SECOND AMENDED LOAN AGREEMENT
This Second Amended Loan Agreement, dated as of the 31st day
of January, 1997, is entered into by and among TACO CABANA, INC.,
a Delaware corporation, TEXAS TACO CABANA, L.P., T.P. ACQUISITION
CORP., T.C. MANAGEMENT, INC., TACO CABANA MANAGEMENT, INC.,
COLORADO CABANA, INC., AND TACO CABANA MULTISTATE, INC.
(collectively the "Borrower"), and INTERNATIONAL BANK OF
COMMERCE, a state banking association (the "Lender").
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
SECTION 1. THE LOANS.
1.1 Loan Commitment. Subject to the terms and conditions
hereof, the Lender agrees to lend and advance to Borrower, from
time to the time until April 15, 1999 (the "Loan Commitment
Period"), such sums as the Borrower may request, but which shall
not exceed, in the aggregate principal amount at any one time
outstanding, the amount of $15,000,000.00 ("Loan Commitment").
1.2 The Loans. Each borrowing under the Loan Commitment
shall be referred to herein as a "Loan", shall be deemed a
separate and independent loan and shall be evidenced and secured
as set forth below. Each Loan shall bear interest at the lesser
of (i) the maximum rate allowed by law, or (ii) the floating per
annum rate equal to the New York Prime Rate. The "New York Prime
Rate" shall mean the annual lending rate of interest announced
from time to time by the Chase Manhattan Bank, N.A., New York,
New York, as its prime rate; if a prime rate is not announced by
Chase Manhattan Bank, N.A., then the Loans shall bear interest at
the annual lending rate of interest announced from time to time
by Lender less one percent (1%) as its prime rate. Borrower
acknowledges that Lender makes no warranty or representation that
either of the prime rates charged by Chase Manhattan Bank, N.A.
or Lender is more favorable than another rate or index, or that
rates on other loans or credit facilities may not be based on
other indices, or that rates on loans to other may not be made
below such prime rate. Installments of principal and interest
under each Loan shall be payable quarterly and amortized under a
ten (10) year period, and have a term specified by Lender which
shall not exceed seven (7) years from the date of such Loan.
1.3 Commitment Fee. During the Loan Commitment Period,
Borrower agrees to pay to Lender a commitment fee computed at the
rate of one-quarter of one percent (0.25%) per annum on the daily
average unused amount of the Loan Commitment during each
Quarterly Cycle (as hereinafter defined). Such commitment fee
shall be payable quarterly, in arrears, on the last day of each
March, June, September and December during the Loan Commitment
Period, commencing March 30, 1997 and continuing in consecutive
quarterly payments thereafter until the date of expiration of the
Loan Commitment Period, on which date any accrued and unpaid fee
computed in accordance with the provisions of this Section shall
be due and payable. For purposes of this Section 1.4, the term
"Quarterly Cycle" shall refer to each calendar quarter during the
Loan Commitment Period.
1.4 Replaces Prior Commitment. This Second Amended Loan
Agreement replaces entirely that certain First Amended Loan
Agreement dated as of January 31, 1995 which governed the terms
of a $15,000,000.00 loan commitment from Lender to Taco Cabana,
Inc. ("Prior Commitment"). The Borrower and Lender acknowledge
that the Prior Commitment is null and void and of no further
force or effect.
1.5. Revolving Loan Agreement. The Borrower and Lender
have entered into a Revolving Loan Agreement of even date
herewith ("Revolving Loan Agreement"). The term "Revolving Loan
Documents" as used in this Second Amended Loan Agreement shall
have the meaning provided in Section 3.2 of the Revolving Loan
Agreement.
SECTION 2. SECURITY AND COLLATERAL.
2.1 Composition of the Collateral. The Loans shall be
secured primarily with first liens and security interests upon
those tracts of Borrower's real property which are agreed upon
between Borrower and Lender ("Security Tracts"), together with
the improvements, furniture, fixtures, equipment, accounts and
inventory located on, attributable to or used in connection with
the Security Tracts, as specifically set out in, and together
with such other mortgages, liens and security interests as set
out in the Loan Documents set forth in Section 3.2 below. The
security granted by the Loan Documents shall constitute
collateral for the indebtedness established by the Loans and as
otherwise established and set out in the Loan Documents
(cumulatively the "Secured Indebtedness"). All of the mortgages,
liens, security interests, and rights granted to Lender by the
Loan Documents shall secure any and all Secured Indebtedness.
Lender shall not be required to release any of the liens,
security interests, and rights granted or given to Lender by any
of the Loan Documents unless and until all of the Secured
Indebtedness has been paid in full. The Loan Documents shall
provide that a default under any Loan Document shall constitute a
default under the Loan Documents for all Loans.
2.2 Priority of Liens. The liens, security interests, and
rights granted to Lender to secure the Secured Indebtedness shall
be first and prior except for (i) liens for ad valorem taxes not
yet due or payable, and (ii) those matters expressly approved by
Lender, in advance and in writing, which approval Lender is under
no obligation to provide.
2.3 Perfection and Preservation of Liens. Borrower will
(i) execute and deliver to Lender from time to time at the
request of Lender such documents or instruments as Lender shall
deem necessary or appropriate, and will take such other and
further actions as Lender may from time to time request, in order
to perfect, continue, protect and preserve the liens, security
interests and rights granted to Lender by the Loan Documents; and
(ii) pay or reimburse the Lender for all costs and taxes of
filing or recording the same in such public offices as the Lender
may designate.
SECTION 3. CONDITIONS PRECEDENT.
The obligation of the Lender to make a Loan hereunder is
subject to the following conditions precedent:
3.1 Certain Events. The following conditions precedent
must be fully satisfied as of the date of any Loan:
a. No event of default under this Agreement or any
Loan Document, as defined below, shall have occurred, and no
event shall have occurred and be continuing that, with the giving
of notice or passage of time, or both, would be such an event of
default.
b. Lender shall have received an appraisal of the
fair market value of the real property and improvements thereon
to be granted as security for the Loan, in a form, and prepared
by an appraiser, approved by Lender, which indicates that the
amount of the proposed Loan is no greater than seventy-five
percent (75%) of the lesser of (i) the appraised fair market
value of such property, or (ii) the purchase price paid by
Borrower for such property.
3.2 Documents Required for the Closing. Prior to any
disbursement of any Loan (the "Closing"), the following documents
("Loan Documents") shall have been delivered to Lender, fully
executed and acknowledged where required and all in form and
substance acceptable to Lender:
a. This Agreement.
b. A Real Estate Lien (Promissory) Note ("Note").
c. A Security Agreement between Borrower and Lender,
granting to Lender a security interest in, among other property,
all of Borrower's right, title and interest, whether now or
hereafter acquired, in all accounts, inventory and equipment, and
all proceeds thereof, located on, attributable to or used in
connection with the Security Tracts.
d. A Deed of Trust, Assignment of Rents, Security
Agreement and Financing Statement from Borrower to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Trustee for the benefit of Lender, granting a first lien
upon the real property and improvements thereon to secure t he
respective Loan.
e. Financing statements as Lender shall deem
necessary to file from time to time in order to perfect and
preserve the security interests granted by the Loan Documents.
f. A Commitment and Policy for Mortgagee Title
Insurance issued by a title company acceptable to Lender and for
the aggregate amount of the respective Loan.
g. A survey of the real property and improvement
thereon prepared by a surveyor acceptable to Lender.
h. Engineering and other information evidencing the
absence of pollution or contamination on the property being
acquired and the suitability of such property for Borrower's
intended restaurant operation.
i. Tax Certificates evidencing that there are no ad
valorem taxes or assessments which are past due or payable.
j. Liability and casualty insurance coverage in an
amount and issued by carriers approved by Lender.
k. For the first Loan made hereunder, certified (as
of the date of Closing) copies of (i) resolutions of the
Borrower's board of directors (for each borrower which is a
corporation) or a consent of all general partners (for each
Borrower which is a partnership) authorizing the execution,
delivery, and performance of this Agreement and the Loan
Documents, and each other document to be delivered pursuant
hereto including a certification (dated the date of the Closing)
of the Borrower's secretary or its managing or general partner,
as the case may be, as to the incumbency and signatures of the
officers of the Borrower signing the Loan Documents, and each
other document to be delivered pursuant hereto; (ii) Borrower's
bylaws, or partnership agreement, including all amendments
thereto; (iii) Borrower's articles of incorporation, including
any and all amendments thereto; and (iv) certificates as to the
good standing of Borrower from applicable governmental
authorities. For each Loan after the first Loan, Borrower shall
deliver to Lender and the applicable title insurer (i) a current
written statement of the Borrower's corporate secretary or
managing partner, as the case may be, stating that each of the
documents listed in this Section 3.2(k) delivered in conjunction
with the first Loan remains valid, unamended and effective and
applicable to the particular Loan to be made (or, if such
statement cannot truthfully be given then a current written
statement of Borrower's corporate secretary stating the
particular reasons why such statement cannot be truthfully given,
together with any amended documents), and (ii) any of the
documents listed in this Section 3.2(k) which are required by the
title insurer for a particular Loan, in order to issue the
required mortgagee's title insurance policy.
l. Any and all other documents or instruments as may
be required by Lender.
m. Prior to the first Loan, and thereafter at the
request of Lender, a true and complete list of all legal actions,
claims, proceedings, investigations and notices thereof, against
or affecting Borrower.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Original. To induce the Lender to enter into this
Agreement, and to fund the Loans to be made hereunder, each
Borrower represents and warrants to the Lender as follows:
a. Borrower is a corporation or general partnership
or limited partnership, as applicable, duly organized, validly
existing, and in good standing under the laws of the state under
which it was organized; Borrower has the lawful power to own its
properties and to engage in the business it conducts, and is duly
qualified and in good standing as a foreign corporation or
foreign partnership in the jurisdictions wherein the nature of
the business transacted by it or property owned by it makes such
qualification necessary.
b. Borrower is not in default with respect to any of
its existing indebtedness, and the making and performance of the
Loan Documents will not immediately or with the passage of time,
or the giving of notice, or both: (i) Violate the charter or
bylaw or partnership provisions of Borrower; or (ii) Violate any
Laws or result in a default under any contract, agreement, or
instrument to which Borrower is a party or by which Borrower or
its property is bound.
c. Borrower has the power and authority to enter into
and perform each of the Loan Documents to which it is a party,
and to incur the obligations herein and therein provided for, and
has taken all corporate or partnership action necessary to
authorize the execution, delivery, and performance of this
Agreement and such other Loan Documents.
d. The Loan Documents are, and the Note when
delivered will be, valid, binding, and enforceable in accordance
with their respective terms.
e. There is no pending order, notice, claim,
litigation, proceeding, or investigation against or affecting
Borrower, whether or not covered by insurance, that would
materially and adversely affect the business of Borrower if
adversely determined.
f. All financial information given to Lender,
including any schedules and notes pertaining thereto, have been
prepared in accordance with generally accepted accounting
principles consistently applied, and fully and fairly present the
financial condition of Borrower at the dates thereof and the
results of operations for the periods covered thereby, and there
have been no material adverse changes in the consolidated
financial condition or business of Borrower set forth therein, to
the date hereof.
g. Except as otherwise permitted herein, Borrower has
filed and paid all federal, state, and local tax returns and
other required reports and all taxes, assessments, and other
governmental charges that are due and payable prior to the date
hereof.
h. Except to the extent that the failure to comply
would not materially interfere with the conduct of the business
of the Borrower, Borrower has complied, and shall comply, with
all applicable laws and regulations.
i. No representation or warranty by the Borrower
contained herein or in any Loan Document or certificate or other
document furnished by the Borrower contains any untrue or
misleading statement of material fact or omits to state a
material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was
made.
j. Each consent, approval or authorization of, or
filing, registration, or qualification required to be obtained by
Borrower in connection with the execution and delivery of this
Agreement, the Loan Documents, or the undertaking or performance
of any obligation hereunder or thereunder, has been duly
obtained.
4.2 Survival. All of the representations and warranties
set forth in Section 4.1 shall survive until all Secured
Indebtedness is satisfied in full.
SECTION 5. COVENANTS OF BORROWER.
Borrower does hereby covenant and agree with the Lender
that, so long as any of the Secured Indebtedness remains unpaid,
Borrower will comply with the following covenants:
5.1 Affirmative Covenants.
a. Taco Cabana, Inc. will furnish to Lender within
one hundred twenty (120) days after the close of each fiscal year
(or, in the event an extension of the deadline for filing such
information with the Securities and Exchange Commission ("SEC")
is required or authorized by the SEC, then within one hundred
eighty (180) days after the close of each fiscal year), for such
fiscal year, the following independently audited and prepared
financial information for itself and its subsidiaries prepared on
a consolidated basis: (i) a statement of stockholders' or
partners' equity and a statement of changes of cash flows; ; (ii)
income statements; and (iii) balance sheets; , all in reasonable
detail, including all supporting schedules and comments, and
certified by an independent certified public accountant auditor,
approved by Lender, to have been prepared in accordance with
generally accepted accounting principles consistently applied.
b. Taco Cabana, Inc. will furnish to Lender within
fifty (50) days after the close of each quarterly accounting
period in each fiscal year of each Borrower and its subsidiaries,
for such quarter, prepared on a consolidated basis: (i) a
statement of stockholders' or partners' equity and a statement of
changes in financial position; (ii) income statements; and (iii)
balance sheets as of the end of such quarterly period, all in
reasonable detail, subject to year-end audit adjustments, and
certified by Taco Cabana Inc.'s secretary to have been prepared
in accordance with generally accepted accounting principles
consistently applied.
c. Borrower will furnish to Lender such other
financial statements or reports as Lender may reasonably and
periodically require, including without limitation balance sheets
and income statements for each Borrower on an individual basis.
d. Borrower will maintain its inventory, equipment,
real estate, and other properties in good condition and repair
(normal wear and tear excepted); will pay and discharge, or cause
to be paid and discharged when due, the cost of repairs to or
maintenance of the same; and will pay or cause to be paid all
rental or mortgage payments due on such real estate. The
Borrower hereby agrees that, in the event Borrower fails to pay
or cause to be paid any such payment, the Lender may do so and on
demand be reimbursed therefor by the Borrower.
e. In addition to any requirements in the Loan
Documents, Borrower will maintain, or cause to be maintained,
public liability insurance and fire and extended coverage
insurance on all assets owned by them, all in such form and
amounts, and with such insurers, as are reasonably satisfactory
to Lender. Such policies shall contain a provision whereby they
cannot be canceled except after thirty (30) days' written notice
to the Lender, and shall name Lender as an additional insured.
Borrower will furnish to the Lender such evidence of insurance as
the Lender may require. Borrower hereby agrees that, in the
event it or any Borrower fails to pay or cause to be paid the
premium on any such insurance, the Lender may do so and on demand
be reimbursed therefor by the Borrower.
f. Borrower will pay or cause to be paid when due all
taxes, assessments or fees imposed upon it or on any of its
property or that it is required to withhold and pay over, except
when, prior to impending foreclosure such taxes, assessments or
fees are contested in good faith by appropriate proceedings, with
adequate reserves therefor having been set aside on its books.
g. Borrower will, when requested so to do, make
available for inspection by duly authorized representatives of
the Lender any of their books and records, and will furnish the
Lender any information regarding their business affairs and
financial condition within a reasonable time after written
request therefor.
h. Borrower will take all necessary steps to preserve
its corporate or partnership existence and franchises and will
comply with all present and future Laws applicable to them in the
operation of their respective businesses and all material
agreements to which they are subject.
i. Within ten (10) days after the Lender's request
therefor, Borrower will furnish the Lender with copies of federal
income tax returns filed by the Borrower.
j. Borrower will pay when due (or within applicable
grace periods) all indebtedness due third parties. If any
Borrower defaults in the payment of any principal (or installment
thereof) of, or interest on, any such indebtedness, the Lender
shall have the right, but not the obligation, to pay such
interest or principal for the account of Borrower and be
reimbursed by Borrower therefor on demand.
k. The Borrower will notify the Lender immediately if
it becomes aware of the occurrence of any Event of Default, as
defined below, or of any fact, condition, or event that, with the
giving of notice or passage of time, or both, could become an
Event of Default hereunder, or of the failure of Borrower to
observe any of its undertakings hereunder.
l. The Tangible Net Worth of Borrower (as defined)
shall at all times equal or exceed 90% of Tangible Net Worth as
determined for the purposes of Section 5.2(a).
m. All cash, cash equivalents and funds derived from
operations of the Borrower shall be the property of the Borrower
at the close of each business day, unless such cash, cash
equivalents and funds are utilized by other entities for the
payment of obligations in compliance with applicable law. This
provision is not intended to restrict Borrower's use of fund or
usual and regular course of business.
n. Borrower will maintain Quarterly Cash Flow (as
defined) in an amount equal to, or in excess of, $2,750,000.00.
5.2 Negative Covenants.
a. For so long as any indebtedness under the Loans
remains outstanding, Borrower shall not without the prior written
consent of the holder of the Note:
(1) Permit the ratio of Consolidated Cash Flow to
Consolidated Fixed Charges for any period consisting of four (4)
consecutive fiscal quarters to be less than 2.0:1.0;
(2) Permit Consolidated Net Worth at any time to
be less than (i) $110,000,000.00 through December 31, 1997; and
(ii) $110,000,000.00 plus fifty percent (50%) of the consolidated
net income of Borrower and its Subsidiaries (as of December 31,
1997) thereafter.
(3) Permit the ratio of Debt to Tangible Net
Worth to be greater than 0.5:1.0 at any time; or
(4) Permit the ratio of Intangible Assets to
Consolidated Net Worth to be greater than 0.55:1.0 at any time;
or
(5) Incur capital expenditures: ; (i) in excess
of $20,000,000.00 during the 1997 fiscal year of Borrower; or
(ii) in excess of $40,000,000.00 during the 1998 fiscal year of
Borrower.
For purposes of this subsection 5.2(a), the following terms
shall have the following meanings:
"Consolidated Cash Flow" for any period shall mean the
consolidated net income of the Borrower and all Subsidiaries for
such period (after having taken into account the effects of
income tax), plus (without duplication) interest expense,
depreciation, amortization and all other non-cash charges, all as
determined in accordance with generally accepted accounting
principles consistently applied.
"Consolidated Fixed Charges" for any period shall mean (i)
consolidated interest expense, and obligations under capitalized
leases for such period, plus (ii) matured debt and any additional
debt maturing within one year of the date of determination, plus
(iii) dividends and distributions to partners in respect of their
partnership interest, for the Borrower and all Subsidiaries, all
as determined in accordance with generally accepted accounting
principles consistently applied.
"Consolidated Net Worth" shall mean consolidated
shareholders' or partners' equity of the Borrower and all
Subsidiaries as determined in accordance with generally accepted
accounting principles consistently applied.
"Debt" means, with respect to the Borrower and its
Subsidiaries, on a consolidated basis, (i) indebtedness for
borrowed money or for the deferred purchase price of property or
services, (ii) obligations as lessee under leases which shall
have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, (iii)
obligations under direct or indirect guaranties in respect of and
obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds
referred to in clause (i) or (ii) above, and (iv) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of the Employee Retirement Income Security Act of 1974, as
amended.
"Intangible Assets" means, with respect to the Borrower and
its Subsidiaries, on a consolidated basis, goodwill,
organizational expenses, trademarks, tradenames, and any other
items which are treated as intangibles in conformity with
generally accepted accounting principles consistently applied.
"Quarterly Cash Flow" shall mean for any fiscal quarter of
Borrower the consolidated net income of Borrower and its
Subsidiaries for such period (after having taken into account the
effects of income tax) plus (without duplication) interest
expense, depreciation, amortization and all other non-cash
charges, all as determined in accordance with generally accepted
accounting principles consistently applied.
"Subsidiaries" means all corporations or partnerships of
which at least 99% of the partnership interests, or of the shares
of stock of every class of which, outstanding at the time as of
which any determination is being made, is owned by the Borrower,
either directly or through a Subsidiary. "Subsidiary" means each
of the Subsidiaries.
"Tangible Net Worth" means, with respect to the Borrower and
its Subsidiaries, on a consolidated basis, Consolidated Net Worth
less the value of any intangible assets as determined in
accordance with generally accepted accounting principles
consistently applied.
b. No Borrower shall change its name, enter into any
merger, consolidation, reorganizations or recapitalization, or
reclassify its capital stock without the prior written consent of
Lender, which consent shall not be unreasonably withheld, except
that Borrower shall be permitted to purchase common stock of
Borrower in an aggregate amount not to exceed $3,000,000.00
during the term of this Agreement.
c. No Borrower shall sell, transfer, lease, or
otherwise dispose of all, or (except in the ordinary course of
business) any material part of, its assets, without the prior
written consent of Lender, which consent shall not be
unreasonably withheld.
d. No Borrower shall mortgage, pledge, grant, or
permit to exist a security interest in or lien upon any of the
security given for the Loans, other than pursuant to the Loan
Documents and Revolving Loan Documents and statutory liens in the
ordinary course of its business.
e. Borrower shall not furnish the Lender with any
certificate or other document that will contain any untrue
statement of material fact or that will omit to state a material
fact necessary to make it not misleading in light of the
circumstances under which it was furnished.
f. No Borrower shall transfer, alienate, sell,
assign, or encumber any of its capital stock or partnership
interests in any Subsidiary.
g. No Borrower shall incur, create, assume, or permit
any indebtedness other than (i) under the Revolving Loan
Documents and the Loan Documents; (ii) obligations under leases
for real or personal property used in Borrower's business; (iii)
loans between Borrowers; (iv) loans between Borrowers and
nonborrower Subsidiaries not exceeding the aggregate principal
amount of $100,000.00 without the consent of the Lender, which
consent shall not be unreasonably withheld; (v) normal accruals
and trade accounts payable incurred in the ordinary course of
business; or otherwise become liable, directly or indirectly, as
guarantor or otherwise for any obligation (other than the
endorsement of commercial paper for deposit or collection in the
ordinary course of business and guaranties of affiliate
transactions made in the ordinary course of business).
h. Borrower shall not make any loans or advances to
any officer, shareholder, director, or employee of Borrower or of
any Subsidiary which, at ant time, exceed the outstanding
aggregate principal amount of $300,000.00.
SECTION 6. DEFAULT.
6.1 Events of Default. The occurrence of any one or more
of the following events shall constitute an Event of Default
hereunder:
a. Any installment of principal and/or interest on
the Loans or any other sums due by Borrower under the Loan
Documents shall not be paid when due and payable.
b. Any Borrower shall breach any of the affirmative
or negative covenants contained herein and the breach is not
cured within five days of the receipt of written notice of the
breach from the Lender to the Borrower.
c. Any Borrower shall fail to perform, keep or
otherwise observe any other obligation, term, provision,
covenant, warranty or representation contained herein or in any
of the Loan Documents and such failure is not cured within five
days of the receipt of written notice of the breach from the
Lender to the Borrower.
d. Any financial statement or report, representation,
warranty, or certificate made or furnished by any Borrower to the
Lender hereunder or in connection with this Agreement, any Loan
or any Loan Documents, or in any separate statement or document
to be delivered under the Loan Documents to the Lender, shall be
materially false, incorrect, or incomplete when made or
furnished.
e. Any Borrower shall admit its inability to pay its
debts as they mature, or shall make an assignment for the benefit
of its or any of its creditors.
f. Proceedings in bankruptcy, or for the dissolution,
full or partial liquidation or reorganization of any Borrower, or
for the readjustment of any of their respective debts, under the
Bankruptcy Code, as amended, or any part thereof, or under any
other laws, whether state or federal, for the relief of debtors,
now or hereafter existing, shall be commenced by Borrower.
g. If an application is made by any Borrower for the
appointment of a receiver, trustee, or custodian for Borrower or
for any substantial part of their respective assets, or any
Borrower shall discontinue business or materially change the
nature of its business.
h. If a receiver, trustee, or custodian shall be
appointed for any Borrower or for any part of their respective
assets, and shall not be discharged within 30 days of such
appointment.
i. If all or any of any borrower's assets are
attached, seized, subjected to a writ, or are levied upon, or
come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors.
j. If any Borrower is permanently enjoined,
restrained or in any way prevented by court order from conducting
any material part of its business affairs.
k. If a notice of lien, levy or assessment is filed
of record with respect to all or any of Borrower's assets by the
United States or any department, agency or instrumentality
thereof, or by any state, county, municipality or other
governmental agency, or if any taxes or debts owing at any time
or times hereafter to any one or more of them becomes a lien,
upon all or any material portion of Borrower's assets.
l. A judgment creditor of any Borrower shall obtain
possession of any of the collateral securing repayment of the
Loans by any means, including, but without limitation, levy,
distraint, replevin, or self-help.
m. Any Event of Default occurs under the terms of any
of the Loan Documents or under the terms of any of the Revolving
Loan Documents.
n. Any Borrower shall dissolve, liquidate, or
otherwise terminate its existence, or take any action to effect
such termination.
o. Any Borrower shall suffer a final judgement in
excess of $250,000.00, and shall not discharge the same within
thirty (30) days.
p. To furnish the Lender with any certificate or
other document that will contain any untrue statement of material
fact or that will omit to state a material fact necessary to make
it not misleading in light of the circumstances under which it
was furnished.
q. Any material nonborrower Subsidiary shall have
failed to pay when due all taxes, assessments or fees imposed
upon it or on any of its property or that it is required to
withhold and pay over, except when, prior to impending
foreclosure such taxes, assessments or fees are contested in good
faith by appropriate proceedings, with adequate reserves therefor
having been set aside on its books.
r. Any material nonborrower Subsidiary fails to take
all necessary steps to preserve its corporate or partnership
existence and franchises, or fails to comply with all present and
future laws applicable to it in the operation of its business and
all material agreements to which it is subject.
s. Lender, at its discretion and after five days
written notice given to Borrower, deems itself to be adversely
affected and/or insecure by reason of any material change in any
of Borrower's (including any endorsers and/or guarantors) net
worth, or by reason of any other material change of condition
whether or not described herein.
6.2 Remedies. Upon the occurrence of an Event of Default,
Lender, at its option, may:
a. Terminate any obligation to make any further Loans
and declare the entire principal balance of the Secured
Indebtedness and all interest, unpaid accrued and earned thereon
to be immediately due and payable without demand for payment,
presentment for payment, notices of intention to accelerate
maturity, notices of election to accelerate maturity, protest and
notice of protest or any other notice whatsoever, all of which
are hereby expressly waived.
b. Enforce or avail itself of any and all rights and
remedies given to it by any or all of the Loan Documents.
c. Enforce or avail itself of all rights and remedies
allowed by all applicable laws.
SECTION 7. INTEREST LIMITATION
7.1 Limitation. Interest on the debt evidenced by the
Notes or otherwise in connection with the Loans shall not exceed
the maximum amount of nonusurious interest that may be contracted
for, taken, reserved, charged, or received under law; any
interest in excess of that maximum amount shall be credited on
the principal of the debt or, if that has been paid, refunded.
On any acceleration or required or permitted prepayment, any such
excess shall be canceled automatically as of the acceleration or
prepayment or, if already paid, credited on the principal of the
debt or, if the principal of the debt has been paid, refunded.
This provision overrides other provisions in this and all other
instruments concerning the debt. All sums paid or agreed to be
paid for the use, forbearance or detention of the indebtedness of
Borrower to Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the
full stated term of such indebtedness until payment in full so
that the rate or amount of interest on account of such
indebtedness does not exceed the maximum rate of interest allowed
by law for so long as such indebtedness is outstanding, and to
the extent that TEX. REV. CIV. STAT. ▇▇▇. Art. 5069-1.04, as
amended, is applicable to such indebtedness, the quarterly rate
ceiling from time to time in effect under such article shall be
the applicable ceiling. This provision overrides other
provisions in this and all other instruments concerning the debt.
SECTION 8. MISCELLANEOUS
8.1 No Permanent Waivers. No waiver at any time of the
provisions or conditions of this Agreement or of any of the other
Loan Documents shall be construed as a waiver of any of the other
provisions or conditions hereof or thereof nor be construed as a
right to a subsequent waiver or any other provisions or
conditions.
8.2 Severability. Unenforceability for any reason against
any person or persons of any provision of this Loan Agreement, or
of any of the other Loan Documents or other Agreements between
Borrower and the Lender, shall not limit or impair the operation
or validity of any other provisions of this Agreement or any of
the other Loan Documents.
8.3 Descriptive Headings. The descriptive headings of the
various sections and subsection of this Agreement and the Loan
Documents and any schedule, agreement or other instrument,
executed with reference hereto are inserted for convenience of
reference only, do not constitute a part of any such document and
no inference is to be drawn from such headings. Whenever the
context shall require, words of any gender shall be deemed to
include the other genders and either the singular or the plural
shall include the other.
8.4 Further Assurance. From time to time, Borrower will
execute and deliver to the Lender such additional documents and
will provide such additional information as the Lender may
reasonably require to carry out the terms of this Agreement and
be informed of the Borrower's status and affairs.
8.5 Enforcement and Waiver by the Lender. All rights and
remedies of the Lender are cumulative and concurrent, and the
exercise of one right or remedy shall not be deemed a waiver or
release of any other right or remedy. The Lender shall have the
right at all times to enforce the provisions of this Agreement
and the Loan Documents in strict accordance with the terms hereof
and thereof, notwithstanding any conduct or custom on the part of
the Lender in refraining from so doing at any time or times. Th
failure of the Lender at any time or times to enforce its rights
under such provisions, strictly in accordance with the same,
shall not be construed as having created a custom in any way or
manner contrary to specific provisions of this Agreement or such
Loan Documents or as having in any way or manner modified or
waived the same.
8.6 Expenses of the Lender. The Borrower will, on demand,
pay, or reimburse the lender, for all reasonable expenses,
including the reasonable fees and expenses of legal counsel for
the Lender, incurred by the Lender in connection with the
preparation, administration, amendment, modification, or
enforcement of this Agreement and the Loan Documents, and the
collection or attempted collection of any and all Notes. All
reasonable costs, including but not limited to reasonable
attorney's fees of Borrower, Lender, or other interested parties,
other professional fees, appraiser's and surveyor's fees, taxes
and all expenses of all kinds inured in connection with the
Loans, shall be borne by Borrower, and Borrower agrees to
indemnify the Lender and save it harmless from the payment,
defense and/or expense of any claim or demand for such fees,
costs, taxes and expenses.
8.7 Notices. Any notices or consents required or permitted
by this Agreement shall be in writing and shall be deemed given
when delivered in person, or upon deposit in the U.S. Mail, if
sent by certified mail, postage prepaid, return receipt
requested, as follows, unless such address is changed by written
notice hereunder:
a. If to Borrower:
Taco Cabana, Inc.
Texas Taco Cabana, L.P.
T.P. Acquisition Corp.
T.C. Management, Inc.
Taco Cabana Management, Inc.
Taco Cabana Multistate, Inc.
Colorado Cabana, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
b. If to the Lender:
International Bank of commerce
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
8.8 RELEASE BY THE BORROWER. TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAWS, BORROWER RELEASES THE LENDER AND
ITS DIRECTORS, OFFICERS, ATTORNEYS, AGENTS, AND EMPLOYEES FROM
ALL CLAIMS, CAUSES, DAMAGES, LIABILITY AND RELATED EXPENSES
ARISING OUT OF ANY ACT OR OMISSION ON THE PART OF ANY OF THEM,
WITH REGARD TO THIS AGREEMENT, WHICH DOES NOT INVOLVE FRAUD BAD
FAITH OR NEGLIGENCE BY LENDER OR ITS DIRECTORS, OFFICERS,
ATTORNEYS, AGENTS OR EMPLOYEES.
8.9 Governing Law. This Agreement is made and accepted,
and the obligations of the parties set forth herein shall be
performable, in the County of Bexar and State of Texas, and this
Agreement and all the Loan Documents shall be governed by, and
construed in accordance with, the laws of the State of Texas
except to the extent that such laws may be preempted by laws of
the United States of America. The parties hereby agree that this
Agreement and the Loans to be made pursuant hereto shall not be
subject to the provisions of Chapter 15 of the Texas Credit Code.
8.10 Lender's Relationship to Other. Lender is not a
partner or joint venturer in any manner whatsoever with any
Borrower.
8.11 Waiver, Modification. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or
termination is sought.
8.12 Cumulative Remedies. The right and remedies of the
Lender under the Loan Documents shall be cumulative and the
exercise, or partial exercise, of any such right or remedy shall
not preclude the exercise of any other right or remedy.
8.13 Binding Effect. This Loan Agreement shall be binding
upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, provided that no Borrower may
assign its rights or obligations hereunder. If more than one
party executes this Agreement a Borrower, the term "Borrower"
shall mean and refer to each such party, jointly and severally.
8.14 Survival of Agreement. The provisions thereof shall
survive the execution of all instruments herein mentioned, and
shall continue in full force until the Secured Indebtedness is
paid in full and shall prevail and control over any conflicting
provision contained elsewhere in the Loan Documents.
8.15 Entire Agreement. The Loan Documents embody the
entire agreement between the parties and supersedes all prior
agreements and understandings, if any, relating to the subject
matter hereof. There are no oral agreements or understandings
between the parties which are not evidenced by the Loan
Documents.
8.16 Subsidiaries. Except where otherwise specified
herein, the term "Subsidiary" shall mean every entity of which
more than fifty percent (50%) of the outstanding voting stock or
other ownership interests shall, at the time of determination, be
owned directly or indirectly by the named Borrower or through one
or more intermediaries of Borrower.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and y ear first above written.
BORROWER: TACO CABANA, INC.
WITNESS:
By:______________________
________________________ Name:____________________
Name:___________________ Title:___________________
TEXAS TACO CABANA, L.P.
By:______________________
________________________ Name:____________________
Name:___________________ Title:___________________
T.P. ACQUISITION CORP.
By:______________________
________________________ Name:____________________
Name:___________________ Title:___________________
T.C. MANAGEMENT, INC.
By:______________________
________________________ Name:____________________
Name:___________________ Title:___________________
TACO CABANA MANAGEMENT, INC.
By:______________________
________________________ Name:____________________
Name:___________________ Title:_____________________
TACO CABANA MULTISTATE, INC.
By:______________________
Name:____________________
Title:_____________________
COLORADO CABANA, INC.
By:_______________________
Name:_____________________
Title:______________________
INTERNATIONAL BANK OF COMMERCE
By:______________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President