions, modifications, consolidations and/or renewals thereof and any notes
given in payment thereof
3.2 Financial Statements and Reports. Borrower shall furnish to Lender (i)
as soon as practicable and in any event within ninety (90) days after the end of
each fiscal year of Borrower, a consolidated balance sheet of Borrower as of the
close of such fiscal year, a consolidated statement of earnings and retained
earnings of Borrower as of the close of such fiscal year and a consolidated
statement of cash flows for Borrower for such fiscal year, prepared in
accordance with generally accepted accounting principles consistently applied
("GAAP"), audited by an independent certified public accountant acceptable to
Lender and certified by an officer of Borrower and accompanied by a certificate
of the President of Borrower, stating that to the best of the knowledge of such
officer, Borrower has kept, observed, performed and fulfilled each covenant,
term and condition of this Agreement and the other Loan Documents during the
preceding fiscal year and that no Event of Default, as herein defined, has
occurred and is continuing (or if an Event of Default has occurred and is
continuing, specifying the nature of same, the period of existence of same and
the action Borrower has taken or proposes to take in connection therewith), (ii)
within fifteen (15) days of the end of each calendar month, a consolidated
balance sheet of Borrower as of the close of such month and a consolidated
statement of earnings and retained earnings of Borrower as of the close of such
month, all in reasonable detail (including financial information for the
preceding six (6) months), and prepared substantially in accordance with GAAP
(except for the absence of footnotes and subject to year-end adjustments), and
(iii) with reasonable promptness, such other financial data as Lender may
reasonably request. Without Lender's prior written consent (which consent shall
not be unreasonably withheld), Borrower shall not modify or change any
accounting policies or procedures in effect on the date hereof.
3.3 Maintenance of Books and Records, Inspection. Borrower shall maintain
its books, accounts and records in accordance with GAAP, and after reasonable
notice from Lender, shall permit Lender, its officers, employees and any
professionals designated by Lender in writing, at Borrower's expense, to visit,
inspect and/or audit any of its properties, books and financial records, and to
discuss its accounts, affairs and finances with Borrower or the principal
officers of Borrower during reasonable business hours, all at such times as
Lender may reasonably request; provided that no such visit, inspection and/or
audit shall materially interfere with the conduct of Borrower's business and
prior to an Event of Default (as hereinafter defined), Borrower shall only be
liable for the expenses of one such visit, inspection, and/or audit per year.
3.4 Insurance. Without limiting any of the requirements of any of the other
Loan Documents, Borrower shall maintain in amounts customary for entities
engaged in comparable business activity (i) to the extent required by applicable
law, worker's compensation insurance (or maintain a legally sufficient amount of
self insurance against worker's compensation liabilities, with adequate
reserves, under a plan approved by Lender, such approval not to be unreasonably
withheld or delayed) and (ii) fire and "all risk" casualty insurance on its
properties against such hazards and in at least such amounts as are customary in
Borrower's business. Borrower will make reasonable efforts to obtain and
maintain public liability insurance in an amount, and at a cost, deemed
reasonable to the Borrower's Board of Directors. At the request of Lender,
Borrower will deliver forthwith a certificate specifying the details of such
insurance in effect.
3.5 Taxes and Assessments. Borrower shall (i) file all tax returns and
appropriate schedules thereto that are required to be filed under applicable
law, prior to the date of delinquency, (ii) pay and discharge all taxes,
assessments and governmental charges or levies imposed upon Borrower upon its
income and profits or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and (iii) pay all taxes, assessments and
governmental charges or levies that, if unpaid, might become a lien or charge
upon any of its properties; provided, however, that Borrower in good faith may
contest any such tax, assessment, governmental charge or levy described in the
foregoing clauses (ii) and (iii) so long as appropriate reserves are maintained
with respect thereto.
3.6 Corporate Existence. Borrower shall maintain its corporate existence
and good standing in the state of its incorporation, and its qualification and
good standing as a foreign corporation in each jurisdiction in which such
qualification is necessary pursuant to applicable law, unless failure to
maintain good standing would not have a material affect on Borrower's ability to
meet its obligations under the Loan Documents.
3.7 Compliance with Law and Other Agreements. Except where the failure to
do so would not materially adversely affect Borrower's operations or its ability
to fulfill its obligations under the Loan Documents, Borrower shall maintain its
business, operations and property owned or used in connection therewith in
compliance with (i) all applicable federal, state and local laws, regulations
and ordinances governing such business operations and the use and ownership of
such property, and (ii) all agreements, licenses, franchises, indentures and
mortgages to which Borrower is a party or by which Borrower or any of its
properties is bound. Without limiting the foregoing, Borrower shall pay all of
its indebtedness promptly in accordance with the terms thereof.
3.8 Notice of Default. Borrower shall give written notice to Lender of the
occurrence of any default, event of default or Event of Default under this
Agreement or any other Loan Document promptly upon the occurrence thereof
3.9 Notice of Litigation. Borrower shall give notice, in writing, to Lender
of (i) any actions, suits or proceedings instituted by any persons whomsoever
against Borrower, or affecting any of the assets of Borrower, wherein the amount
at issue is in excess of Twenty-Five Thousand and No/100ths Dollars($25,000.00),
and (ii) any dispute, not resolved within sixty (60) days of the commencement
thereof, between Borrower on the one hand and any governmental regulatory body
on the other hand, which dispute might materially interfere with the normal
operations of Borrower.
3.10 Conduct of Business, Name and Location of Business. Borrower will
continue to engage in a business of the same general type and manner as
conducted by it on the date of this Agreement. Borrower will not change its name
or any location of its business without providing Lender with 10 days' written
notice of such change. In the event Borrower makes a change of its name or
location of business, Borrower shall promptly execute any and all financing
statements, and amendments or continuations thereof and any other documents that
Lender may reasonably request to evidence, continue, and/or perfect any security
interest in or pledge of collateral securing the Loan.
3.11 ERISA Plan. If Borrower has in effect, or hereafter institutes, a
pension plan that is subject to the requirements of Title IV of the Employee
Retirement Income Security Act of 1974, Pub. L. No. 93-406, September 2, 1974,
00 Xxxx. 000, 00 X.X.X.X. ss. 1001 et seq. (1975), as amended from time to time
("ERISA"), then the following warranty and covenants shall be applicable during
such period as any such plan (the "Plan") shall be in effect: (i) Borrower
hereby warrants that no fact that might constitute grounds for the involuntary
termination of the Plan, or for the appointment by the appropriate United States
District Court of a trustee to administer the Plan, exists at the time of
execution of this Agreement, (ii) Borrower hereby covenants that throughout the
existence of the Plan, Borrower's contributions under the Plan will meet the
minimum funding standards required by ERISA and Borrower will not institute a
distress termination of the Plan, and (iii) Borrower covenants that it will send
to Lender a copy of any notice of a reportable event (as defined in ERISA)
required by ERISA to be filed with the Labor Department or the Pension Benefit
Guaranty Corporation, at the time that such notice is so filed.
3.12 Dividends, Distributions, Stock Rights, etc. Borrower shall not
declare or pay any dividend of any kind (other than stock dividends payable to
all holders of any class of capital stock), in cash or in property, on any class
of the capital stock of Borrower, or purchase, redeem, retire or otherwise
acquire for value any shares of such stock, nor make any distribution of any
kind in cash or property in respect thereof, nor make any return of capital of
shareholders, nor make any payments in cash or property in respect of any stock
options, stock bonus or similar plan (except as required or permitted
hereunder), nor grant any preemptive rights with respect to the capital stock of
Borrower, without the prior written consent of Lender. Notwithstanding the
foregoing, beginning January 1, 1999, Borrower may make dividend payments up to
but not exceeding $300,000 to holders of Preferred Stock in each year that
Borrower had a cash balance of $2,700,000 (determined in accordance with GAAP)
on the last day of the immediately preceding fiscal year of Borrower; provided,
however, that Borrower shall make principal prepayments on the Loan in the same
amount of any such dividend payments.
3.13 Guaranties, Loans: Payment of Debt. Without Lender's prior express
written consent, Borrower shall not guarantee.-nor be liable in any manner,
whether directly or indirectly, or become contingently liable after the date of
this Agreement in connection with the obligations or indebtedness `6f any person
or entity whatsoever, except for the endorsement of negotiable instruments
payable to Borrower for deposit or collection in the ordinary course of
business. Without Lender's prior express written consent, Borrower shall not (i)
make any loan, advance or extension of credit to any person other than in the
normal course of its business, or (ii) make any payment on any subordinated
debt.
3.14 Debt. Without the express prior written consent of Lender, Borrower
shall not create, incur, assume or suffer to exist indebtedness of any
description whatsoever, (excluding (i) the indebtedness evidenced by the Note,
(ii) the endorsement of negotiable instruments payable to Borrower for deposit
or collection in the ordinary course of business, (iii) indebtedness incurred in
the ordinary course of business (each of which, individually, does not exceed
$25,000), (iv) the indebtedness listed on Schedule 2.1(l) hereto) and (v)
purchase money indebtedness for new equipment (which does not exceed $50,000 in
the aggregate during any fiscal year of Borrower).
3.15 No Liens. Borrower shall not create, incur, assume or suffer to exist
any lien, security interest, security title, mortgage, deed of trust or other
encumbrance upon or with respect to any of its properties, now owned or
hereafter acquired, except the following permitted liens (the "Permitted
Liens"):
(a) liens in favor of Lender;
(b) liens for taxes or assessments or other governmental charges,
levies or similar charges if not yet due and payable;
(c) liens in connection with the leasing of equipment in favor of the
Lessor of such equipment;
(d) liens described on Schedule 2.1(1) hereto;
(e) purchase money security interests granted by Borrower (i) at a
time when no potential default or Event of Default has occurred and is
continuing hereunder, unless Lender otherwise consents thereto in writing,
(ii) encumbering equipment purchased by Borrower in connection with the
transaction in which such purchase money security interest is granted,
(iii) securing indebtedness in an amount not exceeding the lesser of (A)
$50,000 incurred in the aggregate during any fiscal year, or (B) the fair
market value or the purchase price of the applicable equipment, as to each
such purchase money security;
(f) any lien which may be granted to a surety which insures Borrower's
performance under any contract entered into by Borrower in the ordinary
course of business, but only to the extent that such lien encumbers only
such contract and the sums payable to Borrower thereunder and no other
asset of Borrower, and then only if Borrower provides Lender with at least
thirty (30) calendar days advance notice of the granting of such lien and
the "entry into the related surety arrangement; and
(g) subsequently arising liens which are approved in advance by Lender
in writing.
3.16 Mergers, Consolidations, Acquisitions and Sales. Without the prior
written consent of Lender, Borrower shall not (a) be a party to any merger,
consolidation or corporate reorganization, nor (b) purchase or otherwise acquire
all or substantially all of the assets or stock of, or any partnership or joint
venture interest in, any other person, firm or entity, nor (c) sell, transfer,
convey, grant a security interest in or lease all or any substantial part of its
assets, nor (d) create any Subsidiaries nor convey any of its assets to any
Subsidiary. Without prior written notice to Lender, Borrower shall not open any
new restaurants. Notwithstanding the foregoing, if Borrower opens a new
restaurant, Borrower shall, or shall cause each new restaurant to, execute all
documents reasonably necessary for Lender to perfect a security interest in the
assets of the new restaurant and a pledge of the stock of the new restaurant to
the extent the new restaurant is set up as a new subsidiary of Borrower.
3.17 Transactions With Affiliates. Borrower shall not enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms no less favorable to Borrower than
Borrower would obtain in a comparable arm's length transaction with a person not
an affiliate. For the purposes of this Section 3.17, "affiliate" shall mean a
person, corporation, partnership or other entity controlling, controlled by or
under common control with Borrower.
3.18 Environment. Borrower shall be and remain in compliance with the
provisions of all federal, state and local environmental, health, and safety
laws, codes and ordinances, and all rules and regulations issued thereunder;
notify Lender immediately of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other
party; notify Lender immediately of any hazardous discharge from or affecting
Borrower's premises; immediately contain and remove the same, in compliance with
all applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit Lender to inspect the premises, to conduct tests thereon, and
to inspect all books, correspondence, and records pertaining thereto; and at
Lender's request, and at Borrower's expense, provide a report of a qualified
environmental engineer, satisfactory in scope, form, and content to Lender, and
such other and further assurances reasonably satisfactory to Lender that the
condition has been corrected.
ARTICLE 4
CONDITIONS TO CLOSING
---------------------
4.1 Closing of the Loan. The obligation of Lender to fund the Loan on the
date hereof (the "Closing Date") is subject to the fulfillment, on or prior to
the Closing Date, of each of the following conditions:
(a) Borrower shall have performed and complied in all material
respects with all of the covenants, agreements, obligations and conditions
required by this Agreement.
(b) Lender shall have received an opinion of the Borrower's counsel,
Nelson, Mullins, Xxxxx & Xxxxxxxxxxx, L.L.P., dated the Closing Date, in
form and substance satisfactory to Lender's counsel, Chablis & Banner, PLO.
(c) Borrower shall have delivered to Lender the Note executed by
Borrower.
(d) Borrower shall have delivered to Lender a Stock Purchase Warrant
executed by Borrower, in a form acceptable to Lender.
(e) Borrower shall have delivered to Lender a Security Agreement
executed by Borrower (in form acceptable to Lender) and related BCC-1
Financing Statement(s) (in form acceptable to Lender) executed by Borrower.
(f) Borrower shall have delivered to Lender a Pledge and Security
Agreement (in a form acceptable to Lender) and related stock proxy, stock
power, and stock certificate (all in form acceptable to Lender), executed
by Borrower, respectively, and related stock pledge letter (all in form
acceptable to Lender) executed by each of the Subsidiaries.
(g) Borrower shall have delivered to Lender a Security Agreement
executed by each of the Subsidiaries (in a form acceptable to Lender) and
related UCC-1 Financing Statement(s) (in a form acceptable to Lender)
executed by each of the Subsidiaries (as applicable).
(h) Borrower shall have delivered to Lender a Pledge and Security
Agreement (in a form acceptable to Lender) and related stock proxies, stock
powers, and stock certificates (all in a form acceptable to Lender)
executed by Xxxxx X. Xxxx, III, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx,
respectively, and related stock pledge letters (all in a form acceptable to
Lender) executed by Borrower.
(i) [Intentionally omitted]
(j) Borrower shall have delivered to Lender a Landlord's Consent and
Subordination of Lien, executed by each of Borrower's and each of the
Subsidiaries' landlords, in a form acceptable to Lender.
(k) Lender shall have received copies of the articles of incorporation
and other publicly filed organizational documents of Borrower and each of
the Subsidiaries, certified by the Secretary of State or other appropriate
public official in the jurisdictions in which Borrower and each-W the
Subsidiaries are incorporated.
(l) Lender shall have received certified (as of the date of this
Agreement) copies of all corporate action taken by Borrower and each of the
Subsidiaries, including resolutions of the Board of Directors, authorizing
the execution, delivery and performance of the Loan Documents.
(m) Lender shall have received a certificate as to the legal existence
and good standing of Borrower and each of the Subsidiaries, issued by the
Secretary of State or other appropriate public official in the
jurisdictions in which Borrower and each of Subsidiaries are incorporated.
(n) Lender shall have received certificates of the Secretaries of
State or other appropriate public officials as to Borrower's or
Subsidiaries' qualification to do business and good standing in each
jurisdiction in which a failure to be so qualified would have a material
adverse effect on its or their financial positions or its ability to
conduct its business in the manner now conducted and as hereafter intended
to be conducted.
(o) Borrower shall have delivered to Lender an Assignment of Life
Insurance Policy as Collateral (in a form acceptable to Lender) executed by
Borrower in duplicate, and a Life Insurance Assignment Questionnaire
executed by Borrower covering the life of Xxxxx X. Xxxx, III, in a form
acceptable to Lender.
(p) Lender shall have received an Intercreditor Agreement (in a form
acceptable to Lender) executed by Borrower and Xxxxxxx X. Xxxxxx.
(q) Lender shall have received an Authorization Agreement for
Pre-Authorized Payments (Debit) executed by Borrower and Borrower's bank.
(r) Lender shall have received a Consent and Acknowledgement of Lien
and Security Interest (in form acceptable to Lender) executed by Xxxxxxx X.
Xxxxxx.
(s) Lender shall have received Intercreditor Estoppel Agreements (in
form acceptable to Lender) executed by all senior lenders of the
Subsidiaries.
4.2 Second Advance. The obligation of Lender to fund the Second Advance of
Loan on the date of such Advance is subject to the fulfillment, on or prior to
such date, of each of the following conditions:
(a) An Event of Default (as herein defined) shall not have occurred
and be continuing.
(b) Lender shall have received an opinion of the Borrower's counsel,
Nelson, Mullins, Xxxxx & Xxxxxxxxxxx, L.L.P., dated the date of such
Advance, regarding the enforceability of the promissory note delivered in
connection therewith, in form and substance satisfactory to Lender's
counsel, Xxxxxxxxx & Xxxxxx, PLLC.
(c) Borrower shall have delivered a Note executed by Borrower in the
original principal amount of the applicable Advance.
(d) Borrower shall have delivered a Closing Certificate (in a form
acceptable to Lender), executed by Borrower.
ARTICLE 5
DEFAULT AND REMEDIES
--------------------
5.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default hereunder:
(a) Default by Borrower in the payment of the principal of or interest
on the indebtedness evidenced by the Note in accordance with the terms of
the Note, which default is not cured within five (5) days;
(b) Any misrepresentation by Borrower, any guarantor of Borrower, or
any shareholder, subsidiary, or affiliate of Borrower as to any material
matter hereunder or under any of the other Loan Documents, or delivery by
Borrower of any schedule, statement, resolution, report, certificate,
notice or writing to Lender that is untrue in any material respect on the
date as of which the facts set forth therein are stated or certified;
(c) Failure of Borrower, any guarantor of Borrower, or any
shareholder, subsidiary, or affiliate of Borrower to perform any of its
obligations, covenants or agreements under this Agreement, the Note or any
of the other Loan Documents;
(d) Borrower (i) shall generally not pay or shall be unable to pay its
debts as such debts become due and such failure continues beyond any
applicable grace period (unless disputed) and adequate reserves are
maintained; or (ii) shall make an assignment for the benefit of creditors
or petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its assets; or (iii)
shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect; or (iv)
shall have had any such petition or application filed or any such
proceeding commenced against it in which an order for relief is entered or
an adjudication or appointment is made; or (v) shall indicate, by any act
or intentional and purposeful omission, its consent to, approval of or
acquiescence in any such petition, application, proceeding or order for
relief or the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a
period of sixty (60) days or more;
(e) Borrower shall be liquidated, dissolved, partitioned or
terminated, or the charter thereof shall expire be revoked;
(f) A default or event of default shall occur under any of the other
Loan Documents and, if subject to a cure right, such default or event of
default shall not be cured within the applicable cure period;
(g) Borrower shall default in the timely payment or performance of any
obligation now or hereafter owed to Lender in connection with any other
indebtedness of Borrower now or hereafter owed to Lender and, if subject to
a cure right, such default or event of default shall not be cured within
the applicable cure period;
(h) Borrower shall have defaulted and continue to be in default in the
timely payment or performance of any other indebtedness or obligation and
such failure continues beyond any applicable grace period (unless disputed)
and adequate reserves are maintained, which in the aggregate exceeds
Twenty-Five Thousand and No/100ths Dollars ($25,000.00) or materially
adversely affects Borrower's financial condition;
(i) Except with Lender's consent, Xxxxx X. Xxxx, III, shall no longer
be significantly involved in the management and/or daily operations of
Borrower;
With respect to any Event of Default described above that is capable
of being cured and that does not already provide its own cure procedure (a
"Curable Default"), the occurrence of such Curable Default shall not
constitute an Event of Default hereunder if such Curable Default is fully
cured and/or corrected within thirty (30) days (ten (10) days, if such
Curable Default may be cured by payment of a sum of money) of notice
thereof to Borrower given in accordance with the provisions hereof;
provided, however, that this provision shall not require notice to Borrower
and an opportunity to cure any Curable Default of which Borrower has had
actual knowledge for the requisite number of days set forth.
5.2 Acceleration of Maturity, Remedies. Upon the occurrence of any Event of
Default described in subsection 5.1(d), the indebtedness evidenced by the Note
as well as any and all other indebtedness of Borrower to Lender shall be
immediately due and payable in full; and upon the occurrence of any other Event
of Default described above, Lender at any time thereafter may at its option
accelerate the maturity of the indebtedness evidenced by the Note as well as any
and all other indebtedness of Borrower to Lender; all without notice of any
kind. Upon the occurrence of any such Event of Default and the acceleration of
the maturity of the Indebtedness evidenced by the Note:
(a) Lender shall be immediately entitled to exercise any and all
rights and remedies possessed by Lender pursuant to the terms of the Note
and all of the other Loan Documents; and
(b) Lender shall have any and all other rights and remedies that
Lender may now or hereafter possess at law, in equity or by statute.
5.3 Remedies Cumulative, No Waiver. No right, power or remedy conferred
upon or reserved to Lender by this Agreement or any of the other Loan Documents
is intended to be exclusive of any other right, power or remedy, but each and
every such right, power and remedy shall be cumulative and concurrent and shall
be in addition to any other right, power and remedy given hereunder, under any
of the other Loan Documents or now or hereafter existing at law, in equity or by
statute. No delay or omission by Lender to exercise any right, power or remedy
accruing upon the occurrence of any Event of Default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein, and every right, power and remedy
given by this Agreement and the other Loan Documents to Lender may be exercised
from time to time and as often as may be deemed expedient by Lender.
5.4 Proceeds of Remedies. Any or all proceeds resulting from the exercise
of any or all of the foregoing remedies shall be applied as set forth in the
Loan Document(s) providing remedy or remedies exercised; if none is specified,
or if the remedy is provided by this Agreement, then as follows:
First, to the actual and reasonable costs and expenses, including,
without limitation, reasonable attorney's fees incurred by Lender in
connection with the exercise of its remedies;
Second, to the actual and reasonable expenses of curing the default
that has occurred, in the event that Lender elects, in its sole discretion,
to cure the default that has occurred;
Third, to the payment of the obligations of Borrower under the Loan
Documents (the "Obligations"), including but not limited to the payment of
the principal of and interest on the indebtedness evidenced by the Note, in
such order of priority as Lender shall determine in its sole discretion;
and
Fourth, the remainder, if any, to Borrower or to any other person
lawfully thereunto entitled.
ARTICLE 6
TERMINATION
-----------
6.1 Termination of this Agreement. This Agreement shall remain in full
force and effect until the later of (i) the Maturity Date (as defined in the
Note), or (ii) the payment by Borrower of all amounts owed to Lender, at which
time Lender shall cancel the Note and deliver it to Borrower; provided, however,
that if at any time Borrower has satisfied all obligations to Lender, Borrower
may terminate this Agreement by providing written notice to Lender.
ARTICLE 7
MISCELLANEOUS
-------------
7.1 Performance By Lender. If Borrower shall default in the payment,
performance or observance of any covenant, term or condition of this Agreement,
which default is not cured within the applicable cure period, then Lender may,
at its option, pay, perform or observe the same, and all payments made or costs
or expenses incurred by Lender in connection therewith (including but not
limited to reasonable attorney's fees), with interest thereon at the highest
default rate provided in the Note (if none, then at the maximum rate from time
to time allowed by applicable law), shall be immediately repaid to Lender by
Borrower and shall constitute a part of the Obligations. Lender shall be the
sole judge of the necessity for any such actions and of the amounts to be paid.
7.2 Successors and Assigns Included in Parties. Whenever in this Agreement
one of the parties hereto is named or referred to, the heirs, legal
representatives, successors, successors-in-title and assigns of such parties
shall be included, and all covenants and agreements contained in this Agreement
by or on behalf of Borrower or by or on behalf of Lender shall bind and inure to
the benefit of their respective heirs, legal representatives,
successors-in-title and assigns, whether so expressed or not.
7.3 Costs and Expenses. Borrower agrees to pay all reasonable costs and
expenses incurred by Lender in connection with the making of the Loan, including
but not limited to filing fees, recording taxes, indebtedness taxes, and
reasonable attorneys' fees, promptly upon demand of Lender. Borrower further
agrees to pay all premiums for insurance required to be maintained by Borrower
pursuant to the terms of the Loan Documents and all of the out-of-pocket costs
and expenses incurred by Lender in connection with the collection of the Loan,
amendment to the Loan Documents, or prepayment of the Loan, including but not
limited to reasonable attorneys' fees, promptly upon demand of Lender.
7.4 Assignment. The Note, this Agreement and the other Loan Documents may
be endorsed, assigned and/or transferred in whole or in part by Lender, and any
such holder and/or assignee of the same shall succeed to and be possessed of the
rights and powers of Lender under all of the same to the extent transferred and
assigned. Lender may grant participations in all or any portion of its interest
in the indebtedness evidenced by the Note, and in such event Borrower shall
continue to make payments due under the Loan Documents to Lender and Lender
shall have the sole responsibility of allocating and forwarding such payments in
the appropriate manner and amounts. Borrower shall not assign any of its rights
nor delegate any of its duties hereunder or under any of the other Loan
Documents without the prior express written consent of Lender.
7.5 Time of the Essence. Time is of the essence with respect to each and
every covenant, agreement and obligation hereunder and under all of the other
Loan Documents.
7.6 Severability. If any provision(s) of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
7.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law.
Anything in this Agreement, the Note or any of the other Loan Documents to the
contrary notwithstanding, in no event whatsoever, whether by reason of
advancement of proceeds of the Loan, acceleration of the maturity of the unpaid
balance of the Loan or otherwise, shall the interest and loan charges agreed to
be paid to Lender for the use of the money advanced or to be advanced hereunder
exceed the maximum amounts collectible under applicable laws in effect from time
to time. It is understood and agreed by the parties that, if for any reason
whatsoever the interest or loan charges paid or contracted to be paid by
Borrower in respect of the indebtedness evidenced by the Note shall exceed the
maximum amounts collectible under applicable laws in effect from time to time,
then ipso facto, the obligation to pay such interest and/or loan charges shall
be reduced to the maximum amounts collectible under applicable laws in effect
from time to time, and any amounts collected by Lender that exceed such maximum
amounts shall be applied to the reduction of the principal balance of the
indebtedness evidenced by the Note and/or refunded to Borrower so that at no
time shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced by the Note exceed the maximum amounts permitted from
time to time by applicable law.
7.8 Article and Section Headings: Defined Terms. Numbered and titled
article and section headings and defined terms are for convenience only and
shall not be construed as amplifying or limiting any of the provisions of this
Agreement.
7.9 Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement or any of the Loan Documents shall be
in writing, signed by the party giving such notice, election or demand and shall
be delivered personally, telecopied, or sent by certified mail or overnight via
nationally recognized courier service (such as Federal Express), to the other
party at the address set forth below, or at such other address as may be
supplied in writing and of which receipt has been acknowledged in writing. The
date of personal delivery, telecopy or telex or two (2) business days after the
date of mailing (or the next business day after delivery to such courier
service), as the case may be, shall be the date of such notice, election or
demand. For the purposes of this Agreement:
The Address of Lender is: Sirrom. Capital Corporation
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy: 615/726-1208
with a copy to: Xxxxxxxxx & Xxxxxx, PLLC
0000 Xxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Telecopy: 423/265-9574
The Address of Borrower is: TRC Acquisition Corporation
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, III
Telecopy: (000) 000-0000
with a copy to: Nelson, Mullins, Xxxxx & Scarborough, L.L.P.
0000 Xxxxxxxxx Xxxxxx, X.X.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxx
Telecopy: (000) 000-0000
7.10 Entire Agreement. This Agreement and the other Loan Documents between
Borrower and Lender represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; provided, if ere is a conflict between this
Agreement and any other Loan Documents executed contemporaneously herewith with
respect to the Obligations, the provision of this Agreement all control. The
execution and delivery of this Agreement and the other Loan Documents by e
Borrower were not based upon any fact or material provided by Lender, nor was
the Borrower induced or influenced to enter into this Agreement or the other
Loan Documents by any representation, statement, analysis or promise by Lender.
7.11 Governing Law and Amendments. This Agreement and all of the Loan
documents shall be construed and enforced under the laws of the State of
Tennessee applicable contracts to be wholly performed in such State except to
the extent certain rights and privileges may be granted Lender under applicable
federal laws in which event federal law shall control. No amendment or
modification hereof shall be effective except in a writing executed by each of
the parties hereto.
7.12 Survival of Representations and Warranties. All covenants,
representations and warranties contained herein or in any of the Loan Documents,
or made by or furnished on behalf of the Borrower in connection herewith or any
of the Loan Documents, shall survive the execution and delivery of this
Agreement and all other Loan Documents and shall continue in full force and
effect so long as the Obligations are unpaid.
7.13 Jurisdiction and Venue. Borrower hereby consents to the jurisdiction
of the courts of the State of Tennessee and the-"United States District Court
for the Middle District of Tennessee, as well as to the jurisdiction of all
courts from which an appeal may be taken from such courts, for the purpose of
any suit, action or other proceeding arising out of any of its obligations
arising under this Agreement or any other Loan Documents or with respect to the
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in any of such courts.
7.14 Waiver of Trial by Jury. LENDER AND BORROWER HEREBY WAIVE TRIAL BY
JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT
OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT OR THE LOAN DOCUMENTS.
7.15 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
7.16 Construction and Interpretation. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that a document is to be more strictly construed against
the party that itself or through its agent prepared the same, it being agreed at
the Borrower, Lender and their respective agents have participated in the
preparation eof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be executed by their duly authorized officers, as
of the day and year above written.
LENDER:
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SIRROM CAPITAL CORPORATION, a Tennessee.
corporation
By: /s/ Illegible
Title: Chief Operating Officer
BORROWER:
TRC ACQUISITION CORPORATION, a Georgia
corporation
By: /s/ Xxxx Xxxxxxx
Title: /s/ President
Exhibit A - Form of Note
Schedule 2.1(b) - Subsidiaries
Schedule 2.1(e) - Options, Warrants, Stock Rights, Etc.
Schedule 2.1(f) - Trademarks, Patents, Etc.
Schedule 2.1(h) - Litigation
Schedule 2.1(i)(A) and (B) - Financial Statements
Schedule 2.1(l) - Debt and Liens
Schedule 2.1(m) - Taxes
Schedule 2.1(n) - Shareholder Loans
Schedule 2.1(q) - Significant Contracts
Schedule 2.1(bb) - Deposit Institutions
Schedule 2.1(cc) - Names and Locations