LOAN AGREEMENT
THIS AGREEMENT, made and entered into this 28th day of April, 2000, by
and between the INTRUST BANK, N.A. (herein referred to as "Bank"), and LONE STAR
STEAKHOUSE & SALOON, INC. (herein referred to as "Borrower").
WITNESSETH:
WHEREAS, Borrower is indebted to bank on a term note and has requested
that it be consolidated into a new credit facility; and
WHEREAS, Bank has agreed to provide such credit facility under certain
terms and conditions.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties agree as follows:
ARTICLE I - NOTE
Section 1.1. REVOLVING CREDIT FACILITY. Bank agrees to establish a
revolving credit facility of $20,000,000 (the "Facility") in favor of Borrower
evidenced by a promissory note (the "Facility Note"), a copy of which is
attached hereto, which shall mature on April 10, 2005. A fee of one-quarter
(1/4) of one percent will be charged to Borrower on the amount of the unused
portion of the Facility. Such fee is calculated daily and billed on the last day
of each calendar quarter.
Section 1.2. TERMS OF PAYMENT ON CREDIT FACILITIES. Interest on the
Facility Note, or any advance thereunder, shall be adjusted daily to the Prime
Rate as published in the Money Rates section of the Wall Street Journal. Accrued
interest shall be due on the 10th day of each month commencing May 10, 2000,
until April 10, 2003, at which time the then balance of the Facility will
convert to a term note with monthly principal and interest payments amortized
over the remaining term.
Section 1.3. LIMITATIONS ON CREDIT FACILITIES. Borrower may borrow,
partially or wholly repay its borrowings, and re-borrow, by requesting advances
from the Facility; so long as:
(a) The Facility balance, including all principal and accrued interest,
does not exceed the amount of the Facility at any one time;
(b) None of the terms and conditions of this Agreement are in default
and Bank has not determined that there has been a material adverse change in the
financial condition of Borrower; and
(c) Borrower is not in default under any loan or any other financial
obligation, or any other agreement.
Section 1.4. USE OF PROCEEDS. The proceeds from the Facility shall be
used primarily to fund Borrower's repurchase of its common stock, to consolidate
the existing term note into the Facility, and general corporate purposes.
Section 1.5. SECURITY. The Facility is unsecured.
Section 1.6. RENEWALS AND EXTENSIONS. Any renewal or extension of the
Facility Note, or any advance made pursuant to the terms of such note, or any
other indebtedness which Borrower may have with Bank in the future, shall be
subject to the terms of this Agreement. Bank is under no obligation to renew any
indebtedness when it matures.
Section 1.7. INDEBTEDNESS. Where the term "indebtedness" is used in
this Agreement, it shall include all debt of Borrower to Bank of every kind and
description, direct or indirect, primary or secondary, secured or unsecured
(including overdrafts), joint and several, absolute or contingent, due or to
become due, now existing or hereafter arising, regardless of how it may be
evidenced.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants, and so long as any
indebtedness from Borrower to the Bank remains outstanding, continuously
represents and warrants as follows:
Section 2.1. LEGAL STATUS. Borrower is a corporation duly organized and
existing under the laws of the State of Delaware, and is qualified to do
business, and is in good standing, in all jurisdictions in which it conducts its
business.
Section 2.2. NO VIOLATION. The making and performance by Borrower of
this Agreement does not violate any provision of law, or result in a breach of,
or constitute a default under, Borrower's articles of incorporation and bylaws,
or any Loan Documents, agreement, indenture or other instrument to which
Borrower may be a party or by which it may be bound.
Section 2.3. LITIGATION. There are no pending or threatened actions or
proceedings before any court or administrative agency against Borrower which may
adversely affect the financial condition or operation of Borrower other than
those heretofore disclosed to Bank in writing.
Section 2.4. CORRECTNESS OF FINANCIAL STATEMENTS. The financial
statements heretofore and hereafter delivered by Borrower to Bank present fairly
the financial condition of Borrower, and have been prepared in accordance with
generally accepted accounting principles consistently applied. As of the date of
each such financial statement, and since such date, there has been no material
adverse change in the condition or operation of Borrower, nor has Borrower
mortgaged, pledged or granted a security interest in, or encumbered, any assets
or properties since such date.
Section 2.5. AUTHORIZATION. The Loan Documents have been duly
authorized, executed and delivered by Borrower and are the legal, valid and
binding obligations of Borrower, enforceable in accordance with their respective
terms. As used in this Loan Agreement, "Loan Documents" shall mean and refer to
this Loan Agreement, all Notes and other documents and agreements required to be
executed herein, and as any of them may be extended, renewed, amended or
supplemented from time to time.
Section 2.6. NO SUBORDINATION. The obligations of Borrower under this
Agreement, are not subordinated in right of payment or in lien priority to any
obligation of Borrower.
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Section 2.7. PERMITS, FRANCHISES. The Borrower now possesses, and will
hereafter possess, all permits, memberships, franchises, contracts, and licenses
required and all trademark rights, trade names, trade name rights, patents,
patent rights, and fictitious name rights necessary to enable it to conduct its
business without conflict with the rights of others.
ARTICLE III - CONDITIONS PRECEDENT
The obligation of Bank to make any advance under any Note, is subject
to the fulfillment of the following conditions:
Section 3.1. APPROVAL OF BANK COUNSEL. All legal matters incidental to
all such advances hereunder shall be satisfactory to legal counsel of Bank.
Section 3.2. COMPLIANCE. The representations and warranties contained
herein shall be true as of the date of the signing of this Agreement and on the
date of any advance, no Event of Default, as defined in Article VI herein, and
no condition, event or act which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default, shall have occurred.
Section 3.3. DOCUMENTATION. Borrower shall have delivered to Bank in
form and substance satisfactory to Bank the following described documents:
(a) This Agreement and other Loan Documents duly executed by Borrower;
(b) Certified copy of Corporate Resolution of Borrower ratifying this
Agreement and authorizing the execution of the Loan Documents; and
(c) Such other documentation as the Bank may reasonably require.
ARTICLE IV - AFFIRMATIVE COVENANTS
Borrower covenants that so long as Borrower is indebted to Bank under
this Agreement, Borrower will:
Section 4.1. PUNCTUAL PAYMENT. Punctually pay to Bank all payments
required to be made under this Loan Agreement and any Note.
Section 4.2. ACCOUNTING RECORDS. Maintain adequate books and accounts
in accordance with generally accepted accounting principles consistently
applied, so that any time, and from time to time, the true and complete
financial condition of Borrower is fairly presented and can be readily
determined, and permit any representative of Bank at any reasonable time, to
inspect, audit and examine such books and accounts of Borrower and permit Bank
to make and obtain copies of any such books and accounts, and to permit any
representative of Bank to inspect the properties of Borrower.
Section 4.3. FINANCIAL STATEMENTS: Furnish Bank:
(a) Not later than 120 days after, and as of the end of each calendar
year, an audited financial
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statement of Borrower to include balance sheet and income statement;
(b) Not later than 45 days after the end of each month, a balance sheet
and statement of income of Borrower in a form satisfactory to Bank, certified
correct by an officer of Borrower;
(c) Not later than 10 days after the end of each month, a summary of
the number of Borrower's shares repurchased the previous month and the average
cost per share of such repurchased shares, certified correct by an officer of
Borrower; and:
(d) From time to time such other information as Bank may reasonably
request.
Section 4.4. NOTICE TO ACCOUNTANTS. Notify Borrower's accountants in
writing that Bank intends to rely upon financial information prepared by such
accountants in behalf of Borrower in determining whether to make any extension
of credit covered by this Loan Agreement, including any advance, renewal or
extension thereto.
Section 4.5. EXISTENCE. Preserve and maintain the existence and all of
the rights, privileges and franchises of Borrower; conduct all business in an
orderly, efficient, and regular manner; and comply with the requirements of all
applicable laws, rules, regulations and orders of a governmental authority.
Section 4.6. INSURANCE. Maintain and keep in force insurance of the
types and in amounts customarily carried in the line of business similar to that
of Borrower, including fire, public liability, property damage, workers'
compensation, and carried with companies and in amounts satisfactory to Bank;
and Borrower shall deliver to Bank from time to time, at Bank's request,
schedules setting forth all insurance then in effect. Borrower shall maintain
and keep in force product liability insurance in such amounts deemed adequate
and economically feasible by the parties.
Section 4.7. FACILITIES. Keep all Borrower's properties in good repair
and condition, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained. Borrower shall promptly satisfy any and all mechanic's
or materialmen's liens filed on any of its facilities.
Section 4.8. TAXES AND OTHER LIABILITIES. Pay and discharge when due
any and all indebtedness, obligations, assessments, and taxes of Borrower,
except such as it may in good faith contest or as to which a bona fide dispute
may arise.
Section 4.9. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower.
Section 4.10. NOTICE TO BANK. Promptly give notice in writing to Bank
of (a) the occurrence of any Event of Default, as defined in Article VI; (b) any
change in the name, identity or corporate structure of Borrower; or (c) any
uninsured or partially uninsured loss through fire, theft, liability or property
damage in excess of an aggregate of $100,000 to Borrower.
Section 4.11. FINANCIAL CONDITIONS. Maintain a minimum level of cash
and cash-equivalents, as determined by generally accepted accounting principles,
of $10,000,000.
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Section 4.12. PAYMENT OF COSTS AND EXPENSES. Borrower agrees to pay to
Bank, on demand, all reasonable and necessary costs and expenses as provided in
this Agreement and the other Loan Documents, and all costs and expenses
reasonably and necessarily incurred by Bank from time to time in connection with
this Agreement and the other Loan Documents, including, without limitation,
those reasonably and necessarily incurred in:
(a) preparing, negotiating, amending, waiving or granting consent with
respect to the terms of any or all of the Loan Documents;
(b) enforcing the Loan Documents;
(c) performing any of Borrower's duties under the Loan Documents upon
Borrower's failure to perform them;
(d) compromising, pursuing, or defending any controversy, action or
proceeding resulting, directly or indirectly, from Bank's relationship with
Borrower, regardless of whether Borrower is a party to such controversy, action
or proceeding and whether the controversy, action or proceeding occurs before or
after all indebtedness owing to Bank by Borrower has been paid in full;
provided, however, that Borrower shall not be liable to Bank for costs and
expenses resulting from the gross negligence or the willful misconduct of Bank
in connection therewith; and
(e) enforcing or collecting any part of the
indebtedness owing to Bank by Borrower contemplated under the Loan Documents;
Any amount due to Bank pursuant to this Section shall, if not paid upon demand,
accrue interest at the per annum rate of seven (7) percentage points over Bank's
base rate as adjusted from time to time.
ARTICLE V - NEGATIVE COVENANTS
Borrower covenants that so long as Borrower is indebted to Bank,
Borrower will not, without prior written consent of Bank:
Section 5.1. OTHER INDEBTEDNESS. Except as to indebtedness owed Bank,
create, incur, or permit to exist any liabilities resulting from borrowings,
loans or advances, whether secured or unsecured, or any liens, mortgages or
other encumbrances, other than indebtedness outstanding as of the date of this
Agreement. Nothing in this Section shall prevent Borrower from incurring
obligations in the ordinary course of business.
Section 5.2. MERGER, CONSOLIDATION, SALE OF ASSETS, MANAGEMENT CHANGE.
Merge into or consolidate with any corporation or other entity, or acquire all
or substantially all of the assets of any other corporation or entity; or sell,
lease, assign, transfer or otherwise dispose of all or substantially all of its
operating assets, or materially change or remove senior management.
Section 5.3. GUARANTEES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments in the
ordinary course of business) or accommodation for the debt or
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obligations of any person or entity.
Section 5.4. NEGATIVE PLEDGE. Pledge, assign, mortgage, transfer or
grant any security interest in any asset of Borrower.
ARTICLE VI - EVENTS OF DEFAULT
Section 6.1. EVENTS OF DEFAULT. Any of the following shall constitute
an Event of Default.
(a) Default by Borrower in any payment of principal or interest under
any indebtedness to Bank or any sum due in this Agreement; or
(b) Any representation or warranty made by Borrower hereunder which
shall prove to be at any time incorrect in any material respect; or
(c) Default by Borrower in the performance of any other term, covenant
or agreement contained herein, which default is not cured within 20 days from
its occurrence; or
(d) Default by Borrower under the terms of any agreement, note or other
instrument and such default having not been cured within 30 days; provided,
however, that if Borrower defaults in its performance under any other agreement,
note, or instrument and such default causes Borrower's obligations to be
immediately due and payable, then Bank, in its sole discretion, may immediately
exercise its rights under Section 6.2 herein; or
(e) The failure of Borrower to promptly pay and discharge any judgment,
levy of attachment, execution or other process against the assets of Borrower
and such judgment be not satisfied, or such levy or other process be not
removed, within 10 days after the entry of levy thereof; or
(f) Borrower shall be adjudicated a bankrupt or insolvent, or shall
consent to or apply for the appointment of a receiver, trustee or liquidator of
itself or any of its property, or shall admit in writing its inability to pay
its debts generally as they become due, or shall make a general assignment for
the benefit of creditors, or shall file a voluntary petition in bankruptcy or
voluntary petition or an answer seeking reorganization or arrangement in a
proceeding under any bankruptcy law; or
(g) There shall have occurred a material adverse change, as reasonably
determined by Bank, in the financial condition or results in operations of the
Borrower since the date of this Agreement including, but not limited to, a
change in ownership or management of Borrower; or
(h) An Event of Default (as defined in the other Loan Documents) occurs
in any of the other Loan Documents.
Section 6.2. ACCELERATION. If an Event of Default shall occur, any
indebtedness of Borrower under this Agreement or any Note, any term of such Note
to the contrary notwithstanding, shall, at Bank's option and without notice
become immediately due and payable without presentment, notice or demand, all of
which are hereby expressly waived by Borrower; and the obligation, if any, of
the Bank to permit further
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borrowings hereunder shall immediately cease and terminate.
ARTICLE VII - MISCELLANEOUS
Section 7.1. WAIVER. No delay or failure of Bank, in exercising any
right, power or privilege hereunder, shall affect such right, power or
privilege; nor shall any single or partial exercise thereof or any abandonment
or discontinuance of steps to enforce such a right, power or privilege
hereunder, shall affect such right, power or privilege. The rights and remedies
of Bank hereunder are cumulative and not exclusive. Any waiver, permit, consent
or approval of any kind to Bank, of any breach or default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in such writing.
Section 7.2. JURY WAIVER. Borrower expressly waives any right to a
trial by jury in any action or proceedings to enforce or defend any rights
hereunder or under any amendment, instrument, document or agreement delivered,
or which may hereafter be delivered, to Borrower.
Section 7.3. NOTICES. All notices, requests and demands given to or
made upon the respective parties shall be deemed to have been given or made when
deposited in the mail, postage prepaid, and addressed as follows:
Borrower: Xxxxx Xxxxxx, CFO
000 X. Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
And copy to:
Xxxxx X. Xxxxxxx, Chairman & CEO
000 X. Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Bank: INTRUST Bank, N.A.
P.O. Box One
Attn: First Centre Dept.
Xxxxxxx, XX 00000
Section 7.4. WRITTEN AGREEMENTS. THIS LOAN AGREEMENT, TOGETHER WITH
OTHER WRITTEN AGREEMENTS OF THE PARTIES, IS THE FINAL EXPRESSION OF THE
AGREEMENT BETWEEN THE BANK AND THE BORROWER, AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES. ANY
NON-STANDARD TERM MUST BE WRITTEN BELOW TO BE ENFORCEABLE.
BY SIGNING BELOW THE PARTIES AFFIRM THERE ARE NO UNWRITTEN AGREEMENTS
BETWEEN THEM.
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"BANK" "BORROWER"
INTRUST Bank, N.A. Lone Star Steakhouse & Saloon, Inc.
By ________________________________ By ______________________________
Xxxx Xxxxxxx, Vice President Xxxx X.. White, Executive Vice
President
By ______________________________
Xxxxxxx X. Xxxxxx, Chief
Financial Officer
Section 7.5. KANSAS LAW APPLICABLE. This Agreement shall be construed
in accordance with the laws of the State of Kansas, without regard to principles
of conflicts of laws, and applicable federal law. Borrower expressly agrees that
jurisdiction and venue for all legal proceedings filed in connection herewith
shall lie exclusively in Sedgwick County, Kansas.
Section 7.6. OTHER LOAN DOCUMENTS. Borrower understands and agrees that
it is additionally bound by the terms and conditions of the other Loan
Documents, which such terms and conditions are incorporated herein and made a
part of this Agreement. To the extent that any term or provision contained in
other Loan Documents conflicts with a term or provision of this Agreement, the
term or provision providing the Bank the most security or the greatest right
shall control.
Section 7.7. BINDING EFFECT. The rights and obligations of the parties
under this Agreement shall inure to the benefit of, and shall be binding upon
their successors and assigns.
Section 7.8. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
first above written.
"BANK" "BORROWER"
INTRUST Bank, N.A. Lone Star Steakhouse & Saloon, Inc.
By ________________________________ By ______________________________
Xxxx Xxxxxxx, Vice President Xxxx X.. White, Executive Vice
President
By ______________________________
Xxxxxxx X. Xxxxxx, Chief
Financial Officer
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