Exhibit 10.1 - Discretionary Line of Credit Note
$10,000,000.00 As of June 30, 1997
FOR VALUE RECEIVED, PAPA ▇▇▇▇'S INTERNATIONAL, INC. (the "Borrower"), with an
address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, promises to pay
to the order of PNC BANK, KENTUCKY, INC. (the "Bank"), in lawful money of the
United States of America in immediately available funds at its offices located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
location as the Bank may designate from time to time, the principal sum of TEN
MILLION DOLLARS ($10,000,000.00) (the "Facility") or such lesser amount as may
be advanced to or for the benefit of the Borrower hereunder, together with
interest accruing on the outstanding principal balance from the date hereof, as
provided below:
1. Rate of Interest. Each advance outstanding under this Note will bear
interest at a rate per annum determined in the Bank's sole discretion, as
offered by the Bank to the Borrower as the rate at which the Bank would advance
funds to the Borrower in the principal amount requested for the interest period
requested, each as agreed upon in writing between the Borrower and the Bank.
Interest will be calculated on the basis of a year of 360 days for the
actual number of days in each interest period. In no event will the rate of
interest hereunder exceed the maximum rate allowed by law.
2. Discretionary Advances. This is not a committed line of credit and
advances under this Note, if any, shall be made by the Bank in its sole
discretion. Nothing contained in this Note or any other Loan Documents shall be
construed to obligate the Bank to make any advances. The Bank shall have the
right to refuse to make any advances at any time without prior notice to the
Borrower.
The Borrower may request advances, repay and request additional
advances hereunder, subject to the terms and conditions of this Note and the
Loan Documents (as defined herein). In no event shall the aggregate unpaid
principal amount of advances under this Note exceed the face amount of this
Note.
3. Payment Terms. The principal amount of each advance shall be due and
payable on the earlier of (i) the last day of the applicable interest period for
such advance or (ii) the Expiration Date (as defined in the Loan Documents).
Interest shall be due and payable at the times set forth in the Loan Documents,
and no less frequently than quarterly.
If any payment under this Note shall become due on a Saturday, Sunday
or public holiday under the laws of the State where the Bank's office indicated
above is located, such payment shall be made on the next succeeding business day
and such extension of time
shall be included in computing interest in connection with such payment. The
Borrower hereby authorizes the Bank to charge the Borrower's deposit account at
the Bank for any payment when due hereunder. Payments received will be applied
to charges, fees and expenses (including attorneys' fees), accrued interest and
principal in any order the Bank may choose, in its sole discretion.
4. Default Rate. If any advance or other amount is not paid when due, the
Borrower shall pay interest on such amount until it is paid in full at a rate
per annum (based on a year of 360 days and actual days elapsed) (the "Default
Rate") equal to two hundred (200) basis points (2%) above the Prime Rate but not
more than the maximum rate allowed by law. As used herein, "Prime Rate" shall
mean the rate publicly announced by the Bank from time to time as its prime
rate. The Prime Rate is determined from time to time by the Bank as a means of
pricing some loans to its borrowers. The Prime Rate is not tied to any external
rate of interest or index, and does not necessarily reflect the lowest rate of
interest actually charged by the Bank to any particular class or category of
customers. If and when the Prime Rate changes, the rate of interest on this
Note will change automatically without notice to the Borrower, effective on the
date of any such change. The Default Rate shall continue to apply whether or
not judgment shall be entered on this Note.
5. Prepayment. The Borrower shall have the right to prepay at any time
and from time to time, in whole or in part, without penalty, any advance
hereunder which is accruing interest at a rate based upon a floating rate. If
the Borrower prepays all or any part of any advance which is accruing interest
at a fixed rate on other than the last day of the applicable interest period,
the Borrower shall also pay to the Bank, on demand therefor, the Cost of
Prepayment. "Cost of Prepayment" means an amount equal to the present value, if
positive, of the product of (a) the difference between (i) the yield, on the
beginning date of the applicable interest period, of a U.S. Treasury obligation
with a maturity similar to the applicable interest period minus (ii) the yield,
on the prepayment date, of a U.S. Treasury obligation with a maturity similar to
the remaining maturity of the applicable interest period, and (b) the principal
amount to be prepaid, and (c) the number of years, including fractional years
from the prepayment date to the end of the applicable interest period. The
yield on any U.S. Treasury obligation shall be determined by reference to
Federal Reserve Statistical Release H.15(519) "Selected Interest Rates". For
purposes of making present value calculations, the yield to maturity of a
similar maturity U.S. Treasury obligation on the prepayment date shall be deemed
the discount rate. The Cost of Prepayment shall also apply to any payments made
after acceleration of the maturity of this Note.
6. Other Loan Documents. This Note is issued pursuant to the letter
agreement dated as of June 30, 1997, and the other documents referred to
therein, the terms of which are incorporated herein by reference (the "Loan
Documents").
7. Advance Procedures. A request for advance made by telephone must be
promptly confirmed in writing by such method as the Bank may require. The
Borrower authorizes the Bank to accept telephonic requests for advances, and the
Bank shall be entitled to rely upon the authority of any person providing such
instructions. The Borrower hereby indemnifies and holds the Bank harmless from
and against any and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which may
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arise or be created by the acceptance of such telephone requests or making such
advances. The Bank will enter on its books and records, which entry when made
will be presumed correct, absent manifest error, the date and amount of each
advance, the interest rate and interest period applicable thereto, as well as
the date and amount of each payment made by the Borrower.
8. Yield Protection. The undersigned shall pay to the Bank, on written
demand therefor, together with the written evidence of the justification
therefor, all direct costs incurred, losses suffered or payments made by Bank by
reason of any change in law or regulation or its interpretation imposing any
reserve, deposit, allocation of capital, or similar requirement (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective
assets.
9. Events of Default. The occurrence of any of the following events will
be deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note when due; (ii) the
occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt, liability or obligation
to the Bank of any Obligor; (iii) the filing by or against any Obligor or any
Affiliate of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against any Obligor or any Affiliate,
such proceeding is not dismissed or stayed within thirty (30) days of the
commencement thereof); (iv) any assignment by any Obligor or any Affiliate for
the benefit of creditors, or any levy, garnishment, attachment or similar
proceeding is instituted against any property of any Obligor or any Affiliate
held by or deposited with the Bank; (v) a default with respect to any other
indebtedness of any Obligor or any Affiliate for borrowed money in excess of
$100,000.00, if the effect of such default is to cause or permit the
acceleration of such debt; (vi) the entry of a final judgment in excess of
$100,000.00 against any Obligor or any Affiliate and the failure of such Obligor
or any Affiliate to discharge the judgment within ten days of the entry thereof;
(vii) any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor or any Affiliate; (viii) the
revocation or attempted revocation, in whole or in part, of any guarantee by any
Guarantor; (ix) any representation or warranty made by any Obligor or any
Affiliate to the Bank in any document, including but not limited to the Loan
Documents is false, erroneous or misleading in any material respect; (x) the
failure of any Obligor or any Affiliate to observe or perform any covenant or
other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor or any
Affiliate to the Bank; and (xi) the occurrence of any event of default or
default and the lapse of any notice or cure period under any debt, liability or
obligation to the Bank of any Affiliate.
As used herein, the term "Obligor" means any Borrower and any
Guarantor, the term "Guarantor" means any guarantor of the obligations of the
Borrower to the Bank existing on the date of this Note or arising in the future,
and the term "Affiliate" means each of PJ Food Service, Inc. and PJFS of
Mississippi, Inc.
Upon the occurrence of an Event of Default: (a) the Bank shall
continue to have no obligation to make advances hereunder; (b) if an Event of
Default specified in clause (iii) or (iv) above shall occur, the outstanding
principal balance and accrued interest hereunder
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together with any additional amounts payable hereunder shall be immediately due
and payable without demand or notice of any kind; (c) if any other Event of
Default shall occur, the outstanding principal balance and accrued interest
hereunder together with any additional amounts payable hereunder, at the option
of the Bank and without demand or notice of any kind, may be accelerated and
become immediately due and payable; (d) at the option of the Bank, this Note
will bear interest at the Default Rate from the date of the occurrence of the
Event of Default; and (e) the Bank may exercise from time to time any of the
rights and remedies available to the Bank under the Loan Documents or under
applicable law.
10. Right of Setoff. In addition to all liens upon and rights of setoff
against the money, securities or other property of the Borrower given to the
Bank by law, the Bank shall have, with respect to the Borrower's obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of the Borrower's right, title and interest in and to, all deposits,
moneys, securities and other property of the Borrower now or hereafter in the
possession of or on deposit with, or in transit to, the Bank whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all IRA,
▇▇▇▇▇, and trust accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to the Borrower. Every such right of
setoff shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default hereunder without any action of the Bank, although the Bank
may enter such setoff on its books and records at a later time.
11. Miscellaneous. No delay or omission of the Bank to exercise any right
or power arising hereunder shall impair any such right or power or be considered
to be a waiver of any such right or power nor shall the Bank's action or
inaction impair any such right or power. The Borrower agrees to pay on demand,
to the extent permitted by law, all costs and expenses incurred by the Bank in
the enforcement of its rights in this Note and in any security therefor,
including without limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
The Borrower and all other makers and endorsers of this Note hereby
forever waive presentment, protest, notice of dishonor and notice of non-
payment. The Borrower also waives all defenses based on suretyship or
impairment of collateral.
If this Note is executed by more than one Borrower, the obligations of
such persons or entities hereunder will be joint and several. This Note shall
bind the Borrower and its heirs, executors, administrators, successors and
assigns, and the benefits hereof shall inure to the benefit of Bank and its
successors and assigns.
This Note has been delivered to and accepted by the Bank and will be
deemed to be made in the State where the Bank's office indicated above is
located. This Note will be interpreted and the rights and liabilities of the
Bank and the Borrower determined in accordance with the laws of the State where
the Bank's office indicated above is located, excluding its conflict of laws
rules. The Borrower
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hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court located for the county or judicial district where the Bank's
office indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the Borrower
at the Borrower's address set forth herein and service so made will be deemed to
be completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
12. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all
rights the Borrower may have to a trial by jury in any action, proceeding or
claim of any nature relating to this Note, any documents executed in connection
with this Note or any transaction contemplated in any of such documents. The
Borrower acknowledges that the foregoing waiver is knowing and voluntary.
The Borrower acknowledges that it has read and understood all the
provisions of this Note, including the waiver of jury trial, and has been
advised by counsel as necessary or appropriate.
WITNESS the due execution hereof as of the date first written above, with the
intent to be legally bound hereby.
PAPA ▇▇▇▇'S INTERNATIONAL, INC.
By /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Print Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Corporate Controller
WITNESS/ATTEST:
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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