$175,000,000
REVOLVING CREDIT AGREEMENT
Dated as of April 1, 1998
Among
FOODMAKER, INC.
as Borrower
-- --------
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Initial Lenders
-- ---------------
NATIONSBANK OF TEXAS, N.A.
as Agent
-- -----
NATIONSBANC MONTGOMERY SECURITIES LLC
as Arranger
-- --------
and
CREDIT LYONNAIS LOS ANGELES BRANCH
as Documentation Agent
-- -------------------
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . 1
Section 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . 1
Section 1.02. Computation of Time Periods . . . . . . . . . . . . . 22
Section 1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . 22
Section 1.04. Other Definitional Provisions . . . . . . . . . . . . 22
ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . . . . . . 23
Section 2.01. The Advances . . . . . . . . . . . . . . . . . . . . . 23
Section 2.02. Making the Advances . . . . . . . . . . . . . . . . . 23
Section 2.03. Repayment . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.04. Reduction of the Revolving Commitments, Swing Line
Commitment and Letter of Credit Subfacility . . . . . 27
Section 2.05. Prepayments . . . . . . . . . . . . . . . . . . . . . 28
Section 2.06. Interest . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.08. Increased Costs, Etc . . . . . . . . . . . . . . . . . 33
Section 2.09. Payments and Computations . . . . . . . . . . . . . . 34
Section 2.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.11. Sharing of Payments, Etc . . . . . . . . . . . . . . . 38
Section 2.12. Use of Proceeds . . . . . . . . . . . . . . . . . . . 39
Section 2.13. Evidence of Debt . . . . . . . . . . . . . . . . . . . 39
ARTICLE III. AMOUNTS AND TERMS OF LETTERS OF CREDIT . . . . . . . . . . . 40
Section 3.01. The Letter of Credit Subfacility . . . . . . . . . . . 40
Section 3.02. Issuance of Letters of Credit . . . . . . . . . . . . 40
Section 3.03. Drawing and Reimbursement . . . . . . . . . . . . . . 41
Section 3.04. Obligations Absolute . . . . . . . . . . . . . . . . . 42
Section 3.05. Letter of Credit Compensation . . . . . . . . . . . . 43
Section 3.06. Use of Letters of Credit . . . . . . . . . . . . . . . 43
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . 43
Section 4.01. Conditions Precedent to Initial Borrowing . . . . . . 43
Section 4.02. Conditions Precedent to Each Borrowing and Issuance . 47
Section 4.03. Determinations Under Section 4.01 . . . . . . . . . . 48
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 48
Section 5.01. Representations and Warranties of the Borrower . . . . 48
ARTICLE VI. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . 54
Section 6.01. Affirmative Covenants . . . . . . . . . . . . . . . . 54
Section 6.02. Negative Covenants . . . . . . . . . . . . . . . . . . 58
Section 6.03. Reporting Requirements . . . . . . . . . . . . . . . . 64
Section 6.04. Financial Covenants . . . . . . . . . . . . . . . . . 66
ARTICLE VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 67
Section 7.01. Events of Default . . . . . . . . . . . . . . . . . . 67
Section 7.02. Actions in Respect of the
Letters of Credit Upon Default . . . . . . . . . . . . 70
ARTILCE VIII. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.01. Authorization and Action . . . . . . . . . . . . . . . 70
Section 8.02. Agent's Reliance, Etc . . . . . . . . . . . . . . . . 71
Section 8.03. NationsBank and Affiliates . . . . . . . . . . . . . . 71
Section 8.04. Lender Party Credit Decision . . . . . . . . . . . . . 71
Section 8.05. Indemnification . . . . . . . . . . . . . . . . . . . 72
Section 8.06. Successor Agents . . . . . . . . . . . . . . . . . . . 72
ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.01. Amendments, Etc; Release of Collateral . . . . . . . . 73
Section 9.02. Notices, Etc . . . . . . . . . . . . . . . . . . . . . 74
Section 9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . 74
Section 9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . 76
Section 9.06. Binding Effect . . . . . . . . . . . . . . . . . . . . 76
Section 9.07. Assignments and Participations . . . . . . . . . . . . 76
Section 9.08. Governing Law . . . . . . . . . . . . . . . . . . . . 79
Section 9.09. Execution in Counterparts . . . . . . . . . . . . . . 79
Section 9.10. No Liability of the Issuing Bank . . . . . . . . . . . 79
Section 9.11. Confidentiality . . . . . . . . . . . . . . . . . . . 80
Section 9.12. Waiver of Jury Trial . . . . . . . . . . . . . . . . . 80
SCHEDULES AND EXHIBITS
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Schedules
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Schedule I Commitments, and Applicable Lending
Offices
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Excluded Asset Sales
Schedule 1.01(c) Existing Liens
Schedule 4.01(c) Surviving Debt
Schedule 4.01(j) Mortgages
Schedule 5.01(b) Capital Stock
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Schedule 5.01(q)(i) Existing Debt
Schedule 5.01(q)(ii) Surviving Debt
Schedule 5.01(r) Owned and Leased Real Property
Schedule 5.01(s) Existing Investments
Schedule 5.01(t) Intellectual Property
Schedule 5.01(u) Other Agreements
Exhibits
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Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Swing Line Borrowing
Exhibit C Form of Notice of Issuance
Exhibit D-1 Form of Revolving Note
Exhibit D-2 Form of Swing Line Note
Exhibit E Form of Security Agreement
Exhibit F Form of Guaranty
Exhibit G Form of Opinion of Borrower's Counsel
Exhibit H Form of Amendment to Guaranty
Exhibit I-1 Form of Mortgage
Exhibit I-2 Form of Deed of Trust
Exhibit J Form of Amendment to Security Agreement
Exhibit K-1 Form of Organizational Documents -
Corporation
Exhibit K-2 Form of Organizational Documents -
Limited Partnership
iii
"CREDIT AGREEMENT dated as of April 1, 1998, among FOODMAKER, INC., a
Delaware corporation (the "Borrower"), the financial institutions and other
entities listed on the signature pages hereof as Lenders (the "Initial
Lenders"), NATIONSBANC MONTGOMERY SECURITIES LLC, as arranger for the Lenders
and the Issuing Banks hereunder (the "Arranger"), CREDIT LYONNAIS LOS ANGELES
BRANCH, as documentation agent (the "Documentation Agent"), and NATIONSBANK OF
TEXAS, N.A. ("NationsBank"), as L/C Bank (as hereinafter defined) and as agent
(in such capacity, together with any successor in such capacity appointed
pursuant to Article VII, the "Agent") for the Lenders and the Issuing Banks
hereunder.
PRELIMINARY STATEMENTS
(1) The Borrower has requested, on the terms and conditions set forth
herein, (a) that the Lenders make Revolving Advances (as hereinafter defined) to
the Borrower from time to time in an aggregate principal amount not to exceed at
any time outstanding the aggregate Revolving Commitments (as hereinafter
defined) of the Lenders (less the sum of (i) the aggregate amount of Letter of
Credit Obligations (as hereinafter defined) outstanding at such time, and (ii)
Swing Line Advances (as hereinafter defined) outstanding from time to time), (b)
that the Swing Line Lender (as hereinafter defined) makes Swing Line Advances to
the Borrower from time to time in an aggregate principal amount not to exceed at
any time outstanding $5,000,000 and (c) that the L/C Bank and the other Issuing
Banks (as hereinafter defined) issue Letters of Credit (as hereinafter defined)
for the account of the Borrower from time to time in an aggregate Available
Amount (as hereinafter defined) not to exceed at any time outstanding the L/C
Sublimit (as hereinafter defined).
(2) Subject to the terms and conditions set forth in this Agreement,
(a) the Lenders have agreed severally to make such Revolving Advances to the
Borrower, (b) the Swing Line Lender has agreed to make such Swing Line Advances
to the Borrower, and (c) the L/C Bank has agreed to issue such Letters of Credit
for the account of the Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Additional Mortgages" has the meaning specified in Section 6.01(k).
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"Advance" means a Revolving Advance, a Swing Line Advance or an L/C
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
Agreement.
"Agent's Account" means the account of the Agent maintained by the
Agent with NationsBank at its office at 901 Main Street, Dallas, Texas 75202,
Account No. 1292000883, Attention: Agency Services, Reference: Foodmaker.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means with respect to any Base Rate Advances or
Eurodollar Rate Advances, a percentage per annum determined by reference to the
applicable Total Funded Debt to EBITDA Ratio as set forth below:
Total Funded Debt LIBOR Base Rate
to EBITDA Ratio Margin Margin
------------------ ------ ---------
less than 1:75:1.0 0.625% 0.000%
1.75:1.0 or greater, but less 0.875% 0.000%
than 2.25:1.0
2.25:1.0 or greater, but less 1.125% 0.000%
than 3.00:1.0
3.00:1.0 or greater, but less 1.375% 0.250%
than 3.50:1.0
3.50:1.0 or greater 1.625% 0.500%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Applicable Margin, the Total Funded Debt to EBITDA Ratio shall
be deemed to be greater than or equal to 3.50 to 1.0 at all times when a Default
has occurred and is continuing based on the Borrower's failure to deliver any
financial statement or compliance certificate in the form required within five
days after the date required for delivery thereof pursuant to Sections 6.03(b)
or 6.03(c), as applicable. For purposes of this Agreement, any change in the
Applicable Margin based on a change in the Total Funded Debt to EBITDA Ratio
shall be effective three Business Days after the date of receipt by the Agent of
the financial statements and compliance certificate required by Sections 6.03(b)
or 6.03(c), as applicable, reflecting such change.
2
"Arranger" means NationsBanc Montgomery Securities LLC.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit A hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the highest
of: (a) the rate of interest announced publicly by NationsBank from time to time
as NationsBank's prime rate; and (b) 1/2 of one percent per annum above the
Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a).
"Borrower" has the meaning set forth in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Bank of America at its office at Corporate Support Center
#5693, Concord, CA 94520, Account No. 00502-15249, ABA No. 121000358.
"Borrower's Form 10-K" has the meaning specified in Section 4.01(e).
"Borrowing" means a Revolving Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Los Angeles, California or Dallas, Texas and,
if the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capitalized Leases which is capitalized on a Consolidated balance
sheet of the Borrower and its Subsidiaries) that in conformity with GAAP would
otherwise be classified as capital expenditures; provided, however, that Capital
Expenditures shall not include expenditures in connection with any Permitted
Sale-Leaseback Repurchase.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of Debt.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower free and clear of all Liens and having a maturity of not greater
than 360 days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
3
faith and credit of the Government of the United States, (b) insured
certificates of deposit or bankers' acceptances of or time deposits with any
commercial bank that (i) is a Lender or a member of the Federal Reserve System,
(ii) issues (or the parent of which issues) commercial paper rated as described
in clause (c), (iii) is organized under the laws of the United States or any
State thereof and (iv) has combined capital and surplus of at least $500
million, (c) commercial paper (other than commercial paper issued by or on
behalf of the Borrower or any of its Affiliates) issued by any corporation
organized under the laws of any State of the United States (i) maturing no more
than one year from the date of acquisition thereof and, at the time of
acquisition, rated at least "Prime-1" (or the then equivalent grade) by Moody's
Investors Services or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group, or (ii) maturing not more than 90 days from the date of
acquisition thereof and, at the time of acquisition, rated at least "Prime-2"
(or the then equivalent grade) by Moody's Investors Services or "A-2" (or the
then equivalent grade) by Standard & Poor's Ratings Group, and (d) money market
accounts maintained with any commercial bank satisfying the criteria set forth
in clause (b) above and (e) money market funds organized under the laws of the
United States or any State thereof that invest solely in (X) any of the types of
investments permitted under clauses (a) and (b) above, (Y) commercial paper
maturing no more than one year from the date of acquisition thereof and, at the
time of acquisition, rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Services or "A-1" (or the then equivalent grade) by Standard
&
Poor's Ratings Group, or (Z) any combination of the types of investments set
forth in items (X) and (Y) of this clause (e).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended or supplemented from time to time, and the
regulations promulgated pursuant thereto.
"Change of Control" means that either of the following events have
occurred: (i) any Person or Group becomes the beneficial owner of 50% or more of
the equity interests of the Borrower, on a fully diluted basis, or (ii) any
Person or Group acquires the voting power necessary to elect a majority of the
board of directors of the Borrower, or (iii) a "Change in Control" as defined in
the indenture relating to the senior subordinated notes of the Borrower
described in clause (A) of the definition of "Permitted Subordinated Debt."
"Closing Date" means the date on which each of the conditions in
Section 4.01 is satisfied or waived.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is subject to any Lien in favor of the
Agent, the Lenders or the Issuing Bank.
"Collateral Documents" means the Security Agreement, the Mortgages and
any Additional Mortgages.
"Collateral Release Date" has the meaning specified in Section
9.01(b).
4
"Collateral Release Test" means one or more of the following events:
(i) the senior unsecured Debt of the Borrower shall be rated at least "Baa3" (or
the then equivalent grade) by Moody's Investors Services, or (ii) the senior
unsecured Debt of the Borrower shall be rated at least "BBB-" (or the then
equivalent grade) by Standard & Poor's Ratings Group, or (iii) the Total Funded
Debt to EBITDA Ratio shall be less than or equal to 2.00:1.00 as of the end of
any two consecutive fiscal quarters; provided that, in each case, as of the date
of such event, no Default or Event of Default shall have occurred and be
continuing.
"Commitment" means a Revolving Commitment or a Swing Line Commitment.
"Commitment Fee Percentage" means a percentage per annum determined by
reference to the Total Funded Debt to EBITDA Ratio as set forth below:
Total Funded Debt Commitment Fee
to EBITDA Ratio Percentage
------------------ --------------
less than 1:75:1.0 0.150%
1.75:1.0 or greater, but less 0.200%
than 2.25:1.0
2.25:1.0 or greater, but less 0.250%
than 3.00:1.0
3.00:1.0 or greater, but less 0.325%
than 3.50:1.0
3.50:1.0 or greater 0.400%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Commitment Fee Percentage, the Total Funded Debt to EBITDA Ratio
shall be deemed to be greater than or equal to 3.50 to 1.0 at all times when a
Default has occurred and is continuing based on the Borrower's failure to
deliver any financial statement or compliance certificate in the form required
within five days after the date required for delivery thereof pursuant to
Sections 6.03(b) or 6.03(c), as applicable. For purposes of this Agreement, any
change in the Commitment Fee Percentage based on a change in the Total Funded
Debt to EBITDA Ratio shall be effective three Business Days after the date of
receipt by the Agent of the financial statements and compliance certificate
required by Sections 6.03(b) and 6.03(c), as applicable, reflecting such change.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender pursuant to this Agreement, the Loan
Documents and the transactions contemplated hereunder and thereunder, but does
not include any such information that is or becomes generally available to the
public other than as a result of a breach by the Agent or any Lender of its
obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
5
"Consolidated Net Income" means, for any period, the net earnings (or
loss) after taxes of the Borrower and its Subsidiaries on a Consolidated basis
determined for such period in conformity with GAAP.
"Consolidated Net Worth" means the excess of (i) the total assets of
the Borrower and its Subsidiaries determined on a Consolidated basis in
accordance with GAAP, over (ii) all liabilities of the Borrower and its
Subsidiaries determined on a Consolidated basis in accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Interest Type into Advances of the other Interest Type pursuant
to Section 2.06.
"CRC-I" means CRC-I Limited Partnership, a Massachusetts limited
partnership.
"CRC-II" means CRC-II Limited Partnership, a Massachusetts limited
partnership.
"CRC Excluded Debt" means (a) any Debt existing on the Closing Date of
FM 1993A Corp., a Delaware corporation, CRC-I, CRC-II, FM 1997 Limited
Partnership, a Delaware limited partnership, and FM 1997 Corp., a Delaware
corporation, and (b) any Debt referred to in clause (a) above with respect to
which any Excluded Subsidiary becomes an obligor or a co-obligor; provided, that
the aggregate principal amount for all such Debt outstanding at any time shall
not exceed $70,000,000; provided, further, that in determining the aggregate
amount of CRC Excluded Debt outstanding for purposes of this definition, any
such Debt with respect to which one or more of FM 1993A Corp., CRC-I and CRC-II
are co-obligors shall be included only once with respect to such determination.
"CRC Leases" means (a) the Master Lease between CRC-I and the
Borrower, dated as of December 15, 1993, as amended and supplemented from time
to time to the Closing Date, and (b) the Master Lease between CRC-II and the
Borrower, dated as of December 15, 1993, as amended and supplemented from time
to time to the Closing Date.
"CRC Notes" means the 9.75% Senior Secured Notes Due November 1, 2003
issued by FM 1993A Corp., a Delaware corporation.
"Currency Hedging Agreements" means currency swap agreements, currency
future or option contracts and other similar agreements.
"Debt" of any Person means without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than payables to trade
creditors and service providers incurred in the ordinary course of such Person's
business and not overdue by more than 60 days (unless being disputed in good
faith)), (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
6
are limited to repossession or sale of such property), (e) (i) all Obligations
of such Person as lessee under the CRC Leases, and (ii) all Obligations of such
Person as lessee under leases that have been or should be, in accordance with
GAAP, recorded as capital leases including, without limitation, the CRC Leases
("Capitalized Leases"), (f) all Obligations, contingent or otherwise, of such
Person under letter of credit facilities, banker's acceptance facilities or
similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of Redeemable Preferred Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends (other than Obligations
to pay dividends upon and after declaration of dividends to the extent such
dividends are permitted under Section 6.02(g)), (h) all Obligations of such
Person in respect of Hedge Agreements, (i) all Debt of others referred to in
clauses (a) through (h) above guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (j) all Debt
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt; provided, however, that, for purposes of
the definition of Debt, the Debt of Borrower and its Subsidiaries shall not
include any CRC Excluded Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Default Rate" has the meaning specified in Section 2.06(d).
"Disclosed Litigation" has the meaning specified in Section 4.01(e).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"EBITDA" means, for any period, (i) net income (or net loss) minus any
non-recurring or extraordinary gains plus (ii) to the extent deducted in
determining such net income (or net loss), the sum of (a) interest expense, (b)
income tax expense, (c) depreciation expense, (d) amortization expense, and (e)
non-recurring or extraordinary losses, in each case determined in accordance
with GAAP for such period.
7
"Eligible Assignee" means (a) any Lender Party and any Affiliate of
any Lender Party, and (b) any commercial bank, savings and loan association,
savings bank, finance company, insurance company, mutual fund or other financial
institution, fund or investor which has been approved in writing (or, in the
case of the Borrower, deemed approved as provided below) by the Borrower and the
Agent as an Eligible Assignee for purposes of this Agreement, provided that in
each such case such approval shall not be unreasonably withheld, and provided,
further, that if (i) the Borrower is requested in writing at any time to approve
any Person as an Eligible Assignee hereunder and the Agent has not received
written notice from the Borrower, within five Business Days after receipt by the
Borrower of such request, that the Borrower does not approve such Person as an
Eligible Assignee, the Borrower shall be deemed to have approved such Person as
an Eligible Assignee, and (ii) such approval of the Borrower shall not be
required if an Event of Default has occurred and is continuing.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
including, without limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any Environmental Law and (b) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
and any and all common law requirements, rules and bases of liability relating
to the environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water Act, the Toxic Substances Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide and Rodenticide Act and the Occupational Safety
and Health Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of
a reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
8
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to administer,
such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for any
Interest Period therefor, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the rate per annum obtained by
dividing (a) the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period
by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period. If for any reason the rate described in the foregoing
clause (a) is not available at the time of determination of the Eurodollar Rate
for any Eurodollar Rate Advances for any Interest Period, the term "Eurodollar
Rate" shall mean, for any such Eurodollar Rate Advances for any such Interest
Period therefor, an interest rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) equal to the rate per annum obtained by dividing (i)
the rate per annum appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period (provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates) by (ii) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(b).
9
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for any Eurodollar Rate Advance, the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 7.01.
"Excluded Asset Sale" means one or more of the following: (i) the sale
of inventory, equipment and other goods in the ordinary course of business of
the Borrower and its Subsidiaries; (ii) the sale of inventory, equipment, other
goods and other assets to franchisees of the Borrower in the ordinary course of
business of the Borrower and its Subsidiaries and consistent with past practice
of the Borrower excluding properties listed on Part I of Schedule 4.01(j); (iii)
the sale of any property or assets, excluding properties listed on Part I of
Schedule 4.01(j), pursuant to a Permitted Sale-Leaseback Transaction; (iv) the
sale, lease, transfer or disposal of any asset or assets by the Borrower or any
of its wholly-owned Subsidiaries to the Borrower or any of its wholly-owned
Solvent Subsidiaries (other than an Excluded Subsidiary or an Inactive
Subsidiary); (v) the sale or other disposition of obsolete or worn out equipment
or other assets in the ordinary course of business of the Borrower and its
Subsidiaries; (vi) the sale, lease, transfer or disposal of properties listed on
Schedule 1.01(b), as amended from time to time in accordance herewith; (vii) the
sale, lease, transfer or disposal of any property listed on Part I of Schedule
4.01(j); provided, however, that, at all times prior to the Collateral Release
Date, such sale, lease, transfer or disposal of properties shall constitute an
Excluded Asset Sale if and only if the Borrower shall prior to such sale add to
Part I of Schedule 4.01(j) an equivalent number of sites, the real estate of
each having a value not less than that of the property for which it is being
substituted and the Agent shall have received prior to or contemporaneously with
such sale (a) evidence satisfactory to the Agent that deeds of trust, trust
deeds and/or mortgages have been or will be contemporaneously duly recorded in
all filing or recording offices that the Agent may deem necessary or desirable
in order to create a valid first and subsisting Lien on the property described
therein in favor of the Agent for the benefit of the Lender Parties and that all
filing and recording taxes and fees have been or will be contemporaneously paid,
and (b) revised versions of Schedule 1.01(b) and Part I of Schedule 4.01(j),
reflecting such deletions and additions and marked to show the date of such
revisions; (viii) the sale, lease, transfer or disposal of assets having a fair
market value not exceeding $5,000,000 in the aggregate for the Borrower and its
Subsidiaries in any fiscal year of the Borrower; provided, however, that for
purposes of clause (viii) no sale, lease, transfer or disposal of assets having
a fair market value of less than $100,000 shall be included in any aggregation
of sales, leases, transfers and disposals thereunder; or (ix) the sale or other
disposition to a franchisee of the Borrower of (a) any restaurant that has been
acquired by the Borrower from a franchisee of the Borrower or (b) any other
restaurant owned or leased by the Borrower, provided that in each fiscal year of
the Borrower the aggregate value of such restaurants of the Borrower sold or
otherwise disposed of pursuant to this clause (ix) during such fiscal year does
not exceed the aggregate value of restaurants acquired by the Borrower from its
franchisees during such fiscal year.
10
"Excluded Subsidiaries" means (a) FM 1997 Limited Partnership, a
Delaware limited partnership, (b) FM 1997 Corp., a Delaware corporation and (c)
any other special purpose Subsidiary of the Borrower created or to be created
solely for (i) the purpose of such Subsidiary's purchase of estates for years
from CRC-I or CRC-II and (ii) purposes ancillary thereto; provided, that such
estates for years constitute direct or indirect security for the CRC Notes.
"Existing Credit Agreement" means that certain Amended and Restated
Revolving Credit Agreement, dated as of March 15, 1996, among the Borrower, the
banks named therein, Credit Lyonnais New York Branch, as agent, collateral agent
and swing line bank, and Union Bank, as issuing bank, as amended, supplemented
or otherwise modified to the date hereof.
"Existing Letters of Credit" means the letters of credit described on
Schedule 1.01(a) issued under the Existing Credit Agreement.
"Existing Senior Note Indenture" means that certain Indenture, dated
as of March 1, 1992, between the Borrower and the trustee named therein, as
amended by First Supplemental Indenture, dated as of July 28, 1997, pursuant to
which the Existing Senior Notes were issued.
"Existing Senior Notes" means the 9.25% Senior Notes of the Borrower
Due 1999, issued pursuant to the Existing Senior Note Indenture.
"Existing Senior Subordinated Note Indenture" means that certain
Indenture, dated as of March 1, 1992, between the Borrower and the trustee named
therein, pursuant to which the Existing Senior Subordinated Notes were issued.
"Existing Senior Subordinated Notes" means the 9.75% Senior
Subordinated Notes of the Borrower Due 2002, issued pursuant to the Existing
Senior Subordinated Note Indenture.
"Existing Warrants" means the warrants to purchase not more than
100,000 shares of the Borrower's common stock issued and outstanding on the
Closing Date under that certain Warrant Purchase Agreement, dated as of
December 8, 1988.
"Facility" means the Revolving Facility, the Letter of Credit Facility
or the Swing Line Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
11
"Foreign Subsidiary" means any "controlled foreign corporation" within
the meaning of Section 957(a) of the Internal Revenue Code as to which the
Borrower or any of its Subsidiaries is a "United States shareholder" as defined
in Section 951(b) of the Internal Revenue Code.
"Funded Debt" of any Person means, without duplication, (A) Debt of
such Person referred to in clauses (a), (c) and (e) of the definition of "Debt",
and (B) to the extent that the underlying guaranteed Debt would be Debt of the
types referred to in clause (A) of this definition, Debt of such Person referred
to in clause (i) of the definition of "Debt".
"GAAP" has the meaning specified in Section 1.03.
"Group" has the meaning specified in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect on the date hereof.
"Guarantor" means each present and future direct or indirect
Subsidiary of the Borrower, other than the Excluded Subsidiaries and any Foreign
Subsidiary.
"Guaranty" has the meaning specified in Section 4.01(h)(ix), and
includes any amendment to Guaranty delivered hereunder.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"Headquarters Property" means the real property and improvements
located at 9330 Balboa Avenue, San Diego, California.
"Hedge Agreements" means Interest Rate Contracts and Currency Hedging
Agreements.
"Inactive Foreign Subsidiaries" means Foodmaker Franchising Overseas
Limited, a British Virgin Islands corporation, and Foodmaker International (Hong
Kong), Ltd., a Hong Kong corporation.
"Inactive Subsidiaries" means CP Distribution Co., a Delaware
corporation, CP Wholesale Co., a Delaware corporation, Foodmaker International
Franchising, a Delaware corporation, Jack In The Box, Inc., a New Jersey
corporation, and the Inactive Foreign Subsidiaries.
12
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Information Memorandum" means the information memorandum dated March
1998 used by the Agent in connection with the syndication of the Commitments.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA,
computed using assumptions required by the PBGC.
"Interest Period" has the meaning specified in Section 2.06(b).
"Interest Rate Contracts" means interest rate swap, cap or collar
agreements, interest rate future or option contracts and other similar
agreements.
"Interest Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clauses (i) and (j) of the definition of "Debt" in
respect of such Person; provided, however, that the term "Investment" shall not
include any of (a) advances to customers, suppliers, franchisees or contractors
in the ordinary course of business that are, in conformity with GAAP, recorded
as accounts receivable, prepaid expenses or deposits on the balance sheet of the
Borrower or its Subsidiaries, (b) any obligations of the Borrower or its
Subsidiaries with respect to any CRC Excluded Debt or (c) any Permitted
Refinancing.
"Issue" means, with respect to any Letter of Credit, either issue such
Letter of Credit, extend the expiry of such Letter of Credit (other than any
such extension occurring pursuant to the terms of such Letter of Credit), renew
such Letter of Credit (other than any such renewal occurring pursuant to the
terms of such Letter of Credit), or increase the amount of such Letter of
Credit, and the terms "Issued", "Issuing", and "Issuance" shall have
corresponding meanings.
"Issuing Bank" means the L/C Bank and any other Revolving Lender that
is a commercial bank, acting through a domestic branch, as issuer of a Letter of
Credit.
13
"Lender Party" means any Lender or any Issuing Bank.
"Lenders" means the Initial Lenders and each Eligible Assignee that
shall become a party hereto pursuant to Section 9.07.
"L/C Advance" means a payment made by an Issuing Bank under a Letter
of Credit.
"L/C Bank" means NationsBank in its capacity as an Issuing Bank.
"L/C Cash Collateral Account" has the meaning specified in Section
7.02.
"L/C Related Documents" has the meaning specified in Section 3.04(a).
"L/C Sublimit" means $25,000,000 as such amount may be reduced
pursuant to Section 2.04.
"Letter of Credit" means any letter of credit issued hereunder.
"Letter of Credit Agreement" has the meaning specified in Section
3.02(a).
"Letter of Credit Facility" means the amount of Letters of Credit the
Issuing Banks may elect to issue pursuant to Section 3.01.
"Letter of Credit Obligations" means, as of any date of determination
with respect to any Letter of Credit, the sum of (a) the then outstanding
Available Amount of such Letter of Credit, and (b) the aggregate amount of the
Unreimbursed Letter of Credit Liability thereunder.
"Letter of Credit Subfacility" has the meaning specified in Section
3.01.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Collateral Documents and each Letter of Credit Agreement.
"Loan Parties" means the Borrower, the Guarantors and any other
Subsidiary of the Borrower that is, from time to time, a party to a Loan
Document (including pursuant to Section 6.01(l) hereof).
"Margin Stock" has the meaning specified in Regulation U.
14
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the rights and remedies of the Agent or any Lender Party under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations under
any Loan Document to which it is or is to be a party.
"Mortgage" has the meaning specified in Section 4.01(h)(viii).
"Mortgage Policy" has the meaning specified in Section 4.01(h)(viii).
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding six plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt or capital
stock, any securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock by any Person, the
aggregate amount of cash received from time to time by or on behalf of such
Person in connection with such transaction after deducting therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a direct result of such
transaction and (c) the amount of any Debt secured by a Lien on such asset that,
by the terms of such transaction, is required to be repaid upon such
disposition, in each case with respect to the foregoing clauses (a) and (c) to
the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid to a Person that is not an Affiliate
and are properly attributable to such transaction or to the asset that is the
subject thereof; provided, however, that Net Cash Proceeds shall not include any
such cash received by or on behalf of such Person with respect to (i) the
Existing Warrants or (ii) any securities convertible into or exchangeable for
capital stock issued to any officer, director, employee or consultant of such
Person or any warrants, rights or options to acquire capital stock issued to any
officer, director, employee or consultant of such Person to the extent permitted
under 6.02(g).
"Note" means a Revolving Note or a Swing Line Note.
15
"Notice of Borrowing" means a notice in substantially the form of
Exhibit B-1.
"Notice of Issuance" means a notice in substantially the form of
Exhibit C.
"Notice of Swing Line Borrowing" means either (a) a notice
substantially in the form of Exhibit B-2, or (b) notice by teletransmission or
telephonic notice of the information required by Exhibit B-2.
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 7.01(f). Without limiting the generality of
the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.10(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted CRC Transaction" shall mean any transaction under which
(i) the Borrower or any Excluded Subsidiary purchases from CRC-I, CRC-II or any
Excluded Subsidiary (whether existing as of the Closing Date or formed after the
Closing Date) some or all of the estates for years owned as of the Closing Date
by any of CRC-I, CRC-II or any Excluded Subsidiary or (ii) the Borrower or any
Excluded Subsidiary is or becomes a party to any CRC Lease (whether by
assignment, novation or otherwise).
"Permitted Encumbrances" means: (a) Liens for taxes, assessments and
governmental charges or levies not yet due and payable or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as applicable, in conformity with GAAP; (b) Liens imposed by law,
such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings; (c) Liens, pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (d) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
16
interfere with the ordinary conduct of the business of the Borrower or such
Subsidiary; (e) attachment or judgment Liens not giving rise to a Default or
Event of Default; and (f) leases or subleases granted to others not interfering
with the ordinary conduct of business of the Borrower or any of its
Subsidiaries.
"Permitted Liens" means: (a) Permitted Encumbrances; (b) Liens in
favor of a trustee in an indenture relating to the Borrower's public Debt to the
extent such Liens secure customary compensation and reimbursement obligations of
such trustee under such indenture; (c) Liens arising in connection with
obligations under Capitalized Leases permitted hereunder, provided that no such
Liens shall cover or extend to assets other than assets subject to such
Capitalized Leases and the proceeds thereof; (d) any mortgage, encumbrance or
other Lien upon, or security interest in, any property hereafter acquired by the
Borrower or its Subsidiaries, created contemporaneously with such acquisition to
secure or provide for the payment or financing of any part of the purchase price
thereof, or the assumption of any Lien upon, or security interest in, any such
property hereafter acquired existing at the time of such acquisition, or the
acquisition of any such property subject to any Lien without the assumption
thereof or any Permitted Refinancing thereof; provided, that (A) the Debt
secured by any such Lien shall not exceed $5,000,000 individually or $15,000,000
in the aggregate in any fiscal year of the Borrower and (B) each such Lien shall
attach only to the property so acquired and fixed improvements thereon; (e)
existing Liens (not attaching to any Collateral) on properties of the Borrower
or its Subsidiaries constituting direct or indirect security for the CRC Notes
and existing Liens (not attaching to any Collateral) pursuant to the CRC Leases;
(f) existing Liens (not attaching to any Collateral) with respect to sale-
leaseback transactions consummated by the Borrower prior to the Closing Date;
and (g) Liens existing on the date hereof described on Schedule 1.01(c) and
other Liens existing on the date hereof securing Debt in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding.
"Permitted Refinancing" shall mean any refinancing of existing Debt
(other than the Existing Senior Notes) in which (a) the principal amount of Debt
resulting from such refinancing does not exceed the sum of (i) the principal
amount of Debt so refinanced plus (ii) customary fees and expenses incurred in
connection with such refinancing, (b) the maturity of the Debt resulting from
such refinancing does not occur sooner than the maturity of the Debt so
refinanced, (c) (i) Debt ranking subordinate to the Advances and Letter of
Credit Obligations is replaced with other subordinated Debt which constitutes
Permitted Subordinated Debt, (ii) Debt ranking pari passu with the Advances and
Letter of Credit Obligations is replaced with either subordinated Debt which
constitutes Permitted Subordinated Debt or pari passu Debt and (iii) Debt
secured by a Permitted Lien is replaced by Debt with no greater security than
the Debt being replaced, and (d) the direct obligors therefor do not change.
"Permitted Sale-Leaseback Repurchase" means any repurchase by the
Borrower or any of its Subsidiaries of a restaurant formerly sold by the
Borrower or any of its Subsidiaries to a third party and at such time leased
back to the Borrower or such Subsidiary; provided, however, that if the
restaurant subject thereto is not re-sold by the Borrower or any such Subsidiary
to a third party within twenty-four (24) months of such repurchase then (a) such
repurchase as of the end of such twenty-fourth (24th) month shall cease to
17
qualify as a Permitted Sale-Leaseback Repurchase and (b) the amount of such
repurchase shall constitute a Capital Expenditure deemed to be made in its
entirety on the last day of such twenty-four (24) month period.
"Permitted Sale-Leaseback Transaction" means any sale and leaseback
transaction with any Person providing for the leasing by the Borrower or any of
its Subsidiaries of real or personal property which has been sold by the
Borrower or such Subsidiary for fair value for cash consideration only to such
Person in an aggregate amount of gross proceeds for all such sales in any period
set forth below not to exceed the amount set forth below for such period:
Fiscal Year
Ending In Amount
----------- ------------
1998 $90,000,000
1999 $100,000,000
2000 $120,000,000
2001 $150,000,000
2002 $150,000,000
2003 $150,000,000
"Permitted Subordinated Debt" means (A) senior subordinated notes of
the Borrower due 2008 issued on terms and conditions substantially as set forth
in the Offering Memorandum dated March 27, 1998 and in the draft indenture
relating thereto delivered to the Lender Parties prior to the date hereof (with
no changes to clause (i) of the second paragraph of Section 4.07(a) of such
draft indenture), and (B) any other Debt of any Loan Party that (i) is
subordinated to the Obligations of the Loan Parties under the Loan Documents on
terms and conditions satisfactory to the Required Lenders, (ii) requires no
scheduled principal payments prior to, and has a final maturity date at least 12
months after, the Termination Date, determined as of the date of incurrence, and
(iii) otherwise contains terms and conditions reasonably satisfactory to the
Required Lenders.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or priority
over any other capital stock issued by such corporation upon any distribution of
such corporation's assets, whether by dividend or upon liquidation.
"Projections" means the Projected Financial Data and Assumptions
contained in Section IX of the Information Memorandum.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time, the product of (a) a fraction the numerator of which is such Lender's
18
Revolving Commitment (without giving effect to any termination thereof pursuant
to Section 7.01) at such time and the denominator of which is the Revolving
Facility (without giving effect to any termination of Commitments pursuant to
Section 7.01) at such time times (b) such amount.
"Redeemable" means, with respect to any capital stock, Debt or other
right or Obligation, any such right or Obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at the option
of the holder.
"Redemption Amount" means $125,000,000, which represents the amount
payable by, or on behalf of, the Borrower in order to redeem, repurchase or
repay 100% of the Borrower's Existing Senior Notes; provided that, for purposes
of determining the Unused Revolving Commitment of each Revolving Lender, the
Redemption Amount shall be reduced on each Redemption Deposit Date by an amount
equal to the aggregate principal amount of Existing Senior Notes to be redeemed
on the related Redemption Date (but only to the extent such aggregate principal
amount is deposited with the trustee under, and in accordance with, the Existing
Senior Note Indenture).
"Redemption Date" means a date specified in a Redemption Notice as a
date on which Existing Senior Notes are to be redeemed by the Borrower.
"Redemption Deposit Date" means the last date on which the Redemption
Amount or any portion thereof is required to be deposited by the Borrower with
the trustee or paying agent under the Existing Senior Note Indenture pursuant to
Section 3.04 of the Existing Senior Note Indenture in order to redeem Existing
Senior Notes on any Redemption Date.
"Redemption Notice" means a notice of redemption pursuant to which the
Borrower (or the trustee under the Existing Senior Note Indenture on behalf of
the Borrower) has given irrevocable notice (pursuant to Sections 3.03 and 3.05
of the Existing Senior Note Indenture) to the holders of the Existing Senior
Notes that Existing Senior Notes are to be redeemed by the Borrower on the
Redemption Date specified therein.
"Register" has the meaning specified in Section 9.07(c).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Lenders" means at any time Lender Parties owed or holding
more than 50% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, or, if no such principal amount and no
Letters of Credit are outstanding at such time, Lenders holding more than 50% of
the aggregate Commitments under all the Facilities at such time. For purposes of
this definition, the Available Amount of each Letter of Credit and the aggregate
principal amount of all outstanding Swing Line Advances shall be considered to
be owed to the Revolving Lenders ratably in accordance with their respective
Revolving Commitments.
19
"Revolving Advance" has the meaning specified in Section 2.01(a).
"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Advances of the same Interest Type made by the Revolving Lenders.
"Revolving Commitment" means, (i) with respect to any Revolving Lender
listed on Schedule I, the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving Commitment," (ii) with respect to any
Revolving Lender not listed on Schedule I hereto, the amount set forth in the
Assignment and Acceptance pursuant to which such Person became a Revolving
Lender hereunder, or (iii) if any of such Lenders has entered into one or more
Assignments and Acceptances, the amount set forth for such Lender in the
Register maintained by the Agent pursuant to Section 9.07(c) as such Lender's
"Revolving Commitment", in the case of each of the foregoing clauses (i), (ii)
and (iii), as such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"Revolving Commitment Termination Date" means March 30, 2003.
"Revolving Facility" means, at any time, the aggregate amount of the
Revolving Lenders' Revolving Commitments at such time.
"Revolving Lender" means any Lender that has a Revolving Commitment.
"Revolving Note" means a promissory note of the Borrower payable to
the order of any Revolving Lender, in substantially the form of Exhibit D-1
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Advances made by such Lender.
"Security Agreement" has the meaning specified in Section
4.01(h)(vii).
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
20
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) (b) the interest in the capital or profits of such partnership,
limited liability company or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Surviving Debt" has the meaning specified in Section 4.01(c).
"Surviving Debt Agreement" means any agreement or instrument setting
forth the terms and conditions of any Surviving Debt.
"Swing Line Advance" means an advance by a Swing Line Lender to the
Borrower pursuant to Section 2.01(b).
"Swing Line Borrowing" means a borrowing consisting of simultaneous
Swing Line Advances made by the Swing Line Lender.
"Swing Line Commitment" means, with respect to the Swing Line Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Swing Line Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances with respect to the Swing Line
Commitment, the amount set forth for the Swing Line Lender in the Register
maintained by the Agent pursuant to Section 9.07(c) as such Lender's "Swing Line
Commitment", in each case as such amount may be reduced at or prior to such time
pursuant to Section 2.04.
"Swing Line Facility" means, at any time, the aggregate amount of the
Swing Line Lender's Swing Line Commitment at such time.
"Swing Line Lender" means NationsBank and any assignee of the Swing
Line Commitment which assumes such Swing Line Commitment in accordance with the
terms of Section 9.07.
"Taxes" has the meaning specified in Section 2.10(a).
"Termination Date" means the earlier of March 31, 2003 and the date of
termination in whole of the Revolving Commitments pursuant to Section 2.04 or
7.01.
"Total Funded Debt to EBITDA Ratio" means the ratio of (i) Funded Debt
of the Borrower and its Subsidiaries on a Consolidated basis, to (ii)
Consolidated EBITDA of the Borrower and its Subsidiaries, in each case for the
period of the then most recently ended period of four consecutive fiscal
quarters of the Borrower.
21
"Unreimbursed Letter of Credit Liability" means, as of any date of
determination with respect to any Letter of Credit, the aggregate amount of all
L/C Advances which have been made by, and not reimbursed to, the Issuing Bank
under such Letter of Credit.
"Unused Revolving Commitment" means, with respect to any Revolving
Lender at any time, (a) such Lender's Revolving Commitment at such time, minus
(b) the sum of (i) the aggregate principal amount of all Revolving Advances of
such Lender outstanding at such time, plus (ii) such Lender's Pro Rata Share of
the aggregate Letter of Credit Obligations outstanding at such time, plus, (iii)
such Lender's Pro Rata share of all Swing Line Advances outstanding at such
time, plus (iv) such Lender's Pro Rata Share of the Redemption Amount in effect
at such time.
"Unused Swing Line Commitment" means, with respect to the Swing Line
Lender at any time, the lesser of (i) the remainder of (a) such Lender's Swing
Line Commitment at such time, minus (b) the aggregate principal amount of all
Swing Line Advances made by such Lender and outstanding at such time, and (ii)
the aggregate Unused Revolving Commitments at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 5.01(f) ("GAAP").
Section 1.04. Other Definitional Provisions. References to Sections
and subsections shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specified. The term "including" means including
without limitation.
22
ARTICLE II.
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. The Advances.
(a) Revolving Advances. Each Revolving Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each a
"Revolving Advance") to the Borrower from time to time on any Business Day
during the period from the Closing Date until the Revolving Commitment
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Commitment on such Business Day after giving effect to any
repayment of Swing Line Advances made or to be made with the proceeds thereof
pursuant to a designation therefor set forth by the Borrower in a Notice of
Borrowing for such Borrowing or pursuant to a Notice of Borrowing given by the
Agent in accordance with Section 2.02(f). Each Revolving Borrowing shall be in
an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Revolving Advances made by the Lenders
ratably according to their respective Revolving Commitments. Within the limits
of each Revolving Lender's Unused Revolving Commitment in effect from time to
time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to
Section 2.05 and reborrow under this Section 2.01(a).
(b) Swing Line Advances. The Swing Line Lender agrees, on the terms
and conditions hereinafter set forth, to make advances (each a "Swing Line
Advance") to the Borrower from time to time on any Business Day during the
period from the Closing Date until the Termination Date in an amount not to
exceed the Swing Line Lender's Unused Swing Line Commitment on such Business
Day. Each Swing Line Borrowing shall consist of Base Rate Advances and shall be
in an amount equal to $1,000,000 or an integral multiple of $500,000 in excess
thereof. Immediately upon the making of each Swing Line Advance by the Swing
Line Lender, the Swing Line Lender shall be deemed to have sold and transferred
to each Lender, and each Lender shall be deemed to have purchased and received
from the Swing Line Lender, in each case irrevocably and without any further
action by any party, an undivided interest and participation in such Swing Line
Advance and the Obligations of the Borrower under this Agreement in respect
thereof in an amount equal to such Lender's Pro Rata Share of such Swing Line
Advance; provided, however, that (i) no Lender shall be required to fund its
participation in any such Swing Line Advance until demand therefor is made by
the Agent pursuant to Section 2.02(f)(ii) hereof, and (ii) no Lender shall be
entitled to share in any payments of principal or interest in respect of its
participation in any such Swing Line Advance except to the extent set forth in
Section 2.02(f)(ii) hereof with respect to any such participation which has been
funded by such Lender as provided therein. Within the limits of the Swing Line
Lender's Unused Swing Line Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(b), prepay pursuant to Section 2.05 and
reborrow under this Section 2.01(b).
Section 2.02. Making the Advances.(a) Initial Borrowings. The
initial Borrowings hereunder shall be made on the Closing Date and shall be made
on notice received by the Agent from the Borrower (pursuant to a Notice of
Borrowing) not later than 12:00 noon (Dallas, Texas time) (or such later time
as the Agent may agree) on the Business Day immediately preceding the Closing
23
Date. Such Notice of Borrowing shall be irrevocable upon receipt by the Agent.
Each Lender shall, before 12:00 noon (Dallas, Texas time) on the Closing Date,
make available for the account of its Applicable Lending Office to the Agent
such Lender's ratable share of such Borrowings by depositing same day funds in
the Agent's Account.
(b) Subsequent Revolving Borrowings. Each Revolving Borrowing
occurring after the Closing Date shall be made on notice received by the Agent
from the Borrower (pursuant to a Notice of Borrowing) not later than 12:00 noon.
(Dallas, Texas time) (a) on the Business Day prior to the date of such Borrowing
if such Borrowing consists of Base Rate Advances, and (b) on the third Business
Day prior to the date of such Borrowing if such Borrowing consists of Eurodollar
Rate Advances. Each such Notice of Borrowing shall be irrevocable upon receipt
by the Agent and, in the case of any Notice of Borrowing for Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified by such Notice of Borrowing the applicable conditions
set forth in this Section 2.02 or Article IV, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as a part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
(c) Swing Line Borrowings. Each Swing Line Borrowing shall be made
on notice received by the Agent from the Borrower (pursuant to a Notice of Swing
Line Borrowing) not later than 1:30 p.m. (Dallas, Texas time) on the date of
such Borrowing. Each such Notice of Swing Line Borrowing shall be irrevocable
upon receipt by the Agent.
(d) Advances by Lenders. If the Agent receives a Notice of
Borrowing, or a Notice of Swing Line Borrowing (or if the Agent gives a Notice
of Borrowing pursuant to Section 2.02(f)) the Agent shall promptly on the
Business Day prior to the date of such Borrowing or, if such Borrowing consists
of Eurodollar Rate Advances, the third Business Day prior to the date of such
Borrowing) give each Lender notice of such Notice of Borrowing or Notice of
Swing Line Borrowing. Each Lender shall (i) before 12:00 noon (Dallas, Texas
time) on the date of such Borrowing in the case of any Revolving Borrowing to be
made on such date, or (ii) before 4:00 p.m. (Dallas, Texas time) on the date of
such Borrowing in the case of a Swing Line Borrowing, make available for the
account of its Applicable Lending Office to the Agent such Lender's ratable
portion of such Borrowing by depositing same day funds in the Agent's Account.
Unless the Agent shall have received written notice from a Revolving Lender
prior to the date of any Revolving Borrowing hereunder that such Lender will not
make available to the Agent such Lender's ratable portion of such Borrowing, the
Agent may assume that such Lender has made such ratable portion available to the
Agent on the date of such Borrowing in accordance with the terms hereof and the
Agent may, in reliance upon such assumption, but shall not be required to, make
available to or for the account of the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Agent and the Agent makes such ratable portion
available to the Borrower, such Lender and the Borrower, without prejudice to
any rights or remedies that the Borrower may have against such Lender, severally
agree to repay to the Agent forthwith on demand such corresponding amount
24
together with interest thereon, for each day from the date such amount is made
available to or for the account of the Borrower until the date such amount is
repaid to the Agent, at (A) in the case of the Borrower, the interest rate
applicable at the time to the Advances comprising such Borrowing, and (B) in the
case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Agent such amount, such amount so paid shall constitute such Lender's Advance as
part of the relevant Borrowing for purposes of this Agreement and, to the extent
that the Borrower previously paid such amount to the Agent, the Agent will
refund to the Borrower such amount so paid, but without interest.
(e) Disbursement of Advances. Upon fulfillment of the applicable
conditions set forth in Article IV (which fulfillment the Agent may assume in
the absence of actual knowledge, or notice received from the Borrower or the
Required Lenders, to the contrary), the Agent will make funds for any Borrowing
available to the Borrower by crediting the Borrower's Account (or to such other
accounts as may be designated from time to time in writing by the Borrower to
the Agent and approved by the Agent in writing (such approval not to be
unreasonably withheld)), subject to the Agent's receipt of funds from the
Lenders, and provided that the Agent shall first make a portion of such funds
equal to any outstanding L/C Advance under any Letter of Credit, and any
interest accrued and unpaid thereon to and as of such date, available to the
applicable Issuing Bank for reimbursement of such L/C Advance and payment of
such interest.
(f) Settlement of Swing Line Advances. (i) The Agent may, and upon
request by the Swing Line Lender the Agent shall, at any time and from time to
time, give to the Revolving Lenders and the Borrower a Notice of Borrowing for a
Borrowing of Revolving Advances which are Base Rate Advances on behalf of the
Borrower, in each case in an amount equal to the aggregate amount of Swing Line
Advances then owing by the Borrower (or such lesser amount as the Agent or the
Swing Line Lender shall specify), and the proceeds of which are to be used to
prepay such Swing Line Advances on the date of such Borrowing. Upon receipt of
any such Notice of Borrowing, each Lender (other than the Swing Line Lender)
shall (subject to Section 2.02(f)(iv)), on or before the time specified by the
Agent (which in no event shall be earlier than 11:00 a.m. nor later than 4:00
p.m. (Dallas, Texas time) on the Business Day following the date on which such
Notice of Borrowing is given), make available for the account of its Applicable
Lending Office to the Agent such Lender's Pro Rata Share of such Borrowing by
depositing same day funds in the Agent's Account. Notwithstanding any contrary
provision of this Agreement, (A) the proceeds of any such Borrowing shall be
distributed by the Agent to the Swing Line Lender (subject to Section
2.02(f)(iv)) as a prepayment of all or a portion of the then outstanding Swing
Line Advances, and (B) the outstanding Swing Line Advances of the Swing Line
Lender, in an amount equal to the Swing Line Lender's Pro Rata Share of the
aggregate amount of the Swing Line Advances to be prepaid on such date, shall be
deemed to be prepaid with the proceeds of a Revolving Advance made by the Swing
Line Lender and such portion of the Swing Line Advances deemed to be so prepaid
shall no longer be outstanding as Swing Line Advances but shall be outstanding
as Revolving Advances made by the Swing Line Lender.
25
(ii) In addition to the right of the Swing Line Lender to require a
Borrowing under Section 2.02(f)(i), the Swing Line Lender may at any time and
from time to time request (by notice to the Agent and the Borrower) the Agent
to, and upon receipt of such request the Agent shall, make demand on each Lender
for payment of its participation in each Swing Line Advance then outstanding,
and upon receipt of any such demand each Lender shall (subject to Section
2.02(f)(iv)) promptly fund such participation by paying to the Agent, for the
ratable account of the Swing Line Lender (subject to Section 2.02(f)(iv)), the
amount of such participation in same day funds. With respect to each such
participation in the Swing Line Advance which is funded by any Lender, the Swing
Line Lender shall promptly pay to the Agent, and the Agent shall promptly pay to
such Lender, in lawful money of the United States and in the kind of funds so
received, an amount equal to such Lender's ratable share of all payments
received by the Swing Line Lender in respect of (A) the principal of such Swing
Line Advance, and (B) interest on such Swing Line Advance for the period from
and after the date on which such participation was funded. If any payment
received by the Swing Line Lender on account of the Swing Line Advance and
distributed to any Lender as a participant under the preceding sentence is
thereafter recovered from the Swing Line Lender in connection with any
bankruptcy or insolvency proceeding relating to the Borrower or otherwise, each
Lender which received such distribution shall, upon demand by the Swing Line
Lender through the Agent, repay to the Swing Line Lender such Lender's ratable
share of the amount so recovered together with such Lender's ratable share
(according to the proportion of (1) the amount of such Lender's required
prepayment to (2) the total amount so recovered) of any interest or other amount
paid or payable by the Swing Line Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender purchasing a participation in
the Swing Line Advance from the Swing Line Lender hereunder may, to the fullest
extent permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
(iii) Anything contained herein to the contrary notwithstanding
(but subject to Section 2.02(f)(iv) below), the obligation of each Lender to
make any Revolving Advance pursuant to Section 2.02(f)(i) or to fund its
participation in any Swing Line Advances pursuant to Section 2.02(f)(ii) shall
be absolute and unconditional and shall not be subject to any conditions set
forth in Article IV hereof or otherwise affected by any circumstance including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Swing Line Lender or any Loan
Party; (B) the occurrence or continuance of a Default or Event of Default;
(C) any adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party; (D) any
breach of any Loan Document by the Borrower, any other Loan Party or any other
Lender Party; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(iv) Notwithstanding Section 2.02(f)(iii) above, if at the time that
any Lender is required to make any Revolving Advance or fund any participation
pursuant to Section 2.02(f)(i) or (ii) above, the Borrower would not otherwise
be entitled to obtain a Borrowing as a result of the failure of any of the
conditions set forth in Article IV hereof, the obligation of each Lender to make
any such Revolving Advance or to fund any such participation with respect to any
26
Swing Line Advance owing to the Swing Line Lender shall be subject to the
condition that at least one of the following is true: (A) the Swing Line Lender
shall have believed in good faith that all conditions under Article IV to the
making of such Swing Line Advance were satisfied at the time such Swing Line
Advance was made, or (B) such Lender shall have had actual knowledge, by receipt
of the statements required pursuant to Section 6.03 or otherwise, that any such
condition had not been satisfied and failed to notify the Swing Line Lender and
the Agent in writing that it had no obligation to make Revolving Advances until
such condition was satisfied (which notice shall be effective as of the date of
receipt by the Swing Line Lender and the Agent), or (C) the satisfaction of any
such condition not satisfied shall have been waived by the Required Lenders
prior to or at the time such Swing Line Advance was made. Anything contained in
this Section 2.02(f) to the contrary notwithstanding, the amount to be
distributed by the Agent to the Swing Line Lender under this Section 2.02(f)
shall be reduced to the extent that any Lender shall refuse to fund its portion
of any Revolving Advance or participation with respect to the Swing Line Lender
as a result of the failure of the conditions set forth above.
(v) The Borrower irrevocably authorizes (A) the Agent to give any
Notice of Borrowing pursuant to Section 2.02(f)(i) (with a copy to the
Borrower), (B) the Lenders to make the Revolving Advances pursuant to such
Notice of Borrowing, and (C) the Agent to distribute the proceeds thereof as
provided herein.
(g) Nature of Lenders' Obligations. The failure of any Lender to
make the Advance to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on the date
of any Borrowing.
Section 2.03. Repayment.
(a) Revolving Advances. The Borrower shall repay to each Lender (in
accordance with the provisions of Section 2.09(a)) on the Revolving Commitment
Termination Date the aggregate principal amount of all Revolving Advances owing
to such Lender outstanding on the Revolving Commitment Termination Date.
(b) L/C Advances. The Borrower shall repay each L/C Advance as
provided in Section 3.03.
(c) Swing Line Advances. The Borrower shall repay to the Swing Line
Lender (in accordance with the provisions of Section 2.09(a)) on the Termination
Date the aggregate principal amount of all Swing Line Advances owing to such
Lender outstanding on the Termination Date.
Section 2.04. Reduction of the Revolving Commitments, Swing Line
Commitment and Letter of Credit Subfacility.
(a) Optional Reductions. The Borrower shall have the right, upon at
least three Business Days' notice to the Agent, to terminate in whole or reduce
27
ratably in part the unused portions of the respective Revolving Commitments of
the Revolving Lenders; provided, however, that (i) each partial reduction shall
be in an amount of $5,000,000 or any multiple of $1,000,000 in excess thereof,
and (ii) the aggregate amount of the Revolving Commitments shall not be reduced
pursuant to this Section 2.04 to an amount less than the sum of (A) the
aggregate principal amount of all Revolving Advances then outstanding, (B) the
aggregate amount of all Letter of Credit Obligations then outstanding, and (C)
the aggregate principal amount of all Swing Line Advances then outstanding.
(b) Mandatory Reductions. The Revolving Facility shall be
automatically and permanently reduced on a pro rata basis on each date on which
prepayment thereof is required to be made (or would be required to be made if
any Revolving Advances were then outstanding) pursuant to Section 2.05(b)(iii)
in an amount equal to the Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in the transaction giving rise to such required prepayment.
Each such reduction of the Revolving Facility shall be made ratably among the
Revolving Lenders in accordance with their Revolving Commitments.
(c) Reduction of Swing Line Commitment. The Swing Line Commitment
of the Swing Line Lender shall be (i) terminated automatically and
simultaneously upon any termination in whole of the Revolving Commitments, and
(ii) reduced by an amount equal to the amount by which, as a result of any
partial reduction of the Revolving Commitments of the Lenders, the aggregate
Revolving Commitments of the Lenders are reduced below $5,000,000.
(d) Reduction of the Letter of Credit Subfacility. The Letter of
Credit Subfacility shall be (i) terminated automatically and simultaneously upon
any termination in whole of the Revolving Commitments, and (ii) reduced by an
amount equal to the amount by which, as a result of any partial reduction of the
Revolving Commitments of the Lenders, the aggregate Revolving Commitments of the
Lenders are reduced below $25,000,000 (any such reduction of the Letter of
Credit Subfacility to be effective automatically and simultaneously with any
such reduction of the Revolving Commitments).
Section 2.05. Prepayments
(a) Optional Prepayments. The Borrower may, upon prior notice to the
Agent (which may be given on the date of prepayment in the case of prepayment of
Swing Line Advances, and which shall be given at least one Business Day in
advance in the case of prepayment of Revolving Advances which consist of Base
Rate Advances and three Business Days in advance in the case of prepayment of
Revolving Advances which are Eurodollar Rate Advances, stating the proposed date
and aggregate principal amount of the prepayment and Interest Type of Advances
to be prepaid (and if such notice is given the Borrower shall), prepay in whole
or in part the outstanding principal of Advances of such Interest Type, together
with in the case of any prepayment of Eurodollar Rate Advances, interest
thereon to the date of such prepayment on the principal amounts prepaid (plus,
in the case of prepayment of Eurodollar Rate Advances prior to the end of the
applicable Interest Period, any additional amount for which the Borrower shall
be obligated pursuant to Section 9.04(c)); provided, however, that each partial
prepayment shall be in an aggregate principal amount of (i) in the case of any
28
Eurodollar Rate Advance, $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, and (ii) in the case of any Base Rate Advance, $1,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) Mandatory Prepayments
(i) Excess Advances. If, at any time, the then outstanding
aggregate principal amount of all Revolving Advances shall exceed the
aggregate amount of the Revolving Commitments of the Lenders at such time
minus the sum of (i) the aggregate amount of the Letter of Credit
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Advances then outstanding, the Borrower shall immediately
prepay, for the ratable account of the Lenders, the outstanding principal
amount of Revolving Advances in an aggregate amount equal to such excess.
If, at any time, the then outstanding aggregate amount of all Swing Line
Advances shall exceed either (i) the Swing Line Commitment of the Swing
Line Lender, or (ii) the aggregate amount of the Revolving Commitments of
the Lenders minus the sum of (A) the aggregate amount of the Letter of
Credit Obligations then outstanding, and (B) the aggregate principal amount
of the Revolving Advances then outstanding, the Borrower shall thereupon
prepay, for the account of the Swing Line Lender, the outstanding principal
amount of Swing Line Advances in an aggregate amount equal to such excess.
(ii) Incomplete Settlement. If any Lender shall for any reason
fail to fund any participation in any Swing Line Advances, or fail to make
any Revolving Advance to be made by it pursuant to Section 2.02(f), the
Borrower shall, on demand by the Agent, prepay the Swing Line Advances then
outstanding in an amount equal to such amount.
(iii) Net Cash Proceeds. The Borrower shall, on the date of
receipt by the Borrower or any of its Subsidiaries of the Net Cash Proceeds
from (A) the sale, lease, transfer or other disposition of any assets of
the Borrower or any of its Subsidiaries (including the sale by the Borrower
or any of its Subsidiaries of the capital stock of any of their respective
Subsidiaries but excluding Excluded Asset Sales), and (B) the incurrence or
issuance by the Borrower or any of its Subsidiaries of any Debt not
permitted under Section 6.02(b) (it being understood that the provisions of
this Section 2.05(b)(iii) shall not be construed to permit the incurrence
of Debt otherwise prohibited by Section 6.02(b)) prepay the aggregate
principal amount of outstanding Revolving Advances in an amount equal to
the amount of such Net Cash Proceeds. Each such prepayment of the
Revolving Advances shall be paid ratably to each Lender in accordance with
the provisions of Section 2.09(a). Notwithstanding any contrary provision
hereof, the Net Cash Proceeds from the issuance or incurrence of Permitted
Subordinated Debt shall not be subject to mandatory prepayment pursuant to
this Section.
(iv) L/C Cash Collateral. If, at any time, the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the L/C
Sublimit in effect at such time, the Borrower shall immediately pay to the
Agent for deposit in the L/C Cash Collateral Account an amount sufficient
to cause the aggregate amount on deposit in such account to equal the
amount of such excess.
29
(c) Interest Payable on Amounts Prepaid. All prepayments of
Eurodollar Rate Advances under this Section 2.05 shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid.
Section 2.06. Interest. The Borrower shall pay interest on the
unpaid principal amount of each Advance from the date of such Advance until such
principal is paid in full at the applicable rate set forth below.
(a) Interest on Base Rate Advances. Except to the extent that the
Borrower shall elect to pay interest on all or any part of any Advance made or
to be made to the Borrower under Section 2.01 for any Interest Period pursuant
to subsections (b) and (c) of this Section 2.06, the Borrower shall pay interest
on the unpaid principal amount of each Advance, from the date of such Advance
until such principal amount is paid in full, payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing
June 30, 1998 and on the Revolving Commitment Termination Date, at a fluctuating
interest rate per annum equal, subject to Section 2.06(d), to the sum of the
Base Rate in effect from time to time plus the Applicable Margin for Base Rate
Advances in effect from time to time.
(b) Interest Periods for Eurodollar Rate Advances. The Borrower may,
pursuant to Section 2.06(c), elect to have the interest on the principal amount
of all or any portion of any Advances made or to be made to the Borrower under
Section 2.01, in each case ratably according to the respective outstanding
principal amounts of Advances owing to each Lender (each such principal amount
owing to a Lender as to which such election has been made being a "Eurodollar
Rate Advance" owing to such Lender) determined and payable for a specified
period (an "Interest Period" for such Eurodollar Rate Advance) in accordance
with subsection (c) below, provided, however, that the Borrower may not (i) make
any such election with respect to any Swing Line Advances, or (ii) have more
than five Eurodollar Rate Advances owing to any Lender outstanding at any one
time. Each Interest Period shall be one, two, three, or six months, at the
Borrower's election pursuant to subsection (c) below, provided, however, that:
(i) the first day of an Interest Period for any Eurodollar Rate
Advance shall be either the last day of any then current Interest Period
for such Advance or, if there shall be no then current Interest Period for
such Advance, any Business Day;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided, however, that if such extension would cause the last day of such
Interest Period to occur in the next following month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on
a day of the month for which there is no numerically corresponding day in
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the calendar month that succeeds such initial calendar month by the number
of months equal to the number of months of such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding
calendar month.
(c) Interest on Eurodollar Rate Advances. The Borrower may from time
to time, on the condition that no Event of Default has occurred and is
continuing, and subject to the provisions of Sections 2.06(b) and 2.06(e), elect
to pay interest on all or any portion of any Advances during any Interest Period
therefor at a rate per annum equal to the sum of the Eurodollar Rate for such
Interest Period for such Advances plus the Applicable Margin for Eurodollar Rate
Advances in effect from time to time, by notice, specifying the amount of the
Advances as to which such election is made (which amount shall aggregate at
least $5,000,000 or any multiple of $1,000,000 in excess thereof) and the first
day and duration of such Interest Period, received by the Agent before 12:00
noon (Dallas, Texas time) three Business Days prior to the first day of such
Interest Period. If the Borrower has made such election for Eurodollar Rate
Advances for any Interest Period, the Borrower shall pay interest on the unpaid
principal amount of such Eurodollar Rate Advances during such Interest Period,
payable in arrears on the last day of such Interest Period and, in the case of
any Interest Period which is longer than three months, on each three month
anniversary of the first day of such Interest Period, in each case at a rate
equal, subject to Section 2.06(d), to the sum of the Eurodollar Rate for such
Interest Period for such Eurodollar Rate Advances plus the Applicable Margin for
Eurodollar Rate Advances in effect from time to time during such Interest
Period. On the last day of each Interest Period for any Eurodollar Rate
Advance, the unpaid principal balance thereof shall automatically become and
bear interest as a Base Rate Advance, except to the extent that the Borrower has
elected to pay interest on all or any portion of such amount for a new Interest
Period commencing on such day in accordance with this Section 2.06(c). Each
notice by the Borrower under this Section 2.06(c) shall be irrevocable upon
receipt by the Agent, and the Borrower shall indemnify each Lender against any
out-of-pocket loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified by such notice the applicable
conditions set forth in this Section 2.06(c) or Article IV, including, without
limitation, any out-of-pocket loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund any such Eurodollar Rate Advance when such Eurodollar Rate Advance, as
a result of such failure, is not made or does not become effective.
(d) Default Interest. Upon the occurrence and during the continuance
of an Event of Default, the Borrower shall, at the dates set forth herein for
the payment of interest and upon demand, (i) pay interest on all Base Rate
Advances and any other amounts owing hereunder not paid when due (other than
then outstanding Eurodollar Rate Advances) at a rate per annum (the "Default
Rate") equal at all times to the rate otherwise applicable to Base Rate Advances
plus 2.00% per annum, and (ii) pay interest on each then outstanding Eurodollar
Rate Advance at a rate per annum equal at all times to the rate otherwise
applicable to such Eurodollar Rate Advance plus 2.00% per annum.
31
(e) Suspension of Eurodollar Rate Advances.
(i) Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or
other governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Agent, (i) each
Eurodollar Rate Advance made by such Lender will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of such
Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended (and such Lender shall make its portion of any Borrowing
available as a Base Rate Advance) until the Agent shall notify the Borrower
that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation
would allow such Lender or its Eurodollar Lending Office to continue to
perform its obligations to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
(ii) Other Circumstances. If, with respect to any Eurodollar
Rate Advances, (A) the Administrative Agent shall determine in good faith
(which determination shall be conclusive) that the Eurodollar Rate cannot
be determined in accordance with the definition thereof, or (B) the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Agent shall forthwith so notify the Borrower
and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no
longer exist.
(iii) Suspension on Event of Default. Upon the occurrence
and during the continuance of any Event of Default, (i) each Eurodollar
Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to convert Advances into, Eurodollar
Rate Advances shall be suspended.
Section 2.07. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the Agent a
commitment fee on the average daily amount of each Lender's Revolving
32
Commitment less the sum of (i) Revolving Advances made by such Lender and
outstanding from time to time, (ii) such Lender's Pro Rata Share of the
aggregate Letter of Credit Obligations outstanding from time to time, and (iii)
in the case of the Swing Line Lender only, such Lender's Pro Rata Share of any
Swing Line Advances, for the account of such Lender, from the Closing Date in
the case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Revolving Commitment Termination Date, at the rate
per annum equal to the Commitment Fee Percentage in effect from time to time,
payable in arrears on the last Business Day of each March, June, September and
December, commencing June 30, 1998 and, and on the Revolving Commitment
Termination Date.
(b) Agent's Fees. The Borrower agrees to pay to the Agent, for its
own account, (i) the fees in the amounts and at the times set forth in the
letter dated February 10, 1998 from NationsBank and the Arranger, to the
Borrower, and agreed to and accepted by the Borrower on February 10, 1998, and
(ii) such other fees as may from time to time be agreed between the Borrower and
the Agent.
(c) Absolute Obligation. The Borrower's obligation hereunder to pay
the fees referred to in this Section 2.07 shall be absolute and unconditional
and shall survive the making and repayment of Advances, the termination of all
Letter of Credit Obligations and the termination of this Agreement. All fees
which are due or become due pursuant to this Section 2.07 are nonrefundable.
Section 2.08. Increased Costs, Etc.
(a) Increased Costs. If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), in any case
occurring on or after the Closing Date, there shall be any increase in the cost
to any Lender Party of agreeing to make or of making, funding or maintaining
Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining
Letters of Credit (or of agreeing to purchase or purchasing participations
therein) or of agreeing to make or of making or maintaining L/C Advances (or of
agreeing to purchase or purchasing participations therein), then the Borrower
shall from time to time, upon demand by such Lender Party (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for such increased
cost; provided, however, that, before making any such demand, each Lender Party
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party. A certificate
as to the amount of such increased cost, submitted to the Borrower by such
Lender Party, shall be conclusive and binding for all purposes, absent manifest
error.
33
(b) Capital Requirements. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), in any case
occurring on or after the Closing Date, there shall be any increase in the
amount of capital required or expected to be maintained by such Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue or purchase
participations in Letters of Credit hereunder and other commitments of such type
or the issuance or maintenance of the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party (with a copy of such demand
to the Agent), the Borrower shall pay to the Agent for the account of such
Lender Party, from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party in the light of such
circumstances, to the extent that such Lender Party reasonably determines such
increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts
submitted to the Borrower by such Lender Party, shall be conclusive and binding
for all purposes, absent manifest error.
(c) Limitations on Borrower's Compensation Obligations.
Notwithstanding any other provision of this Agreement to the contrary, the
Borrower shall not be obligated to make any payment to any Lender Party pursuant
to this Section 2.08 in respect of any amounts or costs accruing in or allocable
to any period prior to the 90th day preceding written demand by such Lender
Party for payment therefor (unless such amounts or costs prior to such 90th day
period result from the retroactive effect of any of the events described in the
foregoing Sections 2.08(a) or 2.08(b) giving rise to such written demand and
which occurred during such 90 day period).
Section 2.09. Payments and Computations.
(a) Payments by Borrower. The Borrower shall make each payment
hereunder and under any other Loan Document to which it is a party, irrespective
of and without condition or deduction for any counterclaim, defense, recoupment
or setoff, in lawful money of the United States and in same day funds delivered
to the Agent not later than 1:00 p.m. (Dallas, Texas time) on the day when due
by deposit of such funds to the Agent's Account. Any payment so delivered to
the Agent after 1:00 p.m. (Dallas, Texas time) on any Business Day, or on any
day which is not a Business Day, shall be deemed received by the Agent on the
next succeeding Business Day. The Agent will promptly after receipt of each
payment cause to be distributed like funds relating to the payment of principal,
interest, commitment fees or letter of credit fees ratably to each Lender for
the account of its Applicable Lending Office, and like funds relating to the
payment of any other amount payable to any Lender or any Issuing Bank (including
payments with respect to Letters of Credit and payments for the account of any
Lender under Sections 2.08, 2.10 or 9.04(c)) to such Lender for the account of
its Applicable Lending Office or to such Issuing Bank, in each case to be
applied in accordance with, and subject to, the terms of this Agreement,
including Section 2.09(e) below. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
34
pursuant to Section 9.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
any other Loan Document in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) Computations. All computations of interest in respect of Base
Rate Advances (and in respect of any other amount payable hereunder other than
interest in respect of Eurodollar Rate Advances and Letter of Credit fees and
commissions) and all computations in respect of commitment fees shall be made by
the Agent on the basis of a year of 365 days or 366 days, as applicable, and all
computations of interest in respect of Eurodollar Rate Advances and all
computations in respect of Letter of Credit fees and commissions shall be made
by the Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable; provided that if any
Advance is repaid on the same day on which it is made, one day's interest shall
be paid on such Advance. Each determination by the Agent of an interest rate,
fee, commission or discount rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(c) Payments Assumed. Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
or any Issuing Bank hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such assumption, but
shall not be required to, cause to be distributed to each Lender or such Issuing
Bank on such due date an amount equal to the amount then due to such Lender or
such Issuing Bank. If and to the extent that the Borrower shall not have so
made such payment in full to the Agent, each Lender and Issuing Bank shall repay
to the Agent forthwith on demand such amount distributed to such Lender or
Issuing Bank together with interest thereon, for each day from the date such
amount is distributed to such Lender or Issuing Bank until the date such Lender
or Issuing Bank repays such amount to the Agent, at the Federal Funds Rate.
(d) Application of Payments Specified by the Borrower. Except as
otherwise specified herein, so long as no Event of Default has occurred and is
continuing, all payments shall be applied as instructed by the Borrower (except
that, unless the Agent otherwise consents, outstanding Swing Line Advances shall
be prepaid before prepayment of any Revolving Advances) if such instructions are
received by the Agent prior to or contemporaneously with receipt of funds
therefor.
(e) Application of Payments Not Otherwise Specified. If the Agent
receives funds for application to the Advances or any Letter of Credit
Obligations or other Obligations of the Borrower under the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility or the Obligations to which, or the manner in which, such funds are to
be applied, the Agent may elect to distribute such funds first, to the Issuing
Banks ratably in payment of the principal of and interest on any outstanding L/C
Advances, second, to the payment of the outstanding Swing Line Advances and
35
interest thereon, third, to each Lender ratably in accordance with such Lender's
proportionate share of all Advances (other than Swing Line Advances) then
outstanding, in repayment or prepayment of such of the outstanding Advances
(other than Swing Line Advances), and for application to such principal
installments, as the Agent may direct, and thereafter ratably to the Lenders in
repayment or prepayment of any other Obligations of the Borrower then
outstanding under the Loan Documents as the Agent shall direct, provided that if
an Event of Default has occurred and is continuing and the Revolving Commitments
of the Lenders and the Swing Line Commitment of the Swing Line Lender have been
terminated in full, the Agent shall distribute any payments and any proceeds of
any collection, sale or other realization or liquidation of any Collateral
first, to the payment of all costs and expenses of the Agent under the Loan
Documents, second, to the Issuing Banks ratably in payment of the principal of
and interest on any outstanding L/C Advances, third, to the payment of the
outstanding Swing Line Advances and interest thereon, and fourth, to each Lender
ratably in accordance with such Lender's proportionate share of the principal
amount of all Advances (other than Swing Line Advances) and Letter of Credit
Obligations then outstanding, in payment or prepayment of such Obligations owed
to such Lender under the Loan Documents, and for application to such principal
installments (if applicable) as the Agent shall direct.
(f) Payments on Business Days. Whenever any payment hereunder or
under any other Loan Document shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest and commitment and other fees; provided, however, if such
extension would cause payment of interest on or principal of any Eurodollar Rate
Advance to be made in the next following month, such payment shall be made on
the next preceding Business Day.
(g) Certain Terms. The terms "pay", "paid" or "payment" under this
Agreement shall include prepay, prepaid or prepayment, respectively, under this
Agreement, and the term "due" under this Agreement shall include due by reason
of a mandatory prepayment (including upon an actual or deemed entry of an order
for relief with respect to the Borrower or any Guarantor under the Federal
Bankruptcy Code or upon acceleration).
Section 2.10. Taxes.
(a) Withholding Taxes. Subject to Section 2.10(f), any and all
payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.09, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender Party and the Agent, net income taxes that are imposed by the
United States and franchise taxes and net income taxes that are imposed on such
Lender Party or the Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender Party, franchise
taxes and net income taxes that are imposed on such Lender Party by the state or
foreign jurisdiction of such Lender Party's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
36
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender Party
or the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.10) such Lender Party or the Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) Other Taxes. In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) Indemnification. Subject to Section 2.10(f), the Borrower shall
indemnify each Lender Party and the Agent for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any jurisdiction on amounts
payable under this Section 2.10, paid by such Lender Party or the Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender Party or the Agent (as
the case may be) makes written demand therefor.
(d) Evidence of Payment. Within 30 days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent, at its address
referred to in Section 9.02, the original receipt of payment thereof or a
certified copy of such receipt. In the case of any payment hereunder or under
the Notes by the Borrower through an account or branch outside the United States
or on behalf of the Borrower by a payor that is not a United States person, if
the Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Foreign Lenders and Issuing Banks. Each Lender Party organized
under the laws of a jurisdiction outside the United States shall, on or prior to
the date of its execution and delivery of this Agreement in the case of each
Initial Lender, and on the date of the Assignment and Acceptance pursuant to
which it became a Lender Party in the case of each other Lender Party, and from
time to time thereafter upon the reasonable request in writing by the Borrower
or the Agent (but only so long thereafter as such Lender Party remains lawfully
able to do so), provide the Agent and the Borrower with Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
is entitled to a reduced rate of United States withholding tax on payments under
this Agreement or the Notes. If the form provided by a Lender Party at the time
37
such Lender Party first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender Party assignee becomes
a party to this Agreement, the Lender Party assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent and only to such extent, the
term Taxes shall include (in addition to withholding taxes that may be imposed
in the future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender Party assignee on
such date. If any form or document referred to in this Section 2.10(e) requires
the disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) Failure to Provide Forms. For any period with respect to which
a Lender Party has failed to provide the Borrower with the appropriate form
described in Section 2.10(e) (other than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under Section 2.10(e)), such
Lender Party shall not be entitled to indemnification under Section 2.10(a) or
Section 2.10(c) with respect to Taxes imposed by the United States; provided,
however, that should a Lender Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as such Lender Party shall reasonably request to assist such Lender Party to
recover such Taxes.
(g) Change of Applicable Lending Office. Any Lender Party claiming
any additional amounts payable pursuant to this Section 2.10 shall use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party.
(h) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.10 shall survive the payment in full of
principal and interest hereunder and under the Notes.
Section 2.11. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
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Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such other
Lender Party's ratable share (according to the proportion of (i) the purchase
price paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.11 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
Section 2.12. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) to repay in
full all amounts outstanding under the Existing Credit Agreement, to redeem the
Existing Senior Notes, to provide working capital for, and finance capital
expenditures by, the Borrower and its Subsidiaries and, subject to the
provisions of this Agreement and the other Loan Documents, for other general
corporate purposes of the Borrower and its Subsidiaries.
Section 2.13. Evidence of Debt.
(a) Maintenance of Accounts by Lenders. Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(b) Maintenance of Accounts by Agent. The Register maintained by the
Agent pursuant to Section 9.07(c) shall include a control account, and a
subsidiary account for each Lender Party, in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made hereunder, the
Interest Type of the Advances comprising such Borrowing and any Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
39
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender Party
hereunder, and (iv) the amount of any sum received by the Agent from the
Borrower hereunder and each Lender Party's share thereof. The entries made in
the Register shall be conclusive and binding for all purposes, absent manifest
error.
ARTICLE III.
AMOUNTS AND TERMS OF LETTERS OF CREDIT
Section 3.01. The Letter of Credit Subfacility. The Borrower may
request any Lender, on the terms and conditions hereinafter set forth, to Issue,
and any such Lender may, if in its sole discretion it elects to do so, and the
L/C Bank shall, if no other Lender elects to do so, Issue standby Letters of
Credit for the account of the Borrower from time to time on any Business Day
during the period after the Closing Date until 30 days prior to the Revolving
Commitment Termination Date (a) in an aggregate Available Amount for all Letters
of Credit (including the Existing Letters of Credit) not to exceed at any time
$25,000,000 (the "Letter of Credit Subfacility"), and (b) in an Available Amount
for each such Letter of Credit not to exceed the Unused Revolving Commitments of
the Lenders on such Business Day. No Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to require
renewal) later than 30 days before the Termination Date and one year after the
date of issuance thereof (but a Letter of Credit may, by its terms, be renewable
annually with the consent of the Issuing Bank). As of the Closing Date, each
Existing Letter of Credit shall constitute, for all purposes of this Agreement
and the other Loan Documents, a Letter of Credit issued and outstanding
hereunder and shall, for purposes of Section 3.05, be deemed to be Issued
hereunder on the Closing Date. Within the limits of the Letter of Credit
Subfacility, and subject to the limits referred to above, the Borrower may
request the Issuance of one or more Letters of Credit under this Section 3.01,
repay amounts due resulting from L/C Advances thereunder pursuant to Section
3.03, and request the Issuance of one or more additional Letters of Credit under
this Section 3.01.
Section 3.02. Issuance of Letters of Credit.
(a) Notice of Issuance. Each Letter of Credit shall be Issued
pursuant to a Notice of Issuance, which must be received by the Agent and the
Issuing Bank not later than 12:00 noon (Dallas, Texas time) on the third
Business Day prior to the date of the proposed Issuance of such Letter of Credit
(or such shorter period as may be acceptable to the applicable Issuing Bank).
Each such Notice of Issuance shall specify the requested (i) date of such
Issuance (which shall be a Business Day), (ii) Available Amount of such Letter
of Credit, (iii) expiration date of such Letter of Credit, (iv) name and address
of the beneficiary of such Letter of Credit, and (v) form of such Letter of
Credit, and shall be accompanied by such customary application and agreement for
letter of credit of the Issuing Bank (a "Letter of Credit Agreement") as the
Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit.
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(b) Conditions to Issuance. If (i) the requested form of such Letter
of Credit is acceptable to the Agent and the Issuing Bank in the reasonable
discretion of each, (ii) in the case of any Issuing Bank other than the L/C
Bank, such Issuing Bank elects in its sole discretion to Issue the requested
Letter of Credit, and (iii) such Issuing Bank has not received notice from the
Agent or the Required Lenders that the Issuance of such Letter of Credit is not
authorized because such Issuance would not comply with the requirements of
clause (a) or (b) of Section 3.01 or one or more of the conditions set forth in
Section 4.02 has not been satisfied, then such Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Section 4.02 (which
fulfillment such Issuing Bank may assume in the absence of actual knowledge, or
notice received from the Borrower, the Agent or the Required Lenders, to the
contrary) and subject to the provisions of this Article III, make such Letter of
Credit available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed upon with the Borrower in connection with such Issuance. In
the event and to the extent that the provisions of any Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(c) Reports by Issuing Banks. Each Issuing Bank shall furnish to the
Agent (i) on the fifth Business Day of each month a written report summarizing
Issuance and expiration dates of Letters of Credit Issued by such Issuing Bank
during the preceding month and L/C Advances during such month under all Letters
of Credit Issued by such Issuing Bank, and (ii) two Business Days prior to the
last Business Day of each March, June, September and December, a written report
setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit Issued by such Issuing Bank.
Section 3.03. Drawing and Reimbursement. The Borrower agrees to
reimburse the Issuing Bank under each Letter of Credit, within one Business Day
after it has notice of any L/C Advance by such Issuing Bank thereunder, for the
principal amount of such L/C Advance, and shall pay to such Issuing Bank, on
demand, interest on the unreimbursed principal of such L/C Advance at a rate per
annum equal to (a) from the date of such L/C Advance to the first Business Day
after notice thereof has been given to the Borrower, the rate applicable to Base
Rate Advances in effect from time to time, and (b) from and after such first
Business Day, the Default Rate. If the Borrower shall fail to so reimburse the
Issuing Bank within one Business Day after the Borrower receives notice that any
such L/C Advance has been made, then upon demand by the Issuing Bank, and
whether or not a Default has occurred and is continuing or any conditions set
forth in Section 4.02 are satisfied, each Revolving Lender shall purchase from
such Issuing Bank, and such Issuing Bank shall sell and assign to each Revolving
Lender, such Lender's Pro Rata Share of such outstanding L/C Advance as of the
date of such purchase, by making available for the account of such Issuing Bank,
by deposit to the Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such L/C Advance to be purchased
by such Lender. Each Revolving Lender agrees to purchase its Pro Rata Share of
an outstanding L/C Advance on (A) the Business Day on which demand therefor is
made by the Issuing Bank which made such L/C Advance, provided notice of such
demand is given not later than 12:00 noon (Dallas, Texas time) on such Business
Day, or (B) the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by an Issuing Bank to
any Lender of a portion of an L/C Advance, such Issuing Bank represents and
41
warrants to such Lender that such Issuing Bank is the legal and beneficial owner
of such interest being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to such L/C Advance, the
Loan Documents or any Loan Party.
Section 3.04. Obligations Absolute. The Obligations of the Borrower
under Article III of this Agreement, any Letter of Credit Agreement and any
other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
the Issuing Bank of any draft or the reimbursement by the Borrower thereof):
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (this Agreement and all of the other foregoing
being collectively referred to herein as the "L/C Related Documents");
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(c) the existence of any claim, set-off, defense or other right that
the Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
(d) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(e) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit;
(f) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the Borrower
in respect of the L/C Related Documents; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
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Section 3.05. Letter of Credit Compensation.
(a) The Borrower shall pay to the Agent:
(i) for the account of the Issuing Bank which Issues a Letter of
Credit, an issuance fee in an amount equal to 1/8 of 1% per annum of the
average daily Available Amount of such Letter of Credit outstanding from
time to time: and
(ii) for the account of each Lender, a letter of credit fee with
respect to each Letter of Credit, in each case in an amount equal to a rate
per annum equal to the Applicable Margin for Eurodollar Rate Advances in
effect from time to time on such Lender's Pro Rata Share of the average
daily Available Amount of such Letter of Credit outstanding from time to
time.
The letter of credit and issuance fees payable under this Section 3.05(a) shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing June 30, 1998, and on the Revolving
Commitment Termination Date. For purposes of computing any fees under this
Section 3.05(a), the determination of the maximum amount available to be drawn
under a Letter of Credit at any time shall assume strict compliance with all
conditions for drawing. Any fees paid pursuant to this Section 3.05(a) are
nonrefundable.
(b) The Borrower shall pay to each Issuing Bank, for its own account
and on demand, such other commissions, issuance fees, transfer fees and other
fees, charges and expenses in connection with the Issuance, amendment, transfer,
cancellation or administration of each Letter of Credit as the Borrower and such
Issuing Bank shall agree; provided that in no event shall any Issuing Bank
require, after giving effect to the amounts payable to it pursuant to Section
3.05(a) above (in the case of the Issuance of any Letter of Credit), more than
the standard fees, charges and expenses which it normally charges in connection
with such matters.
Section 3.06. Use of Letters of Credit. Any Letters of Credit Issued
hereunder shall be used solely to support Obligations of the Borrower and its
Subsidiaries not prohibited hereunder.
ARTICLE IV.
CONDITIONS OF LENDING
Section 4.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender Party to make an Advance on the occasion of the
initial Borrowing is subject to the following conditions precedent:
(a) The Lender Parties shall be satisfied with the corporate and
legal structure and capitalization of each Loan Party and each of its
Subsidiaries, including the terms and conditions of the charter, bylaws and each
class of capital stock of each Loan Party and each such Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
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(b) The Borrower (or the trustee under the Existing Senior Note
Indenture on behalf of the Borrower) shall have mailed a Redemption Notice in
respect of Existing Senior Notes in an aggregate principal amount of $75,000,000
to the holders of the Existing Senior Notes, and the Agent shall have been
provided with a copy of such Redemption Notice.
(c) The Lender Parties shall (i) be satisfied that all Funded Debt,
other than the Debt identified on Schedule 4.01(c) and the Existing Senior Notes
("Surviving Debt"), has been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished, and (ii) shall have received satisfactory evidence
(including, without limitation, a duly executed payoff letter, UCC termination
statements and real property reconveyances) that all liens and security
interests granted pursuant to, or in connection with, the Existing Credit
Agreement and the Security Documents (as defined in the Existing Credit
Agreement) shall be terminated or released contemporaneously with the initial
Borrowing.
(d) There shall have occurred no Material Adverse Change since
September 28, 1997.
(e) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) could
have a Material Adverse Effect other than the matters disclosed in the Annual
Report of the Borrower (the "Borrower's Form 10-K") for the fiscal year ended
September 28, 1997 filed with the Securities and Exchange Commission and the
matters disclosed in the preliminary offering memorandum dated March 27, 1998
relating to the senior subordinated notes of the Borrower described in clause
(A) of the definition of "Permitted Subordinated Debt" (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity or enforceability
of this Agreement, any Note, any other Loan Document, or the consummation of the
transactions contemplated hereby, and there shall have been no adverse change in
the status, or financial effect on the Borrower and its Subsidiaries, taken as
a whole, of the Disclosed Litigation from that disclosed in the Borrower's Form
10-K.
(f) The Lenders, the Agent and the Arranger shall have completed a
due diligence investigation of the Borrower and its Subsidiaries in scope, and
with results, satisfactory to the Lenders, the Agent and the Arranger, and
nothing shall have come to the attention of the Lenders, the Agent or the
Arranger during the course of such due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading, incorrect
or incomplete in any material respect, without limiting the generality of the
foregoing, the Lenders, the Agent and the Arranger shall have been given such
access to the management, records, books of account, contracts and properties of
the Borrower and its Subsidiaries as they shall have requested.
(g) The Borrower shall have paid all accrued fees and expenses of the
Agent and the Lender Parties (including, to the extent invoiced, the accrued
fees and expenses of counsel to the Agent).
(h) The Agent shall have received on or before the day of the initial
Borrowing the following, each dated such day (unless otherwise specified), in
44
form and substance satisfactory to the Agent (unless otherwise specified) and
(except for the Notes) in sufficient copies for each Lender Party:
(i) The Notes to the order of each Lender, as appropriate.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower authorizing this Agreement, the Notes, and of
each other Loan Party approving each Loan Document to which it is or is to
be a party, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement,
the Notes, and each other Loan Document.
(iii) A copy of the charter of the Borrower and each other
Loan Party and each amendment thereto, certified (as of a date reasonably
near the date of the initial Borrowing) by the Secretary of the State of
the State in which each such Person is organized as being a true and
correct copy thereof (except in the case of Jack In The Box, Inc., in which
case such certification shall be provided in a certificate of the Secretary
of Jack In The Box, Inc.).
(iv) A copy of a certificate of the Secretary of State of the
State in which each such Person is organized, dated reasonably near the
date of the initial Borrowing, listing the charter of the Borrower and each
other Loan Party and each amendment thereto on file in such office and
certifying that (A) such amendments are the only amendments to the
Borrower's, or such other Loan Party's charter on file in such office, (B)
the Borrower and each other Loan Party have paid all franchise taxes to the
date of such certificate and (C) the Borrower and each other Loan Party are
duly incorporated and in good standing under the laws of such State.
(v) A certificate of the Borrower and each other Loan Party
signed on behalf of the Borrower and such other Loan Party by its
President, any Vice President, Chief Financial Officer or Treasurer and its
Secretary or any Assistant Secretary, dated the date of the initial
Borrowing (the statements made in which certificate shall be true on and as
of the date of the initial Borrowing), certifying as to (A) the absence of
any amendments to the charter of the Borrower or such other Loan Party
since the date of the Secretary of State's certificate (or the Secretary's
certificate in the case of Jack In The Box, Inc.) referred to in Section
4.01(i)(iv), (B) a true and correct copy of the bylaws of the Borrower and
such other Loan Party as in effect on the date of the initial Borrowing,
(C) the due incorporation and good standing of the Borrower and such other
Loan Party as a corporation organized under the laws of the State of its
jurisdiction of incorporation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such other Loan Party, (D)
the truth of the representations and warranties contained in the Loan
Documents as though made on and as of the date of the initial Borrowing and
(E) the absence of any event occurring and continuing, or resulting from
the initial Borrowing, that constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary of
the Borrower and each other Loan Party certifying the names and true
45
signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes, and each other Loan Document
to which they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(vii) A security agreement in substantially the form of
Exhibit E (as amended from time to time in accordance with its terms, the
"Security Agreement"), duly executed by the Borrower and the Inactive
Subsidiaries (other than the Inactive Foreign Subsidiaries), together with:
(A) certificates representing the Pledged Shares referred
to therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt referred to therein indorsed
in blank,
(B) duly executed financing statements in appropriate form
for filing under the Uniform Commercial Code in all jurisdictions that
the Agent may deem necessary or desirable in order to perfect the
Liens created by the Security Agreement, covering the Collateral
described in the Security Agreement,
(C) evidence of the insurance required by the terms of the
Security Agreement, and
(D) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens
created by the Security Agreement has been taken.
(viii) Deeds of trust, trust deeds and mortgages in
substantially the form of Exhibit I-1 and I-2 and covering the properties
(other than the Headquarters Property) listed on Part I of Schedule 4.01(j)
(as amended from time to time in accordance with their terms, the
"Mortgages"), duly executed by the Borrower in appropriate form for filing
in all filing or recording offices that the Agent may deem necessary or
desirable in order to create a valid and subsisting Lien subject only to
Permitted Liens on the property described therein in favor of the Agent for
the benefit of the Lender Parties, together with:
(A) with respect to the six properties identified on Part
II of Schedule 4.01(j) (other than the Headquarters Property), a
commitment from First American Title Insurance Company to issue
American Land Title Association Lender's Extended Coverage title
insurance policies (the "Mortgage Policies") in form and substance,
with endorsements and in amount acceptable to the Agent, issued,
coinsured and reinsured by title insurers acceptable to the Agent,
insuring the Mortgages covering the six properties listed on Part II
of Schedule 4.01(j) (other than the Headquarters Property) to be valid
and subsisting Liens with the priority set forth in the applicable
Mortgage Policy on the property described therein, free and clear of
all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted Liens,
and providing for such other affirmative insurance (including
46
endorsements for future advances under the Loan Documents and for
mechanics' and materialmen's Liens) and such coinsurance and direct
access reinsurance as the Agent may deem necessary or desirable,
(B) such consents and agreements of third parties under
existing deeds of trust (other than the existing deed of trust with
respect to the Headquarters Property), as the Agent may deem necessary
or desirable, and
(C) evidence that all other action that the Agent may deem
necessary or desirable in order to create valid first and subsisting
Liens on the property described in the Mortgages has been taken.
(ix) A guaranty in substantially the form of Exhibit F (as
amended from time to time in accordance with its terms, the "Guaranty"),
duly executed by the Guarantors.
(x) Such financial, business and other information regarding
each Loan Party and their Subsidiaries as the Lender Parties shall have
requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations
under ERISA and Welfare Plans, collective bargaining agreements and other
arrangements with employees, annual financial statements dated September
26, 1996 and September 28, 1997 respectively, interim financial statements
dated the end of the most recent fiscal quarter for which financial
statements are available (or, in the event the Lender Parties' due
diligence review reveals material changes since such financial statements,
as of a later date within 45 days of the day of the initial Borrowing), and
the Projections.
(xi) Evidence of insurance naming the Agent as insured and loss
payee with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as is
satisfactory to the Lender Parties.
(xii) A favorable opinion of Gibson, Dunn & Crutcher, LLP,
counsel for the Borrower and the other Loan Parties, in substantially the
form of Exhibit G hereto and as to such other matters as any Lender Party
through the Agent may reasonably request.
(xiii) A favorable opinion of Latham & Watkins, counsel for
the Agent, in form and substance satisfactory to the Agent.
Section 4.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Lender to make an Advance (other than an L/C
Advance and other than a Revolving Advance made by a Revolving Lender pursuant
to Section 2.02(f)) on the occasion of each Borrowing (including the initial
Borrowing), and the right of the Borrower to request a Swing Line Borrowing or
the issuance of Letters of Credit, shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Swing Line Borrowing or Notice of Issuance and the
47
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, as though made on and as of such
date other than any such representations or warranties that, by their
terms, are specifically made as of a date other than the date of such
Borrowing or issuance; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default.
Section 4.03. Determinations Under Section 4.01. For purposes of
determining compliance with the conditions specified in Section 4.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender Parties
unless an officer of the Agent responsible for the transactions contemplated by
the Loan Documents shall have received notice from such Lender Party prior to
the initial Borrowing specifying its objection thereto and such Lender Party
shall not have made available to the Agent such Lender Party's ratable portion
of such Borrowing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Incorporation, Qualification, Corporate Power and Authority.
Each Loan Party (i) is a corporation duly organized, validly existing and good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to
so qualify or be licensed would not reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Capital Stock. Set forth on Schedule 5.01(b) hereto is a
complete and accurate list, as of the date hereof, of all Subsidiaries of each
Loan Party, showing as of the date hereof (as to each such Subsidiary), the
jurisdiction of its incorporation, the number of shares of each class of capital
stock authorized and outstanding, the percentage of the outstanding shares of
each such class owned (directly or indirectly) by such Loan Party and the number
of shares covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights. All of the outstanding capital stock of all of
such Subsidiaries has been validly issued, is fully paid and non-assessable
(except to the extent such concepts are not applicable to a Foreign Subsidiary)
48
and is owned by such Loan Party or one or more of its Subsidiaries free and
clear of all Liens, except those created by the Collateral Documents. Each such
Subsidiary (except to the extent such concepts are not applicable to a Foreign
Subsidiary) (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(c) Authorization; No Conflict or Violation; Compliance with Laws.
The execution, delivery and performance by each Loan Party of this Agreement,
the Notes, and each other Loan Document to which it is or is to be a party, and
the consummation of the transactions contemplated hereby and thereby (including
the redemption of the Existing Senior Notes as contemplated hereby), are within
such Loan Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's charter or
by-laws, (ii) violate any law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument binding on or affecting any Loan Party,
any of its Subsidiaries or any of their properties or (iv) except for the Liens
created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries. Neither any Loan Party nor any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which is reasonably likely to have a
Material Adverse Effect.
(d) Approvals and Consents. All authorizations, consents, approvals,
registrations, filings, notices, exemptions and licenses with or from, or other
actions, by any governmental authority or regulatory body or any third party
which are necessary for the borrowing hereunder, the grant of security interests
in and liens on the Collateral, the execution and delivery of the Loan
Documents, the redemption of the Existing Senior Notes as contemplated hereby,
the performance by the Loan Parties of their respective obligations hereunder
and thereunder and the exercise by the Agent or the Lender Parties of their
remedies hereunder and thereunder have been effected, obtained or taken and are
in full force and effect, except for those that may be necessary in connection
with the perfection or protection of liens granted pursuant to the Collateral
Documents.
(e) Enforceability. This Agreement has been, and each of the Notes,
and each other Loan Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement is, and
49
each of the Notes and each other Loan Document when delivered hereunder will be,
the legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights or remedies
of creditors generally and the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law.
(f) Financial Statements. (i) The Consolidated balance sheet of the
Borrower and its Subsidiaries as at September 28, 1997, and the related
Consolidated statement of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of
KPMG Peat Marwick, independent public accountants, and the Consolidated
balance sheet of the Borrower and its Subsidiaries as at January 18, 1998,
and the related Consolidated statement of income and cash flows of the
Borrower and its Subsidiaries for the 16 weeks then ended, duly certified
by the chief financial officer or chief accounting officer of the Company,
copies of which have been furnished to the Agent, fairly present, subject,
in the case of said balance sheet as at January 18, 1998, and said
statement of income and cash flows for the 16 weeks then ended, to year-end
audit adjustments, the Consolidated financial condition of the Borrower
and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended on
such dates, all in accordance with GAAP applied on a consistent basis, and
since September 28, 1997, there has been no Material Adverse Change.
(ii) The Projections delivered to the Lenders pursuant to
Section 4.01(h)(x) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower's best estimate of its
future financial performance.
(g) Disclosure. Neither the Information Memorandum nor any other
information, exhibit or report furnished by any Loan Party to the Agent or any
Lender Party in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein taken as a whole not misleading.
(h) Litigation. There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of their Subsidiaries, including
any Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect other than the Disclosed Litigation or (ii) purports to affect
the legality, validity or enforceability of this Agreement, any Note, or any
other Loan Document or the consummation of the transactions contemplated hereby
or thereby and there has been no adverse change in the status, or financial
effect on any Loan Party or any of their Subsidiaries, of the Disclosed
Litigation from that disclosed in the Borrower's Form 10-K.
(i) Use of Proceeds.
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(i) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
(ii) Following application of the proceeds of each Advance, not
more than 25 percent of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or 5.02(e) or subject to any
restriction contained in any agreement or instrument between the Borrower
and any Lender Party or any Affiliate of any Lender Party relating to Debt
and within the scope of Section 6.01(e) will be Margin Stock.
(j) Pension Plans.
(i) Each Loan Party and its ERISA Affiliates has fulfilled the
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in substantial compliance in
all material respects with the presently applicable provisions of ERISA and
the Internal Revenue Code with respect to each Plan. Neither any Loan
Party nor any of its ERISA Affiliates has incurred any material liability
under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
(ii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates that has resulted in or is reasonably likely to result in a
material liability of any Loan Party or any of its ERISA Affiliates.
(iii) Schedule B (Actuarial Information) to the 1996 annual
report (Form 5500 Series) for each Plan of any Loan Party or any of its
ERISA Affiliates, copies of which have been filed with the Internal Revenue
Service and furnished to the Lender Parties, and each subsequent Schedule B
(Actuarial Information) provided to the Lender Parties pursuant to Section
6.03(g), is complete and accurate and fairly presents the funding status of
such Plan, as of the time it was given, and no Loan Party is aware of any
events or conditions since the date of such report that would create a
material adverse change in the funding status of such Plan.
(iv) Neither any Loan Party nor any of its ERISA Affiliates
contributes to, is obligated to contribute to, has contributed to or has
been obligated to contribute to any Multiemployer Plan.
(v) The aggregate Insufficiency of all Plans of the Loan Parties
and their ERISA Affiliates (excluding any Plans which do not have any
Insufficiency) does not exceed $18,254,000 (the amount of the Insufficiency
on the Closing Date) plus $4,000,000.
51
(vi) The aggregate annualized cost (including, without
limitation, the cost of insurance premiums) with respect to post-retirement
benefits under Welfare Plans for which the Loan Parties and their
Subsidiaries are liable does not exceed $750,000.
(k) No Adverse Conditions. Neither the business nor the properties
of any Loan Party or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that would be reasonably likely to have a
Material Adverse Effect.
(l) Compliance with Environmental Laws.
(i) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all Environmental
Laws, all necessary Environmental Permits have been obtained and are in
effect for the operations and properties of each Loan Party and its
Subsidiaries, each Loan Party and its Subsidiaries are in compliance in all
material respects with all such Environmental Permits, and no circumstances
exist that would be reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries or
any of their properties that could have a Material Adverse Effect or (ii)
cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(ii) None of the properties of any Loan Party or any of its
Subsidiaries is listed or proposed for listing on the National Priorities
List under CERCLA or on the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list of sites
requiring investigation or cleanup or is adjacent to any such property, and
no underground storage tanks, as such term is defined in 42 U.S.C. 6991,
are located on any property of any Loan Party or any of its Subsidiaries.
(iii) Neither any Loan Party nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Materials
to any location that is listed or proposed for listing on the National
Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list, Hazardous
Materials have not been generated, used, treated, handled, stored or
disposed of on, or released or transported to or from, any property of any
Loan Party or any of its Subsidiaries, except for limited quantities
required in connection with the normal operation and maintenance of such
properties and used or stored at such properties in compliance with all
Environmental Laws and Environmental Permits, and all other wastes
generated at any such properties have been disposed of in compliance with
all Environmental Laws and Environmental Permits.
(m) No Burdensome Agreements. Neither any Loan Party nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or any lease
52
or other agreement or instrument or subject to any charter or corporate
restriction that would be reasonably likely to have a Material Adverse Effect.
(n) Tax Information.
(i) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown
thereon to be due, together with applicable interest and penalties.
(ii) As of the date hereof, there are no adjustments to the
state, local and foreign tax liability of the Borrower and its Subsidiaries
proposed by any state, local or foreign taxing authorities (other than
amounts arising from adjustments to Federal income tax returns). No issues
have been raised by such taxing authorities that, in the aggregate, would
be reasonably likely to have a Material Adverse Effect.
(o) No Investment Company. Neither any Loan Party nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. Neither
the making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(p) Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(q) Debt of the Borrower and its Subsidiaries.
(i) Set forth on Schedule 5.01(q)(i) hereto is a complete and
accurate list, as of the date hereof, of all existing Funded Debt (other
than Surviving Debt), showing as of the date hereof the principal amount
outstanding thereunder; the aggregate principal amount of all other Debt
(other than Surviving Debt) as of the date hereof does not exceed $50,000;
(ii) Set forth on Schedule 4.01(c) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding thereunder.
(r) Owned Real Property.
(i) Set forth on Schedule 5.01(r) hereto is a complete and
accurate list of all real property owned in fee as of the date hereof by
any Loan Party or any of their Subsidiaries, showing as of the date hereof
the street address, county or other relevant jurisdiction, book value
thereof, and state thereof. Borrower has good, record, marketable and
53
insurable fee simple title to such real property, free and clear of all
Liens, other than Liens of the types described in clauses (a), (b) and (e)
inclusive, of the definition of Permitted Liens.
(ii) Set forth on Schedule 5.01(r) hereto is a complete and
accurate list of all leases of real property under which any Loan Party or
any of their Subsidiaries is the lessee, showing as of the date hereof the
street address and state thereof. Each Loan Party or such Subsidiary has a
valid leasehold interest in such leases of real property, free and clean of
all Liens, other than Liens of the types described in clauses (a) and (b),
inclusive, of the definition of Permitted Liens. To the best knowledge of
the Loan Parties and their Subsidiaries, each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(s) Investments. Set forth on Schedule 5.01(s) hereto is a complete
and accurate list of all Investments held by any Loan Party or any of their
Subsidiaries, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(t) Intellectual Property. Set forth on Schedule 5.01(t) hereto is
a complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of their Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(u) Other Agreements. Schedule 5.01(u) sets forth a complete and
accurate list as of the date hereof of (i) all joint venture and partnership
agreements to which the Borrower or any of its Subsidiaries is a party, and (ii)
all covenants not to compete restricting the Borrower or any of its Subsidiaries
to which the Borrower or any of its Subsidiaries is a part or by which the
Borrower or any of its Subsidiaries is bound.
(v) Inactive Subsidiaries. The book value of all property and other
assets of the Inactive Subsidiaries (other than the Inactive Foreign
Subsidiaries), as of the date hereof, does not exceed $100,000 in the aggregate.
The fair market value of all property and other assets of the Inactive Foreign
Subsidiaries, as of the date hereof, does not exceed $100,000 in the aggregate.
ARTICLE VI.
COVENANTS OF THE BORROWER
Section 6.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970.
54
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom in respect of which the amount of the underlying tax,
assessment, charge or claim is more than $1,000,000 attaches to its property and
becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and use its best efforts to cause all lessees and other Persons
occupying its properties to comply, in all material respects, with all
Environmental Laws and Environmental Permits applicable to its operations and
properties; obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries (except for the Inactive Subsidiaries) to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Borrower and its Subsidiaries may
consummate any merger or consolidation permitted under Section 6.02(d) and
provided further, neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right or franchise if the Board of Directors of the
Borrower or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, such Subsidiary or the Lender Parties.
(f) Visitation Rights. At any reasonable time and from time to time
and with reasonable prior notice, permit the Agent or any of the Lender Parties
or any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs, finances
55
and accounts of the Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(i) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property,
keep such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or canceled,
except in each case, where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
(j) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate, other than
(i) payments for management advisory services not to exceed $375,000 in the
aggregate, (ii) transactions permitted under Section 6.02(g), (iii) the CRC
Leases and (iv) any Permitted CRC Transaction.
(k) Additional Loan Parties; Additional Collateral. At all times
prior to the Collateral Release Date, substantially concurrently with the
formation or acquisition of any Subsidiary (other than an Excluded Subsidiary or
a Foreign Subsidiary) of the Borrower, the Borrower shall (i) cause such
Subsidiary to guarantee all Obligations of the Borrower hereunder and under the
Notes by executing and delivering to the Agent an amendment to Guaranty in
substantially the form of Exhibit H, (ii) cause such Subsidiary to execute and
deliver to the Agent, an amendment to the Security Agreement, in substantially
the form of Exhibit J (whereby such Subsidiary shall grant a Lien on those of
its assets described in the Security Agreement), (iii) promptly pledge to the
Agent or cause to be pledged to the Agent all of the outstanding capital stock
of such Subsidiary owned by any Loan Party to secure such Loan Party's
Obligations under the Loan Documents, (iv) with respect to any real property in
which such Subsidiary has a fee simple ownership interest, cause such Subsidiary
to execute and deliver such deeds of trust, trust deeds and mortgages
("Additional Mortgages") in appropriate form for filing in all filing or
recording offices that the Agent may deem necessary or desirable to create a
valid first and subsisting Lien on the property described therein in favor of
the Agent for the benefit of the Lender Parties, (v) promptly take, and cause
such Subsidiary and each other Loan Party to take all action necessary or (in
the reasonable opinion of the Agent or the Required Lenders) desirable to
perfect and protect the Liens intended to be created by the Collateral
Documents, as amended pursuant to this Section 6.01(k), and (vi) promptly
56
deliver to the Agent such opinions of counsel, if any, as the Agent or the
Required Lenders may reasonably require with respect to the foregoing (including
opinions as to enforceability and perfection of security interests). At all
times prior to the Collateral Release Date, substantially concurrently with the
formation or acquisition of any Excluded Subsidiary or Foreign Subsidiary of any
Loan Party, such Loan Party shall promptly pledge to the Agent or cause to be
pledged to the Agent all of the outstanding capital stock of such Subsidiary
(or, if such Subsidiary is a Foreign Subsidiary, 65% of such capital stock)
owned by such Loan Party to secure such Loan Party's obligations under the Loan
Documents. In addition to the foregoing, upon the acquisition by the Borrower
or any other Loan Party (other than an Excluded Subsidiary) on or after the date
hereof and prior to the Collateral Release Date of any fee simple ownership
interest in any real property and, with respect to any real property subject to
any CRC Lease, if the granting of such a Lien shall be permitted under, and
shall not cause a default or event of default under, the transaction documents
relating to the CRC Notes and the CRC Excluded Debt (including without
limitation the CRC Leases, the mortgages on the properties subject to the CRC
Leases executed by the Borrower, and the indenture relating to the CRC Notes),
(i) the applicable Loan Party shall promptly execute and deliver such Additional
Mortgages in appropriate form for filing in all filing or recording offices that
the Agent may deem necessary or desirable to create a valid first and subsisting
Lien on such real property in favor of the Agent for the benefit of the Lender
Parties, (ii) the Borrower shall promptly take, and cause each Loan Party to
take all action necessary or (in the reasonable opinion of the Agent or the
Required Lenders) desirable to perfect and protect the Liens intended to be
created by the Additional Mortgages, and (iii) promptly deliver to the Agent
such opinions of counsel, if any, as the Agent or the Required Lenders may
reasonably require with respect to the foregoing (including opinions as to
enforceability and perfection of security interests); provided, however, that
the obligations of the Borrower and the other Loan Parties as set forth in this
sentence shall not apply to (X) real properties owned by the Borrower on the
Closing Date (other than the CRC Properties) and (Y) real properties acquired by
the Borrower pursuant any Permitted Sale-Leaseback Repurchase (for as long as it
constitutes a Permitted Sale-Leaseback Repurchase) or Permitted Sale-Leaseback
Transactions.
In addition to the foregoing and notwithstanding any contrary
provision hereof or of any other Loan Document, the Borrower shall execute and
deliver to the Agent an Additional Mortgage of not less than second priority
with respect to the Headquarters Property (subject only to the deed of trust
encumbering such property on the date hereof and with no increase in the
principal amount of Debt secured thereby) and shall cause to be delivered to the
Agent a policy of title insurance with respect thereto, in form and substance,
with endorsements and in amount acceptable to the Agent, in each case at the
Borrower's sole cost and expense and not later than 60 days after the date
hereof.
(l) Redemption of Existing Senior Notes. The Borrower shall (i) on
or before April 15, 1998, redeem $75,000,000 in aggregate principal amount of
the Existing Senior Notes, (ii) on or before June 1, 1998, redeem all
outstanding Existing Senior Notes, (iii) on or before October 1, 1998, redeem
all outstanding Existing Senior Subordinated Notes, and (iv) in each case,
provide the Agent with evidence satisfactory to the Agent of such redemption.
57
(m) Excluded Subsidiaries. Within 60 days of payment in full of the
CRC Notes, the Borrower shall, with respect to each Excluded Subsidiary, (i)
file, or shall cause to be filed, with the appropriate governmental authority a
petition for the dissolution of such Excluded Subsidiary, or (ii) cause such
Excluded Subsidiary to be merged with and into the Borrower; provided, in the
case of clause (ii), such Excluded Subsidiary is Solvent and has no material
liabilities as of the date of such merger.
(n) Organizational Documents. The Borrower shall ensure that the
organizational documents of each Excluded Subsidiary formed or organized on or
after the Closing Date are substantially in the form of the organizational
documents attached hereto as (i) Exhibit K-1, with respect to any such Excluded
Subsidiary that is a corporation, and (ii) Exhibit K-2, with respect to any such
Excluded Subsidiary that is a limited partnership; provided that with respect to
any such Excluded Subsidiary that is neither a corporation nor a limited
partnership, the Borrower shall ensure that the organizational documents of such
Excluded Subsidiary contain substantially the terms and conditions set forth in
Exhibits K-1 and K-2 with only such conforming changes as are necessary to
reflect that such Excluded Subsidiary is a general partnership, limited
liability company, joint venture or trust, as applicable.
Section 6.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will not, at any time, without the
written consent of the Required Lenders or, if required under Section 9.01, of
all of the Lenders.
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its assets or properties of any character (including,
without limitation, accounts and the capital stock of the Borrower and any of
its Subsidiaries) whether now owned or hereafter acquired, excluding, however,
from the operation of the foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) Liens granted by any Excluded Subsidiary permitted by
the organizational documents of such Excluded Subsidiary;
(iv) Liens granted by the Borrower or any of its Subsidiaries
with respect to any Permitted Sale-Leaseback Repurchase, so long as each
such Lien shall attach only to the property acquired with respect to such
Permitted Sale-Leaseback Repurchase;
(v) Liens arising in connection with Permitted Sale-Leaseback
Transactions provided that, with respect to each Permitted Sale-Leaseback
Transaction, such Liens extend only to the property subject to such
Permitted Sale-Leaseback Transaction; and
58
(vi) the replacement, extension or renewal of any Permitted
Encumbrance, Permitted Lien or any Lien permitted by clauses (i), (ii),
(iii), (iv) or (v) above upon or in the same property theretofore subject
thereto; or the replacement, extension or renewal (without increase in the
amount, or change in any direct or contingent obligor) of the Debt secured
by any Permitted Encumbrance, Permitted Lien or any Lien permitted by
clauses (i), (ii), (iii), (iv) or (v) above.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) in the case of the Borrower,
(A) Debt under the Loan Documents;
(B) Permitted Subordinated Debt;
(C) Debt in respect of Hedge Agreements entered into in
order to manage existing or anticipated interest rate or exchange rate
risks and not for speculative purposes and subordinated to the rights
of the Lender Parties hereunder in a manner that is acceptable to the
Required Lenders in an aggregate notional amount not to exceed
$50,000,000 at any time outstanding;
(ii) in the case of any of its Subsidiaries (other than any
Excluded Subsidiary or any Inactive Foreign Subsidiary),
(A) Debt owed to the Borrower or to a wholly-owned
Subsidiary of the Borrower; and
(iii) in the case of the Borrower and any of its
Subsidiaries,
(A) Debt secured by Permitted Liens described in clause (c)
or (d) of the definition of Permitted Liens; provided, however, that
the principal amount of any such Debt incurred during any fiscal year
shall not exceed $15,000,000;
(B) the Surviving Debt;
(C) Debt consisting of Capitalized Leases entered into
pursuant to Permitted Sale-Leaseback Transactions;
(D) Debt of the Borrower in an aggregate principal amount
not to exceed $20,000,000 incurred with respect to any Permitted Sale-
Leaseback Repurchase;
(E) Debt of any Excluded Subsidiary permitted by the
organizational documents of such Excluded Subsidiary;
59
(F) Debt consisting of a Permitted Refinancing;
(G) additional unsecured Debt of the Borrower and its
Subsidiaries not to exceed $25,000,000 at any time outstanding; and
(H) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
provided, however, that notwithstanding any contrary provision hereof or of any
other Loan Document, the Borrower shall not incur any Indebtedness (as defined
in the indenture relating to the senior subordinated notes of the Borrower
described in clause (A) of the definition of "Permitted Subordinated Debt"),
other than Debt under the Loan Documents, in reliance upon clause (i) of the
second paragraph of Section 4.07(a) of such indenture or in reliance on any
corresponding provision of any Permitted Refinancing thereof.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligations as lessee under any transaction that is not a Capitalized Lease for
the rental or hire of real or personal property in connection with any sale and
leaseback transaction other than (i) the CRC Leases or (ii) Permitted
Sale-Leaseback Transactions.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except as contemplated by Section 6.01(m) and except that (i) any wholly-owned
Solvent Subsidiary (other than an Excluded Subsidiary) of the Borrower may merge
into or consolidate with any other wholly-owned Solvent Subsidiary (other than
an Excluded Subsidiary) of the Borrower provided that, in the case of any such
consolidation, the Person formed by such consolidation shall be a Subsidiary of
the Borrower, and (ii) any of the Borrower's wholly-owned Subsidiaries (other
than an Excluded Subsidiary) that is Solvent may merge into the Borrower.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets except (i) in a transaction authorized by
Section 6.02(d), (ii) Excluded Asset Sales, (iii) any Permitted CRC Transaction
and (iv) so long as no Default shall occur and be continuing, the grant of any
option or other right to purchase any asset in a transaction which would be
permitted under the provisions of the next preceding clauses (i), (ii) and
(iii).
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than
(i) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and additional investments in
wholly-owned Subsidiaries that are Loan Parties (other than Inactive
Subsidiaries);
60
(ii) Investments by the Borrower and its Subsidiaries in Excluded
Subsidiaries and Inactive Subsidiaries; provided, however, that the
aggregate Investment by the Borrower and its Subsidiaries in all Excluded
Subsidiaries and Inactive Subsidiaries shall not exceed $3,000,000;
(iii) loans and advances to officers and employees of the
Borrower and its Subsidiaries in the ordinary course of the business of the
Borrower and its Subsidiaries as presently conducted in an aggregate
principal amount not to exceed $2,000,000 at any time outstanding;
(iv) Investments by the Borrower and its Subsidiaries in Cash
Equivalents and in Hedge Agreements permitted under Section 6.02(b)(i)(C);
(v) advances in connection with purchases of equipment and
inventory in the ordinary course of business of the Borrower and its
Subsidiaries as presently conducted, required deposits in connection with
leases and otherwise in the ordinary course of business as presently
conducted in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding and Capital Expenditures otherwise permitted hereunder;
(vi) Investments in joint ventures in an aggregate amount at any
time outstanding not to exceed $4,000,000, subject to Section 6.02(o);
(vii) loans and advances to Jack In The Box franchisees in
the ordinary course of business of the Borrower and its Subsidiaries
consistent with past practice in an aggregate amount at any one time
outstanding not to exceed $5,000,000;
(viii) Investments consisting of Permitted Sale-Leaseback
Repurchases;
(ix) Investments consisting of the assumption of up to $5,000,000
in Debt of the Borrower's franchisees in connection with any purchase of a
restaurant and related assets and assumption of related liabilities from a
franchisee of the Borrower;
(x) Investments consisting of Permitted CRC Transactions; and
(xi) Investments by any Excluded Subsidiary permitted by the
organizational documents of such Excluded Subsidiary; and
(xii) other Investments in an aggregate amount invested not
to exceed $5,000,000.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
61
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of the Borrower or any warrants, rights or options to acquire
such capital stock or to issue or sell any capital stock or any warrants, rights
or options to acquire such capital stock, except that, so long as no Default
shall have occurred and be continuing, the Borrower may (i) declare and deliver
dividends and distributions payable only in (and to the holders of) common stock
of the Borrower, (ii) the Borrower may issue any stock or stock options or
warrants or derivative rights in respect thereof (including, without limitation,
stock options, restricted stock, stock appreciation rights and phantom stock)
pursuant to any employee benefit plan or program or compensation plan for
officers, employees, directors and consultants, including, without limitation,
employee stock purchase plans, qualified or non-qualified plans of deferred
compensation, 401(K) plans, or similar programs for officers, employees,
directors and consultants, (iii) the Borrower and its Subsidiaries may enter
into any merger or consolidation permitted under Section 6.02(d) and may sell or
otherwise dispose of assets to the extent permitted by Section 6.02(e), (iv) the
Borrower may declare and deliver dividends and distributions payable in cash to
the holders of common stock of the Borrower in an amount up to $10,000,000 per
fiscal year, provided that at the time of declaration thereof and after any such
payment, the Borrower would not be in Default hereunder; and (v) the Borrower
may acquire capital stock of the Borrower, provided that the aggregate purchase
price for any such capital stock in any fiscal year shall not exceed $10,000,000
and that at the time of and immediately after any such acquisition, the Borrower
would not be in Default hereunder.
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Corporate Organization. (A) Create any Subsidiaries (other than
Excluded Subsidiaries) not in existence on the date hereof; or (B) amend, or
permit any of its Subsidiaries (whether or not existing on the date hereof) to
amend, its certificate or articles of incorporation, bylaws or other
organizational or charter documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required by generally accepted accounting principles.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner the CRC Excluded Debt or any Debt other than (A) the prepayment of the
Advances in accordance with the terms of this Agreement, (B) regularly scheduled
or required repayments or redemptions of Surviving Debt, (C) the redemption of
the Existing Senior Notes as contemplated hereby and (D) the redemption of the
Existing Senior Subordinated Notes following the issuance of the senior
subordinated notes described in clause (A) of the definition of "Permitted
Subordinated Debt"; (ii) make any payment in violation of any subordination
terms of any Debt; or (iii) amend, modify or change in any manner any term or
condition of any Surviving Debt or Permitted Subordinated Debt in a manner
adverse to the Agent or the Lenders, or permit any of its Subsidiaries to do any
of the foregoing other than to prepay any Debt payable to the Borrower.
62
(l) Payment Restrictions Affecting Certain Subsidiaries. Enter into,
or permit any of its Subsidiaries (other than any Excluded Subsidiary) to enter
into, any agreement, instrument or other document which directly or indirectly
prohibits or restricts in any manner, or would have the effect of prohibiting or
restricting in any manner, the ability of any of the Borrower's Subsidiaries
(other than any Excluded Subsidiary) to (i) pay dividends or make any other
distributions in respect of its capital stock or any other equity interest or
participation in its profits owned by the Borrower or any of its Subsidiaries,
or pay or repay any Debt owed to the Borrower or any of its Subsidiaries, (ii)
make loans or advances to the Borrower, or (iii) transfer any of its properties
or assets to the Borrower or any of its Subsidiaries; provided, however, that
the foregoing provisions shall not restrict any encumbrances or restrictions:
(A) existing on the Closing Date in any agreements in effect on the Closing
Date, and any modifications, extensions, refinancings, renewals, substitutions
or replacements of such agreements, provided that the encumbrances and
restrictions in any such modifications, extensions, refinancings, renewals,
substitutions or replacements are no less favorable in any material respect to
the Lender Parties than those encumbrances or restrictions that are then in
effect and that are being modified, extended, refinanced, renewed, substituted
or replaced; (B) existing under or by reason of applicable law; (C) existing
with respect to any Person or the property or assets of such Person acquired by
the Borrower or any Subsidiary thereof, existing at the time of such acquisition
and not incurred in contemplation thereof, which encumbrances or restrictions
are not applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired, and any
modifications, extensions, refinancings, renewals, substitutions or replacements
of such agreements, provided that the encumbrances and restrictions in any such
modifications, extensions, refinancings, renewals, substitutions or replacements
are no less favorable in any material respect to the Lender Parties than those
encumbrances or restrictions that are then in effect and that are being
modified, extended, refinanced, renewed, substituted or replaced; and (D) in the
case of clause (iii) above, (X) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (Y) existing by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Subsidiary thereof
(other than any Excluded Subsidiary) not otherwise prohibited hereby or (Z)
arising or agreed to in the ordinary course of business, not relating to any
Debt, and that do not, individually or in the aggregate, detract from the value
of property or assets of the Borrower or any Subsidiary thereof (other than any
Excluded Subsidiary) in any manner material to the Borrower or any Subsidiary
thereof (other than any Excluded Subsidiary). Nothing contained in this Section
6.02(l) shall prevent the Borrower or any Subsidiary thereof from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted by
Section 6.02(a) or (2) restricting the sale or other disposition of property or
assets of the Borrower or its Subsidiaries that secure Debt of the Borrower or
any of its Subsidiaries to the extent such Liens and such Debts are permitted
hereunder.
(m) Negative Pledge. From and after the Collateral Release Date,
enter into or permit any of its Subsidiaries (other than any Excluded
Subsidiary) to enter into any agreement prohibiting or conditioning the creation
or assumption of any Lien upon any of its property or assets other than any
agreement (i) in favor of the Agent and the Lender Parties or (ii) in connection
with any Surviving Debt and any Debt of a Subsidiary outstanding on the date
63
such Subsidiary first becomes a Subsidiary; provided that this Section 6.02(m)
shall not apply to restrictions under Capitalized Leases with respect to the
property subject thereto or to Debt secured by Liens of the type described in
clause (d) of the definition of Permitted Liens, provided such restrictions are
by their terms effective only against the assets subject to such Liens.
(n) Partnerships. Become a general partner in any general or limited
partnership (other than an Excluded Subsidiary), or permit any of its
Subsidiaries (other than an Excluded Subsidiary) to become a general partner in
any general or limited partnership, other than any Subsidiary the sole assets of
which consist of its interest in such partnership.
Section 6.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing, furnish (or, in the case of the items set
forth in Section 6.03(g), make available) to the Lender Parties:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer or treasurer of the
Borrower setting forth details of such Default and the action that the Borrower
has taken and proposes to take with respect thereto
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each fiscal
year of the Borrower, Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements of income
and cash flows of the Borrower and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief financial
officer or chief accounting officer of the Borrower as having been prepared in
accordance with GAAP, together with (i) a certificate of said officer stating
that the representations and warranties in Section 5.01 are true and correct in
all material respects as of the date of such certificate and that no Default has
occurred and is continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower has taken
and proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 6.02(a), (b),
(c), (e), (f) and (g) and Sections 6.04(a) through (e) inclusive.
(c) Annual Financials. As soon as available and in any event within
90 days after the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, including
therein Consolidated balance sheets of the Borrower and its Subsidiaries as of
the end of such fiscal year and Consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion acceptable to the Required Lenders of KPMG Peat
Marwick or other independent public accountants of recognized standing
acceptable to the Required Lenders, together with (i) a certificate of the chief
64
financial officer or chief accounting officer of the Borrower stating that the
representations and warranties in Section 5.01 are true and correct in all
material respects as of the date of such certificate, no Default has occurred
and is continuing or, if a default has occurred and is continuing, a statement
as to the nature thereof and the action that the Borrower has taken and proposes
to take with respect thereto, and (ii) a schedule in form satisfactory to the
Agent of the computations used by the chief financial officer of the Borrower in
determining, as of the end of such financial year, compliance with the covenants
contained in Sections 6.02(a), (b), (c), (e), (f) and (g) and Sections 6.04(a)
through (e) inclusive.
(d) Annual Forecasts. As soon as available and in any event no later
than 30 days following the end of each fiscal year of the Borrower, forecasts
prepared by management of the Borrower, in form satisfactory to the Agent, of
income statements and cash flow statements for each four week period for the
fiscal year following such fiscal year then ended and a projected year-end
balance sheet and on an annual basis for each fiscal year thereafter until the
Termination Date.
(e) ERISA Events. Promptly and in any event within ten days after
any Loan Party or any of its ERISA Affiliates knows or has reason to know that
any ERISA Event with respect to any Loan Party or any of its ERISA Affiliates
has occurred, a statement of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that such Loan Party or such
ERISA Affiliate has taken and proposes to take with respect thereto.
(f) Plan Terminations. Promptly and in any event within ten days
after receipt thereof by any Loan Party or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any Plan of any
Loan Party or any of its ERISA Affiliates or to have a trustee appointed to
administer any such Plan.
(g) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of each Loan Party or any of its ERISA Affiliates.
(h) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of its
Subsidiaries of the type described in Section 4.01(e), and promptly after the
occurrence thereof, notice of any significant adverse change in the status or
the financial effect on any Loan Party or any of their Subsidiaries of the
Disclosed Litigation from that disclosed in the Borrower's Form 10-K; provided,
that such notice would not, in the opinion of counsel to the Borrower,
constitute a waiver of the attorney-client privilege with respect to any matter
related to such litigation.
(i) Press Releases; Securities Reports. Concurrently with the
sending or filing thereof, copies of all (i) press releases, (ii) proxy
statements, financial statements and reports that any Loan Party or any of its
Subsidiaries sends to its stockholders, and (iii) regular, periodic and special
reports, and all registration statements, that any Loan Party or any of its
65
Subsidiaries files with the Securities and Exchange Commission (including any
reports on Forms 10-K or 10-Q) or any governmental authority that may be
substituted therefor, or with any national securities exchange.
(j) Creditor Reports. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
any Loan Party or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lender Parties pursuant to any other clause of this Section
6.03.
(k) Environmental Conditions. Promptly after the occurrence thereof,
notice of any condition or occurrence on any property of any Loan Party or any
of its Subsidiaries that results in a material noncompliance by any Loan Party
or any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against any Loan Party or any of its Subsidiaries or such property that could
have a Material Adverse Effect or (ii) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(l) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party may from time to time reasonably request.
Section 6.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
otherwise consent in writing:
(a) Net Worth. Maintain a Consolidated Net Worth of not less than an
amount equal to the sum of: (i) $90,045,000, plus, (ii) 50% of the Consolidated
Net Income arising or otherwise attributable to periods commencing on or after
January 18, 1998, plus (iii) 100% of the Net Cash Proceeds of the sale or
issuance by the Borrower or any of its Subsidiaries of any capital stock, any
securities convertible into or exchangeable for such capital stock or any
warrants, rights or options to acquire such capital stock, plus (iv) 100% of the
excess of Consolidated total assets over Consolidated total liabilities of or
attributable to any Person or business acquired or formed on or after the
Closing Date.
(b) Fixed Charge Coverage Ratio. Maintain, for each period of four
consecutive fiscal quarters ending as of the last day of any fiscal quarter, a
ratio of Consolidated EBITDA plus rental expense under leases of real or
personal, or mixed, property during such period to the sum of (i) interest
expense of the Borrower and its Subsidiaries on, and amortization of debt
discount in respect of, all Debt during such period plus (ii) rental expense of
the Borrower and its Subsidiaries under leases of real or personal, or mixed,
property during such period plus (iii) principal amounts of all Debt payable
during such period by the Borrower and its Subsidiaries of not less than
1.25:1.00 at any time.
66
(c) Funded Debt to EBITDA Ratio. Maintain as at the end of any
period of four consecutive fiscal quarters ending during a test period set forth
below a ratio of Funded Debt of the Borrower and its Subsidiaries on a
Consolidated basis to Consolidated EBITDA of not more than the amount set forth
below for each period set forth below:
Fiscal Quarter
Ending On Ratio
----------------------- ---------
Closing Date through and
including July 11, 1999 3.75:1.00
July 12, 1999 through and
including July 8, 2001 3.50:1.00
July 9, 2001 through and
including the Termination Date 3.00:1.00
provided, however, that, notwithstanding anything to the contrary herein, at
any time on or after the Collateral Release Date, the Borrower will maintain a
ratio of Funded Debt of the Borrower and its Subsidiaries on a Consolidated
basis to Consolidated EBITDA of not greater than 3.00:1.00 at any time.
(d) Capital Expenditures. Not make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrower and its Subsidiaries in any
period set forth below to exceed the amount set forth below for such period:
Fiscal Year Amount
----------- ------------
1998 $115,000,000
1999 $125,000,000
2000 $140,000,000
2001 $160,000,000
2002 $166,000,000
2003 $166,000,000
The Borrower and its Subsidiaries may carry forward to the next
succeeding fiscal year only (but not to subsequent fiscal years) the amount by
which the actual Capital Expenditures of the Borrower and its Subsidiaries in
any fiscal year are less than the Capital Expenditures amount set forth above as
permitted in such fiscal year; provided, however, that the maximum amount that
may be carried forward to the next succeeding fiscal year shall be $10,000,000.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
67
(a) the Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or any Loan Party shall fail to make any
interest or any other payment under any Loan Document within three days after
such interest or other amount becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 6.02 or 6.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 10 days after written notice thereof
shall have been given to the Borrower by the Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal or notional amount of at least
$5,000,000 in the aggregate (but excluding Debt outstanding hereunder) of such
Loan Party or such Subsidiary (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise); or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder thereof to
cause, such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or any Loan
Party or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$5,000,000 (to the extent not paid or fully covered by insurance) shall be
rendered against any Loan Party or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 60 consecutive days
68
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse Effect,
and there shall be any period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 4.01 shall for any reason cease to be valid and binding on
or enforceable against any Loan Party to it, or any such Loan Party shall so
state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 4.01 shall, after the making of all appropriate filings or notifications
necessary to create a perfected Lien thereon, for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected Lien with
the priority required by the applicable Collateral Document on the Collateral
purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan of any
Loan Party or any of its ERISA Affiliates and the liability of the Loan Parties
and their ERISA Affiliates related to such ERISA Event and any and all other
ERISA Events which shall have occurred and then exist with respect to any Plans
of the Loan Parties and their ERISA Affiliates exceeds (i) $18,254,000 (the
amount of the Insufficiency on the Closing Date) plus $4,000,000 to the extent
such liability relates to the Insufficiency of the Plans, or (ii) $2,000,000 in
all other circumstances; or
(m) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Loan Parties and their ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification), exceeds
$2,000,000 or requires payments exceeding $1,000,000 per annum; or
(n) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the Loan
Parties and their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $2,000,000,
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then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances and of the any Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to any
Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x) the
obligation of each Lender Party to make Advances and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
Section 7.02. Actions in Respect of the Letters of Credit Upon
Default. If any Event of Default shall have occurred and be continuing, the
Agent may, irrespective of whether it is taking any of the actions described in
Section 7.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Agent on behalf of the Lender Parties
in same day funds at the Agent's office designated in such demand, for deposit
to a non-interest bearing account established by the Agent for such purposes or
for purposes of Section 2.05(b)(iv) (the "L/C Cash Collateral Account"), an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding (and the Borrower hereby grants to the Agent, for the ratable
benefit of the Agent and each Lender Party, a continuing security interest in
all amounts at any time on deposit in the L/C Cash Collateral Account to secure
all Letter of Credit Obligations from time to time outstanding and all other
Obligations hereunder). If at any time the Agent determines that any funds held
in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Agent, pay to the Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Agent determines to be free and clear of any such right and claim.
ARTICLE VIII.
THE AGENT
Section 8.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes, the Agent shall not
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be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender Party prompt notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement.
Section 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations made in or in connection with the Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (v) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
Section 8.03. NationsBank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, NationsBank
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not the Agent; and the
terms "Lender", "Lenders", "Lender Party" or "Lender Parties" shall, unless
otherwise expressly indicated, include NationsBank in its individual capacity.
NationsBank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if NationsBank were not the Agent and
without any duty to account therefor to the Lender Parties.
Section 8.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and based on the financial statements referred to in
Section 5.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
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Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
Section 8.05. Indemnification. Each Lender Party severally agrees to
indemnify the Agent and the Arranger (to the extent not promptly reimbursed by
the Borrower) from and against such Lender Party's ratable share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent or the Arranger in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by the Agent or the Arranger under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's or the Arranger's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender Party agrees to reimburse each of the Agent and the Arranger
promptly upon demand for its ratable share of any costs and expenses payable by
the Borrower under Section 9.04, to the extent that the Agent and the Arranger
are not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 8.05, the Lender Parties' respective ratable shares of
any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances (other than L/C Advances) outstanding
at such time and owing to the respective Lender Parties, (b) their respective
Pro Rata Shares of the aggregate Letter of Credit Obligations outstanding at
such time, plus (c) their respective Unused Revolving Commitments at such time.
The failure of any Lender Party to reimburse the Agent or the Arranger promptly
upon demand for its ratable share of any amount required to be paid by the
Lender Parties to the Agent or the Arranger as provided herein shall not relieve
any other Lender Party of its obligation hereunder to reimburse the Agent or the
Arranger, as applicable, for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent or the Arranger for such other Lender Party's ratable share
of such amount.
Section 8.06. Successor Agents. The Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lender Parties, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and upon
the execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to the Mortgages, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
72
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE IX.
MISCELLANEOUS
Section 9.01. Amendments, Etc; Release of Collateral.
(a) Amendments. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders (and, in the case of any such amendment, the Borrower),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed by all the
Lender Parties, do any of the following at any time: (i) waive any of the
conditions specified in Section 4.02 or, in the case of the initial Borrowing,
4.01, (ii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes that shall be required for the Lender Parties or
any of them to take any action hereunder, (iii) release all or substantially all
of the Collateral (except pursuant to Section 9.01(b)) or release any Guarantor
from its obligations under the Guaranty or (iv) amend this Section 9.01 or amend
Section 2.05, and (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender that has a Commitment under
the Facility affected by such amendment, waiver or consent, (i) increase the
Commitments of such Lender or subject such Lender to any additional obligations,
(ii) reduce the principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender, or (iii) postpone
any date fixed for any payment of principal of, or interest on, the Notes held
by such Lender or any fees or other amounts payable hereunder to such Lender;
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Lender or of the Issuing Bank, as the case may be,
under this Agreement; and provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any Note.
(b) Release of Collateral. Anything contained in this Agreement or
any of the other Loan Documents to the contrary notwithstanding, upon delivery
of a certificate of the chief financial officer of the Borrower certifying that
one or more of the Collateral Release Tests has been satisfied and the written
request of the Borrower, the Collateral Documents shall be terminated, and all
collateral pledged under the Collateral Documents shall be released, without
further action on the part of the Agent or any Lender Party (the date of such
release, the "Collateral Release Date"). Any release of collateral pledged
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under the Collateral Documents in accordance with the provisions of this Section
9.01(b) shall be deemed to be a release of such pledged collateral upon the
approval thereof by all of the Lender Parties for purposes of the Loan
Documents. In connection with any such release, the Agent shall, upon request,
at the Borrower's expense, execute all such further documents and instruments as
may be reasonably requested by the Borrower in order to more fully evidence or
effect such release.
Section 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to the Borrower, at its address at Foodmaker, Inc.,
9330 Balboa Avenue, San Diego, California 92123-1516, Telecopier No.
(619) 571-2101, Attn: Treasurer, with a courtesy copy to the Borrower at
Telecopier No. (619) 277-9791, Attn: Treasurer and a courtesy copy to Andrew E.
Bogen, Gibson, Dunn & Crutcher LLP, 333 South Grand Ave., Los Angeles, CA
90071; if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at 901 Main Street, Dallas,
Texas 75202, Telecopier No.: (214) 508-2118, Attn: Donna Cornell, Agency
Services, with a copy to NationsBank, 444 South Flower Street, Suite 4100, Los
Angeles, California 90071-2901, Telecopier No. (213) 624-5815, Attn: George V.
Hausler; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or cabled,
be effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, except that notices and communications to the Agent
pursuant to Article II, III, IV or VIII shall not be effective until received
by the Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Agent to exercise, and no delay in exercising, any right
hereunder, under any Note or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 9.04. Costs and Expenses.
(a) The Borrower agrees to pay on demand (i) all reasonable costs and
expenses of the Agent and the Arranger in connection with the preparation,
execution, delivery, syndication, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Agent and the Arranger with respect thereto, with
respect to advising each of the Agent and the Arranger as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
74
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent, the Arranger, each Lender and each Issuing Bank
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the Agent, the
Arranger and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, the
Arranger, each Lender, each Issuing Bank and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) this
Agreement or any other Loan Document, the actual or proposed use of the proceeds
of any Advance or of any Letter of Credit issued hereunder or any of the
transactions contemplated hereby (including the redemption of the Existing
Senior Notes as contemplated hereby) or by the other Loan Documents, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan
Party or any of its Subsidiaries or any Environmental Action relating in any way
to any Loan Party or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. The Borrower also agrees not to assert
any claim against the Agent, the Arranger, any Lender Party, any of their
affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in any other Loan Document or the actual or proposed use
of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or conversion pursuant to Section 2.05 or 2.06, acceleration of the
maturity of the Notes pursuant to Section 7.01, or for any other reason, or by
an Eligible Assignee to a Lender Party other than on the last day of the
Interest Period for such Advance upon an assignment of rights and obligations
under this Agreement pursuant to a demand by the Borrower pursuant to Section
9.07(a), the Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender Party
any amounts required to compensate such Lender Party for any additional out-of-
pocket losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any out-of-pocket loss, cost or
75
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Agent or any Lender Party, in its sole
discretion and the Borrower shall reimburse the Agent or such Lender Party on
demand for any amounts so paid with interest thereon at the Default Rate from
the date of such payment until so reimbursed.
Section 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 7.01,
each Lender Party and each of is Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender Party or such Affiliate to or for the credit or the account of
the Borrower against any and all of the Obligations of the Borrower now or
hereafter existing under this Agreement and the Note or Notes held by such
Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Lender Party agrees promptly to notify the Borrower
after any such set-off and application; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender Party and its Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its Affiliates may have.
Section 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender Party and their respective successors and assigns, except
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender Parties.
Section 9.07. Assignments and Participations.
(a) Each Lender Party may and, if demanded by the Borrower (which
demand may only be made within 30 days after a demand by such Lender Party
pursuant to Section 2.08(a), 2.08(b) or 2.10 upon at least 10 Business Days'
notice to such Lender Party and the Agent), will assign to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of all
of the Facilities, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender Party or an assignment of all
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of a Lender Party's rights and obligations under this Agreement, the amount of
the Commitment of the assigning Lender Party being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower pursuant to this Section 9.07(a)
shall be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender Party under this Agreement or an assignment of a portion of such rights
and obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender Party under this Agreement, (v) no Lender Party shall be
obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 9.07(a) unless and until such Lender Party shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender Party, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender Party under this Agreement, and (vi) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
Party hereunder and (y) the Lender Party assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender Party's
rights and obligations under this Agreement, such Lender Party shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Lender Party makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 5.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
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without reliance upon the Agent, such assigning Lender Party or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.
(c) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lender
Parties and the Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Agent and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit A hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender Party has retained a
Commitment hereunder under such Facility, a new Note to the order of the
assigning Lender Party in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit D-1 or D-2 hereto, as
applicable.
(e) Each Lender Party may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender Party's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lender
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Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement,
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, release all
or substantially all of the Collateral (other than pursuant to Section 9.01(b))
or release any Guarantor from its obligations under the Guaranty.
(f) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
Section 9.08. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA.
Section 9.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.10. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
79
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 9.11. Confidentiality. Except as may be required to enforce
the rights and duties established hereunder and under the other Loan Documents
(including establishing and maintaining the perfection and priority of the
security interests in the Collateral), neither the Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to the Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
Section 9.12. Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT,
THE ISSUING BANK AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES, ANY LETTER OF CREDIT OR THE ACTIONS OF THE AGENT OR ANY LENDER PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
FOODMAKER, INC.
By: HAROLD L. SACHS
---------------
Name: Harold L. Sachs
---------------
Title: Treasurer
---------------
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
CREDIT LYONNAIS LOS ANGELES
BRANCH,
as Documentation Agent
By: DIANNE M. SCOTT
---------------
Name: Dianne M. Scott
---------------
Title: Vice President and Manager
--------------------------
Issuing Bank
------------
NATIONSBANK OF TEXAS, N.A.,
as L/C Bank
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
Initial Lenders
---------------
NATIONSBANK OF TEXAS, N.A.,
as Initial Lender
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
CREDIT LYONNAIS LOS ANGELES
BRANCH,
as Initial Lender
By: DIANNE M. SCOTT
---------------
Name: Dianne M. Scott
---------------
Title: Vice President and Manager
--------------------------
ROYAL BANK OF CANADA,
as Initial Lender
By: JOHN LUSTGARTEN
---------------
Name: John Lustgarten
---------------
Title: Manager
---------------
UNION BANK OF CALIFORNIA, N.A.,
as Initial Lender
By: ANN M. YASUDA
-------------
Name: Ann M. Yasuda
-------------
Title: Vice President
--------------
U.S. BANK NATIONAL ASSOCIATION,
as Initial Lender
By: JANET JORDAN
------------
Name: Janet Jordan
------------
Title: Vice President
--------------
BANK ONE, TEXAS, N.A.,
as Initial Lender
By: WYATT DICKSON
-------------
Name: Wyatt Dickson
-------------
Title: Assistant Vice President
------------------------
CIBC INC.,
as Initial Lender
By: CHRISTOPHER KLECZKOWSKI
-----------------------
Name: Christopher Kleczkowski
-----------------------
Title: Executive Director
-----------------------
CIBC Oppenheimer Corp., AS AGENT
THE FUJI BANK, LTD.,
LOS ANGELES AGENCY,
as Initial Lender
By: MASAHITO FUKUDA
---------------
Name: Masahito Fukuda
---------------
Title: Joint General Manager
---------------------
SANWA BANK CALIFORNIA,
as Initial Lender
By: LARRY D. HART
-------------
Name: Larry D. Hart
-------------
Title: Vice President
--------------
NATEXIS BANQUE - BFCE,
as Initial Lender
By: IAIN A. WHYTE
-------------
Name: Iain A. Whyte
-------------
Title: Vice President
--------------
JOAN M. FARRELL
---------------
Joan M. Farrell
---------------
Assistant Vice President
------------------------