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EXHIBIT 10.3
SIZZLER INTERNATIONAL, INC.
WESTPAC BANKING CORPORATION
GUARANTEE AND INDEMNITY
MINTER ELLISON
Lawyers
Waterfront Place
1 Eagle Street
BRISBANE QLD 4000
DX 102 Brisbane
Telephone (07) 3226 6333
Facsimile (07) 3229 1066
SKL GB 1090692
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GUARANTEE AND INDEMNITY
AGREEMENT dated August 21, 2000
BETWEEN SIZZLER INTERNATIONAL, INC (a company incorporated in Delaware,
United States of America) ('GUARANTOR')
AND WESTPAC BANKING CORPORATION ARBN 007 457 141 of 260 Queen Street,
Brisbane, Queensland, Australia ('THE FINANCIER')
RECITALS
A. At the request of the Guarantor, the Financier has agreed to enter into
a bill facility agreement dated on or about the date of this Agreement
(the 'Principal Agreement') with Collins Restaurants Management Pty Ltd
ACN 093 912 979 ('THE DEBTOR').
B. In consideration of the Financier agreeing to enter into the Principal
Agreement, the Guarantor has agreed to provide a guarantee and
indemnity, on the terms set out in this agreement, in respect of the
Debtor's obligations under the Principal Agreement.
AGREEMENT
1. DEFINITIONS
1.1 In this agreement, the following words and expressions have the meanings
indicated unless the contrary intention appears.
"AUTHORISED OFFICER" means:
(a) in relation to the Financier, an attorney of the Financier and a
person holding or acting in the office of director, chief
executive or secretary or whose title includes the word
'Manager' or 'Director; and
(b) in relation to the Guarantor, a person holding or acting in the
office of president, vice president, chief financial officer,
chief executive or secretary.
'BUSINESS DAY' means a day on which banks (as that term is defined in
the Banking Act 1959 (Cth)) are open for general business in Brisbane,
excluding Saturdays or Sundays.
'COLLATERAL SECURITY' means every letter of credit, bond, guarantee,
indemnity, mortgage, charge, pledge, lien, encumbrance, negotiable
instrument, security, deed, agreement and document now or in the future
held or taken by the Financier or entered into by the Financier and any
other person in connection with the Guaranteed Obligation.
'GUARANTEED MONEYS' means all moneys owing by the Debtor, on any
account, to the Financier up to a maximum amount of A$10 million.
'SUBSIDIARY' of a corporation means an entity whose accounts are
included in the first corporations consolidated accounts.
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2. CONSIDERATION
The Guarantor acknowledges that the Guarantor is entering into this
agreement in consideration of the Financier agreeing at the request of
the Guarantor to enter into the Principal Agreement with the Debtor.
3. GUARANTEE AND INDEMNITY
3.1 The Guarantor unconditionally and irrevocably guarantees to the
Financier that the Debtor will pay the Guaranteed Moneys to the
Financier ('the Guaranteed Obligation').
3.2 If:
(a) the Debtor does not pay the Guaranteed Moneys or any part of the
Guaranteed Moneys on time; and
(b) the Financier makes a demand on the Guarantor,
the Guarantor must pay the Guaranteed Moneys to the Financier on demand,
whether or not the Financier has made a demand on the Debtor.
3.3 The Financier shall only be entitled to make a demand on the Guarantor
pursuant to clause 3.2 if:
(a) the Financier does not receive on or before 15 December 2000
evidence reasonably satisfactory to it that a management equity
agreement, as defined in the Principal Agreement, is signed by
all of the parties to it and in full force and effect as at 15
December 2000; and
(b) the 30 day written notice period referred to in the last
paragraph of clause 5.6 of the Principal Agreement has expired.
3.4 The Guarantor unconditionally and irrevocably indemnifies the Financier
against all losses, damages, costs and expenses which the Financier may
now or in the future suffer or incur consequent on or arising directly
or indirectly out of any breach or non-observance by the Debtor of the
Guaranteed Obligation up to a maximum amount of $10 million.
3.5 The indemnity contained in clause 3.4 remains effective even if the
Guaranteed Obligation is or may be unenforceable or at any time not
immediately enforceable against the Debtor (whether by reason of any
legal limitation, disability or incapacity on or of the Debtor and
whether the Principal Agreement was void ab initio or has been
subsequently avoided and whether or not any of the relevant facts were
or ought to have been known by the Financier).
3.6 The other provisions of this agreement apply to the Guarantor's
indemnity even if the guarantee contained in clause 3.1 is invalid or
unenforceable and the Guarantor waives all rights which may be
inconsistent with this clause.
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4. PRESERVATION OF RIGHTS OF THE FINANCIER
4.1 This agreement constitutes a continuing guarantee and indemnity for the
purpose of securing the whole of the Guaranteed Obligation, even if the
Guaranteed Obligation is partially performed.
4.2 The liabilities of the Guarantor under this agreement are not altered or
extinguished nor are the rights of the Financier against the Guarantor
under this agreement adversely affected by anything which might
otherwise have that effect at law or in equity including, but not
limited to, one or more of the following (whether occurring with or
without any person's consent):
(a) the granting of time or other indulgence or concession to,
compounding or compromising with or wholly or partially
releasing the Debtor, any other Guarantor or any other person in
any way;
(b) laches, acquiescence, delay, acts, omissions or mistakes on the
part of the Financier or any other person;
(c) the transaction of business, expressly or impliedly, with, for
or at the request of the Debtor, the Guarantor or any other
person;
(d) any variation, assignment or novation of the Principal Agreement
(whether by the Debtor or the Financier or both of them);
(e) changes which from time to time may take place in the
membership, name or business of a firm, partnership, committee
or association whether by death, retirement, admission or
otherwise whether or not the Debtor, the Guarantor or any other
person was a member;
(f) the existence of any Collateral Security or of any obligation of
the Guarantor to the Financier in addition to the Guarantor's
obligations under this agreement;
(g) the loss or impairment of a Collateral Security or a Collateral
Security being void, voidable or unenforceable;
(h) the Financier or any other person dealing in any way with any
Collateral Security or with any right which the Financier may
now or in the future have from or against the Debtor or any
other person (including, but not limited to, taking, abandoning
or releasing (wholly or partially), realising, exchanging,
varying or abstaining from perfecting or taking advantage of
it);
(i) the death or insolvency of any person;
(j) a change in the legal capacity, rights or obligations of any
person;
(k) the fact that any person is a trustee, nominee, joint owner,
joint venturer or a member of a partnership, firm or
association;
(l) a judgment against the Debtor or any other person.
4.3 This agreement is valid and fully enforceable against any executing
party despite:
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(a) any failure to execute by any person intended to be, or in
contemplation as, a party to this agreement;
(b) any defect in the manner of execution of this agreement by any
party; or
(c) this agreement being for any other reason unenforceable against
any party or against any person intended to be, or in
contemplation as, a party to this agreement.
4.4 If:
(a) a claim is made that any payment, obligation or transaction
('RELEVANT EVENT') in connection with the Guaranteed Obligation
is void or voidable under any law relating to insolvency or the
protection of creditors or for any other reason;
(b) that claim is upheld, conceded or compromised; and
(c) a release, settlement or discharge has been made or given on the
faith of the Relevant Event,
that release, settlement or discharge is void and, accordingly:
(d) the Financier and the Guarantor may exercise all rights and be
subject to all liabilities which they respectively would have
had if the Relevant Event had not occurred and any release,
settlement or discharge had not been made or given; and
(e) the Guarantor must take all steps and sign all documents
required by the Financier in connection with the replacement or
reinstatement of this agreement and any other securities
previously held by the Financier from the Guarantor.
4.5 Even if payment is made to the Financier under this agreement, in the
event of the insolvency of the Debtor or the Guarantor, the Financier
may prove for any amount payable to it under the Principal Agreement or
this agreement as if that payment had not been made.
5. RESTRICTIONS ON GUARANTOR
5.1 The Guarantor waives any right which it may have to require the
Financier to proceed against or enforce any other right, power, remedy
or security against or to claim payment from the Debtor or any other
person before claiming from the Guarantor under this agreement.
5.2 Until the Guarantor is released from its obligations under this
agreement the Guarantor:
(a) may not claim the benefit of any Collateral Security;
(b) must hold or cause to be held in trust for the Financier any
security which is held by or for the Guarantor from the Debtor;
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(c) in the event of the insolvency of the Debtor or any other
Guarantor, must not prove in that insolvency in competition with
the Financier, whether in respect of an amount paid by the
Guarantor under this agreement or otherwise;
(d) must not raise against the Financier a defence, set-off or
counterclaim available to itself, the Debtor or any other
Guarantor, or claim a set-off or make a counterclaim against the
Financier, in reduction of the Guarantor's liability under this
agreement; and
(e) must not make a claim or enforce a right against the Debtor or
any other Guarantor or against their estate or property.
6. WARRANTIES
6.1 The Guarantor represents and warrants that:
(a) it has in full effect the authorisations necessary to enter into
this agreement, perform obligations under it and allow it to be
enforced;
(b) its obligations under this agreement are not void, voidable or
unenforceable;
(c) it has fully disclosed in writing to the Financier all facts
relating to the Guarantor, this agreement and anything in
connection with it which are material to the assessment of the
nature and amount of the risk undertaken by the Financier in
entering into this agreement and doing anything in connection
with it;
(d) its obligations under this agreement rank at least equally with
all other unsecured and unsubordinated indebtedness of the
Guarantor except liabilities mandatorily preferred by law; and
(e) it is not entering into this agreement in its capacity as a
trustee of any trust or settlement.
6.2 The Guarantor also represents and warrants that:
(a) it has been duly incorporated in accordance with the relevant
legislation in force in its place of incorporation, is validly
existing under that legislation, owns its rights, property,
undertaking and assets and has power and authority to carry on
its business as it is now being conducted;
(b) it has power to enter into and observe its obligations under
this agreement;
(c) this agreement and the transactions under it do not contravene
its constituent documents or its obligations or cause a
limitation of its powers or the powers of its directors to be
exceeded;
(d) the most recent audited financial report of the Guarantor and
audited consolidated financial statements of the Guarantor and
its Subsidiaries give a true and fair view of its financial
position and their consolidated financial
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position in all material respects as at the date to which they
are prepared and disclose or reflect all their material actual
and contingent liabilities;
(e) there has been no material adverse change in the financial
position of the Guarantor or in the consolidated financial
position of the Guarantor and its Subsidiaries since the date to
which the audited financial report of the Guarantor and audited
consolidated financial statements of the Guarantor and its
Subsidiaries were last prepared before the date of this
agreement;
(f) neither the Guarantor nor any of its Subsidiaries is in default
under a law, regulation, official directive, instrument,
undertaking or obligation which has or may have a material
affect on any of them or their respective assets;
(g) there is no pending or threatened action or proceeding affecting
the Guarantor or any of its Subsidiaries or any of their
respective assets before a court, governmental agency,
commission or arbitrator which may have a material affect on the
Guarantor's ability to perform the Guaranteed Obligations;
(h) neither the Guarantor nor any of its Subsidiaries has immunity
from the jurisdiction of a court or from legal process (whether
through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise).
6.3 The warranties set out in this clause are made on the date of this
agreement and apply continuously throughout the term of this agreement.
7. CERTIFICATE
A certificate signed by an Authorised Officer of the Financier
specifying any matter of a factual nature which is relevant to any of
the rights or obligations of the Financier, the Debtor or the Guarantor
in connection with the Guaranteed Obligation is admissible in any
proceedings and is conclusive evidence of the matters specified in it
except in the case of manifest error.
8. DISCHARGE OF GUARANTOR
8.1 The Financier may in its absolute discretion retain its copy of this
agreement and decline to execute a release or discharge of the Guarantor
from its liabilities under this agreement until the Financier is
satisfied that no payment or other transaction in connection with the
Guaranteed Obligation remains liable to be avoided as described in
clause 4.4.
8.2 A discharge or release of the Guarantor from its liabilities under this
agreement:
(a) is effective if it is in writing and signed by an Authorised
Officer of the Financier; and
(b) is subject to clause 4.4.
9. ASSIGNMENT
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The Financier may assign its rights under this agreement and is not
obliged to give notice to, or obtain the consent of, the Guarantor in
respect of the assignment.
10. COSTS
10.1 The Guarantor must pay to the Financier on demand:
(a) all taxes, levies, imposts, deductions and charges of any nature
whatever (other than income tax imposed on the income of the
Financier) and all stamp, financial institutions, registration
and other governmental duties (together with interest or
penalties, if any) imposed under the laws of the Commonwealth of
Australia or its States or Territories and incurred directly or
indirectly by the Financier on or in respect of this agreement;
(b) all other costs, charges and expenses incurred by or on behalf
of the Financier:
(i) in or about the preparation and execution of this
agreement including all legal costs and expenses; and
(ii) on or in connection with the preservation of the rights
of the Financier or any breach or default in the
observance or performance by the Guarantor of the
provisions of this agreement.
10.2 For the purposes of this clause and in the absence of manifest error a
written statement signed by an Authorised Officer of the Financier
setting out any amount payable in terms of this clause is conclusive.
11. ENTIRE AGREEMENT
This agreement constitutes the entire agreement of the parties as to its
subject matter. The parties acknowledge that there is no other
understanding, agreement, warranty, representation or indemnity, whether
expressed or implied and whether given or reached prior to or at the
same time as this agreement, in any way relating to these provisions or
any of the matters to which this agreement relates, other than any
warranty implied by statute the operation of which cannot be excluded.
12. ALTERATION
This agreement may only be altered in writing signed by each party.
13. FURTHER ACTION
Each party must:
(a) use its best endeavours to do all things necessary or desirable
to give full effect to this agreement; and
(b) refrain from doing anything which might hinder performance of
this agreement.
14. GOVERNING LAW AND JURISDICTION
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14.1 This agreement is governed by the law of Queensland.
14.2 Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Queensland.
15. AGENT FOR SERVICE OF PROCESS
The Guarantor, having its registered office outside Queensland:
(a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN
093 912 979 as its agent for service of process relating to any
proceedings before the courts and appellate courts of the State
of Queensland in connection with this document;
(b) agrees that failure by CRM to notify it of the process will not
invalidate the proceedings concerned; and
(c) agrees that nothing shall affect the right to serve process in
any other manner permitted by law.
16. NOTICE
16.1 A notice given by a party to another party under this agreement must be:
(a) in writing;
(b) directed to the recipient's address specified in this agreement
or as varied by written notice; and
(c) hand delivered or sent by prepaid post or facsimile to that
address.
16.2 For the purposes of clause 16.1(b) the Guarantor's address is the
address of the agent appointed pursuant to clause 15.
16.3 A notice given in accordance with clause 16.1 is taken to be received:
(a) if hand delivered, on delivery;
(b) if sent by prepaid post, 2 Business Days after the date of
posting; or
(c) if sent by facsimile, when the confirmation is received.
16.4 The provisions of this clause are in addition to any other method of
service permitted by law.
17. WAIVER
The failure of the Financier at any time to require performance by the
Guarantor of an obligation under this agreement is not a waiver of the
Financier's right at any time later to insist on performance of that or
any other obligation under this agreement.
18. SEVERABILITY
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18.1 The parties agree that a construction of this agreement which results in
all provisions being enforceable is to be preferred to a construction
which does not so result.
18.2 If, despite the application of clause 18.1, a provision of this
agreement is illegal or unenforceable:
(a) if the provision would not be illegal or unenforceable if a word
or words were omitted, that word or those words will be severed;
and
(b) in any other case, the whole provision will be severed,
and the remainder of this agreement will continue to have full force and
effect.
19. COUNTERPARTS
This agreement may be executed in any number of counterparts. A
counterpart unconditionally executed and delivered by a party binds that
party.
20. INTERPRETATION
20.1 In this agreement, unless the contrary intention appears:
(a) the singular include the plural and vice versa and words
importing a gender include other genders;
(b) words and expressions importing natural persons include
partnerships, bodies corporate, associations, governments and
governmental and local authorities and agencies;
(c) a reference to any legislation or statutory instrument or
regulation is construed in accordance with the Acts
Interpretation Act 1901 (Cth) or the equivalent State
legislation, as applicable;
(d) other grammatical forms of defined words or expressions have
corresponding meanings;
(e) a reference to a clause, paragraph, schedule or annexure is a
reference to a clause or paragraph of or schedule or annexure to
this agreement and a reference to this agreement includes any
schedules and annexures;
(f) if a party to this agreement comprises 2 or more persons, the
provisions of this agreement binding that party binds those
persons jointly and severally;
(g) words and expressions defined in the Corporations Law as at the
date of this agreement have the meanings given to them in the
Corporations Law at that date;
(h) a reference to a party to this agreement or any other document
or agreement includes its successors and permitted assigns;
(i) a reference to dollars or '$' is a reference to Australian
dollars;
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(j) a reference to a document or agreement, including this
agreement, includes a reference to that document or agreement as
novated, altered or replaced from time to time;
(k) headings are for ease of reference only and do not affect the
construction of this agreement; and
(l) a reference to writing includes typewriting, printing,
lithography, photography and any other method of representing or
reproducing words, figures or symbols in a permanent and visible
form.
21. GOODS AND SERVICES TAX
21.1 All payments to be made by the Guarantor under or in connection with
this agreement have been calculated without regard to GST.
If all or part of any such payment is the consideration for a taxable
supply for GST purposes then, when the Guarantor makes the payment:
(a) it must pay to the Financier an additional amount equal to that
payment (or part) multiplied by the appropriate rate of GST; and
(b) the Financier will promptly provide to the Guarantor a tax
invoice complying with the GST law.
21.2 Where under this agreement the Guarantor is required to reimburse or
indemnify for an amount, the Guarantor will pay the relevant amount
(including any sum in respect of GST) less any GST input tax credit the
Financier determines that it is entitled to claim in respect of that
amount.
21.3 Any word or expression used in this clause which is defined in A New Tax
System (Goods and Services Tax) Act 1999 (C'th) has the same meaning in
this document.
EXECUTED as an agreement.
THE COMMON SEAL of )
SIZZLER INTERNATIONAL, INC. )
is fixed to this document in accordance with )
its constitution in the presence of )
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Signature of authorised officer Signature of authorised officer
(Please delete as applicable)
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Name of authorised officer (print) Name of authorised officer (print)
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SIGNED for and on behalf of WESTPAC BANKING ) WESTPAC BANKING CORPORATION by
CORPORATION by ) its attorneys who respectively
) state that at the time of their
and ) executing this instrument they
) have no notice of the
its duly constituted attorneys in the presence ) revocation of the Power of
of ) Attorney registered in the
) office of the Registrar General
) No. 390 Book 4047 under the
) authority of which they have
) executed this instrument
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Witness