EX-10.29 3 dex1029.htm LINE OF CREDIT AGREEMENT LOAN AGREEMENT
Exhibit 10.29
LOAN AGREEMENT
This Agreement dated as of October 17, 2007, is between Bank of America, N.A., a national banking association (the “Bank”) and BJ’s Restaurants, Inc., a California corporation (the “Borrower”).
| 1. | FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS |
1.1 Line of Credit Amount.
| (a) | During the availability period described below, the Bank will provide a line of credit to the Borrower. The amount of the line of credit (the “Facility No. 1 Commitment”) is Twenty-Five Million and 00/100 Dollars ($25, 000, 000. 00). The Facility No. 1 Commitment shall be reduced by the aggregate face amount of the outstanding letters of credit to Union Bank described on Schedule 1 attached hereto. |
| (b) | This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them. |
| (c) | The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit, the Borrower will immediately pay the excess to the Bank upon the Bank’s demand. |
1.2 Availability Period. The line of credit is available between the date of this Agreement and September 30, 2012, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility No. 1 Expiration Date”).
1.3 Repayment Terms.
| (a) | The Borrower will pay interest on December 31, 2007, and then on the last day of the third month of each quarter thereafter until payment in full of any principal outstanding under this facility. |
| (b) | The Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility No. 1 Expiration Date. Any interest period for an optional interest rate (as described below) shall expire no later than the Facility No. 1 Expiration Date. |
1.4 Interest Rate.
| (a) | The interest rate is a rate per year equal to the Bank’s Prime Rate. |
| (b) | The Prime Rate is the rate of interest publicly announced from time to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank based on various factors, including the Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans. The Bank may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in the Bank’s Prime Rate. |
| (c) | In addition to interest at the Prime Rate, the Borrower shall pay to the Bank, an unused commitment fee equal to the applicable Unused Commitment Fee under Section 1.6 times the actual daily amount by which the Facility No. 1 Commitment exceeds the outstanding principal balance of any loans or letters of credit issued hereunder. The unused commitment fee shall accrue at all times during the Availability Period, and shall be paid quarterly in arrears on the same date that interest payments are due to the Bank under Section 1.3, and on Facility No. 1 Expiration Date. The unused commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that the Applicable Rate was in effect. |
| Standard Loan Agreement | 1 | Revised 2/2005 |
1.5 Optional Interest Rates. Instead of the interest rate based on the rate stated in the paragraph entitled “Interest Rate” above, the Borrower may elect the optional interest rates listed below for this Facility No. 1 during interest periods consisting of one month, two months, three months, or six months, or as otherwise agreed to by the Bank and the Borrower. The optional interest rates shall be subject to the terms and conditions described later in this Agreement. Any principal amount bearing interest at an optional rate under this Agreement is referred to as a “Portion.” The following optional interest rates are available:
| (a) | The LIBOR Rate plus the Applicable Margin as defined below. |
1.6 Applicable Rate. The Applicable Rate shall be the following amounts per annum, based upon the Lease Adjusted Leverage Ratio (as defined in the “Covenants” section of this Agreement), as set forth in the most recent compliance certificate (or, if no compliance certificate is required, the Borrower’s most recent financial statements) received by the Bank as required in the Covenants section; provided, however, that, until the Bank receives the first compliance certificate or financial statement, such amounts shall be those indicated for pricing level 1 set forth below:
Applicable Rate
(in percentage points per annum)
| Pricing Level | Lease and Rental Expense | LIBOR Rate | Unused Commitment Fee | Letter of Credit Fee | ||||
| 1 | < 2.25x | plus 0.625 | 0.070 | 0.625 | ||||
| 2 | < 2.75x | plus 0.875 | 0.100 | 0.875 | ||||
| 3 | < 3.25x | plus 1.125 | 0.150 | 1.125 | ||||
| 4 | >= 3.25x | plus 1.375 | 0.200 | 1.375 |
The Applicable Rate shall be in effect from the date the most recent compliance certificate or financial statement is received by the Bank until the date the next compliance certificate or financial statement is received; provided, however, that if the Borrower fails to timely deliver the next compliance certificate or financial statement within five days from the date that such certificate or statement is due, the Applicable Rate shall be the highest pricing level set forth above commencing on the sixth day following the due date until the date such compliance certificate or financial statement is received by the Bank.
In addition to interest at the applicable LIBOR rate, the Borrower shall pay to the Bank in accordance with the applicable percentage, an unused commitment fee equal to the Applicable Rate times the actual daily amount by which the Facility No. 1 Commitment exceeds the outstanding principal balance of any loans or letters of credit issued hereunder. The unused commitment fee shall accrue at all times during the Availability Period, and shall be paid quarterly in arrears on the same date that interest payments are due to the Bank under Section 1.3, and on Facility No. 1 Expiration Date. The unused commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that the Applicable Rate was in effect.
| 2. | OPTIONAL INTEREST RATES |
2.1 Optional Rates. Each optional interest rate is a rate per year. Interest will be paid on December 31, 2007, and then on the last day of each March, June, September and December, thereafter until payment in full of any principal outstanding under this Agreement. No Portion will be converted to a different interest rate during the applicable interest period. Upon the occurrence of an event of default under this Agreement, the Bank may terminate the availability of optional interest rates for interest periods commencing after the default occurs. At the end of each interest period, the interest rate will revert to the rate stated in the paragraph(s) entitled “Interest Rate” above, unless the Borrower has designated another optional interest rate for the Portion.
2.2 LIBOR Rate. The election of LIBOR Rates shall be subject to the following terms and requirements:
| (a) | The interest period during which the LIBOR Rate will be in effect will be one month, two months, three months or six months. The first day of the interest period must be a day other than a Saturday or a Sunday on which banks are open for business in New York and London and dealing in offshore dollars (a “LIBOR Banking Day”). The last day of the interest period and the actual number of days during the interest period will be determined by the Bank using the practices of the London inter-bank market. |
| (b) | Each LIBOR Rate portion will be for an amount not less than One Hundred Thousand and 00/100 Dollars ($100,000.00) or a whole multiple of $100,000 in excess thereof. |
| (c) | The “LIBOR Rate” means the interest rate determined by the following formula. (All amounts in the calculation will be determined by the Bank as of the first day of the interest period.) |
| Standard Loan Agreement | 2 | Revised 2/2005 |
| LIBOR Rate = | London Inter-Bank Offered Rate | |||
| (1.00 - Reserve Percentage) |
Where,
| (i) | “London Inter-Bank Offered Rate” means for any applicable interest period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) at approximately 11:00 a.m. London time two (2) London Banking Days before the commencement of the interest period for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period. If such rate is not available at such time for any reason then the rate for that interest period will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars. |
| (ii) | “Reserve Percentage” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency, supplemental, special, and other reserve percentages. If any advance hereunder is not funded by deposits, the Reserve Percentage shall be 0%. |
| (d) | The Borrower shall irrevocably request a LIBOR Rate Portion no later than 12:00 noon Eastern time on the LIBOR Banking Day preceding the day on which the London Inter-Bank Offered Rate will be set, as specified above. For example, if there are no intervening holidays or weekend days in any of the relevant locations, the request must be made at least three days before the LIBOR Rate takes effect. |
| (e) | The Bank will have no obligation to accept an election for a LIBOR Rate Portion if any of the following described events has occurred and is continuing: |
| (i) | Dollar deposits in the principal amount, and for periods equal to the interest period, of a LIBOR Rate Portion are not available in the London inter-bank market; or |
| (ii) | The LIBOR Rate does not accurately reflect the cost of a LIBOR Rate Portion. |
| (f) | Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by the amount of accrued interest on the amount prepaid and a prepayment fee as described below. A “prepayment” is a payment of an amount on a date earlier than the scheduled payment date for such amount as required by this Agreement. |
| (g) | The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable interbank market, whether or not such Portion was in fact so funded. |
2.3 Future Increases in Aggregate Commitment.
(a) Request for Increase. Provided that no Event of Default has occurred or is continuing, upon written notice to the Bank, the Borrower may from time to time request an increase in the Facility No. 1 Commitment by an amount (for all such requests) not exceeding $25,000,000; provided that (i) any such request for an increase shall be in a minimum amount of $10,000,000, and (ii) the Borrower may make a maximum of 3 such requests.
(b) Bank Election to Increase. Bank shall notify Borrower within ten (10) Business Days whether or not it agrees to increase the Facility No. 1 Commitment, and if, so the amount of the increase and the effective date thereof (the “Increase Effective Date”).
| Standard Loan Agreement | 3 | Revised 2/2005 |
(c) Effective Date. If the Facility No. 1 Commitment is increased in accordance with this Section, the Bank and the Borrower shall determine the effective date (“Increase Effective Date”) and the amount of such increase.
(d) Conditions to Effectiveness of Increase. As a condition precedent to any such increase, the Borrower shall deliver to the Bank (i) a certificate of the Borrower, which will contain, among other things, certifications by the Borrower that, before and after giving effect to such increase, (A) the representations and warranties contained in Article 6 are true and correct on and as of the Increase Effective Date, and (B) no Event of Default exists, and (ii) any updated evidence of authority, incumbency certificates, consents of guarantors or other documents as the Bank may reasonably request.
(e) No Commitment to Increase. Borrower acknowledges that this Section 2.3 is not a commitment by the Bank to make any future increase in the Facility No. 1 Commitment, and the Bank may approve or reject any request for an increase in its sole discretion.
2.4 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, the Bank agrees (A) from time to time on any Business Day during the period from the date of this Agreement until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (B) to honor drafts under the Letters of Credit; provided that the Bank shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit if as of the date of such L/C Credit Extension, (y) the Total Outstandings would exceed the Facility No. 1 Commitment or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Bank shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Bank from issuing such Letter of Credit, or any Law applicable to the Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Bank shall prohibit, or request that the Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Bank is not otherwise compensated hereunder) not in effect on the date of this Agreement, or shall impose upon the Bank any unreimbursed loss, cost or expense which was not applicable on the date of this Agreement and which the Bank in good xxxxx xxxxx material to it;
(B) subject to (b)(iii) below, the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date;
(D) the issuance of such Letter of Credit would violate one or more policies of the Bank; or
(E) such Letter of Credit is in an initial amount less than $75,000, or is to be denominated in a currency other than Dollars.
(iii) The Bank shall be under no obligation to amend any Letter of Credit if (A) the Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the Bank in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such L/C Application must be received by the Bank not later than 1:00 p.m. Eastern time, at least two Business Days (or such later date and time as the Bank may agree in a particular
| Standard Loan Agreement | 4 | Revised 2/2005 |
instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Bank: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Bank may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Bank (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the Bank may require.
(ii) Upon the Bank’s determination that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the Bank’s usual and customary business practices.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the Bank may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the Bank, the Borrower shall not be required to make a specific request to the Bank for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Bank shall, subject to the terms and conditions set forth herein, permit the extension of such Letter of Credit to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the Bank shall have no obligation to permit the extension of any Auto-Extension Letter of Credit at any time if it has determined that it would have no obligation at such time to issue such Letter of Credit in its extended form under the terms hereof (by reason of the provisions of (a)(ii) above or otherwise).
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the Bank will also deliver to the Borrower a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements.
(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Bank shall notify the Borrower thereof. Not later than 1:00 p.m. Eastern time on the date of any payment by the Bank under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the Bank in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the Bank, the Borrower shall be deemed to have requested a borrowing of a Prime Rate Loan to be disbursed on the Honor Date in an amount equal to the amount of such unreimbursed drawing.
(ii) If the Borrower fails to reimburse the Bank for any drawing under any Letter of Credit (whether by means of a borrowing or otherwise), such unreimbursed amount shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate set forth in Section 4.6.
(d) Obligations Absolute. The obligation of the Borrower to reimburse the Bank for each drawing under each Letter of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any person for whom any such beneficiary or any such transferee may be acting), the Bank or any other person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
| Standard Loan Agreement | 5 | Revised 2/2005 |
(iv) any payment by the Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Bank under such Letter of Credit to any person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any debtor relief law; or
(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the Bank. The Borrower shall be conclusively deemed to have waived any such claim against the Bank and its correspondents unless such notice is given as aforesaid.
(e) Role of Bank. The Borrower agrees that, in paying any drawing under a Letter of Credit, the Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the person executing or delivering any such document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Bank, any of its affiliates, any of the respective officers, directors, employees, agents or attorneys-in-fact of the Bank and its affiliates, nor any of the respective correspondents, participants or assignees of the Bank shall be liable or responsible for any of the matters described in clauses (i) through (v) of this Section; provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the Bank, and the Bank may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Bank’s willful misconduct or gross negligence or the Bank’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(f) Applicability of ISP and UCP. Unless otherwise expressly agreed by the Bank and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the International Standby Practices 1998 (or such later version thereof as may be in effect at time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.
(g) Letter of Credit Fees. The Borrower shall pay to the Bank a Letter of Credit fee for each standby Letter of Credit equal to the Applicable Rate times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit unless such maximum amount has been permanently reduced by a partial draw or other agreed upon reduction in amount). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such letter of credit fees shall be due and payable on the last day of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each standby Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.
(h) Documentary and Processing Charges Payable to Bank. The Borrower shall pay to the Bank the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the Bank relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
| Standard Loan Agreement | 6 | Revised 2/2005 |
(i) Conflict with Letter of Credit Application. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.
The following terms have the meanings indicated for the purposes of this Section 2.4:
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of the Commonwealth of Massachusetts.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.
“L/C Obligations” means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all unreimbursed drawings under all Letters of Credit.
“Letter of Credit” means any letter of credit issued hereunder.
“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Bank.
“Letter of Credit Expiration Date” means the Facility No. 1 Expiration Date.
“Letter of Credit Sublimit” means an amount equal to the Facility No. 1 Commitment. The Letter of Credit Sublimit is part of, and not in addition to, the Commitment.
“Outstanding Amount” means (i) with respect to loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.
“Request for Credit Extension” means (a) with respect to a borrowing, conversion or continuation of a Loan, a Loan Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.
“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of the Borrower or any Guarantor, as applicable. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower or Guarantor shall be conclusively presumed to have been authorized by all necessary corporate action on the part of such party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such party.
“Total Outstandings” means the aggregate Outstanding Amount of all loans hereunder and all L/C Obligations.
| 3. | FEES AND EXPENSES |
3.1 Fees.
Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank’s option, pay the Bank a reasonable and customary fee for each waiver or amendment in an amount advised by the Bank at the time the Borrower requests the waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested by the Borrower. The Bank may impose additional requirements as a condition to any waiver or amendment.
| Standard Loan Agreement | 7 | Revised 2/2005 |
| 4. | DISBURSEMENTS, PAYMENTS AND COSTS |
4.1 Disbursements and Payments.
| (a) | Each payment by the Borrower will be made in U.S. Dollars and immediately available funds by wire transfer to an account designated by the Bank pursuant to pre-approved wire instructions or direct debit to a deposit account as specified below or, for payments not required to be made by direct debit, by mail to the address shown on the Borrower’s statement. Each payment shall be made no later than 3:00 p.m. Eastern time on the date specified herein. All payments received by the Bank after 3:00 p.m. Eastern time shall be deemed received on the next succeeding day and any applicable interest or fee shall continue to accrue. |
| (b) | Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrower to sign one or more promissory notes. |
4.2 Telephone and Telefax Authorization.
| (a) | The Bank may honor telephone or telefax instructions for advances or repayments given, or purported to be given, by any one of the individuals authorized to sign loan agreements on behalf of the Borrower, or any other individual designated by any one of such authorized signers. |
| (b) | Advances will be deposited in and repayments will be withdrawn from account number 14595-154324 owned by the Borrower or such other of the Borrower’s accounts with the Bank as designated in writing by the Borrower; provided, however, that this provision shall not apply if the Borrower provides wire instructions to the Bank for the disbursement of any advance, or if the Borrower has notified the Bank that it elects to wire funds due to the Bank for repayments. |
| (c) | The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank reasonably believes are made by any individual authorized by the Borrower to give such instructions, except that this indemnity shall not apply to any liability, loss or cost arising from the Bank’s gross negligence. This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents. |
4.3 Direct Debit (Pre-Billing).
| (a) | Unless the the Borrower elects to wire payments directly to the Bank pursuant to pre-approved instructions, the Borrower agrees that the Bank will debit deposit account number 14595-15324 owned by the Borrower or such other of the Borrower’s accounts with the Bank as designated in writing by the Borrower (the “Designated Account”) on the date each payment of principal and interest and any fees from the Borrower becomes due (the “Due Date”). |
| (b) | Prior to each Due Date, the Bank will mail to the Borrower a statement of the amounts that will be due on that Due Date (the “Billed Amount”). The xxxx will be mailed a specified number of calendar days prior to the Due Date, which number of days will be mutually agreed from time to time by the Bank and the Borrower. The calculations in the xxxx will be made on the assumption that no new extensions of credit or payments will be made between the date of the billing statement and the Due Date, and that there will be no changes in the applicable interest rate. |
| (c) | Unless the Borrower elects to wire payments directly to the Bank pursuant to pre-approved instructions, the Bank will debit the Designated Account for the Billed Amount, regardless of the actual amount due on that date (the “Accrued Amount”). If the Billed Amount debited to the Designated Account differs from the Accrued Amount, the discrepancy will be treated as follows: |
| (i) | If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy. The Borrower will not be in default by reason of any such discrepancy. |
| (ii) | If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the discrepancy. |
| Standard Loan Agreement | 8 | Revised 2/2005 |
Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of principal outstanding without compounding. The Bank will not pay the Borrower interest on any overpayment.
| (d) | The Borrower will maintain sufficient funds in the Designated Account to cover each debit. If there are insufficient funds in the Designated Account on the date the Bank enters any debit authorized by this Agreement, the Bank may reverse the debit. |
| (e) | The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement. |
4.4 Banking Days. Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank’s lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day. All payments received on a day which is not a banking day will be applied to the credit on the next banking day.
4.5 Interest Calculation. Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed. This results in more interest or a higher fee than if a 365-day year is used. Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid.
4.6 Default Rate. Upon the occurrence of any default or after maturity or after judgement has been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement, including any interest, fees, or costs which are not paid when due, will at the option of the Bank bear interest at a rate which is 2.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. This may result in compounding of interest. This will not constitute a waiver of any default.
| 5. | CONDITIONS |
Before the Bank is required to extend any credit to the Borrower under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below.
5.1 Authorizations. If the Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrower and/or such guarantor of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.
5.2 Governing Documents. Copies of the Borrower’s and each Guarantor’s organizational documents.
5.3 Payment of Fees. Payment of all fees and other amounts due and owing to the Bank, including without limitation payment of all accrued and unpaid expenses incurred by the Bank as required by the paragraph entitled “Reimbursement Costs.”
5.4 Good Standing. Certificates of good standing for the Borrower from its state of formation and from any other state in which the Borrower is required to qualify to conduct its business.
5.5 Insurance. Evidence of insurance coverage, as required in the “Covenants” section of this Agreement.
| Standard Loan Agreement | 9 | Revised 2/2005 |
5.6 Subsidiary Guaranties. Unconditional guaranties from all of the Borrower’s subsidiaries. The Borrower shall cause any subsidiary formed or acquired after the date of this Agreement to deliver to the Bank, within ten (10) days of written request, its unconditional guaranty of the Borrower’s obligations to the Bank hereunder, which guaranty shall be in form and substance substantially similar to the form of guaranty provided by each of the Borrower’s current subsidiaries in favor of the Bank on or about the date of this Agreement.
5.7 Existing Agreement. Evidence that the existing credit agreement with Union Bank of California (“Existing Credit Agreement”) has been or concurrently with the closing of this credit arrangement is being terminated, and all liens securing obligations under the Existing Credit Agreement (if any) have been or concurrently with the closing of this credit arrangement are being released.
5.8 Legal Opinion. A written opinion from Borrower’s legal counsel , covering such matters as the Bank may require, including the due organization and legal existence of the Borrower and each guarantor, and the enforceability of the loan documents. The legal counsel and the terms of the opinion must be acceptable to the Bank.
| 6. | REPRESENTATIONS AND WARRANTIES |
When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes the following representations and warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request:
6.1 Formation. If the Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized.
6.2 Authorization. This Agreement, and any instrument or agreement required hereunder, are within the Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational papers.
6.3 Enforceable Agreement. This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable.
6.4 Good Standing. In each state in which the Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.
6.5 No Conflicts. This Agreement does not conflict with any law, agreement, or obligation by which the Borrower is bound.
6.6 Financial Information. All financial and other information that has been or will be supplied to the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrower’s (and any guarantor’s) financial condition, including all material contingent liabilities. Since the date of the most recent financial statement provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of the Borrower (or any guarantor). If the Borrower is comprised of the trustees of a trust, the foregoing representations shall also pertain to the trustor(s) of the trust.
6.7 Lawsuits. There is no lawsuit, tax claim or other dispute pending or threatened against the Borrower which, if lost, would impair the Borrower’s financial condition or ability to repay the loan, except as have been disclosed in writing to the Bank.
6.8 Permits, Franchises. The Borrower possesses all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights and fictitious name rights necessary to enable it to conduct the business in which it is now engaged.
6.9 Other Obligations. The Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease (excluding any lease obligations in which there is a bona fide dispute with the lessor, provided, however, that such disputed lease obligations shall not exceed in the aggregate $3,000,000), commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank.
6.10 Tax Matters. The Borrower has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing to the Bank or are not material to the Borrower’s financial condition or ability to repay the loan.
| Standard Loan Agreement | 10 | Revised 2/2005 |
6.11 No Event of Default. There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement.
6.12 Insurance. The Borrower has obtained, and maintained in effect, the insurance coverage required in the “Covenants” section of this Agreement.
6.13 Environmental Compliance. The Borrower and its subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. “Material Adverse Effect” means a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower or the Borrower and its subsidiaries taken as a whole.
6.14 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any governmental authority, with respect to any Plan that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c)(i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any unfunded pension liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
The following terms have the meanings indicated for the purposes of this Section 6.14:
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a reportable event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
| Standard Loan Agreement | 11 | Revised 2/2005 |
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
6.15 Subsidiaries. As of the Closing Date, the Borrower has no subsidiaries other than those specifically disclosed to the Bank and has no equity investments in any other corporation or entity other than those specifically disclosed to the Bank.
6.16 Disclosure. The Borrower has disclosed to the Bank all agreements, instruments and corporate or other restrictions to which it or any of its subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
| 7. | COVENANTS |
The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full:
7.1 Use of Proceeds.
| (a) | To use the proceeds of Facility No. 1 to fund restaurant and brewery development, capital expenditures, letters of credit, working capital and for other general corporate purposes. |
| (b) | The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any indebtedness incurred for such purpose. |
7.2 Financial Information. To provide the following financial information and statements in form and content acceptable to the Bank, and such additional information as requested by the Bank from time to time. The Bank reserves the right, upon written notice to the Borrower, to require the Borrower to deliver financial information and statements to the Bank more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.
| (a) | Within ninety (90) days of the fiscal year end, the annual financial statements of the Borrower, certified and dated by an authorized financial officer. These financial statements must be audited (with an opinion satisfactory to the Bank) by a Certified Public Accountant acceptable to the Bank. The statements shall be prepared on a consolidated basis. |
| (b) | Within forty five (45) days of the period’s end, quarterly financial statements of the Borrower, certified and dated by an authorized financial officer. These financial statements may be company-prepared. The statements shall be prepared on a consolidated basis. |
| (c) | Within sixty (60) days after the first day of each fiscal year, a budget and financial forecast prepared by the Borrower for such fiscal year, which budget and financial forecast shall include income statement, balance sheet and cash flow statement prepared on a quarterly basis. The Bank acknowledges that budgets and forecasts are subject to risks and uncertainties and other factors which may cause actual results to be materially different from those budgeted or forecasted. |
| (d) | Within ninety (90) days of the end of each fiscal year and within forty five (45) days of the end of each quarter, a compliance certificate of the Borrower signed by an authorized financial officer, and setting forth (i) the information |
| Standard Loan Agreement | 12 | Revised 2/2005 |
| and computations (in sufficient detail) to establish that the Borrower is in compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action the Borrower is taking and proposes to take with respect thereto. |
7.3. Fixed Charge Coverage Ratio. To maintain on a consolidated basis a Fixed Charge Ratio of at least 2.0 to 1.0. “Fixed Charge Ratio” means the ratio of (a) the sum of EBITDA plus Rental Expense, to (b) the sum of Interest Expense and Rental Expense. “EBITDA” means net income, less income or plus loss from discontinued operations and extraordinary items, plus any non-cash stock based compensation, plus pre-opening expenses, plus income taxes, plus interest expense, plus depreciation, depletion and amortization. This ratio shall be calculated at the end of each reporting period for which the Bank required financial statements, using the results of the twelve-month period ending with that reporting period. “Rental Expense” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the operating lease expense of the Borrower and its Subsidiaries determined in accordance with GAAP for leases with an initial term greater than one year, as disclosed in the notes to the consolidated financial statements of the Borrower and its Subsidiaries. “Interest Expense” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of Rental Expense with respect to such period under capital leases that is treated as interest in accordance with GAAP.
7.4 Total Lease Adjusted Leverage Ratio. To maintain on a consolidated basis a Total Lease Adjusted Leverage Ratio of not more than 4.50 to 1.0. “Total Lease Adjusted Leverage Ratio” means the ratio of (a)Total Funded Debt plus eight (8) times Rental Expense, to (b) EBITDA plus Rental Expense. “Total Funded Debt” means all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of Subordinated Liabilities. “Subordinated Liabilities” means liabilities subordinated to the Borrower’s obligations to the Bank in a manner acceptable to the Bank in its sole discretion. “EBITDA” has the meaning set forth in Section 7.3.
7.5 Dividends and Distributions. There shall be no limitation hereunder on dividends, redemptions of stock or membership interests, distributions and withdrawals (as applicable) to its owners, as long as:
| (a) | Lease Adjusted Leverage Ratio < 4.25x; |
7.6 [Intentionally Omitted]
7.7 Other Debts. Not to have outstanding or incur any direct or contingent liabilities or lease obligations (other than those to the Bank), or become liable for the liabilities of others, without the Bank’s written consent. This does not prohibit:
| (a) | Acquiring goods, supplies, or merchandise on normal trade credit. |
| (b) | Endorsing negotiable instruments received in the usual course of business. |
| (c) | Obtaining surety bonds in the usual course of business. |
| (d) | Liabilities, lines of credit and leases in existence on the date of this Agreement disclosed in writing to the Bank and leases entered into by the Borrower in the ordinary course of business. |
| (e) | Existing Letters of Credit in favor of Union Bank described on Schedule 1 attached hereto, provided that such letters of credit shall not be amended or extended and shall terminate on or before December 31, 2007. |
7.8 Other Liens. Not to create, assume, or allow any security interest or lien (including judicial liens) on property the Borrower now or later owns, except:
| (a) | Liens and security interests in favor of the Bank. |
| (b) | Liens for taxes not yet due. |
| (c) | Liens outstanding on the date of this Agreement disclosed in writing to the Bank. |
| (d) | Liens incurred in the ordinary course of Borrower’s business. |
| Standard Loan Agreement | 13 | Revised 2/2005 |
| (e) | Sale and leaseback transactions in the aggregate of $20,000,000 during the term of this Agreement. |
7.9 Maintenance of Assets.
(a) Not to sell, assign, lease, transfer or otherwise dispose of any part of the Borrower’s business or the Borrower’s assets except in the ordinary course of the Borrower’s business.
(b) Not to sell, assign, lease, transfer or otherwise dispose of any assets for less than fair market value, or enter into any agreement to do so, except that the Borrower may dispose of assets that are in disrepair or obsolete at less than fair market value in the ordinary course of its business.
(c) To make any repairs, renewals, or replacements to keep the Borrower’s properties in good working condition.
7.10 Investments. Not to have any existing, or make any new, investments in any individual or entity, or make any capital contributions or other transfers of assets to any individual or entity, except for:
| (a) | Existing investments disclosed to the Bank in writing. |
| (b) | Investments in the Borrower’s current subsidiaries or any investment or joint venture the purpose of which is the owning, operating or managing of BJ’s restaurants and breweries. |
| (c) | Investments in any of the following: |
| (i) | certificates of deposit; |
| (ii) | U.S. treasury bills and other obligations of the federal government; |
| (iii) | readily marketable securities (including commercial paper, but excluding restricted stock and stock subject to the provisions of Rule 144 of the Securities and Exchange Commission); |
| (iv) | investments in the ordinary course of the Borrower’s business. |
7.11 Loans. Not to make any loans, advances or other extensions of credit to any individual or entity, except for:
| (a) | Existing extensions of credit disclosed to the Bank in writing. |
| (b) | Extensions of credit to the Borrower’s current subsidiaries. |
| (c) | Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities. |
7.12 [INTENTIONALLY OMITTED]
7.13 Change of Ownership. Not to cause, permit, or suffer any change in capital ownership such that there is a change of more than twenty-five percent (25%) in the direct or indirect capital ownership of the Borrower.
7.14 Additional Negative Covenants. Not to, without the Bank’s written consent:
(a) Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture (other than investments or joint ventures permitted by section 7.10), or a member of a limited liability company, except that (a) any subsidiary of the Borrower may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving entity, or (ii) any one or more other subsidiaries, provided that when any guarantor is merging with another subsidiary, the guarantor shall be the continuing or surviving entity; and (b) any subsidiary of the Borrower may dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another subsidiary, provided that if the transferor in such a transaction is a guarantor, then the transferee must either be the Borrower or a guarantor.
(b) Acquire or purchase a business or its assets, provided that there is no bank consent or other limitation on the Borrower’s ability to acquire or purchase a business or its assets, as long as:
Lease Adjusted Leverage Ratio < 4.25x;
| Standard Loan Agreement | 14 | Revised 2/2005 |
(c) Engage in any business activities substantially different from the Borrower’s present business.
(d) Liquidate or dissolve the Borrower’s business.
(e) Voluntarily suspend the Borrower’s business.
7.15 Notices to Bank. To promptly notify the Bank in writing of:
| (a) | Any lawsuit over $3,000,000.00 against the Borrower (or any guarantor or, if the Borrower is comprised of the trustees of a trust, any trustor). |
| (b) | Any substantial dispute between any governmental authority and the Borrower (or any guarantor or, if the Borrower is comprised of the trustees of a trust, any trustor). |
| (c) | Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default; except that notice is not required hereunder in advance of the expiration of the cure period for any payment default under Section 8.1 or in advance of the filing date of any financial information required to be furnished to the Bank under Section 7. 2. |
| (d) | Any material adverse change in the Borrower’s (or any guarantor’s, or, if the Borrower is comprised of the trustees of a trust, any trustor’s) business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit. |
| (e) | Any change in the Borrower’s name, legal structure, place of business, or chief executive office if the Borrower has more than one place of business. |
| (f) | Any actual contingent liabilities of the Borrower (or any guarantor or, if the Borrower is comprised of the trustees of a trust, any trustor), and any such contingent liabilities which are reasonably foreseeable and would be disclosed in filings with the Securities and Exchange Commission. |
7.16 Insurance.
| (a) | General Business Insurance. To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of the Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for the Borrower’s business. Each policy shall provide for at least 30 days prior notice to the Bank of any cancellation thereof. |
7.17 Compliance with Laws. To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrower’s business. The Bank shall have no obligation to make any advance to the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in complying with all such applicable laws and regulations.
7.18 ERISA Plans. Promptly during each year, to pay and cause any subsidiaries to pay contributions adequate to meet at least the minimum funding standards under ERISA with respect to each and every Plan; file each annual report required to be filed pursuant to ERISA in connection with each Plan for each year; and notify the Bank within ten (10) days of the occurrence of any Reportable Event that might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty Corporation or for the appointment by the appropriate United States District Court of a trustee to administer any Plan. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. Capitalized terms in this paragraph shall have the meanings defined within ERISA.
7.19 Books and Records. To maintain adequate books and records.
7.20 Audits. To allow the Bank and its agents to inspect the Borrower’s properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrower’s properties, books or records are in the possession of a third party, the Borrower authorizes that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank’s requests for information concerning such properties, books and records.
| Standard Loan Agreement | 15 | Revised 2/2005 |
7.21 Cooperation. To take any action reasonably requested by the Bank to carry out the intent of this Agreement.
| 8. | DEFAULT AND REMEDIES |
If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled “Bankruptcy,” below, with respect to the Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately.
8.1 Failure to Pay. The Borrower fails to make a payment under this Agreement within five (5) days of date when due.
8.2 Other Bank Agreements. Any default occurs under any other agreement the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has with the Bank or any affiliate of the Bank. For purposes of this Agreement, “Obligor” shall mean any guarantor, any party pledging collateral to the Bank, or, if the Borrower is comprised of the trustees of a trust, any trustor.
8.3 Cross-default. Any default occurs under any agreement in excess of $3,000,000 in connection with any credit the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has obtained from anyone else or which the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has guaranteed and such failure continues for 30 days.
8.4 False Information. The Borrower or any Obligor has given the Bank materially false or misleading information or representations.
8.5 Bankruptcy. The Borrower, any Obligor, or any general partner of the Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties, or the Borrower, any Obligor, or any general partner of the Borrower and such involuntary proceeding is not dismissed within ninety (90) days of filing, or of any Obligor makes a general assignment for the benefit of creditors.
8.6 Receivers. A receiver or similar official is appointed for a substantial portion of the Borrower’s or any Obligor’s business, or the business is terminated, or, if any Obligor is anything other than a natural person, such Obligor is liquidated or dissolved.
8.7 Judgments. Any judgments or arbitration awards are entered against the Borrower or any Obligor, or the Borrower or any Obligor enters into any settlement agreements with respect to any litigation or arbitration, in an aggregate amount of $3,000,000.00 or more in excess of any insurance coverage.
8.8 Material Adverse Change. A material adverse change occurs, or is reasonably likely to occur, in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit; or the Bank reasonably determines that it is insecure for any other reason.
8.9 Government Action. Any government authority takes action that the Bank reasonably believes materially adversely affects the Borrower’s or any Obligor’s financial condition or ability to repay.
8.10 Default under Related Documents. Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement or any such document is no longer in effect, or any guarantor purports to revoke or disavow the guaranty.
8.11 ERISA Plans. Any one or more of the following events occurs with respect to a Plan of the Borrower subject to Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank, to subject the Borrower to any tax, penalty or liability (or any combination of the foregoing) which, in the aggregate, could have a material adverse effect on the financial condition of the Borrower:
| (a) | A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan. |
| Standard Loan Agreement | 16 | Revised 2/2005 |
| (b) | Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by the Borrower or any ERISA Affiliate. |
8.12 Other Breach Under Agreement. A default occurs under any other term or condition of this Agreement not specifically referred to in this Article. This includes any failure or anticipated failure by the Borrower (or any other party named in the Covenants section) to comply with the financial covenants set forth in this Agreement, whether such failure is evidenced by financial statements delivered to the Bank or is otherwise known to the Borrower or the Bank.
| 9. | ENFORCING THIS AGREEMENT; MISCELLANEOUS |
9.1 GAAP. Except as otherwise stated in this Agreement, all financial information provided to the Bank and all financial covenants will be made under generally accepted accounting principles, consistently applied.
9.2 Massachusetts Law. This Agreement is governed by Massachusetts law.
9.3 Successors and Assigns. This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borrower agrees that it may not assign this Agreement without the Bank’s prior consent. The Bank may sell participations in or assign this loan, and may exchange information about the Borrower (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees. If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower.
9.4 Dispute Resolution Provision. This paragraph, including the subparagraphs below, is referred to as the “Dispute Resolution Provision.” This Dispute Resolution Provision is a material inducement for the parties entering into this agreement.
| (a) | This Dispute Resolution Provision concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or (ii) any document related to this agreement (collectively a “Claim”). For the purposes of this Dispute Resolution Provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this agreement. |
| (b) | At the request of any party to this agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”). The Act will apply even though this agreement provides that it is governed by the law of a specified state. |
| (c) | Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association or any successor thereof (“AAA”), and the terms of this Dispute Resolution Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision shall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any provision of this arbitration clause, the Bank may designate another arbitration organization with similar procedures to serve as the provider of arbitration. |
| (d) | The arbitration shall be administered by AAA and conducted, unless otherwise required by law, in any U.S. state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and have judgment entered and enforced. |
| (e) | The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitrable shall be determined by the arbitrator(s), except as set forth at subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement. |
| Standard Loan Agreement | 17 | Revised 2/2005 |
| (f) | This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies. |
| (g) | The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration. |
| (h) | Any arbitration or trial by a judge of any Claim will take place on an individual basis without resort to any form of class or representative action (the “Class Action Waiver”). Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to this Agreement acknowledge that the Class Action Waiver is material and essential to the arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties’ agreement to arbitrate shall be null and void with respect to such proceeding, subject to the right to appeal the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and agree that under no circumstances will a class action be arbitrated. |
| (i) | By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in any way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW. |
9.5 Severability; Waivers. If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in writing.
9.6 Attorneys’ Fees. The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by the Bank in connection with the enforcement or preservation of any rights or remedies under this Agreement and any other documents executed in connection with this Agreement, and in connection with any amendment, waiver, “workout” or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator. In the event that any case is commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys’ fees incurred by the Bank related to the preservation, protection, or enforcement of any rights of the Bank in such a case. As used in this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-house counsel.
9.7 One Agreement. This Agreement and any related security or other agreements required by this Agreement, collectively:
| (a) | represent the sum of the understandings and agreements between the Bank and the Borrower concerning this credit; |
| (b) | replace any prior oral or written agreements between the Bank and the Borrower concerning this credit; and |
| (c) | are intended by the Bank and the Borrower as the final, complete and exclusive statement of the terms agreed to by them. |
In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. Any reference in any related document to a “promissory note” or a “note” executed by the Borrower and dated as of the date of this Agreement shall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, or restated.
9.8 Indemnification. The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this Agreement or any document required hereunder, (b) any credit extended or committed by the Bank to the Borrower hereunder, and (c) any litigation or
| Standard Loan Agreement | 18 | Revised 2/2005 |
proceeding related to or arising out of this Agreement, any such document, or any such credit. This indemnity includes but is not limited to attorneys’ fees (including the allocated cost of in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns. This indemnity will survive repayment of the Borrower’s obligations to the Bank. All sums due to the Bank hereunder shall be obligations of the Borrower, due and payable immediately without demand.
9.9 Notices. Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.
9.10 Headings. Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.
9.11 Counterparts. This Agreement may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement.
9.12 Limitation of Interest and Other Charges. If, at any time, the rate of interest, together with all amounts which constitute interest and which are reserved, charged or taken by the Bank as compensation for fees, services or expenses incidental to the making, negotiating or collection of the loan evidenced hereby, shall be deemed by any competent court of law, governmental agency or tribunal to exceed the maximum rate of interest permitted to be charged by the Bank to the Borrower under applicable law, then, during such time as such rate of interest would be deemed excessive, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary prepayment of principal. As used herein, the term “applicable law” shall mean the law in effect as of the date hereof; provided, however, that in the event there is a change in the law which results in a higher permissible rate of interest, then this Agreement shall be governed by such new law as of its effective date.
9.13 Lien and Setoff. The Borrower hereby grants to the Bank a right of setoff as security for all of the Borrower’s liabilities and obligations to the Bank, whether now existing or hereafter arising, upon and against all the deposits, credits, collateral and property of the Borrower (other than clients’ trust and other fiduciary accounts or escrows) now or hereafter in the possession, custody, or control of the Bank or any entity under the control of Bank of America Corporation and its successors and assigns or in transit to any of them. At any time after an Event of Default, without further demand or notice (any such notice being expressly waived by the Borrower), the Bank may setoff the same or any part thereof and apply the same to any liability or obligation of the Borrower even though unmatured and regardless of the adequacy of any other collateral securing the loan evidenced hereby.
9.14 Termination. The Borrower may, upon notice to the Bank, terminate the Line of Credit, or from time to time permanently reduce the Line of Credit; provided that (i) any such notice shall be received by the Bank five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall not terminate or reduce the Line of Credit if, after giving effect thereto and to any concurrent prepayments hereunder, the outstanding balance would exceed the Facility No. 1 Commitment, All fees accrued until the effective date of any termination or reduction of the Line of Credit shall be paid on the effective date of such termination or reduction. This Agreement shall continue in full force and effect until all obligations to the Bank hereunder have been paid and/or satisfied in full.
| Standard Loan Agreement | 19 | Revised 2/2005 |
The Borrower executed this Agreement as of the date stated at the top of the first page, intending to create an instrument executed under seal.
| Borrower: | Bank: | |||||||
| BJ’s Restuarants, Inc. | Bank of America, N.A. | |||||||
| By: | (Seal) | By: | ||||||
| ______________, ______________ | ______________, ______________ | |||||||
| Xxxxxx Xxxxxxx Vice President | ||||||||
| Witness |
| Address where notices to BJ’s Restuarants, Inc. are to be sent: | Address where notices to the Bank are to be sent: | |
| Xxxx Xxxxx Chief Financial Officer BJ’s Restaurants, Inc. 0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxx Xxxxx, XX 00000 (p) 714- 500- 2440 (f) 714 -500- 2416 (e) xxxxxx@xxxxxxxxxxxxxx.xxx | Xxxxxx Xxxxxxx Bank of America, N.A. 000 Xxxxxxx Xxxxxx, XX0-000-00-00 Xxxxxx, XX 00000 (p) 000-000-0000 (f) 000-000-0000 (e) xxxxxx.x.xxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxxxx Xxxxxxx Bank of America, N.A. 000 Xxxxxxx Xxxxxx, XX0-000-00-00 Xxxxxx, XX 00000 (p) 000-000-0000 (f) 000-000-0000 (e) xxxxxxx.x.xxxxxxx@xxxxxxxxxxxxx.xxx |
Affiliate Sharing Notice. Notice to Individual Borrowers, Guarantors and Pledgors (“Obligors”): From time to time Bank of America, N.A. (the “Bank”) may share information about the Obligor’s experience with Bank of America Corporation (or any successor company) and its subsidiaries and affiliated companies (the “Affiliates”). The Bank may also share with the Affiliates credit-related information contained in any applications, from credit reports and information it may obtain about the Obligor from outside sources. If the Obligor is an individual, the Obligor may instruct the Bank not to share this information with the Affiliates. The Obligor can make this election by (1) calling the Bank at 0.000.000.0000, (2) visiting the Bank online at xxx.xxxxxxxxxxxxx.xxx, selecting “Privacy & Security,” and then selecting “Set Your Privacy Preferences,” or (3) contacting the Obligor’s client manager or local banking center. To help the Bank complete the Obligor’s request, the Obligor should include the Obligor’s name, address, phone number, account number(s) and social security number. If the Obligor makes this election, certain products or services may not be made available to the Obligor. This request will apply to information from applications, consumer reports and other outside sources only, and may take six to eight weeks to be fully effective. Through the normal course of doing business, including servicing the Obligor’s accounts and better serving the Obligor’s financial needs, the Bank will continue to share transaction and account experience information, as well as other general information among the Affiliates. The Bank may change this policy from time to time. Visit our website, xxx.xxxxxxxxxxxxx.xxx, for the latest policy.
USA Patriot Act Notice. Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for the Borrower’s legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or other related persons.
| Standard Loan Agreement | 20 | Revised 2/2005 |
SCHEDULE 1
UNION BANK LETTERS OF CREDIT
BJ’s Restaurants, Inc
Outstanding Letters of Credit
| Bank | Beneficiary | Amount | Expires | Policy Year | ||||
| Union Bank of California | Chubb | 100,000 | 10/31/07 | 11/02-10/03 | ||||
| Union Bank of California | Chubb | 310,000 | 10/31/07 | 11/03-10/04 | ||||
| Union Bank of California | Zurich | 1,260,000 | 10/31/07 | 11/04-10/06 | ||||
| Union Bank of California | Zurich | 600,000 | 01/08/08 | 11/06-10/07 | ||||
| 2,270,000 | ||||||||
