EXHIBIT 10.9
EXECUTION VERSION
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT"), entered into as of July 7,
2003, is executed and delivered by each of the undersigned subsidiaries of
XXXXXX'X RESTAURANT GROUP, INC., a Delaware corporation (such subsidiaries, each
a "DEBTOR" and individually and collectively, and jointly and severally, the
"DEBTORS"), in favor of XXXXX FARGO FOOTHILL, INC., a California corporation,
(the "LENDER"), in light of the following:
WHEREAS, Xxxxxx'x Restaurant Group, Inc., a Delaware corporation
("BORROWER") and the Lender are, contemporaneously herewith, entering into that
certain Loan and Security Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the "LOAN AGREEMENT");
WHEREAS, each Debtor has executed that certain General Continuing
Guaranty, of even date herewith, in favor of Lender (as amended, restated,
supplemented or otherwise modified from time to time, the "GUARANTY"),
respecting the obligations of Borrower owing to Lender and the Bank Product
Providers under the Loan Agreement;
WHEREAS, each Debtor desires to secure its obligations under the Loan
Documents to which it is party (including the Guaranty) by granting to Lender,
for its benefit and for the benefit of the Bank Product Providers, security
interests in the Collateral as set forth herein; and
WHEREAS, each Debtor is a Subsidiary of Borrower, and will benefit by
virtue of the financial accommodations from Lender and the Bank Product
Providers to Borrower.
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and each intending
to be bound hereby, Lender and each Debtor agree as follows:
I. DEFINITIONS AND CONSTRUCTION.
A. DEFINITIONS. All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Loan Agreement. As used
in this Agreement, the following terms shall have the following definitions:
"ACCOUNT" means any "account" (as that term is defined in the Code),
and any and all supporting obligations in respect thereof.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION 2.4(c) of
this Agreement.
"AGREEMENT" has the meaning set forth in the preamble of this
Agreement.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 U.S.C.
Section 101 ET SEQ.), as amended, and any successor statute.
"BORROWER" has the meaning set forth in the recitals of this
Agreement.
"CODE" means the New York Uniform Commercial Code as in effect from
time to time.
"COLLATERAL" means all of each Debtor's now owned or hereafter
acquired right, title, and interest in and to each of the following: Accounts;
such Debtor's Books; commercial tort claims; Deposit Accounts; Equipment;
General Intangibles; Inventory; Investment Property (including all securities
and Securities Accounts); Negotiable Collateral; any money, or other assets of a
Debtor which now or hereafter come into the possession, custody, or control of
Lender; and the proceeds and products, whether tangible or intangible, of any of
the foregoing, including proceeds of insurance covering any and all Accounts,
Debtor's Books, Deposit Accounts, Equipment, General Intangibles, Inventory,
Investment Property, Negotiable Collateral, Real Property, money, or other
tangible or intangible property resulting from the sale, exchange, collection,
or other disposition of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof; provided, however, that Collateral shall not
include Excluded Assets.
"COMMERCIAL TORT CLAIM ASSIGNMENT" has the meaning set forth in
SECTION 2.4(b) of this Agreement.
"CONTROL AGREEMENT" means a control agreement, in form and substance
reasonably satisfactory to Lender, executed and delivered by Debtor, Lender, and
the applicable securities intermediary with respect to a Securities Account or
bank with respect to a Deposit Account.
"DEBTOR" and "DEBTORS" have the respective the meanings set forth in
the preamble to this Agreement.
"DEBTOR'S BOOKS" means the applicable Debtor's now owned or hereafter
acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of its Records relating to its business operations or financial condition,
and all of its goods or General Intangibles related to such information).
"DEPOSIT ACCOUNT" means any "deposit account" (as that term is defined
in the Code).
"EXCLUDED ASSETS" means:
(i) any leasehold interest of Debtors in real property,
(ii) contracts, leasehold interests, permits, licenses or charter
agreements (the "Contracts") of Debtors to the extent (and only to the extent)
that the Contracts by their terms prohibit the granting of a Lien thereon
without consent and any required consent has not been
-2 -
obtained, PROVIDED, that, the exclusion contained in this clause (ii) shall not
apply and shall in no way be construed to apply (x) to the extent that the
granting of a Lien in, to or on any of the Contracts is or would be effective
under Sections 9-406, 9-407, or 9-408 of the Code or other applicable law, (y)
so as to limit, impair, or otherwise affect Lender's Liens upon any rights or
interests of Debtor in or to monies due or to become due under any of the
Contracts (including any Accounts), or (z) to limit, impair, or otherwise affect
Lender's Liens upon any rights or interests of Debtor in and to any proceeds
from the sale, license, lease, or other dispositions of any of the Contracts or
any other asset;
(iii) Investment Property of Debtors constituting capital Stock of
Debtors' direct Subsidiaries that are CFCs, solely to the extent that such
Investment Property is in excess of 65% of the capital Stock of such CFC;
(iv) any intent-to-use trademark or service xxxx application contained
in the General Intangibles if granting a security interest therein is deemed to
invalidate, void, cancel or abandon such applications, provided that such
applications shall constitute Collateral at such time as the same is used in
commerce; and
(v) any fee interest of any Debtor in Real Property to the extent that
(a) such Real Property is subject to an existing mortgage (other than any
Mortgage entered into at any time in favor of Lender) until the termination of
such mortgage (or such Real Property is subject to a Permitted Sale and
Leaseback) or (b) the Fair Market Value of such fee interest does not exceed
$1,000,000; PROVIDED, HOWEVER, that the Fair Market Value of all fee interests
excluded pursuant to this CLAUSE (v)(b) shall not exceed $2,500,000 in the
aggregate at any one time.
"EQUIPMENT" means "equipment" (as that term is defined in the Code),
and includes machinery, machine tools, motors, furniture, furnishings, fixtures,
vehicles (including motor vehicles), tools, parts, goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
"GENERAL INTANGIBLES" means "general intangibles" (as that term is
defined in the Code), including payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trade secrets, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any and all supporting obligations in respect thereof, and
any other personal property other than Accounts, Deposit Accounts, goods,
Investment Property, and Negotiable Collateral.
"GUARANTY" has the meaning set forth in the recitals to this
Agreement.
"INVENTORY" means "inventory" (as that term is defined in the Code).
-3 -
"INVESTMENT PROPERTY" means "investment property" (as that term is
defined in the Code), and any and all supporting obligations in respect thereof.
"LENDER" has the meaning set forth in the preamble to this Agreement.
"LENDER'S LIENS" means the Liens granted by a Debtor to Lender under
this Agreement or the other Loan Documents to which such Debtor is a party.
"LOAN AGREEMENT" has the meaning set forth in the recitals to this
Agreement.
"NEGOTIABLE COLLATERAL" means letters of credit, letter of credit
rights, instruments, promissory notes, drafts, documents, and chattel paper
(including electronic chattel paper and tangible chattel paper), and any and all
supporting obligations in respect thereof.
"SECURED OBLIGATIONS" means, with respect to each Debtor, all
liabilities, obligations, or undertakings owing by such Debtor to Lender and the
Bank Product Providers of any kind or description arising out of or outstanding
under, advanced or issued pursuant to, or evidenced by the Guaranty, the Loan
Agreement, this Agreement, or any of the other Loan Documents, irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, voluntary or involuntary, whether now existing
or hereafter arising, and including all interest, costs, indemnities, fees
(including attorneys fees), and expenses (including interest, costs,
indemnities, fees, and expenses that, but for the provisions of the Bankruptcy
Code, would have accrued irrespective of whether a claim therefor is allowed)
and any and all other amounts which such Debtor is required to pay pursuant to
any of the foregoing, by law, or otherwise.
"VOIDABLE TRANSFER" has the meaning set forth in Section 11.8 to this
Agreement.
B. CODE. Any terms used in this Agreement which are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
C. CONSTRUCTION. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the term "including" is not limiting, and the term
"or" has, except where otherwise indicated, the inclusive meaning represented by
the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Section, subsection, clause,
schedule, and exhibit references are to this Agreement unless otherwise
specified. Any reference in this Agreement or in any of the other Loan Documents
to this Agreement or any of the other Loan Documents shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth therein). In the event of a direct conflict
between the terms and provisions of this Agreement and the Loan Agreement, it is
the intention of the parties hereto that both such documents shall be read
together and construed, to the fullest extent possible, to be in concert with
each other. In the event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of the Loan
-4 -
Agreement shall control and govern; PROVIDED, HOWEVER, that the inclusion herein
of additional obligations on the part of any Debtor and supplemental rights and
remedies in favor of Lender, in each case in respect of the Collateral, shall
not be deemed a conflict with the Loan Agreement. Any reference herein to the
payment in full of the Secured Obligations shall mean the payment in full in
cash of all Secured Obligations other than contingent indemnification Secured
Obligations and other than any Bank Product Obligations that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding and are
not required to be repaid or cash collateralized pursuant to the provisions of
the Loan Agreement, and the termination of all Commitments of Lender under the
Loan Agreement. Any reference herein to any Person shall be construed to include
such Person's successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record and any Record
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.
D. SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
II. CREATION OF SECURITY INTEREST.
X. XXXXX OF SECURITY INTEREST. Each Debtor hereby grants to Lender, for its
benefit and for the benefit of the Bank Product Providers, a continuing security
interest in all of its right, title, and interest in all currently existing and
hereafter acquired or arising Collateral in order to secure prompt repayment of
any and all of the Secured Obligations in accordance with the terms and
conditions of the Loan Documents and in order to secure prompt performance by
such Debtor of such Debtor's covenants and duties under the Loan Documents.
Lender's Liens in and to the Collateral shall attach to all Collateral without
further act on the part of Lender or any Debtor. Anything contained in this
Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, no Debtor has any authority, express or implied, to
dispose of any item or portion of the Collateral.
B. NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Lender's security interest is
dependent on or enhanced by possession, each Debtor, promptly upon the request
of Lender, shall endorse and assign such Negotiable Collateral to Lender and
deliver physical possession of such Negotiable Collateral to Lender.
C. COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, NEGOTIABLE COLLATERAL. At
any time after the occurrence and during the continuation of an Event of
Default, Lender or Lender's designee may (a) notify Account Debtors of any
Debtor that the Accounts, chattel paper, or General Intangibles have been
assigned to Lender or that Lender has a security interest therein, or (b)
collect the Accounts, chattel paper, or General Intangibles directly and charge
the reasonable collection costs and expenses to the Loan Account. Each Debtor
agrees that it will hold in trust for Lender, as Lender's trustee, any
Collections that it receives and promptly will deliver said Collections to
Lender or a Cash Management Bank in their original form as received by such
Debtor.
-5 -
D. FILING OF FINANCING STATEMENTS; COMMERCIAL TORT CLAIMS; DELIVERY OF
ADDITIONAL DOCUMENTATION REQUIRED.
1. Each Debtor authorizes Lender to file any financing statement
necessary or desirable to effectuate the transactions contemplated by this
Agreement and the other Loan Documents, and any continuation statement or
amendment with respect thereto, in any appropriate filing office without the
signature of such Debtor where permitted by applicable law. Each Debtor hereby
ratifies the filing of any financing statement filed without the signature of
such Debtor prior to the date hereof.
2. If any Debtor acquires any commercial tort claims after the date
hereof, such Debtor shall promptly (but in any event within 3 Business Days
after such acquisition) deliver to Lender a written description of such
commercial tort claim and shall deliver a written agreement, in form and
substance reasonably satisfactory to Lender, pursuant to which such Debtor shall
pledge and collaterally assign all of its right, title and interest in and to
such commercial tort claim to Lender, as security for the Secured Obligations (a
"COMMERCIAL TORT CLAIM ASSIGNMENT").
3. At any time upon the request of Lender, each Debtor shall execute
and deliver to Lender, any and all financing statements, original financing
statements in lieu of continuation statements, fixture filings, security
agreements, pledges, assignments, Commercial Tort Claim Assignments,
endorsements of certificates of title, and all other documents (collectively,
the "ADDITIONAL DOCUMENTS") that Lender may request in its Permitted Discretion,
in form and substance reasonably satisfactory to Lender, to create, perfect and
continue perfected or to better perfect the Lender's Liens in the Collateral
(whether now owned or hereafter arising or acquired, tangible or intangible,
real or personal), to create and perfect Liens in favor of Lender in any Real
Property (owned in fee) acquired after the Closing Date and having a purchase
price equal to or greater than $1,000,000 individually or $2,500,000 in the
aggregate, and in order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents. If any Debtor refuses to, or fails
timely to, execute and deliver any Additional Document, to the maximum extent
permitted by applicable law, each Debtor authorizes Lender to execute any such
Additional Documents in such Debtor's name and authorizes Lender to file such
executed Additional Documents in any appropriate filing office. In addition, on
such periodic basis as Lender shall require, each Debtor shall (i) provide
Lender with a report of all new material (i.e. with a Fair Market Value in
excess of $100,000) patentable, copyrightable, or trademarkable materials
acquired or generated by such Debtor during the prior period, (ii) cause all
material patents, copyrights and trademarks acquired or generated by such Debtor
that are not already the subject of a registration with the appropriate filing
office (or an application therefor diligently prosecuted) to be registered with
such appropriate filing office in a manner sufficient to impart constructive
notice of such Debtor's ownership thereof, and (iii) cause to be prepared,
executed, and delivered to Lender supplemental schedules to the applicable Loan
Documents to identify such patents, copyrights and trademarks as being subject
to the security interests created hereunder.
E. POWER OF ATTORNEY. Each Debtor hereby irrevocably makes, constitutes,
and appoints Lender (and any of Lender's officers, employees, or agents
designated by Lender) as such Debtor's true and lawful attorney, with power to:
(a) if such Debtor refuses to, or fails timely to
-6 -
execute and deliver any of the documents described in SECTION 2.4, sign the name
of such Debtor on any of the documents described in SECTION 2.4; (b) at any time
that an Event of Default has occurred and is continuing, sign such Debtor's name
on any invoice or xxxx of lading relating to the Collateral, drafts against
Account Debtors, or notices to Account Debtors; (c) send requests for
verification of Accounts; (d) endorse such Debtor's name on any Collection item
that may come into Lender's possession; (e) at any time that an Event of Default
has occurred and is continuing, make, settle, and adjust all claims under such
Debtor's policies of insurance and make all determinations and decisions with
respect to such policies of insurance; and (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting the Accounts, chattel paper, or General Intangibles directly with
Account Debtors, for amounts and upon terms which Lender determines to be
reasonable, and Lender may cause to be executed and delivered any documents and
releases which Lender determines to be necessary. The appointment of Lender as
each Debtor's attorney, and each and every one of Lender's rights and powers,
being coupled with an interest, is irrevocable until, and shall terminate when,
all of the Secured Obligations have been paid in full and performed and Lender's
obligation to extend credit under the Loan Agreement is terminated.
F. RIGHT TO INSPECT. Lender and its officers, employees, or agents shall
have the right, from time to time hereafter during normal business hours, or at
any time following the occurrence and during the continuance of a Default or
Event of Default, to inspect each Debtor's Books and make copies or abstracts
thereof and to check, test, and appraise the Collateral, or any material portion
thereof, in order to verify each Debtor's financial condition or the amount,
quality, value, condition of, or any other matter relating to, the Collateral.
G. CONTROL AGREEMENT. Each Debtor agrees that it will not transfer assets
out of any of its Deposit Accounts or Securities Accounts; PROVIDED, HOWEVER,
that so long as no Event of Default has occurred and is continuing or would
result therefrom, each Debtor may use such assets (and the proceeds thereof) to
the extent not prohibited by this Agreement or the other Loan Documents and, if
the transfer is to another bank or securities intermediary, so long as such
Debtor, Lender, and the substitute bank or securities intermediary have entered
into a Control Agreement. Each Debtor agrees that it will comply (to the extent
applicable) with Section 2.7(c) of the Loan Agreement and take any or all
reasonable steps that Lender requests in order for Lender to obtain control in
accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect
to any of its electronic chattel paper, Investment Property, and
letter-of-credit rights. No arrangement contemplated hereby or by any Control
Agreement in respect of any Securities Accounts or other Investment Property
shall be modified by any Debtor without the prior written consent of Lender.
Upon the occurrence and during the continuance of a Default or Event of Default,
Lender may notify any bank or securities intermediary to liquidate the
applicable Deposit Account or Securities Account or any related Investment
Property maintained or held thereby and remit the proceeds thereof to the
Lender's Account.
III. REPRESENTATIONS AND WARRANTIES.
Each Debtor makes the representations and warranties which are set
forth in SECTION 5 of the Loan Agreement as if such Debtor were a party thereto.
-7 -
IV. AFFIRMATIVE COVENANTS.
To the extent applicable, each Debtor shall comply with each of the
affirmative covenants which are set forth in SECTION 6 of the Loan Agreement as
if such Debtor were a party thereto.
V. NEGATIVE COVENANTS.
Each Debtor shall comply with each of the negative covenants which are
set forth in SECTION 7 of the Loan Agreement as if such Debtor were a party
thereto.
VI. LENDER'S RIGHTS AND REMEDIES.
A. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of
an Event of Default, in addition to all other rights and remedies available to
Lender as provided hereafter, Lender may, at its election, without notice of its
election and without demand (other than any notice required to be provided to
Borrower pursuant to the terms of the Loan Agreement), do any one or more of the
following, all of which are authorized by each Debtor:
1. Proceed directly and at once, without notice, against each Debtor
to collect and recover the full amount or any portion of the Secured
Obligations, without first proceeding against Borrower, or against any security
or collateral for the Secured Obligations;
2. Without notice to any Debtor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply toward
the payment of the Secured Obligations (i) any indebtedness due or to become due
from Lender to any Debtor and (ii) any moneys, credits or other property
belonging to any Debtor at any time held by or coming into the possession of
Lender;
3. Exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein and in the Guaranty or otherwise available to
it, all the rights and remedies available to it at law (including those of a
secured party under the Code) or in equity;
4. Settle or adjust disputes and claims directly with Account Debtors
for amounts and upon terms which Lender considers advisable, and in such cases,
Lender will credit the Loan Account with only the net amounts received by Lender
in payment of such disputed Accounts after deducting all Lender Expenses
incurred or expended in connection therewith;
5. Without notice or demand upon any Debtor, make such payments and do
such acts as Lender considers necessary or reasonable in its Permitted
Discretion to protect its security interest in the Collateral. Each Debtor
agrees to assemble the Collateral if Lender so requires, and to make the
Collateral available to Lender as Lender may designate. Each Debtor authorizes
Lender to enter the premises where the Collateral is located, to take and
maintain possession of the Collateral, or any part of it, and to pay, purchase,
contest, or compromise any encumbrance, charge, or lien which in Lender's
determination appears to be prior or superior to its security interest and to
pay all expenses incurred in connection therewith. With respect to any of any
Debtor's owned premises, such Debtor hereby grants, to the fullest extent
permitted by law and binding contract, Lender a license to enter into possession
of such premises and to occupy the
-8 -
same, without charge, for up to one hundred twenty (120) days in order to
exercise any of Lender's rights or remedies provided herein, at law, in equity,
or otherwise;
6. Without notice to any Debtor (such notice being expressly waived),
and without constituting an acceptance of any collateral in full or partial
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Secured Obligations any and all (i) balances and deposits of any
Debtor held by Lender, or (ii) indebtedness at any time owing to or for the
credit or the account of any Debtor held by Lender;
7. Hold, as cash collateral, any and all balances and deposits of any
Debtor held by Lender to secure the full and final repayment of all of the
Secured Obligations;
8. Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Each Debtor hereby grants Lender (to the fullest extent permitted by
law and binding contract) a license or other right to use, without charge, each
Debtor's labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, and advertising matter, or any property
of a similar nature, as it pertains to the Collateral, in completing production
of advertising for sale and selling any Collateral, and each Debtor's rights
under all licenses and all franchise agreements shall inure to Lender's benefit;
9. Sell all or any part of the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including a Debtor's premises)
as Lender determines in its Permitted Discretion is commercially reasonable. It
is not necessary that the Collateral be present at any such sale;
10. Lender shall give notice of the disposition of the Collateral as
follows:
(i)(i) Lender shall give each Debtor a notice in writing
of the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public sale
is to be made of the Collateral, then the time on or after which
the private sale or other disposition is to be made; and
(ii)(ii) The notice shall be personally delivered or mailed,
postage prepaid, to each Debtor as provided in SECTION 9, at
least ten (10) days before the earliest time of disposition set
forth in the notice; no notice needs to be given prior to the
disposition of any portion of the Collateral that is perishable
or threatens to decline speedily in value or that is of a type
customarily sold on a recognized market;
11. Lender may credit bid and purchase at any public sale;
12. Lender may seek the appointment of a receiver or keeper to take
possession of all or any portion of the Collateral or to operate same and, to
the maximum extent permitted by law, may seek the appointment of such a receiver
or keeper without the requirement of prior notice or a hearing;
-9 -
13. Lender, on behalf of the Bank Product Providers, shall have all
other rights and remedies available at law or in equity or pursuant to any other
Loan Document; and
14. Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by each Debtor. Any excess will be
returned, without interest and subject to the rights of third Persons, by Lender
to Borrower.
B. REMEDIES CUMULATIVE. Lender's rights and remedies under this Agreement,
the other Loan Documents, and all other agreements shall be cumulative. Lender
shall have all other rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by Lender of one right or
remedy shall be deemed an election, and no waiver by Lender of any Event of
Default on any Debtor's part shall be deemed a continuing waiver. No delay by
Lender shall constitute a waiver, election, or acquiescence by it.
VII. TAXES AND EXPENSES REGARDING THE COLLATERAL. If any Debtor fails to pay any
monies (whether taxes, rents, assessments, insurance premiums, or, in the case
of leased properties or assets, rents or other amounts payable under such
leases) due to third Persons, or fails to make any deposits or furnish any
required proof of payment or deposit, all as required under the terms of this
Agreement, then, Lender, in its sole discretion and without prior notice to any
Debtor, may do any or all of the following: (a) make payment of the same or any
part thereof (except to the extent that the validity of such assessment or tax
is the subject of a Permitted Protest); (b) set up such reserves in the Loan
Account as Lender deems necessary to protect Lender from the exposure created by
such failure; or (c) in the case of the failure to comply with SECTION 6.8 of
the Loan Agreement, obtain and maintain insurance policies insuring the
applicable Debtor's ownership and use of the Collateral, and take any action
with respect to such policies as Lender deems prudent. Any amounts paid or
deposited by Lender shall constitute Lender Expenses, shall immediately become
additional Secured Obligations, shall bear interest at the applicable rate
described in the Loan Agreement, and shall be secured by the Collateral. Any
payments made by Lender shall not constitute an agreement by Lender to make
similar payments in the future or a waiver by the Lender, of any Event of
Default under this Agreement. Lender need not inquire as to, or contest the
validity of, any such expense, tax, security interest, encumbrance, or lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
VIII. WAIVERS; INDEMNIFICATION.
A. DEMAND; PROTEST; ETC. Each Debtor waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lender, on which such Debtor may in any way be
liable.
B. LENDER'S LIABILITY FOR COLLATERAL. So long as Lender complies with its
obligations, if any, under the Code, Lender shall not in any way or manner be
liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss
or damage thereto occurring or arising in any manner or fashion from any cause;
(c) any diminution in the value thereof; or (d) any act or default of
-10 -
any carrier, warehouseman, bailee, forwarding agency, or other Person. All risk
of loss, damage, or destruction of the Collateral shall be borne by each Debtor.
C. INDEMNIFICATION. Each Debtor shall pay, indemnify, defend, and hold the
Lender-Related Persons, and each Participant (each, an "INDEMNIFIED PERSON")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
(including any restructuring or workout with respect hereto) of this Agreement,
any of the other Loan Documents, or the transactions contemplated hereby or
thereby or the monitoring of such Debtor's compliance with the terms of this
Agreement and the other Loan Documents, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided thereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"). The foregoing to the
contrary notwithstanding, no Debtor shall have any obligation to any Indemnified
Person under this SECTION 8.3 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of any such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Secured Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
any Debtor was required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by such Debtor with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
IX. NOTICES. All notices and other communications hereunder to Lender shall be
in writing and shall be mailed, sent or delivered in accordance with the Loan
Agreement and all notices and other communications hereunder to any Debtor shall
be in writing and shall be mailed, sent or delivered in care of Borrower in
accordance with the Loan Agreement.
X. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. EACH DEBTOR AND LENDER AGREE THAT
THE PROVISIONS IN THE LOAN AGREEMENT WITH RESPECT TO CHOICE OF LAW AND VENUE AND
JURY TRIAL WAIVER ARE APPLICABLE TO THIS AGREEMENT AS IF FULLY SET FORTH HEREIN.
XI. GENERAL PROVISIONS.
A. EFFECTIVENESS. This Agreement shall be binding and deemed effective when
executed by each Debtor and accepted and executed by Lender.
-11 -
B. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the respective successors and assigns of each of the parties;
PROVIDED, HOWEVER, that no Debtor may assign this Agreement or any rights or
duties hereunder without Lender's prior written consent and any prohibited
assignment shall be absolutely void. No consent to an assignment by Lender shall
release any Debtor from its Secured Obligations. Lender may assign this
Agreement and its rights and duties hereunder pursuant to SECTION 14.1 of the
Loan Agreement and no consent or approval by any Debtor is required in
connection with any such assignment. To the extent that Lender assigns its
rights and obligations to a third Person, Lender thereafter shall be released
from such assigned obligations to each Debtor and such assignment shall effect a
novation between each Debtor and such third Person.
C. SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each section applies equally to this entire Agreement.
D. INTERPRETATION. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Lender or any Debtor, whether
under any rule of construction or otherwise. On the contrary, this Agreement has
been reviewed by all parties and shall be construed and interpreted according to
the ordinary meaning of the words used so as to fairly accomplish the purposes
and intentions of all parties hereto.
E. SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
F. AMENDMENTS IN WRITING. This Agreement can only be amended by a writing
signed by Lender and each Debtor.
G. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
H. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Secured Obligations by any Debtor or the transfer by any Debtor to Lender
of any property of such Debtor should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable payments of money or
transfers of property (collectively, a "VOIDABLE TRANSFER"), and if Lender is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that Lender is required or elects
to repay or restore, and as to all reasonable costs, expenses, and attorneys'
fees
-12 -
of Lender related thereto, the liability of such Debtor automatically shall be
revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
[signature page follows]
-13 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
PORTERHOUSE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/ADDISON, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/ATLANTA, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/BALTIMORE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/BOCA RATON, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/BUCKHEAD, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/CHICAGO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/CINCINNATI, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/XXXXXXX, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/CLEVELAND, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/COLUMBUS, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/DALLAS, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/DENVER, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/DETROIT, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/FIFTH AVENUE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/FLAMINGO ROAD CORP., a Delaware corporation
XXXXXX'X OF CHICAGO/HOUSTON, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/MIAMI, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/MINNEAPOLIS, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/NASHVILLE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/NORTH MIAMI BEACH, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/ORLANDO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PALM BEACH INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PALM DESERT, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PHILADELPHIA, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/PHOENIX, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PITTSBURGH, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PORTLAND, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PUERTO RICO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/ROSEMONT, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/SACRAMENTO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SAN ANTONIO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SAN DIEGO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SAN FRANCISCO, INC., a Delaware corporation
Guarantor Security Agreement Signature Page
XXXXXX'X OF CHICAGO/SANTA XXX, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SCOTTSDALE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SEATTLE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/VIRGINIA, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/WASHINGTON D.C. INC., a Delaware corporation
XXXXXX'X OF CHICAGO/WASHINGTON SQUARE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/XXXXXXXXX, INC., an Illinois corporation
PORTERHOUSE OF LOS ANGELES, INC., a Delaware corporation
MOCGC CORP., a Virginia corporation
XXXXXX'X OF CHICAGO HOLDING, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/BOSTON LLC, a Delaware limited liability company
XXXXX XXXXXX'X OF CHICAGO/BURBANK LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/CHARLOTTE LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/CRYSTAL CITY LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/DENVER CRESCENT TOWN CENTER, LLC, a Delaware limited
liability company
XXXXX XXXXXX'X OF CHICAGO/XXXXXXXX LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/GREAT NECK LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/HACKENSACK LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/HARTFORD LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/HONOLULU LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/INDIANAPOLIS LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/JACKSONVILLE LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/KANSAS CITY LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/KING OF PRUSSIA LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/LOUISVILLE LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/NEW ORLEANS LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/PITTSBURGH LLC, a Delaware limited liability company
Guarantor Security Agreement Signature Page
XXXXXX'X OF CHICAGO/RESTON LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/RICHMOND LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/SCHAUMBURG LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/STAMFORD LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/WHITE PLAINS LLC, a Delaware limited liability company
ITALIAN RESTAURANTS HOLDING CORP., a Delaware corporation
XXXXXXXXX'X RESTAURANTS, INC., a Delaware corporation
XXXXXXXXX'X OF CIRCLE CENTRE, INC., a Delaware corporation
XXXXXXXXX'X/XXXX OF PRUSSIA, INC., a Delaware corporation
XXXXXXXXX'X OF LAS VEGAS, INC., a Delaware corporation
XXXXXXXXX'X AT VILLAGE SQUARE, INC., a Delaware corporation
By: /s/Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations and limited liability
companies
ADDISON STEAKHOUSE, INC., a Texas corporation
CHICAGO STEAKHOUSE, INC., a Texas corporation
HOUSTON STEAKHOUSE, INC., a Texas corporation
SAN ANTONIO STEAKHOUSE, INC., a Texas corporation
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
XXXXX FARGO FOOTHILL, INC., a California corporation
By: /s/ Xxxx Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
