Exhibit 10.1
LOAN AGREEMENT
($127,000,000 ADVANCE LOAN FACILITY
AND
$25,000,000 REVOLVING LOAN FACILITY)
dated as of May 12, 1997
AMONG
CARROLS CORPORATION,
as Borrower,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Agent and as a Lender,
HELLER FINANCIAL, INC.,
as Documentation Agent and as a Lender,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Co-Agent and as a Lender,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
TABLE OF CONTENTS
Page
1. Definitions..............................................................................................1
1.1 Certain Defined Terms.........................................................................1
1.2 Miscellaneous................................................................................21
2. Commitments and Loans...................................................................................21
2.1 Loans........................................................................................21
2.2 Letters of Credit............................................................................22
2.3 Terminations or Reductions of Commitments....................................................26
2.4 Commitment Fees..............................................................................26
2.5 Several Obligations..........................................................................27
2.6 Notes........................................................................................27
2.7 Use of Proceeds..............................................................................28
3. Borrowings, Payments, Prepayments and Interest Options..................................................28
3.1 Borrowings...................................................................................28
3.2 Prepayments..................................................................................28
3.3 Interest Options.............................................................................31
4. Payments; Pro Rata Treatment; Computations, Etc.........................................................36
4.1 Payments.....................................................................................36
4.2 Pro Rata Treatment...........................................................................37
4.3 Certain Actions, Notices, Etc................................................................38
4.4 Non-Receipt of Funds by Agent................................................................39
4.5 Sharing of Payments, Etc.....................................................................39
5. Conditions Precedent....................................................................................40
Page
5.1 Initial Loans and Letters of Credit..........................................................40
5.2 Advance Loans................................................................................42
5.3 All Loans and Letters of Credit..............................................................43
6. Representations and Warranties..........................................................................43
6.1 Organization.................................................................................44
6.2 Financial Statements.........................................................................44
6.3 Enforceable Obligations; Authorization.......................................................44
6.4 Other Debt...................................................................................45
6.5 Litigation...................................................................................45
6.6 Title........................................................................................45
6.7 Taxes........................................................................................45
6.8 Regulations G, U and X.......................................................................45
6.9 Subsidiaries.................................................................................45
6.10 No Untrue or Misleading Statements...........................................................45
6.11 ERISA........................................................................................46
6.12 Investment Company Act.......................................................................46
6.13 Public Utility Holding Company Act...........................................................46
6.14 Solvency.....................................................................................46
6.15 Fiscal Year..................................................................................46
6.16 Compliance...................................................................................46
6.17 Environmental Matters........................................................................46
6.18 Certificate of Title Property................................................................47
6.19 Mortgaged Properties and Other Collateral; Subsidiary Property...............................47
7. Affirmative Covenants...................................................................................47
7.1 Taxes, Existence, Regulations, Property, Etc.................................................48
7.2 Financial Statements and Information.........................................................48
7.3 Financial Tests..............................................................................49
7.4 Inspection...................................................................................49
7.5 Further Assurances...........................................................................49
7.6 Books and Records............................................................................49
7.7 Insurance....................................................................................49
7.8 Notice of Certain Matters....................................................................50
7.9 Interest Rate Risk...........................................................................50
7.10 Capital Adequacy.............................................................................50
7.11 ERISA Information and Compliance.............................................................51
7.12 Additional Security Documents................................................................52
7.13 Guaranties; Pledge of Subsidiary Stock.......................................................53
8. Negative Covenants......................................................................................53
8.1 Borrowed Money Indebtedness..................................................................53
8.2 Liens........................................................................................53
8.3 Contingent Liabilities.......................................................................53
8.4 Mergers, Consolidations and Dispositions of Assets...........................................54
8.5 Redemption, Dividends and Distributions......................................................55
8.6 Nature of Business...........................................................................55
8.7 Transactions with Related Parties............................................................55
8.8 Loans and Investments........................................................................55
8.9 Subsidiaries.................................................................................55
8.10 Key Agreements...............................................................................55
8.11 Organizational Documents.....................................................................56
8.12 Certificate of Title Property................................................................56
8.13 Unfunded Liabilities.........................................................................56
8.14 Acquisitions of Assets.......................................................................56
8.15 Prepayment of Heller Financial...............................................................57
9. Defaults................................................................................................57
Page
9.1 Events of Default............................................................................57
9.2 Right of Setoff..............................................................................60
9.3 Collateral Account...........................................................................61
9.4 Preservation of Security for Unmatured Reimbursement Obligations.............................61
9.5 Remedies Cumulative..........................................................................61
10. Agent...................................................................................................61
10.1 Appointment, Powers and Immunities...........................................................61
10.2 Reliance.....................................................................................62
10.3 Defaults.....................................................................................63
10.4 Material Written Notices.....................................................................63
10.5 Rights as a Lender...........................................................................63
10.6 Indemnification..............................................................................64
10.7 Non-Reliance on Agent and Other Lenders......................................................64
10.8 Failure to Act...............................................................................64
10.9 Resignation or Removal of Agent..............................................................65
10.10 No Partnership...............................................................................65
11. Miscellaneous...........................................................................................66
11.1 Waiver.......................................................................................66
11.2 Notices......................................................................................66
11.3 Expenses, Etc................................................................................66
11.4 Indemnification..............................................................................67
11.5 Amendments, Etc..............................................................................67
11.6 Successors and Assigns.......................................................................68
11.7 Limitation of Interest.......................................................................71
11.8 Survival.....................................................................................72
11.9 Captions.....................................................................................72
11.10 Counterparts.................................................................................72
11.11 Governing Law................................................................................72
11.12 Severability.................................................................................72
11.13 Tax Forms....................................................................................72
11.14 Conflicts Between This Agreement and the Other Loan Documents................................73
11.15 Jury Waiver..................................................................................73
11.16 Limitation on Charges; Substitute Lenders; Non-Discrimination................................73
11.17 Amendment and Restatement; Renewal Notes.....................................................74
EXHIBITS
- ---------
A -- Request for Extension of Credit
B -- Fee Simple Sites
C -- Rate Designation Notice
D -- Advance Note
E -- Revolving Note
F -- Assignment and Acceptance
G -- Compliance Certificate
H -- Lease Agreements
I -- Franchise Agreements
J -- Excluded Assets
K -- Certain Fee Sites (Financing on Sale/Leaseback Not Available)
v
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of May 12, 1997 (the
"Effective Date"), by and among CARROLS CORPORATION, a Delaware corporation
(together with its permitted successors, herein called the "Borrower"); each
of the lenders which is or may from time to time become a party hereto
(individually, a "Lender" and, collectively, the "Lenders"), HELLER FINANCIAL,
INC., as Documentation Agent, FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as
Co-Agent, and TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), a national
banking association, as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
The parties hereto agree as follows:
1. Definitions
1.1 Certain Defined Terms
Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein
or in the Loan Documents (as hereinafter defined) have the following meanings
(all definitions that are defined in this Agreement in the singular have the
same meanings when used in the plural and vice versa):
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of New York in force on the Effective Date.
Acquisition Package shall have the meaning ascribed to such term in
Section 5.2 hereof.
Additional Interest means the aggregate of all amounts accrued or
paid pursuant to the Notes or any of the other Loan Documents (other than
interest on the Notes at the Stated Rate) which, under applicable laws, are or
may be deemed to constitute interest on the indebtedness evidenced by the
Notes.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such
term in Section 7.8 hereof.
Adjusted LIBOR means, with respect to each Interest Period applicable
to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Advance Loan means a Loan made pursuant to Section 2.1(a) hereof.
Advance Loan Availability Period means, for each Advance Loan Lender,
the period from and including the Effective Date to (but not including) the
Advance Loan Termination Date.
Advance Loan Commitment means, as to any Lender, the obligation, if
any, of such Lender to make Advance Loans in an aggregate principal amount at
any one time outstanding up to (but not exceeding) the amount, if any, set
forth opposite such Lender's name on the signature pages hereof under the
caption "Advance Loan Commitment", or otherwise provided for in an Assignment
and Acceptance Agreement (as the same may be reduced from time to time
pursuant to Section 2.3 hereof).
Advance Loan Commitment Percentage means, as to any Advance Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Advance Loan Commitment and the denominator of which
is the aggregate amount of the Advance Loan Commitments of all Lenders.
Advance Loan Lender means each Lender with (i) prior to the Advance
Loan Termination Date, an Advance Loan Commitment and (ii) on and after the
Advance Loan Termination Date, any outstanding Advance Loans.
Advance Loan Maturity Date means June 30, 2003.
Advance Loan Termination Date means the earlier of (a) December 31,
1999 or (b) the date specified by Agent in accordance with Section 9.1 hereof.
Advance Loan Tranche shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
Advance Notes means the Notes of Borrower evidencing the Advance
Loans, in the form of Exhibit D hereto.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Audited Financial Statements means the annual financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal
2
year and an income statement and a statement of cash flows for such fiscal
year, all setting forth in comparative form the corresponding figures from the
previous fiscal year, all prepared in conformity with GAAP in all material
respects, and accompanied by the opinion of independent certified public
accountants of recognized national standing, which shall state that such
financial statements present fairly in all material respects the financial
position of such Person and, if such Person has any Subsidiaries (other than
Non-Recourse Subsidiaries), its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) as of the date thereof and the results of its
operations for the period covered thereby in conformity with GAAP. Such
statements of Borrower shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware
of any Default relating to the financial tests set forth in Section 7.3 hereof
or, if in the opinion of such accountants any such Default exists, a
description of the nature and status thereof.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or
hereafter issued or to be issued under the terms hereof at the request of any
Person.
Assignment and Acceptance shall have the meaning ascribed to such
term in Section 11.6 hereof.
Bankruptcy Code means the United States Bankruptcy Code, as amended,
and any successor statute.
Base Rate means for any day a rate per annum equal to the lesser of
(a) the applicable Margin Percentage from time to time in effect plus the
greater of (1) the Prime Rate for that day and (2) the Federal Funds Rate for
that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent shall
have determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds Rate for any
reason, including, without limitation, the inability or failure of Agent to
obtain sufficient quotations in accordance with the terms hereof, the Base
Rate shall, until the circumstances giving rise to such inability no longer
exist, be the lesser of (a) the Prime Rate plus the applicable Margin
Percentage from time to time in effect or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of
the Loans at any time bearing interest at the Base Rate.
BKC means Burger King Corporation, a Florida corporation.
BKC Consents means, collectively, (i) the Intercreditor Agreement
dated concurrently herewith executed by and among BKC, Borrower, Carrols
Holdings and Agent and (ii) all other Intercreditor Agreements now or
hereafter executed by BKC relating to any of the Mortgaged
3
Properties or Excluded Assets, as the same may from time to time be amended,
modified, supplemented or restated.
Borrowed Money Indebtedness means, with respect to any Person,
without duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (iii) all obligations of such Person under conditional
sale or other title retention agreements relating to Property purchased by
such Person, (iv) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (excluding obligations of such
Person to creditors for raw materials, inventory, services and supplies and
deferred payments for services to employees and former employees incurred in
the ordinary course of such Person's business), (v) all capital lease
obligations of such Person, (vi) all obligations of others secured by any lien
on property or assets owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (vii) Interest Rate Risk
Indebtedness of such Person, (viii) all obligations of such Person in respect
of outstanding letters of credit issued for the account of such Person and
(ix) all guarantees of such Person.
Business Day means any day other than a day on which commercial banks
are authorized or required to close in New York City, New York or Houston,
Texas.
Capital Expenditures means, with respect to any Person for any
period, expenditures in respect of fixed or capital assets by such Person,
including capital lease obligations incurred during such period (to the extent
not already included), which would be reflected as additions to Property,
plant or equipment on a balance sheet of such Person and its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries), if any, prepared in
accordance with GAAP; but excluding expenditures during such period for the
repair or replacement of any fixed or capital asset which was destroyed or
damaged, in whole or in part, to the extent financed by the proceeds of an
insurance policy maintained by such Person.
Carrols Holdings means Carrols Holdings Corporation, a Delaware
corporation.
Ceiling Rate means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or New York
(or any jurisdiction whose usury laws are deemed to apply to the Notes or any
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of New York) laws permits the higher interest
rate, stated as a rate per annum. On each day, if any, that Chapter One
establishes the Ceiling Rate, the Ceiling Rate shall be the "indicated rate
ceiling" (as defined in Chapter One) for that day. Agent may from time to
time, as to current and future balances, implement any other ceiling under
Chapter One by notice to Borrower, if and to the extent permitted by Chapter
One. Without notice to Borrower or any other person or entity, the Ceiling
Rate shall automatically fluctuate upward and downward as and in the amount by
which such maximum nonusurious rate of interest permitted by applicable law
fluctuates.
Chapter One means Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended.
4
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and
interpretations thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal
or mixed, now or hereafter subject to the Security Documents.
Compliance Certificate shall have the meaning given to it in Section
7.2 hereof.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414 of the Code.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities shall be effected by paying to
Agent immediately available funds, to be held by Agent in a collateral account
maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation reasonably satisfactory to Agent, in the amount required
by any applicable provision hereof. Such amount shall be retained by Agent in
such collateral account until such time as in the case of the Cover being
provided pursuant to Sections 2.2(a) or 9.3 hereof, the applicable Letter of
Credit shall have expired and the Reimbursement Obligations, if any, with
respect thereto shall have been fully satisfied; provided, however, that at
such time if a Default or Event of Default has occurred and is continuing,
Agent shall not be required to release such amount in such collateral account
until such Default or Event of Default shall have been cured or waived.
Debt means, with respect to any Person, the sum, without duplication,
of (i) all borrowings under the Notes, (ii) any obligation for Borrowed Money
Indebtedness which under GAAP would be shown on the balance sheet of such
Person as a liability (including, without limitation, capitalized lease
obligations but excluding reserves for deferred income taxes, deferred pension
liability and other deferred expenses and reserves), (iii) Indebtedness
secured by any Lien existing on Property owned by such Person, whether or not
the Indebtedness secured thereby shall have been assumed, (iv) guarantees by
such Person of Borrowed Money Indebtedness and endorsements (other than
endorsements of negotiable instruments for collection in the ordinary course
of business) and (v) Letters of Credit and other letters of credit (whether
drawn or undrawn) for the account of such Person.
Debt Service means, with respect to any Person for any period, the
sum of (i) Interest Expense for such period and (ii) scheduled principal
payments on obligations included within Debt for such period.
5
Debt Service Coverage Ratio means, as of any day, the ratio of (a)
EBITDA for the 12 months ending on such date plus rent expense of Borrower and
its consolidated Subsidiaries (other than Non-Recourse Subsidiaries) for such
12-month period to (b) Debt Service of Borrower and its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) for such 12-month period
plus rent expense of Borrower and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such 12-month period.
Debt to EBITDA Ratio means, as of any day, the ratio of (a) Debt of
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of such date to (b) EBITDA for the 12 months ending on such
date; provided however, that for purposes of this ratio only, so long as
Borrower shall have delivered to Agent financial information in Proper Form
regarding the Property acquired which disclose the prior operating results of
such Property, the pro forma effect of any acquisition by Borrower or any of
its consolidated Subsidiaries (other than Non-Recourse Subsidiaries) of any
Burger King Restaurant during such 12-month period shall be included in EBITDA
as if such acquisition occurred on the first day of such period.
Default means an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.
Dollars and $ means lawful money of the United States of America.
EBITDA means, without duplication, for any period the consolidated
net earnings (excluding any extraordinary gains or losses) of Borrower and its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) plus, to the
extent deducted in calculating consolidated net income, depreciation,
amortization, other non-cash items, Interest Expense, and federal and state
income tax expense.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and
Health Act or similar laws relating to safety of employees) which seeks to
impose liability for (i) noise; (ii) pollution or contamination of the air,
surface water, ground water or land or the clean-up of such pollution or
contamination; (iii) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal or transportation; (iv) exposure to Hazardous
Substances; (v) the safety or health of employees or (vi) the manufacture,
processing, distribution in commerce or use of Hazardous Substances. An
"Environmental Claim" includes, but is not limited to, a common law action, as
well as a proceeding to issue, modify or terminate an Environmental Permit, or
to adopt or amend a regulation to the extent that such a proceeding attempts
to redress violations of an applicable permit, license, or regulation as
alleged by any Governmental Authority.
Environmental Liabilities includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited
6
to: remedial, removal, response, abatement, investigative, monitoring,
personal injury and damage to property or injuries to persons, and any other
related costs, expenses, losses, damages, penalties, fines, liabilities and
obligations, and all costs and expenses necessary to cause the issuance,
reissuance or renewal of any Environmental Permit including reasonable
attorneys' fees and court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous substances or toxic
materials or wastes into ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants or Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder.
Eurodollar Rate means for any day during an Interest Period for a
LIBOR Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage in effect on the first day of such Interest
Period and (b) the Ceiling Rate. Each Eurodollar Rate is subject to
adjustments for reserves, insurance assessments and other matters as provided
for in Section 3.3 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next
highest one ten thousandth [.0001]) which is in effect on such day for
determining all reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to "Eurocurrency
liabilities," as currently defined in Regulation D. Each determination of the
Eurodollar Reserve Requirement by Agent shall be conclusive and binding,
absent manifest error, and may be computed using any reasonable averaging and
attribution method.
Event of Default shall have the meaning assigned to it in Section 9
hereof.
Excess Cash Flow means, without duplication, for any period, (i)
EBITDA for such period less (ii) the sum of all Debt Service (other than
mandatory prepayments calculated on the basis of Excess Cash Flow), voluntary
prepayments, federal and state income taxes actually paid, Investments of the
nature described in clause (f) of the definition of "Permitted Investments"
made by Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during such period and unfinanced Capital Expenditures
(including the unfinanced portion of Properties acquired), in each case for
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) for such period.
7
Excluded Assets means leasehold estates with respect to which BKC is
the lessor and the sites described on Exhibit J hereto.
Federal Funds Rate means, for any day, a fluctuating interest rate
per annum equal for such day 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 such day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by Agent in its sole and absolute discretion.
Fee Simple Sites means the sites described on Exhibit B hereto.
Financing Statements means all such Uniform Commercial Code financing
statements as Agent shall reasonably require, in Proper Form, duly executed by
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of Agent's Liens in any applicable Collateral, as any of
the foregoing may from time to time be amended, modified, supplemented or
restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio of (a)
EBITDA for the 12 months ending on such day less the current portion of
federal and state income taxes actually paid during such 12-month period and
less Maintenance Capital Expenditures for such 12-month period to (b) the sum
of Debt Service of Borrower and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) plus Permitted Dividends by Borrower for such
12-month period.
Franchise Agreements means the franchise agreements described on
Exhibit I attached hereto, as any of the same may from time to time be
amended, modified, supplemented or restated.
Funding Loss means, with respect to (a) Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) Borrower's failure to borrow a LIBOR Borrowing
on the date specified by Borrower; (c) Borrower's failure to make any
prepayment of the Loans (other than Base Rate Borrowings) on the date
specified by Borrower, or (d) any cessation of a Eurodollar Rate to apply to
the Loans or any part thereof pursuant to Section 3.3, in each case whether
voluntary or involuntary, any loss, expense, penalty, premium or liability
actually incurred by any Lender (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such accounting practice as,
in the opinion of independent certified public accountants of recognized
national standing regularly retained by such Person, conforms at the time to
generally accepted accounting principles, consistently applied for all periods
after the Effective Date so as to present fairly the financial condition, and
results of operations and cash flows, of such Person. If any change in any
accounting principle or practice is
8
required by the Financial Accounting Standards Board, all reports and
financial statements required hereunder may be prepared in accordance with
such change so long as Borrower provides to Agent such disclosures of the
impact of such change as Agent may reasonably require. No such change in any
accounting principle or practice shall, in itself, cause a Default or Event of
Default hereunder (but Borrower, Agent and Lenders shall negotiate in good
faith to replace any financial covenants hereunder to the extent such
financial covenants are affected by such change in accounting principle or
practice).
Governmental Authority means any foreign governmental authority, the
United States of America, any State of the United States, and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having jurisdiction over
Agent, any Lender, any Obligor or their respective Property.
Guaranties means, collectively, any and all other guaranties
hereafter executed in favor of Agent, for the benefit of Lenders, relating to
the Obligations, as any of them may from time to time be amended, modified,
restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Indebtedness means, without duplication, (a) all items which in
accordance with GAAP would be included in the liability section of a balance
sheet (other than trade accounts payable and accrued expenses (other than
Interest Expense) arising in the ordinary course of business) on the date as
of which Indebtedness is to be determined (excluding, to the extent
applicable, capital stock, surplus, surplus reserves and deferred credits);
(b) all guaranties, letter of credit contingent reimbursement obligations and
other contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
Indebtedness is being determined in Property owned subject to such Lien
whether or not the Indebtedness secured thereby shall have been assumed;
provided, that the term "Indebtedness" shall not mean or include any
Indebtedness in respect of which monies sufficient to pay and discharge the
same in full (either on the expressed date of maturity thereof or on such
earlier date as such Indebtedness may be duly called for redemption and
payment) shall be deposited with a depository, agency or trustee reasonably
acceptable to Agent in trust for the payment thereof.
Interest Expense means, for any period, total interest expense
(including, without limitation, interest expense attributable to capitalized
leases and net costs under interest rate swap, collar, cap or similar
agreements providing interest rate protection), determined in accordance with
GAAP.
Interest Options means the Base Rate and each Eurodollar Rate, and
"Interest Option" means any of them.
9
Interest Payment Dates means (a) for Base Rate Borrowings, June 30,
1997 and the last day of each March, June, September and December thereafter
prior to the Revolving Loan Maturity Date or the Advance Loan Maturity Date,
as the case may be, and the Revolving Loan Maturity Date or the Advance Loan
Maturity Date, as the case may be; and (b) for LIBOR Borrowings, the end of
the applicable Interest Period (and if such Interest Period exceeds three
months' duration, quarterly, commencing on the first quarterly anniversary of
the first day of such Interest Period) and the Revolving Loan Maturity Date or
the Advance Loan Maturity Date, as the case may be.
Interest Period means, for each LIBOR Borrowing, a period commencing
on the date such LIBOR Borrowing began and ending on the numerically
corresponding day which is, subject to availability as set forth in Section
3.3(c)(iii), 1, 2, 3 or 6 months thereafter, as Borrower shall elect in
accordance herewith; provided, (1) unless Agent shall otherwise consent, no
Interest Period with respect to a LIBOR Borrowing shall commence on a date
earlier than five (5) Business Days after this Agreement shall have been fully
executed; (2) any Interest Period with respect to a LIBOR Borrowing which
would otherwise end on a day which is not a LIBOR Business Day shall be
extended to the next succeeding LIBOR Business Day, unless such LIBOR Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding LIBOR Business Day; (3) any Interest Period with
respect to a LIBOR Borrowing which begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last LIBOR Business Day of the appropriate calendar month; (4) no Interest
Period for a Revolving Loan shall ever extend beyond the Revolving Loan
Maturity Date and no Interest Period for an Advance Loan shall ever extend
beyond the Advance Loan Maturity Date, and (5) Interest Periods shall be
selected by Borrower in such a manner that the Interest Period with respect to
any portion of the Loans which shall become due shall not extend beyond such
due date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by Borrower for the purpose of reducing Borrower's
exposure to interest rate fluctuations and not for speculative purposes,
approved in writing by Agent (such approval not to be unreasonably withheld),
as it may from time to time be amended, modified, restated or supplemented.
Interest Rate Risk Indebtedness means all obligations and
Indebtedness of Borrower with respect to the program for the hedging of
interest rate risk provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities
or Indebtedness of, or the making of any loan, advance, transfer of Property
(other than transfers in the ordinary course of business) or capital
contribution to, or the incurring of any liability (other than trade accounts
payable arising in the ordinary course of business), contingently or
otherwise, in respect of the Indebtedness of, any Person.
10
Issuer means the issuer (or, where applicable, each issuer) of a
Letter of Credit under this Agreement.
Key Agreements means the Franchise Agreements, the Lease Agreements,
the Senior Notes Documentation, the Underlying Lease Agreements, the Purchase
Agreements and the Material Title Documents.
Lease Agreements means the lease and sublease agreements described on
Exhibit H attached hereto, as any of the same may from time to time be
amended, modified, supplemented or restated. Except for the Excluded Assets
and except for Properties acquired after March 15, 1997 (which remain subject
to the provisions of Section 8.14(c) hereof), the leasehold estates created
under the Lease Agreements constitute a part of the real Property comprising
the Mortgaged Properties.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Lessor and Lender Estoppel Agreements means agreements executed by
each landlord and lessor under any of the Lease Agreements or any of the
Underlying Lease Agreements and by each lender under any of the Material Title
Documents, each in Proper Form, containing such consents, representations and
agreements as Agent may reasonably require, as the same may from time to time
be amended, modified, supplemented or restated.
Letter of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in
a currency other than Dollars, such amount shall be converted by Agent to
Dollars by any reasonable method, and such converted amount shall be
conclusive and binding, absent manifest error.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
equal to the average of the offered quotations appearing on Telerate Page 3750
(or if such Telerate Page shall not be available, any successor or similar
service as may be selected by Agent and Borrower) as of 10:00 a.m., Houston,
Texas time (or as soon thereafter as practicable) on the day two LIBOR
Business Days prior to the first day of such Interest Period for deposits in
United States dollars having a term comparable to such Interest Period and in
an amount comparable to the principal amount of the LIBOR Borrowing to which
such Interest Period relates. If none of such Telerate Page 3750 nor any
successor or similar service is available, then "LIBOR" shall mean, with
respect to any Interest Period for any applicable LIBOR Borrowing, the rate of
interest per annum, rounded upwards, if necessary, to the
11
nearest 1/16th of 1%, quoted by Agent at or before 10:00 a.m., Houston, Texas
time (or as soon thereafter as practicable), on the date two LIBOR Business
Days before the first day of such Interest Period, to be the arithmetic
average of the prevailing rates per annum at the time of determination and in
accordance with the then existing practice in the applicable market, for the
offering to Agent by one or more prime banks selected by Agent in its sole
discretion, in the London interbank market, of deposits in United States
dollars for delivery on the first day of such Interest Period and having a
maturity equal to the length of such Interest Period and in an amount equal
(or as nearly equal as may be) to the LIBOR Borrowing to which such Interest
Period relates. Each determination by Agent of LIBOR shall be conclusive and
binding, absent manifest error, and may be computed using any reasonable
averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in
United States dollar deposits between lenders may be carried on in the London
interbank market.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract,
and shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions and other title exceptions.
Loans means the loans provided for by Section 2.1 hereof.
Loan Documents means, collectively, this Agreement, the Notes, the
Guaranties, all Applications, the Security Documents, the BKC Consents, the
Lessor and Lender Estoppel Agreements, the Notice of Entire Agreement, all
instruments, certificates and agreements now or hereafter executed or
delivered by any Obligor to Agent or any Lender pursuant to any of the
foregoing or in connection with the Obligations or any commitment regarding
the Obligations, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
Maintenance Capital Expenditures means, for any period, $20,000
multiplied by the number of restaurants which, as of the first day of such
period, had been operated by the Borrower (or the other applicable Obligor)
for a period in excess of one year.
Majority Lenders means, at any time while no Loans are outstanding,
Lenders having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments and Advance Loan Commitments, and at any time while Loans are
outstanding, Lenders having greater than 66-2/3% of the aggregate amount of
Advance Loans outstanding plus Revolving Loan Commitments and Advance Loan
Commitments outstanding.
12
Margin Percentage means (i) on any day prior to July 1, 1997, 0.75%
with respect to Base Rate Borrowings and 2.25% with respect to LIBOR
Borrowings and (ii) on and after July 1, 1997, the applicable per annum
percentage set forth at the appropriate intersection in the table shown below,
based on the Debt to EBITDA Ratio as of the last day of the most recently
ended fiscal quarter of Borrower calculated by Agent as soon as practicable
after receipt by Agent of all financial reports required under this Agreement
with respect to such fiscal quarter (including a Compliance Certificate)
(provided, however, that if the Margin Percentage is increased as a result of
the reported Debt to EBITDA Ratio, such increase shall be retroactive to the
date that Borrower was obligated to deliver such financial reports to Agent
pursuant to the terms of this Agreement and provided further, however, that if
the Margin Percentage is decreased as a result of the reported Debt to EBITDA
Ratio, and such financial reports are delivered to Agent not more than ten
(10) calendar days after the date required to be delivered pursuant to the
terms of this Agreement, such decrease shall be retroactive to the date that
Borrower was obligated to deliver such financial reports to Agent pursuant to
the terms of this Agreement):
Debt to LIBOR Borrowings Base Rate Borrowings
EBITDA Ratio Margin Percentage Margin Percentage
------------ ----------------- --------------------
Greater than or equal to
4.00 2.50 1.00
Greater than or equal to
3.50 but less than 4.00 2.25 0.75
Greater than or equal to
3.00 but less than 3.50 2.00 0.50
Greater than or equal to
2.50 but less than 3.00 1.75 0.25
Less than 2.50 1.50 0.00
Material Title Documents means the documents and instruments under or
pursuant to which any Lien is created or evidenced which covers all or any
part of the Mortgaged Property and which secures Borrowed Money Indebtedness
or is otherwise of a material nature or character and outside of the ordinary
course of business, as any of the same may from time to time be amended,
modified, restated or supplemented.
Maximum Advance Loan Available Amount means, at any date, an amount
equal to the aggregate of the Advance Loan Commitments.
Maximum Revolving Loan Available Amount means, at any date, an amount
equal to the aggregate of the Revolving Loan Commitments.
13
Mortgage means each deed of trust, mortgage or other applicable
security instrument, each in Proper Form, executed or to be executed by
Borrower (or any other applicable Obligor) in favor of Agent, covering and
affecting the Fee Simple Sites and the leasehold estates created under the
Lease Agreements (except for the Excluded Assets), and all improvements,
appurtenances and personal Property related thereto, together with additional
or supplemental security documents covering and affecting the real Property
comprising the Additional Collateral, as the same may from time to time be
amended, modified, restated or supplemented.
Mortgaged Properties means all Property of any Person, whether now
existing or hereafter acquired, which is subject to the Lien of a Mortgage or,
with the prior written consent of Agent, a Collateral Assignment of Lease.
Non-Recourse Debt means Debt or that portion of Debt of a Subsidiary
of Borrower as to which (i) neither Borrower nor any Subsidiary of Borrower
(other than a Non-Recourse Subsidiary) provides credit support or is directly
or indirectly liable and (ii) no default with respect to such Debt (including
any rights which the holders thereof may have to take enforcement action
against such Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Debt of Borrower or any other Subsidiary of Borrower to
declare a default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
Non-Recourse Subsidiary means a Subsidiary of Borrower which (i) has
no Borrowed Money Indebtedness other than Non-Recourse Debt and (ii) has been
designated as a Non-Recourse Subsidiary by the Board of Directors of Borrower
and (iii) is engaged in the business of providing food services and (iv) is
not an Obligor. Concurrently with the financial statements required under
Subsections 7.2(a) and (b) hereof, Borrower shall identify all then current
Non-Recourse Subsidiaries in a written notice to Agent.
Notes shall have the meaning assigned to such term in Section 2.6
hereof.
Notice of Entire Agreement means a notice of entire agreement, in
Proper Form, executed by Borrower, each other Obligor and Agent, as the same
may from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum
of the following: (i) the aggregate principal amount of Loans outstanding
hereunder on such date, plus (ii) the aggregate amount of the outstanding
Letter of Credit Liabilities hereunder on such date, plus (iii) all other
outstanding liabilities, obligations and indebtedness of any Obligor under any
Loan Document on such date.
Obligors means Borrower, Carrols Holdings and each Subsidiary of
Borrower other than Subsidiaries which are not parties to any Security
Agreement or Mortgage.
14
Organizational Documents means, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership and with respect to a trust, the instrument
establishing such trust; in each case including any and all modifications
thereof as of the date of the Loan Document referring to such Organizational
Document and any and all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser
of (i) the Ceiling Rate for that day or (ii) the Base Rate plus three percent
(3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of Borrower to Borrower and (ii) so long as no Default or Event of
Default shall have occurred and be continuing (or would result therefrom), (a)
dividends and scheduled redemptions payable in respect of preferred stock of
Carrols Holdings under the present terms of that certain Certificate of
Amendment of Restated Certificate of Incorporation of Carrols Holdings
Corporation dated as of February 20, 1997, without amendment except as
approved by the Majority Lenders and (b) in any fiscal year, after the
calculation and payment of the required prepayment provided for in Section
3.2(b)(2), based on the preceding fiscal year's Excess Cash Flow, an amount
not exceeding 50% of such preceding fiscal year's Excess Cash Flow which may
be distributed to Carrols Holdings for the payment of voluntary redemptions of
preferred stock under the present terms of that certain Certificate of
Amendment of Restated Certificate of Incorporation of Carrols Holdings
Corporation dated as of February 20, 1997, without amendment except as
approved by the Majority Lenders.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the United States of America with maturities of not
more than one year; (b) commercial paper rated "Prime 1" by Moody's Investors
Service, Inc. or "A-1" by Standard and Poor's Ratings Services with maturities
of not more than 180 days; (c) certificates of deposit or repurchase
obligations issued by any U.S. domestic bank having capital surplus of at
least $100,000,000 or by any other financial institution acceptable to Agent,
all of the foregoing not having a maturity of more than one year from the date
of issuance thereof; (d) repurchases of the stock of retiring or terminated
employees (excluding Alan Vituli) in an aggregate amount not to exceed, for
the period from the date hereof through December 31, 1997 or for any
subsequent fiscal year, the lesser of (x) $1,500,000 or (y) the sum of
$500,000 plus any prior unused capacity from prior years for permitted
repurchases of stock pursuant to this clause (d), (e) open market purchases by
Borrower of Senior Notes in an aggregate amount not to exceed $3,000,000 and
(f) Investments in Non-Recourse Subsidiaries or in entities in which
Borrower's ownership interest is less than 50% and which are engaged in the
food services business so long as such Investments do not exceed, in the
aggregate after the first day of the fiscal quarter which begins subsequent to
the Effective Date to the end of the most recent fiscal quarter ending prior
to the relevant date of determination, the lesser of (x) $15,000,000 or (y)
50% of the
15
cumulative net income of Borrower and its Subsidiaries (other than
Non-Recourse Subsidiaries) for such period, on a consolidated basis and
determined in accordance with GAAP.
Permitted Liens means each of the following: (a) artisans' or
mechanics' Liens arising in the ordinary course of business, and Liens for
taxes, but only to the extent that payment thereof shall not at the time be
due or if due, the payment thereof is being diligently contested in good faith
and adequate reserves computed in accordance with GAAP have been set aside
therefor; (b) Liens in effect on the Effective Date and disclosed to the
Lenders in the financial statements delivered on or prior to the Effective
Date pursuant to Section 6.2 hereof, in a schedule hereto or in a Title
Insurance Policy, provided that neither the Borrowed Money Indebtedness
secured thereby nor the Property covered thereby shall increase after the
Effective Date without the prior written consent of the Majority Lenders; (c)
normal encumbrances and restrictions on title which do not secure Borrowed
Money Indebtedness and which do not have a material adverse effect on the
value or utility of the applicable Property; (d) Liens in favor of Agent or
any Lender under the Loan Documents, including, without limitation, Liens
securing Interest Rate Risk Indebtedness owed to one or more of the Lenders
(but not to any Person which is not, at such time, a Lender); (e) Liens
incurred or deposits made in the ordinary course of business (1) in connection
with workmen's compensation, unemployment insurance, social security and other
like laws, or (2) to secure insurance in the ordinary course of business, the
performance of bids, tenders, contracts, leases, licenses, statutory
obligations, surety, appeal and performance bonds and other similar
obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the deferred purchase
price of Property; (f) attachments, judgments and other similar Liens arising
in connection with court proceedings, provided that the execution and
enforcement of such Liens are effectively stayed and the claims secured
thereby are being actively contested in good faith with adequate reserves made
therefor in accordance with GAAP; (g) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are
not yet due or which are being contested in good faith by appropriate
proceedings if adequate reserves with respect thereto are maintained in
accordance with GAAP; (h) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, and restrictions on
the use of Property, and which do not in any case singly or in the aggregate
materially impair the present use or value of the Property subject to any such
restriction or materially interfere with the ordinary conduct of the business
of any Obligor; (i) Liens disclosed in the Title Insurance Policies delivered
pursuant to Section 5.1(l) hereof; (j) Liens securing purchase money
Indebtedness permitted under Section 8.1 hereof and covering the Property so
purchased; (k) capital leases and sale/leaseback transactions permitted under
the other provisions of this Agreement, and (l) extensions, renewals and
replacements of Liens referred to in clauses (a) through (k) of this
definition; provided that any such extension, renewal or replacement Lien
shall be limited to the Property or assets covered by the Lien extended,
renewed or replaced and that the Borrowed Money Indebtedness secured by any
such extension, renewal or replacement Lien shall be in an amount not greater
than the amount of the Indebtedness secured by the Lien extended, renewed or
replaced.
16
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code and is either (a) maintained by Borrower or any member of the
Controlled Group for employees of Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and
to which Borrower or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
Prime Rate means, on any day, the prime rate for that day as
determined from time to time by TCB. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
TCB, Agent and each Lender disclaims any statement, representation or warranty
to the contrary. TCB, Agent or any Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
Principal Office means the principal office of Agent, presently
located at 712 Main Street, Houston, Harris County, Texas 77002.
Proper Form means in form and substance reasonably satisfactory to
Agent.
Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Purchase Agreements means, collectively, each purchase agreement
heretofore or hereafter entered into by Borrower or any other Obligor
providing for the acquisition of Burger King restaurants, as any of the same
may from time to time be amended, modified, restated or supplemented.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial
statements of a Person, which statements shall include a balance sheet as of
the end of such fiscal quarter and an income statement and a statement of cash
flows for such fiscal quarter and for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures as of the end of and for the corresponding fiscal
quarter of the preceding year, prepared in accordance with GAAP in all
material respects except that such statements are condensed and exclude
detailed footnote disclosures and certified by the chief financial officer or
other authorized officer of such Person as fairly presenting, in all material
respects, the financial condition of such person as of such date.
17
Rate Designation Date means that Business Day which is (a) in the
case of Base Rate Borrowings, 10:00 a.m., Houston, Texas time, on the date one
Business Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings, 10:00 a.m., Houston, Texas time, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the
form of Exhibit C.
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor
or other regulation relating to reserve requirements applicable to member
banks of the Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or
after the date of this Agreement in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of
any interpretation, directive or request applying to a class of lenders
including such Lender under any Legal Requirements (whether or not having the
force of law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, the obligations of
Borrower then outstanding, or which may thereafter arise, in respect of
Letters of Credit under this Agreement, to reimburse the applicable Issuers
for the amount paid by such Issuers in respect of any drawing under such
Letters of Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other
than Dollars.
Request for Extension of Credit means a request for extension of
credit duly executed by the chief executive officer, chief financial officer
or treasurer of Borrower, appropriately completed and substantially in the
form of Exhibit A attached hereto.
Requirements of Environmental Law means all requirements imposed by
any law (including for example and without limitation The Resource
Conservation and Recovery Act and The Comprehensive Environmental Response,
Compensation, and Liability Act), rule, regulation, or order of any federal,
state or local executive, legislative, judicial, regulatory or administrative
agency, board or authority in effect at the applicable time which relate to
(i) noise; (ii) pollution, protection or clean-up of the air, surface water,
ground water or land; (iii) solid, gaseous or liquid waste generation,
treatment, storage, disposal or transportation; (iv) exposure to Hazardous
Substances; (v) the safety or health of employees or (vi) regulation of the
manufacture, processing, distribution in commerce, use, discharge or storage
of Hazardous Substances.
Revolving Loan means a Loan made pursuant to Section 2.1(b) hereof.
Revolving Loan Availability Period means, for each Revolving Loan
Lender, the period from and including the Effective Date to (but not
including) the Revolving Loan Termination Date.
18
Revolving Loan Lender means each Lender with (i) prior to the
Revolving Loan Termination Date, a Revolving Loan Commitment and (ii) on and
after the Revolving Loan Termination Date, any outstanding Revolving Loan
Obligations.
Revolving Loan Commitment means, as to any Lender, the obligation, if
any, of such Lender to make Revolving Loans and incur or participate in Letter
of Credit Liabilities in an aggregate principal amount at any one time
outstanding up to (but not exceeding) the amount, if any, set forth opposite
such Lender's name on the signature pages hereof under the caption "Revolving
Loan Commitment", or otherwise provided for in an Assignment and Acceptance
Agreement (as the same may be reduced from time to time pursuant to Section
2.3 hereof).
Revolving Loan Commitment Percentage means, as to any Revolving Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Revolving Loan Commitment and the denominator of which
is the aggregate amount of the Revolving Loan Commitments of all Lenders.
Revolving Loan Maturity Date means the maturity of the Revolving
Notes, December 31, 2001. Upon written request from Borrower at any time after
July 31, 2001 but prior to September 30, 2001, Agent shall make request on the
Lenders for approval to a one (1) year extension of the Revolving Loan
Maturity Date; provided, however, that no such extension shall be effective
without the unanimous written consent of the Lenders, which may be given or
denied in their sole discretion, with or without cause.
Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of Revolving Loans outstanding hereunder plus (ii)
the aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Loan Termination Date means the earlier of (a) the
Revolving Loan Maturity Date or (b) the date specified by Agent in accordance
with Section 9.1 hereof.
Revolving Notes means the Notes of Borrower evidencing the Revolving
Loans, in the form of Exhibit E hereto.
Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation as to (a) the resolutions
of the Board of Directors of such corporation authorizing the execution,
delivery and performance of the documents to be executed by such corporation;
(b) the incumbency and signature of the officer of such corporation executing
such documents on behalf of such corporation, and (c) the Organizational
Documents of such corporation.
Security Agreements means security agreements, each in Proper Form,
executed or to be executed by Borrower (or any other applicable Obligor) in
favor of Agent, as the same may from time to time be amended, modified,
restated or supplemented.
19
Security Documents means, collectively, the Mortgages, the Security
Agreements and any and all other security documents now or hereafter executed
and delivered by any Obligor to secure all or any part of the Obligations, as
any of them may from time to time be amended, modified, restated or
supplemented.
Senior Notes means those certain 11-1/2% Senior Notes Due 2003 dated
August 17, 1993 issued in the aggregate principal amount of $110,000,000,
together with all renewals, extensions, modifications and replacements thereof
and substitutions therefor.
Senior Notes Documentation means the Senior Notes and the Indenture
pursuant to which the Senior Notes are issued together with all documents and
instruments now or hereafter executed in connection with the Senior Notes, as
any of them may from time to time be amended, modified, restated or
supplemented.
Stated Rate means the effective weighted per annum rate of interest
applicable to the Loans; provided, that if on any day such rate shall exceed
the Ceiling Rate for that day, the Stated Rate shall be fixed at the Ceiling
Rate on that day and on each day thereafter until the total amount of interest
accrued at the Stated Rate on the unpaid principal balances of the Notes plus
the Additional Interest equals the total amount of interest which would have
accrued if there had been no Ceiling Rate. If the Notes mature (or are
prepaid) before such equality is achieved, then, in addition to the unpaid
principal and accrued interest then owing pursuant to the other provisions of
the Loan Documents, Borrower promises to pay on demand to the order of the
holder of each Note interest in an amount equal to the excess (if any) of (a)
the lesser of (i) the total interest which would have accrued on such Note if
the Stated Rate had been defined as equal to the Ceiling Rate from time to
time in effect and (ii) the total interest which would have accrued on such
Note if the Stated Rate were not so prohibited from exceeding the Ceiling
Rate, over (b) the total interest actually accrued on such Note to such
maturity (or prepayment) date. Without notice to Borrower or any other Person,
the Stated Rate shall automatically fluctuate upward and downward in
accordance with the provisions of this definition.
Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Taxes shall have the meaning ascribed to it in Section 4.1(d).
Texas Credit Code means Title 79, Texas Revised Civil Statutes, 1925,
as amended.
270 Day Period means any period of 270 days designated by Agent which
includes the closing date for the acquisition of the applicable Property by
Borrower or any other Obligor.
Title Insurance Policies means, collectively, the policies of title
insurance, in Proper Form, in face amounts satisfactory to Agent, issued in
favor of Agent by a title insurance company
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satisfactory to Agent and insuring that title to the Mortgaged Properties is
vested in Borrower, free and clear of any Lien other than Permitted Liens and
that each Mortgage creates a valid first and prior lien on all the Mortgaged
Properties affected by such Mortgage, subject only to such exceptions as may
be approved by Agent, together with any endorsements thereto reasonably
requested by Agent. Each of said policies shall contain a complete and
accurate description of the applicable Mortgages, shall specify the recording
and filing information applicable to it and shall describe the Mortgaged
Properties identically to the description thereof in such Mortgage.
Underlying Lease Agreements means any and all lease agreements (other
than the Lease Agreements) now or hereafter affecting any of the Property
covered by any of the Lease Agreements and which is superior to the applicable
Lease Agreement, as any of the same may from time to time be amended,
modified, supplemented or restated.
Unfunded Liabilities means, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all benefits under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent actuarial valuation report
for such Plan, but only to the extent that such excess represents a potential
liability of any member of the Controlled Group to the PBGC or a Plan under
Title IV of ERISA. With respect to multi-employer Plans, the term "Unfunded
Liabilities" shall also include contingent liability for withdrawal liability
under Section 4201 of ERISA to all multi-employer Plans to which Borrower or
any member of a Controlled Group for employees of Borrower contributes in the
event of complete withdrawal from such plans.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement. The
term "annualized" as used herein shall mean the multiplication of the
applicable amount for any given period by a fraction, the numerator of which
is 365 and the denominator of which is the number of days elapsed in such
period.
2. Commitments and Loans
2.1 Loans. Each Lender severally agrees, subject to all of the
terms and conditions of this Agreement (including, without limitation, Sections
5.1, 5.2 and 5.3 hereof), to make Loans as follows:
(a) Advance Loans. From time to time on or after the Effective
Date and during the applicable Advance Loan Availability Period, each Advance
Loan Lender shall make loans under this Section 2.1(a) to Borrower in an
aggregate principal amount at any one time outstanding up to but not exceeding
such Lender's Advance Loan Commitment Percentage of the Maximum Advance Loan
Available Amount. Advance Loans shall be made in separate groupings or
tranches (each an "Advance Loan Tranche"), each of which shall (unless the
Majority Lenders shall otherwise consent in writing to a lower amount) be in
an amount not less than the lesser of (i) $10,000,000 or (ii) the aggregate
unused Advance Loan Commitments. Unless the Majority Lenders shall otherwise
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consent in writing, there shall be no more than ten (10) Advance Loan Tranches
made during the term of this Agreement.
(b) Revolving Loans. From time to time on or after the Effective
Date and during the applicable Revolving Loan Availability Period, each
Revolving Loan Lender shall make loans under this Section 2.1(b) to Borrower
in an aggregate principal amount at any one time outstanding (including its
Revolving Loan Commitment Percentage of all Letter of Credit Liabilities at
such time) up to but not exceeding such Lender's Revolving Loan Commitment
Percentage of the Maximum Revolving Loan Available Amount. Subject to the
conditions in this Agreement, any such Revolving Loan repaid prior to the
Revolving Loan Termination Date may be reborrowed pursuant to the terms of
this Agreement; provided, that any and all such Revolving Loans shall be due
and payable in full at the end of the Revolving Loan Availability Period.
Borrower, Agent and the Lenders agree that Chapter 15 of the Texas Credit Code
shall not apply to this Agreement, the Revolving Notes or any Revolving Loan
Obligation. The aggregate of all Revolving Loans to be made by the Lenders in
connection with a particular borrowing shall be equal to an integral multiple
of $100,000.
2.2 Letters of Credit
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
shall never exceed $5,000,000, (i) Borrower shall have the right to, in
addition to Loans provided for in Section 2.1 hereof, utilize the Revolving
Loan Commitments from time to time during the Revolving Loan Availability
Period by obtaining the issuance of standby letters of credit for the account
of Borrower if Borrower shall so request in the notice referred to in Section
2.2(b)(i) hereof (such standby letters of credit as any of them may be
amended, supplemented, extended or confirmed from time to time, being herein
collectively called the "Letters of Credit)" and (ii) TCB agrees to issue such
Letters of Credit. Upon the date of the issuance of a Letter of Credit, the
applicable Issuer shall be deemed, without further action by any party hereto,
to have sold to each Revolving Loan Lender, and each such Lender shall be
deemed, without further action by any party hereto, to have purchased from the
applicable Issuer, a participation, to the extent of such Lender's Revolving
Loan Commitment Percentage, in such Letter of Credit and the related Letter of
Credit Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the applicable Termination Date.
No Letter of Credit shall have an expiration date later than one year from
date of issuance. Any Letter of Credit that shall have an expiration date
after the end of the Revolving Loan Availability Period shall be subject to
Cover or backed by a standby letter of credit in form and substance, and
issued by a Person, acceptable to Agent in its sole discretion. TCB or, with
the prior approval of Borrower and Agent, another Lender shall be the Issuer
of each Letter of Credit.
(b) Additional Provisions. The following additional provisions
shall apply to each Letter of Credit:
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(i) Borrower shall give Agent notice requesting each
issuance of a Letter of Credit hereunder as provided in Section 4.3
hereof and shall furnish such additional information regarding such
transaction as Agent may reasonably request. Upon receipt of such
notice, Agent shall promptly notify each Revolving Loan Lender of the
contents thereof and of such Lender's Revolving Loan Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal
amount of Revolving Loans plus (B) the aggregate Letter of Credit
Liabilities would exceed the Maximum Revolving Loan Available Amount.
On each day during the period commencing with the issuance of any
Letter of Credit and until such Letter of Credit shall have expired
or been terminated, the Revolving Loan Commitment of each Revolving
Loan Lender shall be deemed to be utilized for all purposes hereof in
an amount equal to such Lender's Revolving Loan Commitment Percentage
of the amount then available for drawings under such Letter of Credit
(or any unreimbursed drawings under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, Agent shall promptly
notify Borrower and each Lender as to the amount to be paid as a
result of such demand and the payment date therefor. If at any time
prior to the earlier of the expiration date of a Letter of Credit or
the applicable Termination Date any Issuer shall have made a payment
to a beneficiary of a Letter of Credit in respect of a drawing under
such Letter of Credit, each Revolving Loan Lender will pay to Agent
immediately upon demand by such Issuer at any time during the period
commencing after such payment until reimbursement thereof in full by
Borrower, an amount equal to such Lender's Revolving Loan Commitment
Percentage of such payment, together with interest on such amount for
each day from the date of demand for such payment (or, if such demand
is made after 11:00 a.m. Houston time on such date, from the next
succeeding Business Day) to the date of payment by such Lender of
such amount at a rate of interest per annum equal to the Federal
Funds Rate for such period. To the extent that it is ultimately
determined that the Borrower is relieved of its obligation to
reimburse the applicable Issuer because of such Issuer's gross
negligence or willful misconduct in determining that documents
received under any applicable Letter of Credit comply with the terms
thereof, the applicable Issuer shall be obligated to refund to the
paying Lenders all amounts paid to such Issuer to reimburse Issuer
for the applicable drawing under such Letter of Credit.
(iv) Borrower shall be irrevocably and unconditionally
obligated forthwith to reimburse Agent, on the date on which the
Agent notifies Borrower of the date and amount of any payment by the
Issuer of any drawing under a Letter of Credit, for the amount paid
by any Issuer upon such drawing, without presentment, demand, protest
or other formalities of any kind, all of which are hereby waived.
Such reimbursement may, subject to satisfaction of the conditions in
Sections 5.1 and 5.2 hereof and to the Maximum Revolving Loan
Available Amount (after adjustment in the same to reflect the
elimination of the
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corresponding Letter of Credit Liability), be made by the borrowing
of Revolving Loans. Agent will pay to each Revolving Loan Lender such
Lender's Revolving Loan Commitment Percentage of all amounts received
from Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to Agent in respect of
such Letter of Credit pursuant to clause (iii) above.
(v) Borrower will pay to Agent at the Principal Office for
the account of each Revolving Loan Lender a letter of credit fee with
respect to each Letter of Credit equal to the greater of (x) $500 or
(y) an amount equal to the Margin Percentage applicable from time to
time with respect to LIBOR Borrowings multiplied by the daily average
amount available for drawings under each Letter of Credit (and
computed on the basis of the actual number of days elapsed in a year
composed of 360 days), in each case for the period from and including
the date of issuance of such Letter of Credit to and including the
date of expiration or termination thereof, such fee to be due and
payable in advance on the date of the issuance thereof. Agent will
pay to each Revolving Loan Lender, promptly after receiving any
payment in respect of letter of credit fees referred to in this
clause (v), an amount equal to the product of such Lender's Revolving
Loan Commitment Percentage times the amount of such fees.
(vi) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that
such Letter of Credit shall be in such form and contain such terms as
shall be reasonably satisfactory to Agent, and (B) that Borrower
shall have executed and delivered such Applications and other
instruments and agreements relating to such Letter of Credit as Agent
shall have reasonably requested and are not inconsistent with the
terms of this Agreement. In the event of a conflict between the terms
of this Agreement and the terms of any Application, the terms hereof
shall control.
(vii) Issuer will send to the Borrower and each Lender,
immediately upon issuance of any Letter of Credit issued by Issuer or
any amendment thereto, a true and correct copy of such Letter of
Credit or amendment.
(c) Indemnification; Release. Borrower hereby indemnifies and
holds harmless Agent, each Revolving Loan Lender and each Issuer from and
against any and all claims and damages, losses, liabilities, costs or expenses
which Agent, such Lender or such Issuer may incur (or which may be claimed
against Agent, such Lender or such Issuer by any Person whatsoever),
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF
THE INDEMNIFIED PARTIES, in connection with the execution and delivery of any
Letter of Credit or transfer of or payment or failure to pay under any Letter
of Credit; provided that Borrower shall not be required to indemnify any party
seeking indemnification for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the party seeking indemnification, or (ii)
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the failure by the party seeking indemnification to pay under any Letter of
Credit after the presentation to it of a request required to be paid under
applicable law. Borrower hereby releases, waives and discharges Agent, each
Revolving Loan Lender and each Issuer from any claims, causes of action,
damages, losses, liabilities, reasonable costs or expenses which may now exist
or may hereafter arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason of or in
connection with the failure of any other Revolving Loan Lender to fulfill or
comply with its obligations to Agent, such Lender or such Issuer, as the case
may be, hereunder (but nothing herein contained shall affect any rights
Borrower may have against such defaulting Lender). Nothing in this Section
2.2(c) is intended to limit the obligations of Borrower under any other
provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. If as a
result of any Regulatory Change there shall be imposed, modified or deemed
applicable any tax (other than any tax based on or measured by net income),
reserve, special deposit or similar requirement against or with respect to or
measured by reference to Letters of Credit issued or to be issued hereunder or
participations in such Letters of Credit, and the result shall be to increase
the cost to any Revolving Loan Lender of issuing or maintaining any Letter of
Credit or any participation therein, or materially reduce any amount
receivable by any Revolving Loan Lender hereunder in respect of any Letter of
Credit or any participation therein (which increase in cost, or reduction in
amount receivable, shall be the result of such Lender's reasonable allocation
of the aggregate of such increases or reductions resulting from such event),
then such Lender shall notify Borrower through Agent (which notice shall be
accompanied by a statement setting forth in reasonable detail the basis for
the determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through Agent, Borrower shall pay to such Lender, from
time to time as specified by such Lender, such additional amounts as shall be
sufficient to compensate such Lender for such increased costs or reductions in
amount. Such statement as to such increased costs or reductions in amount
incurred by such Lender, submitted by such Lender to Borrower, shall be
conclusive as to the amount thereof, absent manifest error, and may be
computed using any reasonable averaging and attribution method. Each Lender
will notify Borrower through Agent of any event occurring after the date of
this Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after any executive officer of such Lender
obtains knowledge thereof and determines to request such compensation, and (if
so requested by Borrower through Agent) will designate a different lending
office of such Lender for the issuance or maintenance of Letters of Credit by
such Lender or will take such other action as Borrower may reasonably request
if such designation or action is consistent with the internal policy of such
Lender and legal and regulatory restrictions, can be undertaken at no
additional cost, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
obligation so to designate a different lending office which is not located in
the United States of America).
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2.3 Terminations or Reductions of Commitments.
(a) Mandatory. On the Revolving Loan Termination Date, all
Revolving Loan Commitments shall be terminated in their entirety. The Advance
Loan Commitments shall be automatically reduced by the amount of any Advance
Loans made and on the Advance Loan Termination Date, all Advance Loan
Commitments shall be terminated in their entirety.
(b) Optional. Borrower shall have the right to terminate or reduce
the unused portion of the Revolving Loan Commitments or Advance Loan
Commitments at any time or from time to time, provided that (i) Borrower shall
give notice of each such termination or reduction to Agent as provided in
Section 4.3 hereof and (ii) each such partial reduction shall be in an
integral multiple of $250,000.
(c) No Reinstatement. No termination or reduction of the Revolving
Loan Commitments or the Advance Loan Commitments may be reinstated without the
written approval of Agent and the Lenders.
2.4 Commitment Fees
(a) Borrower shall pay to Agent for the account of each Revolving
Loan Lender revolving loan commitment fees for the period from May 20, 1997 to
and including the Revolving Loan Termination Date at a rate per annum equal to
0.375%. Such revolving loan commitment fees shall be computed (on the basis of
the actual number of days elapsed in a year composed of 360 days) on each day
and shall be based on the excess of (x) the aggregate amount of each Revolving
Loan Lender's Revolving Loan Commitment for such day over (y) the sum of (i)
the aggregate unpaid principal balance of such Lender's Revolving Note on such
day plus (ii) the aggregate Letter of Credit Liabilities as to such Lender for
such day. Accrued revolving loan commitment fees shall be payable in arrears
on the Quarterly Dates prior to the Revolving Loan Termination Date and on the
Revolving Loan Termination Date.
(b) Borrower shall pay to Agent for the account of each Advance
Loan Lender advance loan commitment fees for the period from May 20, 1997 to
and including the Advance Loan Termination Date at a rate per annum equal to
0.25%. Such advance loan commitment fees shall be computed (on the basis of
the actual number of days elapsed in a year composed of 360 days) on each day
and shall be based on the excess of (x) the aggregate amount of each Advance
Loan Lender's Advance Loan Commitment for such day over (y) the aggregate
unpaid principal balance of such Lender's Advance Notes on such day. Accrued
advance loan commitment fees shall be payable in arrears on the Quarterly
Dates prior to the Advance Loan Termination Date and on the Advance Loan
Termination Date.
(c) Concurrently with each Advance Loan made prior to November 20,
1997, Borrower shall pay to Agent for the account of each Advance Loan Lender
an additional advance loan fee in an amount equal to the Advance Loan made by
such Advance Loan Lender times 0.125% per annum
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calculated for a period equal to the number of days from May 20, 1997 through
the date of such Advance Loan. Concurrently with each Advance Loan made on or
after November 20, 1997, Borrower shall pay to Agent for the account of each
Advance Loan Lender an additional advance loan fee in an amount equal to the
Advance Loan made by such Advance Loan Lender times 0.0625%.
(d) All past due fees payable under this Section shall bear
interest at the Past Due Rate.
2.5 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve any
other Lender of its obligation to make its Loan on such date, but neither
Agent nor any Lender shall be responsible or liable for the failure of any
other Lender to make a Loan to be made by such other Lender or to participate
in, or co-issue, any Letter of Credit. Notwithstanding anything contained
herein to the contrary, (a) no Lender shall be required to make or maintain
Revolving Loans or Advance Loans, as the case may be, at any time outstanding
if as a result the total Revolving Loan Obligations to or the aggregate unpaid
principal balance of the Advance Loans held by, as the case may be, such
Lender shall exceed the lesser of (1) such Lender's Revolving Loan Commitment
Percentage or Advance Loan Commitment Percentage, as the case may be, of all
Revolving Loan Obligations or Advance Loans, as the case may be, and (2) such
Lender's Revolving Loan Commitment Percentage or Advance Loan Commitment
Percentage, as the case may be, of the Maximum Revolving Loan Available Amount
or Maximum Advance Loan Available Amount, as the case may be, (b) if a
Revolving Loan Lender fails to make a Revolving Loan as and when required
hereunder, then upon each subsequent event which would otherwise result in
funds being paid to the defaulting Lender, the amount which would have been
paid to the defaulting Lender shall be divided among the non-defaulting
Lenders ratably according to their respective shares of the outstanding
Revolving Loan Commitment Percentages until the Revolving Loan Obligations of
each Revolving Loan Lender (including the defaulting Lender) are equal to such
Lender's Revolving Loan Commitment Percentage of the total Revolving Loan
Obligations and (c) if an Advance Loan Lender fails to make an Advance Loan as
and when required hereunder, then upon each subsequent event which would
otherwise result in funds being paid to the defaulting Lender, the amount
which would have been paid to the defaulting Lender shall be divided among the
non-defaulting Lenders ratably according to their respective shares of the
outstanding Advance Loan Commitment Percentages until the aggregate unpaid
principal balance of the Advance Loans held by each Advance Loan Lender
(including the defaulting Lender) are equal to such Lender's Advance Loan
Commitment Percentage of the aggregate amount of all Advance Loans
outstanding.
2.6 Notes. The Revolving Loans made by each Lender shall be
evidenced by a single Revolving Note of Borrower in substantially the form of
Exhibit E hereto payable to the order of such Lender in a principal amount
equal to the Revolving Loan Commitment of such Lender, and otherwise duly
completed. The Advance Loans made by each Lender shall be evidenced by
separate Advance Notes (one for each Advance Loan Tranche) in substantially
the form of Exhibit D hereto each payable to the order of such Lender in a
principal amount equal to the principal amount of the applicable Advance Loan
of such Lender. The promissory notes described in this Section are each,
27
together with all renewals, extensions, modifications and replacements thereof
and substitutions therefor, called a "Note" and collectively called the
"Notes". Each Lender is hereby authorized by Borrower to endorse on the
schedule (or a continuation thereof) that may be attached to each Note of such
Lender, to the extent applicable, the date, amount, type of and the applicable
period of interest for each Loan made by such Lender to Borrower hereunder,
and the amount of each payment or prepayment of principal of such Loan
received by such Lender, provided, that any failure by such Lender to make any
such endorsement shall not affect the obligations of Borrower under such Note
or hereunder in respect of such Loan.
2.7 Use of Proceeds. The proceeds of the Advance Loans shall be
used to finance up to 75% of the purchase costs incurred in connection with
permitted acquisitions by Borrower closing on or after the Effective Date
(provided, however, that an Advance Loan Tranche of up to $5,000,000 may,
subject to the terms and conditions of this Agreement, be used to refinance an
existing term loan with Heller Financial, Inc. and an Advance Loan Tranche of
up to $7,700,000 may, subject to the terms and conditions of this Agreement,
be used to refinance an existing term loan with Texas Commerce Bank National
Association) and to repurchase up to $25,000,000 of the Senior Notes if the
holders of the Senior Notes exercise a put option due to a Change of Control
(as defined in the Senior Notes Documentation) event. The proceeds of the
Revolving Loans shall be used to refinance existing Indebtedness of Borrower,
to finance permitted acquisitions by Borrower and new store development by
Borrower, and for other working capital and general corporate purposes.
Neither Agent nor any Lender shall have any responsibility as to the use of
any proceeds of the Loans.
3. Borrowings, Payments, Prepayments and Interest Options.
3.1 Borrowings. Borrower shall give Agent notice of each
borrowing to be made hereunder as provided in Section 4.3 hereof and Agent shall
promptly notify each Lender of such request. Not later than 11:00 a.m. Houston
time on the date specified for each such borrowing hereunder, each Lender shall
make available the amount of the Loan, if any, to be made by it on such date to
Agent at its Principal Office, in immediately available funds, for the account
of Borrower. Such amounts received by Agent will be held in an account
maintained by Borrower with Agent. The amounts so received by Agent shall,
subject to the terms and conditions of this Agreement, be made available to
Borrower by wiring or otherwise transferring, in immediately available funds,
such amount to an account designated by Borrower and approved by Agent.
3.2 Prepayments.
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(a) Optional Prepayments. Except as provided in Section 3.3
hereof, Borrower shall have the right to prepay, on any Business Day, in whole
or in part, without the payment of any penalty or fee, any Loans at any time
or from time to time, provided that Borrower shall give Agent notice of each
such prepayment as provided in Section 4.3 hereof. Each optional prepayment on
a Loan shall be in an amount equal to an integral multiple of $250,000. Such
optional prepayments of Advance Loans shall be applied ratably (based on
outstanding principal balances) to all Advance Notes and shall be applied to
scheduled principal installments in inverse order of their maturities.
(b) Mandatory Prepayments and Cover. Except, in each case, as
provided in Section 3.3 hereof,
(1) Insurance Proceeds and Condemnation Awards.
(i) Promptly following the receipt thereof by any
Obligor, Borrower shall deposit or cause to be deposited
with Agent in an interest bearing account (but without any
obligation to maximize such interest) all of the net cash
proceeds of any payment or award in excess of $250,000 made
to any Obligor under any policy of Property insurance with
respect to any of the Collateral or pursuant to any
condemnation award with respect to any of the Collateral
provided such amounts have not theretofore been reasonably
expended for the restoration or replacement of the asset in
respect of which such payment or award was made. Such
amounts shall be collaterally assigned to Agent as security
for the same portion of the Obligations as the applicable
Collateral secured in a manner reasonably acceptable to
Agent. Upon delivery to Agent of written certification by
Borrower that the applicable Obligor has reasonably expended
amounts or committed in writing to expend amounts for the
restoration or replacement of the asset in respect of which
such payment or award was made, specifying the amount
expended or committed, so long as no Default or Event of
Default shall have occurred and be continuing any such
amount deposited with Agent shall be released by Agent to
Borrower; provided, however, that, in the event that within
180 days of receipt of such payment or award by Borrower, to
the extent Borrower shall not have certified to Agent its
intention to expend an equivalent amount for the restoration
or replacement of the asset in respect of which such payment
or award was made, Borrower shall make a prepayment on the
Advance Loans (using any funds deposited with Agent pursuant
to this Section 3.2(b)(1) or other funds) in the amount of
the excess of the amount of such payment or award over the
amount of such expenditures and/or commitment on such 180th
day. Such prepayment shall be applied to the Advance Notes
secured by the applicable Collateral and shall be applied to
scheduled principal installments in inverse order of their
maturities.
(ii) In cases where the amount of the net cash
proceeds of any payment or award is equal to or less than
$250,000 and no Default or Event of Default has occurred and
is continuing, such proceeds may be paid to any Obligor, and
if received
29
by Agent shall be paid by Agent to Borrower, for use in
paying for replacements or repairs of or substitutes for the
damaged, destroyed or taken assets.
(2) Excess Cash Flow. Within fifteen (15) Business Days
after the delivery of the Annual Audited Financial Statements
pursuant to Section 7.2 hereof with respect to each fiscal year of
Borrower (commencing with the fiscal year ending on December 31,
1997), Borrower shall make a prepayment on the Loans in an amount
equal to (i) Excess Cash Flow for such fiscal year times 50% less
(ii) optional prepayments made on the Advance Loans during such
fiscal year. The calculation of Excess Cash Flow for any fiscal year
based upon the applicable Annual Audited Financial Statements shall
be conclusive, absent manifest error. Such prepayment shall be
applied first to the unpaid principal balance of the Revolving Loans
and the balance to the Advance Notes (applied ratably (based on
outstanding principal balances) to all Advance Notes and applied to
scheduled principal installments ratably over the remaining
payments).
(c) Advance Loan Amortization. The principal of each Advance Note
shall be due and payable in quarterly installments, each due on a Quarterly
Date, beginning on the second Quarterly Date following the date of the
applicable Advance Note, equal to the face amount of the applicable Advance
Note times the percentage set forth in the following table opposite the
applicable payment (to the extent such payment becomes due prior to the
Advance Loan Maturity Date):
Payment Payment Percentage
------- ------------------
first through fourth 1.50%
fifth through eighth 2.00%
ninth through twelfth 2.50%
thirteenth through sixteenth 3.00%
seventeenth through twentieth 3.50%
twenty-first through twenty-fourth 4.00%
On the Advance Loan Maturity Date, the entire unpaid principal balance of each
Advance Note and all accrued and unpaid interest on the unpaid principal
balance of each Advance Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest
Payment Dates.
(e) Payments and Interest on Reimbursement Obligations. Borrower
will pay to Agent for the account of each Lender the amount of each
Reimbursement Obligation on the date on which the Agent notifies Borrower of
the date and amount of the applicable payment by the Issuer of any drawing
under a Letter of Credit. The amount of any Reimbursement Obligation may, if
the applicable conditions precedent specified in Sections 5.1 and 5.2 hereof
have been satisfied, be paid with the proceeds of Revolving Loans. Subject to
Section 11.7 hereof, Borrower will pay to Agent
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for the account of each Lender interest at the applicable Past Due Rate on any
Reimbursement Obligation and on any other amount payable by Borrower hereunder
to or for the account of such Lender (but, if such amount is interest, only to
the extent legally allowed), which shall not be paid in full within five (5)
days after the date due (whether at stated maturity, by acceleration or
otherwise), for the period commencing on the expiration of such five (5) day
period until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Notes shall bear interest at the Base Rate; provided, that (1) all past due
amounts, both principal and accrued interest, shall bear interest at the Past
Due Rate, and (2) subject to the provisions hereof, Borrower shall have the
option of having all or any portion of the principal balances of the Notes
from time to time outstanding bear interest at a Eurodollar Rate. The records
of Agent and each of the Lenders with respect to Interest Options, Interest
Periods and the amounts of Loans to which they are applicable shall be binding
and conclusive, absent manifest error. Interest on the Loans shall be
calculated at the Base Rate except where it is expressly provided pursuant to
this Agreement that a Eurodollar Rate is to apply. Interest on the amount of
each advance against the Notes shall be computed on the amount of that advance
and from the date it is made. Notwithstanding anything in this Agreement to
the contrary, for the full term of the Notes the interest rate produced by the
aggregate of all sums paid or agreed to be paid to the holders of the Notes
for the use, forbearance or detention of the debt evidenced thereby (including
all interest on the Notes at the Stated Rate plus the Additional Interest)
shall not exceed the Ceiling Rate.
(b) Designation and Conversion. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and
subject to the last sentence of Section 3.3(a) and the provisions of Section
3.3(c), Borrower may elect to have a Eurodollar Rate apply or continue to
apply to all or any portion of the principal balance of the Notes. Each change
in Interest Options shall be a conversion of the rate of interest applicable
to the specified portion of the Loans, but such conversion shall not change
the respective outstanding principal balances of the Notes. The Interest
Options shall be designated or converted in the manner provided below:
i) Borrower shall give Agent telephonic notice, promptly
confirmed by a Rate Designation Notice (and Agent shall
promptly inform each Lender thereof). Each such telephonic
and written notice shall specify the amount of the Loan and
type (i.e. Revolving Loan or Advance Loan) which is the
subject of the designation, if any; the amount of borrowings
into which such borrowings are to be converted or for which
an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period or
Periods, if any, selected by Borrower. Such telephonic
notice shall be irrevocable and shall be given to Agent no
later than the applicable Rate Designation Date.
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ii) No more than three (3) LIBOR Borrowings shall be in effect
with respect to the Revolving Loans at any time. No more
than one (1) LIBOR Borrowing shall be in effect with respect
to any Advance Loan Tranche at any time.
iii) Each designation or conversion of a LIBOR Borrowing shall
occur on a LIBOR Business Day.
iv) Except as provided in Section 3.3(c) hereof, no LIBOR
Borrowing shall be converted to a Base Rate Borrowing or
another LIBOR Borrowing on any day other than the last day
of the applicable Interest Period.
v) Each request for a LIBOR Borrowing shall be in the amount
equal to $250,000 or a multiple of $100,000 in excess
thereof.
vi) Each designation of an Interest Option with respect to the
Revolving Notes shall apply to all of the Revolving Notes
ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to any Advance Loan Tranche shall apply to all
of the Advance Notes executed in connection with such
Advance Loan Tranche ratably in accordance with their
respective outstanding principal balances. If any Lender
assigns an interest in any of its Notes when any LIBOR
Borrowing is outstanding with respect thereto, then such
assignee shall have its ratable interest in such LIBOR
Borrowing.
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(c) Special Provisions Applicable to LIBOR Borrowings.
i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at
any time make it unlawful or impossible for any Lender to permit the
establishment of or to maintain any LIBOR Borrowing, the commitment of such
Lender to establish or maintain such LIBOR Borrowing shall forthwith be
canceled and Borrower shall forthwith, upon demand by Agent to Borrower, (1)
convert the LIBOR Borrowing of such Lender with respect to which such demand
was made to a Base Rate Borrowing; (2) pay all accrued and unpaid interest to
date on the amount so converted; and (3) pay any amounts required to
compensate each Lender for any additional cost or expense which any Lender may
incur as a result of such adoption of or change in such Legal Requirement or
in the interpretation or administration thereof and any Funding Loss which any
Lender may incur as a result of such conversion. If, when Agent so notifies
Borrower, Borrower has given a Rate Designation Notice specifying a LIBOR
Borrowing but the selected Interest Period has not yet begun, as to the
applicable Lender such Rate Designation Notice shall be deemed to be of no
force and effect, as if never made, and the balance of the Loans made by such
Lender specified in such Rate Designation Notice shall bear interest at the
Base Rate until a different available Interest Option shall be designated in
accordance herewith.
ii) Increased Cost of Borrowings. If the adoption after the
Effective Date of any applicable Legal Requirement or any change after the
Effective Date in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by any
Lender with any request or directive (whether or not having the force of law)
issued after the Effective Date by any central bank or Governmental Authority
shall at any time as a result of any portion of the principal balances of the
Notes being maintained on the basis of a Eurodollar Rate:
(1) subject any Lender to any Taxes, or any deduction
or withholding for any Taxes, on or from any
payment due under any LIBOR Borrowing or other
amount due hereunder, other than income and
franchise taxes of the United States or its
political subdivisions or such other jurisdiction
in which the applicable Lender has its principal
office or applicable lending office; or
(2) change the basis of taxation of payments due from
Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation
of the overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of any
reserve requirement included in the calculation of
the applicable Eurodollar Rate), special deposit
requirement or similar
33
requirement (including, but not limited to, state law
requirements and Regulation D) against assets of any
Lender, or against deposits with any Lender, or
against loans made by any Lender, or against any
other funds, obligations or other property owned or
held by any Lender; or
(4) impose on any Lender any other condition regarding
any LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender
of agreeing to make or of making, renewing or maintaining such LIBOR
Borrowing, or reduce the amount of principal or interest received by any
Lender, then, within 15 Business Days after demand by Agent (accompanied by a
statement setting forth in reasonable detail the applicable Lender's basis
therefor), Borrower shall pay to Agent additional amounts which shall
compensate each Lender for such increased cost or reduced amount. The
determination by any Lender of the amount of any such increased cost,
increased reserve requirement or reduced amount shall be conclusive and
binding, absent manifest error. Borrower shall have the right, if it receives
from Agent any notice referred to in this paragraph, upon three Business Days'
notice to Agent (which shall notify each affected Lender), either (i) to repay
in full (but not in part) any borrowing with respect to which such notice was
given, together with any accrued interest thereon, or (ii) to convert the
LIBOR Borrowing which is the subject of the notice to a Base Rate Borrowing;
provided, that any such repayment or conversion shall be accompanied by
payment of (x) the amount required to compensate each Lender for the increased
cost or reduced amount referred to in the preceding paragraph; (y) all accrued
and unpaid interest to date on the amount so repaid or converted, and (z) any
Funding Loss which any Lender may incur as a result of such repayment or
conversion. Each Lender will notify Borrower through Agent of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and (if
so requested by Borrower through Agent) will designate a different lending
office of such Lender for the applicable LIBOR Borrowing or will take such
other action as Borrower may reasonable request if such designation or action
is consistent with the internal policy of such Lender and legal and regulatory
restrictions, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
obligation so to designate a different lending office which is located in the
United States of America).
iii) Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, Agent (or, in the case of clause 3 below,
the applicable Lender) shall have determined (which determination shall be
conclusive and binding upon Borrower, absent manifest error) that:
(1) Agent is unable through its customary general
practices to determine any applicable Eurodollar
Rate, or
(2) by reason of circumstances affecting the applicable
market, generally, Agent is not being offered
deposits in United States dollars in such market,
for the
34
applicable Interest Period and in an amount
equal to the amount of any applicable LIBOR
Borrowing requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately
and fairly reflect the cost to any Lender of making
and maintaining such LIBOR Borrowing hereunder for
any proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable
LIBOR Borrowing which has not commenced as of the date of such notice from
Agent shall be deemed for all purposes hereof to be of no force and effect, as
if never given, and (B) until Agent shall notify Borrower that the
circumstances giving rise to such notice from Agent no longer exist, each Rate
Designation Notice requesting the applicable Eurodollar Rate shall be deemed a
request for a Base Rate Borrowing, and any applicable LIBOR Borrowing then
outstanding shall be converted, without any notice to or from Borrower, upon
the termination of the Interest Period then in effect with respect to it, to a
Base Rate Borrowing.
(iv) Funding Losses. Borrower shall indemnify each Lender against
and hold each Lender harmless from any Funding Loss. This indemnity shall
survive the payment of the Notes. A certificate of such Lender (explaining in
reasonable detail the amount and calculation of the amount claimed) as to any
additional amounts payable pursuant to this paragraph submitted to Borrower
shall be conclusive and binding upon Borrower, absent manifest error.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing
by causing a branch or affiliate of such Lender to make such Loan and may
transfer and carry such Loan at, to or for the account of any branch office or
affiliate of such Lender; provided, that in such event for the purposes of
this Agreement such Loan shall be deemed to have been made by such Lender and
the obligation of Borrower to repay such Loan shall nevertheless be to such
Lender and shall be deemed held by it for the account of such branch or
affiliate. Without notice to Borrower or any other Person, each rate required
to be calculated or determined under this Agreement shall automatically
fluctuate upward and downward in accordance with the provisions of this
Agreement. Interest at the Prime Rate shall be computed on the basis of the
actual number of days elapsed in a year consisting of 365 or 366 days, as the
case may be. All other interest required to be calculated or determined under
this Agreement shall be computed on the basis of the actual number of days
elapsed in a year consisting of 360 days, unless the Ceiling Rate would
thereby be exceeded, in which event, to the extent necessary to avoid
exceeding the Ceiling Rate, the applicable interest shall be computed on the
basis of the actual number of days elapsed in the applicable calendar year in
which accrued.
(e) Funding Sources. Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain
its funding of all or any part of the Loans in any manner it sees fit, it
being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded
and maintained each
35
LIBOR Borrowing during each Interest Period through the purchase of deposits
having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be made
by Borrower hereunder, under the Notes and under the other Loan Documents shall
be made in Dollars, in immediately available funds, to Agent at the Principal
Office (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 10:00 a.m. Houston time
on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day). Agent, or any Lender for whose account any such
payment is made, may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit account of
Borrower with Agent or such Lender, as the case may be.
(b) Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to Agent the Loans or
other amounts payable by Borrower hereunder or thereunder to which such
payment is to be applied. Each payment received by Agent hereunder, under any
Note or under any other Loan Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds. If Agent fails
to send to any Lender the applicable amount by the close of business on the
date any such payment is received by Agent if such payment is received prior
to 10:00 a.m. Houston time (or on the next succeeding Business Day with
respect to payments which are received after 10:00 a.m. Houston time), Agent
shall pay to the applicable Lender interest on such amount from such date at
the Federal Funds Rate. Borrower, the Lenders and Agent acknowledge and agree
that this provision and each other provision of this Agreement or any of the
other Loan Documents relating to the application of amounts in payment of the
Obligations shall be subject to the provisions of Section 4.2(d) regarding pro
rata application of amounts after an Event of Default shall have occurred and
be continuing.
(c) If the due date of any payment hereunder or under any Note
falls on a day which is not a Business Day, the due date for such payments
(except as otherwise provided in Section 3.3 hereof) shall be extended to the
next succeeding Business Day and interest shall be payable for any principal
so extended for the period of such extension.
(d) All payments by the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on
account of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of each Lender taxes imposed on or measured by
its net income or franchise taxes imposed by the jurisdiction in which it is
organized or through which
36
it acts for purposes of this Agreement (such non-excluded items being
hereinafter referred to as "Taxes"). If as a result of any change in law (or
the interpretation thereof) after the date that the applicable Lender became a
"Lender" under this Agreement any withholding or deduction from any payment to
be made to, or for the account of, a Lender by the Borrower hereunder or under
any other Loan Document is required in respect of any Taxes pursuant to any
applicable law, rule, or regulation, then the Borrower will (i) pay to the
relevant authority the full amount required to be so withheld or deducted;
(ii) to the extent available, promptly forward to the Agent an official
receipt or other documentation reasonably satisfactory to the Agent evidencing
such payment to such authority; and (iii) pay to the Agent, for the account of
each affected Lender, such additional amount or amounts as are necessary to
ensure that the net amount actually received by such Lender will equal the
full amount such Lender would have received had no such withholding or
deduction been required. Each Lender shall determine such additional amount or
amounts payable to it (which determination shall, in the absence of manifest
error, be conclusive and binding on the Borrower). If a Lender becomes aware
that any such withholding or deduction from any payment to be made by the
Borrower hereunder or under any other Loan Document is required, then such
Lender shall promptly notify the Agent and the Borrower thereof stating the
reasons therefor and the additional amount required to be paid under this
Section. Each Lender shall execute and deliver to the Agent and Borrower such
forms as it may be required to execute and deliver pursuant to Section 11.13
hereof. To the extent that any such withholding or deduction results from the
failure of a Lender to provide a form required by Section 11.13 hereof (unless
such failure is due to some prohibition under applicable Legal Requirements),
the Borrower shall have no obligation to pay the additional amount required by
clause (iii) above. Anything in this Section notwithstanding, if any Lender
elects to require payment by the Borrower of any material amount under this
Section, the Borrower may, within 60 days after the date of receiving notice
thereof and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination the Borrower shall (i) if the Agent and
each of the other Lenders shall consent, pay that Lender all principal,
interest and fees and other amounts owed to such Lender through such date of
termination or (ii) have arranged for another financial institution approved
by the Agent (such approval not to be unreasonably withheld) as of such date,
to become a substitute Lender for all purposes under this Agreement in the
manner provided in Section 11.6; provided further that, prior to substitution
for any Lender, the Borrower shall have given written notice to the Agent of
such intention and the Lenders shall have the option, but no obligation, for a
period of 60 days after receipt of such notice, to increase their Commitments
in order to replace the affected Lender in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made (x) in the case of Advance Loans, ratably from the Advance Loan Lenders
in accordance with their respective Advance Loan Commitments and (y) in the
case of Revolving Loans, ratably from the Revolving Loan Lenders in accordance
with their respective Revolving Loan Commitments; (b) each payment of revolving
loan commitment fees shall be made for the account of the Revolving Loan
Lenders, and each termination or reduction of the Revolving Loan Commitments of
the Revolving Loan Lenders under Section 2.3 hereof shall be applied, pro rata,
according to the Revolving Loan Lenders' respective Revolving
37
Loan Commitments; (c) each payment of advance loan commitment fees shall be made
for the account of the Advance Loan Lenders, and each termination or reduction
of the Advance Loan Commitments of the Advance Loan Lenders under Section 2.3
hereof shall be applied, pro rata, according to the Advance Loan Lenders'
respective Advance Loan Commitments; (d) each payment by Borrower of principal
of or interest on the Advance Loans or Revolving Loans, as the case may be,
prior to the occurrence of an Event of Default (or after the applicable Event of
Default shall have been fully cured) shall be made to Agent for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts
of such Advance Loans or Revolving Loans, as the case may be, held by the
Lenders; (e) each payment by Borrower of principal of or interest on the Advance
Loans or Revolving Loans, as the case may be, after an Event of Default shall
have occurred and be continuing shall be made to Agent for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Obligations held by the Lenders (i.e. such payments shall be shared by all
of the Lenders and not restricted to the holders of Revolving Notes or Advance
Notes, regardless of any attempted contrary designation by Borrower), and (f)
the Revolving Loan Lenders (other than the applicable Issuer) shall purchase
from the applicable Issuer participations in each Letter of Credit to the extent
of their respective Revolving Loan Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to Agent of any
termination or reduction of Revolving Loan Commitments or Advance Loan
Commitments and of borrowings and optional prepayments of Loans and requests
for issuances of Letters of Credit shall be irrevocable and shall be effective
only if received by Agent not later than 10:00 a.m. Houston time on the number
of Business Days prior to the date of the relevant termination, reduction,
borrowing and/or prepayment specified below:
Number of Business Days
Prior Notice
Termination or Reduction of
Revolving Loan Commitments and 5
Advance Loan Commitments
Revolving Loan repayment 1
Borrowing at the Base Rate 1
Letter of Credit issuance 5
Prepayments required pursuant to
Section 3.2(b) same day
Optional prepayment of
Advance Loan 5
38
Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment or Advance Loan Commitment to be
terminated or reduced. Each such notice of borrowing or prepayment shall
specify the amount of the Loans to be borrowed or prepaid and the date of
borrowing or prepayment (which shall be a Business Day). Agent shall promptly
notify the affected Lenders of the contents of each such notice. Any selection
of a Eurodollar Rate with respect to a Loan shall be subject to the advance
notice requirements set forth in Section 3.3 hereof.
4.4 Non-Receipt of Funds by Agent. Unless Agent shall have been
notified by a Lender or Borrower (the "Payor") prior to the date on which such
Lender is to make payment to Agent of the proceeds of a Loan (or funding of a
drawing under a Letter of Credit or reimbursement with respect to any drawing
under a Letter of Credit) to be made by it hereunder or Borrower is to make a
payment to Agent for the account of one or more of the Lenders, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to Agent, Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and,
if the Payor has not in fact made the Required Payment to Agent, the recipient
of such payment (or, if such recipient is the beneficiary of a Letter of
Credit, Borrower and, if Borrower fails to pay the amount thereof to Agent
forthwith upon demand, the Lenders ratably in proportion to their respective
Revolving Loan Commitment Percentages) shall, on demand, pay to Agent the
amount made available by Agent, together with interest thereon in respect of
the period commencing on the date such amount was so made available by Agent
until the date Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of
any principal of or interest on any Loan made by it under this Agreement, on
any Reimbursement Obligation or on any other Obligation then due to such
Lender hereunder, through the exercise of any right of set-off (including,
without limitation, any right of setoff or lien granted under Section 9.2
hereof), banker's lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored.
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Loans
made, or Reimbursement Obligations or other Obligations held, by other Lenders
may exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans, or Reimbursement Obligations or other Obligations in
the amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect
to any other indebtedness or obligation of Borrower.
39
5. Conditions Precedent
5.1 Initial Loans and Letters of Credit. The obligation of each
Lender or each Issuer to make its initial Loans or issue or participate in a
Letter of Credit (if such Letter of Credit is issued prior to the funding of
the initial Loans) hereunder is subject to the following conditions precedent,
each of which shall have been fulfilled or waived to the satisfaction of the
Majority Lenders:
(a) Authorization and Status. Agent shall have received from the
appropriate Governmental Authorities certified copies of the Organizational
Documents (other than by-laws) of each Obligor, and evidence satisfactory to
Agent of all action taken by each Obligor authorizing the execution, delivery
and performance of the Loan Documents and all other documents related to this
Agreement to which it is a party (including, without limitation, a certificate
of the secretary of each such party which is a corporation setting forth the
resolutions of its Board of Directors authorizing the transactions
contemplated thereby and attaching a copy of its bylaws), together with such
certificates as may be appropriate to demonstrate the qualification and good
standing of and payment of taxes by each Obligor in the jurisdiction of its
organization and in each other jurisdiction where the failure in which to
qualify would have a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor.
(b) Incumbency. Each Obligor shall have delivered to Agent a
certificate in respect of the name and signature of each of the officers (i)
who is authorized to sign on its behalf the applicable Loan Documents related
to any Loan or the issuance of any Letter of Credit and (ii) who will, until
replaced by another officer or officers duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving notices
and other communications in connection with any Loan or the issuance of any
Letter of Credit. Agent and each Lender may conclusively rely on such
certificates until they receive notice in writing from the applicable Obligor
to the contrary.
(c) Notes. Agent shall have received the appropriate Notes of
Borrower for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and
delivered the Loan Documents to which it is a party (in such number of copies
as Agent shall have requested). Each such Loan Document shall be in
substantially the form furnished to the Lenders prior to their execution of
this Agreement, together with such changes therein as Agent may approve.
(e) Security Matters. All such action as Agent shall have
requested to perfect the Liens created pursuant to the Security Documents
shall have been taken, including, without limitation, where applicable, the
filing and recording of the Security Documents with the appropriate
Governmental Authorities (except for those Properties in respect of which the
Majority Lenders have given their written consent to deferral of recordation
of the applicable Mortgage so long as no Event of Default has occurred which
is continuing). Agent shall also have received evidence satisfactory
40
to it that the Liens created by the Security Documents constitute first
priority Liens, except for the exceptions expressly provided for herein,
including, without limitation, Uniform Commercial Code search reports,
satisfactory title evidence in form and substance acceptable to Agent, and
executed releases of any prior Liens (except as permitted by Section 8.2).
Agent shall be granted a first priority Lien securing all of the Revolving
Loan Obligations upon all of the issued and outstanding equity interests in
and to Borrower, pursuant to Loan Documentation in Proper Form, as a condition
precedent to any Loan.
(f) Fees and Expenses. Borrower shall have paid to Agent all
unpaid fees in the amounts previously agreed upon in writing among Borrower
and Agent; and shall have in addition paid to Agent all amounts payable under
Section 11.3 hereof, on or before the date of this Agreement, except for
amounts which Agent, in its sole discretion, agrees may be paid at a later
date.
(g) Insurance. Borrower shall have delivered to Agent certificates
of insurance satisfactory to Agent evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents.
(h) Opinions of Counsel. Agent shall have received such opinions
of counsel to Obligors as the Majority Lenders shall reasonably request with
respect to Obligors and the Loan Documents.
(i) Consents. Agent shall have received evidence satisfactory to
the Lenders that (i) BKC shall have consented in writing to the transactions
contemplated in the applicable Purchase Agreements and in this Agreement
without conditions except as approved by the Majority Lenders and (ii) all
material consents of each Governmental Authority and of each other Person, if
any, reasonably required in connection with (a) the Loans and the Letters of
Credit and (b) the execution, delivery and performance of this Agreement and
the other Loan Documents have been satisfactorily obtained.
(j) Key Agreements. Agent shall have received copies of the Key
Agreements, in Proper Form, and, where applicable, shall have received
evidence satisfactory to Agent that the transactions contemplated therein have
been consummated, subject only to the requested funding of Loans. Upon request
of Agent or the Majority Lenders, the copies of any designated Key Agreements
shall be certified as true, correct and complete by Borrower.
(k) Environmental Reports. Agent shall have received environmental
reports satisfactory to the Lenders with respect to the Property of Borrower
and the other Obligors prepared by an environmental consultant or
environmental consultants satisfactory to the Lenders.
(l) Title Insurance Policies. To the extent requested by Agent or
the Majority Lenders, Agent shall have received the Title Insurance Policies
and legible copies of any matters referred to therein, together with a survey
or surveys of the Mortgaged Property, in Proper Form.
41
(m) Equity. Borrower shall have received (through equity
contributions by Carrols Holdings to Borrower) not less than $31,200,000 in
proceeds (prior to deducting for expenses incurred in connection with such
transaction not to exceed $1,000,000 deducted from the equity contributed
concurrently with the execution hereof) from the sale of equity interests in
Carrols Holdings.
(n) Assignment of Liens Securing Existing Indebtedness. All
existing Indebtedness owing to Heller Financial, Inc. shall have been paid in
full (in consideration of the assignment of such Indebtedness to Agent and
Lenders) and all Liens securing such Indebtedness shall have been reviewed and
approved by Agent and shall have been assigned to Agent in such a manner as
shall permit (i) the Revolving Loans to be secured by all Liens presently
securing the existing revolving credit facility provided by Heller Financial,
Inc. and (ii) an Advance Loan Tranche in an amount not exceeding $5,000,000 to
be secured by all Liens presently securing the existing term loans owing to
Heller Financial, Inc.
(o) Compliance with Commitment Letter. Borrower shall have
complied with the terms and provisions of that certain Commitment Letter dated
January 8, 1997 regarding the transactions contemplated herein.
(p) Other Documents. Agent shall have received such other
documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as Agent or the Majority Lenders may
reasonably request.
5.2 Advance Loans. The obligation of each Advance Loan Lender to
make any Advance Loan to be made by it under Section 2.1(b) hereof is further
subject to the following:
(a) The Advance Loans shall be requested for the purpose of paying
a portion (not to exceed 75%) of the purchase costs related to real Property
or material personal Property purchased within a particular 270 Day Period
which shall be equal to or greater than the lesser of $13,333,334 or 1.33
times the Advance Loan Commitments remaining unused. The Property so acquired
is herein collectively called an "Acquisition Package".
(b) The execution and delivery of a Purchase Agreement, in Proper
Form, providing for the acquisition by an Obligor of the applicable
Acquisition Package, including the rights of the franchisees under the
Franchise Agreements relating to restaurants included in such Acquisition
Package, and the closing of the transactions provided therein (subject only to
funding of the applicable Advance Loans under Section 2.1(b)).
(c) Copies, in Proper Form and certified as true, correct and
complete, of financial information regarding such properties as of a recent
date, together with pro forma financial statements for the Borrower assuming
the closing of the applicable Acquisition Package.
42
(d) Agent shall have received an environmental report satisfactory
to the Majority Lenders with respect to the applicable Acquisition Package
prepared by an environmental consultant or environmental consultants
satisfactory to Agent.
(e) Agent shall have received evidence satisfactory to the
Majority Lenders that BKC shall have consented in writing to such purchase
without conditions except as approved by the Majority Lenders in writing and
the Agent shall have received an amendment to the BKC Consent (or an
additional BKC Consent), in Proper Form, incorporating the applicable
Acquisition Package.
(f) Agent shall have received Mortgages and other Security
Documents providing for a Lien upon the applicable Acquisition Package (other
than Excluded Assets) securing the applicable Advance Loan Tranche, together
with Advance Notes evidencing the applicable Advance Loan Tranche and such
other documentation as Agent or the Majority Lenders may reasonably request in
connection therewith.
(g) Compliance with the provisions of Section 7.12 hereof, to the
extent applicable, and with Section 8.14 hereof.
(h) The making of such Advance Loan and the execution and delivery
of the Security Documents relating thereto shall not cause a default under the
Senior Notes Documentation.
5.3 All Loans and Letters of Credit. The obligation of each Lender
to make any Loan to be made by it hereunder or to issue or participate in any
Letter of Credit is subject to (a) the accuracy, in all material respects, on
the date of such Loan or such issuance of all representations and warranties
of each Obligor contained in this Agreement and the other Loan Documents; (b)
Agent shall have received the following, all of which shall be duly executed
and in Proper Form: (1) a Request for Extension of Credit as to the Loan or
the Letter of Credit, as the case may be, no later than 10:00 a.m. Houston
time on the Business Day on which such Request for Extension of Credit must be
given under Section 4.3 hereof, (2) in the case of a Letter of Credit, an
Application, and (3) such other documents as Agent or the Majority Lenders may
reasonably require; (c) prior to the making of such Loan or the issuance of
such Letter of Credit, there shall have occurred no material adverse change in
the assets, liabilities, financial condition, business or affairs of the
Borrower and the Obligors, on a consolidated basis; (d) no Default or Event of
Default shall have occurred and be continuing; (e) the making of such Loan or
the issuance of such Letter of Credit shall not be illegal or prohibited by
any Legal Requirement, and (f) Borrower shall have paid all fees and expenses
of the type described in Section 11.3 hereof and all other fees owed to Agent
or any Lender under the Loan Documents which are due and payable, in each
case, prior to or on the date of such Loan or such issuance. The submission by
the Borrower of a Request for Extension of Credit shall be deemed to be a
representation and warranty that the conditions precedent to the applicable
Loan or Letter of Credit have been satisfied.
6. Representations and Warranties
43
To induce the Lenders to enter into this Agreement and to make the
Loans and issue or participate in the Letters of Credit, Borrower represents
and warrants (such representations and warranties to survive any investigation
and the making of the Loans and the issuance of any Letters of Credit) to the
Lenders and Agent as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all necessary power and authority to conduct its
business as presently conducted, and (c) is duly qualified to do business and
in good standing in the jurisdiction of its organization and in all
jurisdictions in which the failure to so qualify would reasonably be expected
to have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor.
6.2 Financial Statements. Borrower has furnished to Agent audited
financial statements (including a balance sheet) as to Borrower which fairly
present in all material respects, in accordance with GAAP, the financial
condition and the results of operations of Borrower as at the end of
Borrower's 1995 fiscal year and unaudited financial statements (including a
balance sheet) as to Borrower which fairly present in all material respects,
in accordance with GAAP, the financial condition and the results of operations
of Borrower as at the end of the third quarter of Borrower's 1996 fiscal year.
No events, conditions or circumstances have occurred from the date that the
financial statements were delivered to Agent through the Effective Date which
would cause said financial statements to be misleading in any material
respect. There are no material instruments or liabilities which should be
reflected in such financial statements provided to Agent which are not so
reflected.
6.3. Enforceable Obligations; Authorization. The Loan Documents are
legal, valid and binding obligations of each applicable Obligor, enforceable
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency and other similar laws and judicial decisions affecting
creditors' rights generally and by general equitable principles. The
execution, delivery and performance of the Loan Documents (a) have all been
duly authorized by all necessary action; (b) are within the power and
authority of each applicable Obligor; (c) do not and will not contravene or
violate any Legal Requirement applicable to any applicable Obligor or the
Organizational Documents of any applicable Obligor, the contravention or
violation of which would reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations or
Properties of any Obligor; (d) do not and will not result in the breach of, or
constitute a default under, any material agreement or instrument by which any
Obligor or any of its Property may be bound, and (e) do not and will not
result in the creation of any Lien upon any Property of any Obligor, except in
favor of Agent or as expressly contemplated therein. All necessary permits,
registrations and consents for such making and performance have been obtained.
Except as otherwise expressly stated in the Security Documents, the Liens of
the Security Documents, will constitute valid and perfected first and prior
Liens on the Property described therein (except for those Properties in
respect of which the Majority Lenders have given their written consent to
deferral of recordation of the applicable Mortgage so long as no Event of
Default has occurred which is continuing), subject to no other Liens
whatsoever except Permitted Liens.
44
6.4 Other Debt. No Obligor is in default in the payment of any
other Indebtedness or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party and which default would reasonably
be expected to have a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor or on the
ability of any Obligor to perform its respective obligations under any Loan
Document to which it is a party.
6.5 Litigation. There is no litigation or administrative
proceeding, to the knowledge of any executive officer of any Obligor, pending
or threatened against, nor any outstanding judgment, order or decree against,
any Obligor before or by any Governmental Authority which does or would
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations or Properties of any Obligor or
on the ability of any Obligor to perform its respective obligations under any
Loan Document to which it is a party. No Obligor is in default with respect to
any judgment, order or decree of any Governmental Authority where such default
would have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor.
6.6 Title. Each Obligor has good and marketable title to the
Collateral pledged (or purported to be pledged) thereby pursuant to the
Security Documents, free and clear of all Liens except Permitted Liens.
6.7 Taxes. Each Obligor has filed all tax returns required to have
been filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good
faith.
6.8 Regulations G,U and X. None of the proceeds of any Loan will
be used for the purpose of purchasing or carrying directly or indirectly any
margin stock or for any other purpose would constitute this transaction a
"purpose credit" within the meaning of Regulations G, U and X of the Board of
Governors of the Federal Reserve System, as any of them may be amended from
time to time.
6.9 Subsidiaries. As of the Effective Date, Borrower has no
Subsidiaries other than Carrols Realty Holdings Corp., a Delaware corporation,
Carrols Realty I Corp., a Delaware corporation, Carrols Realty II Corp., a
Delaware corporation, Carrols J.G. Corp., a Delaware corporation, CDC Theatre
Properties, a Delaware corporation, HNS Leasing and Equipment Services, Inc.,
a New York corporation, Quanta Advertising Corp., a New York corporation,
Jo-Ann Enterprises, Inc., a New Jersey corporation, and Confectionary Square
Corp., a New Jersey corporation.
6.10 No Untrue or Misleading Statements. No representation or
warranty made by Borrower in any Loan Document or in any document, instrument
or other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document does or
will contain any untrue material statement of fact or will omit to state any
such fact (of which any executive officer of any Obligor has knowledge)
necessary to make the
45
representations, warranties and other statements contained herein or in such
other document, instrument or writing not misleading in any material respect.
6.11 ERISA. With respect to each Plan, Borrower and each member of
the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in
compliance in all material respects with the provisions of ERISA and the Code.
No event has occurred which could result in a liability of Borrower or any
member of the Controlled Group to the PBGC or a Plan (other than to make
contributions in the ordinary course) would reasonably be expected to have a
material adverse effect on the Properties, liabilities, condition (financial
or otherwise), business or operations of any Obligor. There have not been any
nor are there now existing any events or conditions that would cause the Lien
provided under Section 4068 of ERISA to attach to any Property of Borrower or
any member of the Controlled Group. Unfunded Liabilities as of the date hereof
do not exceed $500,000. No "prohibited transaction" has occurred with respect
to any Plan.
6.12 Investment Company Act. No Obligor is an investment company
within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which
is an investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an
"affiliate" or a "subsidiary company" of a "public utility company," or a
"holding company," or an "affiliate" or a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended.
6.14 Solvency. After giving effect to the equity contributions
required under the provisions of Section 5.1(m), none of Borrower, any
Obligor, or Borrower and its Subsidiaries (other than Non-Recourse
Subsidiaries), on a consolidated basis, is "insolvent," as such term is used
and defined in (i) the Bankruptcy Code and (ii) the fraudulent conveyance
statutes of the States of New York or Texas or of any jurisdiction in which
any of the Collateral may be located.
6.15 Fiscal Year. The fiscal year of each Obligor ends on the
Sunday nearest December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith would not reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise), operations or Properties
of any Obligor or the ability of any Obligor to perform its obligations under
this Agreement or the Loan Documents to which it is a party.
6.17 Environmental Matters. Each Obligor has, to the best knowledge
of their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which would reasonably be expected to have a
material adverse
46
effect on the Properties, liabilities, condition (financial or otherwise),
business or operations of any Obligor. Each Obligor and its Properties,
business and operations have been and are, to the best knowledge of their
respective executive officers, in compliance with all applicable Requirements
of Environmental Law and Environmental Permits the failure to comply with
which would reasonably be expected to have a material adverse effect on the
Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor. Each Obligor and its Properties, business and
operations are not subject to any (A) Environmental Claims or (B), to the best
knowledge of their respective executive officers (after making reasonable
inquiry of the personnel and records of their respective Corporations),
Environmental Liabilities, in either case direct or contingent, arising from
or based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof which would reasonably be expected to
have a material adverse effect on the Properties, liabilities, condition
(financial or otherwise), business or operations of any Obligor. None of the
officers of any Obligor has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its Properties, liabilities,
condition (financial or otherwise), business or operations which would
reasonably be expected to have a material adverse effect on the Properties,
liabilities, condition (financial or otherwise), business or operations of any
Obligor. Borrower does not know of any event or condition with respect to
currently enacted Requirements of Environmental Laws presently scheduled to
become effective in the future with respect to any of the Properties of any
Obligor which would reasonably be expected to have a material adverse effect
on the Properties, liabilities, condition (financial or otherwise), business
or operations of any Obligor, for which the applicable Obligor has not made
good faith provisions in its business plan and projections of financial
performance.
6.18 Certificate of Title Property. The aggregate value (based on
the greater of book or market value) of the Collateral which is subject to
certificate of title laws is equal to or less than $250,000 on the date
hereof.
6.19 Mortgaged Properties and Other Collateral; Subsidiary
Property. As of the Effective Date, the Mortgaged Properties and the other
Collateral covered by the Security Documents constitute the only real Property
and all material personal Property owned by any Obligor, other than the
Excluded Assets and other than Properties acquired after March 15, 1997 (which
remain subject to the provisions of Section 8.14(c) hereof). As of the
Effective Date, the Subsidiaries of Borrower do not own any real Property or
material personal Property which is not covered by the Security Documents,
other than the Excluded Assets and other than Properties acquired after March
15, 1997 (which remain subject to the provisions of Section 8.14(c) hereof).
7. Affirmative Covenants.
Borrower covenants and agrees with Agent and the Lenders that prior
to the termination of this Agreement it will do, and cause each other Obligor
to do, and if necessary cause to be done, each and all of the following:
47
7.1 Taxes, Existence, Regulations, Property, Etc. At all times (a)
pay when due all taxes and governmental charges of every kind upon it or
against its income, profits or Property, unless and only to the extent that
the same shall be contested diligently in good faith and adequate reserves in
accordance with GAAP have been established therefor; (b) do all things
necessary to preserve its existence, qualifications, rights and franchises in
all jurisdictions where such failure to qualify would reasonably be expected
to have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor; (c) comply with all
applicable Legal Requirements (including without limitation Requirements of
Environmental Law) in respect of the conduct of its business and the ownership
of its Property, the noncompliance with which would reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor or on the ability of any
Obligor to perform its respective obligations under any Loan Document to which
it is a party; and (d) cause its Property to be protected, maintained and kept
in good repair and make all replacements and additions to such Property as may
be reasonably necessary to conduct its business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agent and
each Lender each of the following: (a) as soon as available and in any event
within 120 days after the end of each applicable fiscal year, beginning with
the fiscal year ending on December 31, 1997, Annual Audited Financial
Statements of Borrower and Carrols Holdings; (b) as soon as available and in
any event within 45 days after the end of each fiscal quarter (other than the
last fiscal quarter) of each applicable fiscal year, Quarterly Financial
Statements of Borrower and Carrols Holdings; (c) concurrently with the
financial statements provided for in Subsections 7.2(a) and (b) hereof, such
schedules, computations and other information, in reasonable detail, as may be
required by Agent to demonstrate compliance with the covenants set forth
herein or reflecting any non-compliance therewith as of the applicable date,
all certified and signed by the president or chief financial officer of
Borrower (or other authorized officer approved by Agent) as true and correct
in all material respects to the best knowledge of such officer and, commencing
with the quarterly financial statement prepared as of June 30, 1997, a
compliance certificate ("Compliance Certificate") in the form of Exhibit G
hereto, duly executed by such authorized officer; (d) by December 31 of each
fiscal year, Borrower's annual business plan for the next fiscal year
(including its balance sheet and income and cash flow projections for such
fiscal year); (e) promptly upon their becoming publicly available, each
financial statement, report, notice or definitive proxy statements sent by any
Obligor to shareholders generally and each regular or periodic report and each
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by any Obligor with, or received
by any Obligor in connection therewith from, any securities exchange or the
Securities and Exchange Commission or any successor agency, and (f) such other
information relating to the condition (financial or otherwise), operations,
prospects or business of any Obligor as from time to time may be reasonably
requested by Agent. Financial Statements for Borrower and Carrols Holding
shall be prepared on a consolidated basis, and shall provide comparison to the
corresponding period of the previous fiscal year. Each delivery of a financial
statement pursuant to this Section 7.2 shall constitute a restatement of the
representations contained in the last two sentences of Section 6.2.
48
7.3 Financial Tests. Borrower will have and maintain:
(a) Debt Service Coverage Ratio - a Debt Service Coverage
Ratio of not less than 1.30 to 1.00 at all times.
(b) Debt to EBITDA Ratio - a Debt to EBITDA Ratio of not
greater than (1) 4.50 to 1.00 at all times during the period
commencing on the date hereof through and including June 30, 1998;
(2) 4.00 to 1.00 at all times during the period commencing on July 1,
1998 through and including June 30, 2000; (3) 3.50 to 1.00 at all
times during the period commencing on July 1, 2000 through and
including June 30, 2002, and (4) 3.00 to 1.00 at all times
thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage
Ratio of not less than 1.10 to 1.00 at all times.
7.4 Inspection. Permit Agent and each Lender upon 3 days' prior
notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its
Property, to examine its files, books and records, except privileged
communication with legal counsel and classified governmental material, and
make and take away copies thereof, and to discuss its affairs with its
officers and accountants, all during normal business hours and at such
intervals and to such extent as Agent may reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at
Borrower's expense, any and all other and further instruments which may be
reasonably requested by Agent to cure any defect in the execution and delivery
of any Loan Document in order to effectuate the transactions contemplated by
the Loan Documents, and in order to grant, preserve protect and perfect the
validity and priority of the security interests created by the Security
Documents (except for those Properties in respect of which the Majority
Lenders have given their written consent to deferral of recordation of the
applicable Mortgage so long as no Event of Default has occurred which is
continuing).
7.6 Books and Records. Maintain books of record and account
which permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Borrower will (and will cause each other Obligor
to) maintain insurance with such insurers, on such of its Property, with
responsible companies in such amounts, with such deductibles and against such
risks as are usually carried by owners of similar businesses and properties in
the same general areas in which the applicable Obligor operates or as Agent
may otherwise reasonably require, and furnish Agent satisfactory evidence
thereof promptly upon request. These insurance provisions are cumulative of
the insurance provisions of the Security Documents. Agent shall be provided
with copies of the policies of insurance and a certificate of the insurer that
the insurance required by this Section may not be canceled, reduced or
affected in any material manner without thirty (30) days' prior written notice
to Agent. Wherever applicable, such insurance shall name Agent as loss payee
and/or mortgagee insured.
49
7.8 Notice of Certain Matters. Give Agent written notice of the
following promptly after any executive officer (vice president or more senior)
of Borrower shall become aware of the same:
(a) the issuance by any court or governmental agency or authority of
any injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or
the making of the Loans or the initiation of any litigation, or any claim or
controversy which would reasonably be expected to result in the initiation of
any litigation, seeking any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $500,000 or which may reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.
Borrower will also notify Agent in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive
office or principal place of business or the place where it keeps its books
and records. After the Effective Date, Borrower will notify Agent in writing
at least 45 days prior to any Obligor's acquisition of any real Property or
any material personal Property (other than Accounts, Inventory and Equipment),
wherever located, other than the Mortgaged Properties and the other Collateral
covered by the Security Documents and other than the Excluded Assets (such
acquisition or ownership being herein called an "Additional Collateral Event"
and the Property so acquired or owned being herein called "Additional
Collateral"). Any such acquisition shall be subject to the provisions of
Section 8.14 hereof. In addition to the foregoing, after the Effective Date,
Borrower will notify Agent in writing at least 10 days prior to any prepayment
of any part of the term loan Indebtedness currently owing to Heller Financial,
Inc. or the refinancing of the revolving loan facility currently owing to
Heller Financial, Inc. and such prepayment or refinancing shall constitute an
"Additional Collateral Event" and concurrently with such prepayment or
refinancing all Property currently securing the applicable Indebtedness owing
to Heller Financial, Inc. shall constitute "Additional Collateral".
7.9 Interest Rate Risk. Borrower shall comply with and shall
maintain in full force and effect a program for the hedging of interest rate
risk (which may include one or more Interest Rate Risk Agreements) upon terms
and in a manner acceptable to Agent providing for a notional amount equal to
the excess amount of (i) the aggregate unpaid principal balance of Borrowed
Money Indebtedness of Borrower (on a consolidated basis) bearing interest at a
variable rate over (ii) 50% of the aggregate unpaid principal balance of the
Borrowed Money Indebtedness of Borrower (on a consolidated basis).
7.10 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any
50
applicable law, rule, regulation or treaty regarding capital adequacy, or any
change therein after the Effective Date, or any change in the interpretation
or administration thereof after the Effective Date by any Governmental
Authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender with any request or
directive after the Effective Date regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency has or would have the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder, under
the Letters of Credit, the Notes or other Obligations held by it to a level
below that which such Lender could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's policies with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, upon satisfaction of the conditions precedent set forth in
this Section 7.10, after demand by such Lender (with a copy to Agent) as
provided below, pay (subject to Section 11.7 hereof) to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction. The certificate of any Lender setting forth such amount or amounts
as shall be necessary to compensate it and the basis thereof and reasons
therefor shall be delivered as soon as practicable to Borrower and shall be
conclusive and binding, absent manifest error. Borrower shall pay the amount
shown as due on any such certificate within five (5) Business Days after the
delivery of such certificate. In preparing such certificate, a Lender may
employ such assumptions and allocations of costs and expenses as it shall in
good faith deem reasonable and may use any reasonable averaging and
attribution method.
7.11 ERISA Information and Compliance. Promptly furnish to Agent
(i) immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under Title IV of ERISA and any notice from the PBGC
under Title IV of ERISA of an intent to terminate or appoint a trustee to
administer any Plan, (ii) if requested by Agent, promptly after the filing
thereof with the United States Secretary of Labor or the PBGC or the Internal
Revenue Service, copies of each annual and other report with respect to each
Plan or any trust created thereunder, (iii) immediately upon becoming aware of
the occurrence of any "reportable event," as such term is defined in Section
4043 of ERISA, for which the disclosure requirements of Regulation Section
2615.3 promulgated by the PBGC have not been waived, or of any "prohibited
transaction," as such term is defined in Section 4975 of the Code, in
connection with any Plan or any trust created thereunder, a written notice
signed by the President or the principal financial officer of Borrower or the
applicable member of the Controlled Group specifying the nature thereof, what
action Borrower or the applicable member of the Controlled Group is taking or
proposes to take with respect thereto, and, when known, any action taken by
the PBGC, the Internal Revenue Service or the Department of Labor with respect
thereto, (iv) promptly after the filing or receiving thereof by Borrower or
any member of the Controlled Group of any notice of the institution of any
proceedings or other actions which may result in the termination of any Plan,
and (v) each request for waiver of the funding standards or extension of the
amortization periods required by Sections 303 and 304 of ERISA or Section 412
of the Code promptly after the request is submitted by Borrower or any member
of the Controlled Group to the Secretary of the Treasury, the Department of
Labor or the Internal Revenue Service, as the case may be. To the extent
required under applicable statutory funding requirements, Borrower will fund,
or will cause the applicable member of the Controlled Group to fund, all
current service pension
51
liabilities as they are incurred under the provisions of all Plans from time
to time in effect, and comply with all applicable provisions of ERISA, in each
case, except to the extent that failure to do the same would not reasonably be
expected to have a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor. Borrower
covenants that it shall and shall cause each member of the Controlled Group to
(1) make contributions to each Plan in a timely manner and in an amount
sufficient to comply with the contribution obligations under such Plan and the
minimum funding standards requirements of ERISA; (2) prepare and file in a
timely manner all notices and reports required under the terms of ERISA
including but not limited to annual reports; and (3) pay in a timely manner
all required PBGC premiums, in each case, except to the extent that failure to
do the same would not reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise), operations or Properties
of any Obligor.
7.12 Additional Security Documents. As soon as practicable and in
any event within three (3) calendar months after an Additional Collateral
Event (except in the case of the payment in full of the Indebtedness currently
owing to Heller Financial, Inc., in which event these requirements must be
satisfied concurrently with such Additional Collateral Event), Borrower shall
(a) execute and deliver or cause to be executed and delivered a Mortgage
and/or other applicable Security Documents, in Proper Form and in an amount
reasonably satisfactory to the Majority Lenders, in favor of Agent and duly
executed by the applicable Obligor, granting a first-priority Lien upon the
applicable Additional Collateral (other than Excluded Assets) securing all of
the Obligations (except as the Majority Lenders may otherwise agree in order
to limit recording taxes or similar charges based upon the amount secured),
and such other documents (including, without limitation, all items required in
connection with the applicable Security Documents previously executed
hereunder, such as surveys, environmental assessments, certificates, legal
opinions, all in Proper Form) as may be required by Agent or the Majority
Lenders in connection with the execution and delivery of such Security
Documents; (b) where applicable, deliver to Agent Franchise Agreements
covering the Additional Collateral and all such amendments to the BKC Consent,
in Proper Form, as Agent or the Majority Lenders may require to incorporate
the Additional Collateral; (c) where applicable, cause a title insurance
underwriter satisfactory to Agent to issue to Agent a Title Insurance Policy,
in Proper Form, insuring the first-priority Lien of each applicable Mortgage
in such amount as is satisfactory to the Majority Lenders; (d) deliver or
cause to be delivered such other documents or certificates consistent with the
terms of this Agreement and relating to the transactions contemplated hereby
as Agent or the Majority Lenders may reasonably request, and (e) pay in full
all documentary stamps, filing and recording fees, taxes and other fees and
charges payable in connection with the filing and recording of any Mortgage
and/or any other Security Document. The provisions of this Section are subject
to the limitations imposed upon Borrower and the other Obligors under the
current Senior Notes Documentation (without amendment except as agreed to in
writing by Agent). To the full extent permitted under the provisions of the
Senior Notes Documentation, Borrower shall (and shall cause each other Obligor
to) execute and deliver to Agent any Security Documents requested by Agent or
the Majority Lenders covering any Property of Borrower or any other Obligor
(other than the Excluded Assets), whether or not the Lien created by such
Security Document is otherwise provided for in this Agreement or other Credit
Documents. It is the stated objective of Borrower, each other Obligor, Agent
and the Lenders to maximize the extent to which Liens may
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be taken upon Property of Borrower and the other Obligors without causing a
default under the Senior Notes Documentation and, to the extent reasonably
requested by Agent or the Majority Lenders, Borrower shall (and shall cause
each Obligor to) cooperate in a timely fashion to accomplish such objective.
7.13 Guaranties; Pledge of Subsidiary Stock. To the full extent
permitted under the provisions of the Senior Notes Documentation, and in any
event concurrently with any refinancing of the Senior Notes, Borrower shall
(i) cause Carrols Holdings and each of the Subsidiaries (other than
Non-Recourse Subsidiaries) of Borrower to execute and deliver to Agent a
guaranty, in Proper Form, whereby payment of all of the Obligations is
guaranteed and (ii) pledge or cause to be pledged all of the issued and
outstanding equity interests in and to Borrower and all of Borrower's interest
in and to each of its Subsidiaries to Agent as security for the Obligations
pursuant to Loan Documents, in Proper Form.
8. Negative Covenants.
Borrower covenants and agrees with Agent and the Lenders that prior
to the termination of this Agreement it will not, and will not suffer or
permit any other Obligor (other than Carrols Holdings) to, do any of the
following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit
to exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a)
Indebtedness under this Agreement and the other Loan Documents and
Indebtedness secured by Liens permitted by Section 8.2 hereof; (b) the
liabilities existing on the date of this Agreement and disclosed in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, and subject to Section 8.10 hereof, all renewals,
extensions and replacements (but not increases) of any of the foregoing; (c)
the Interest Rate Risk Indebtedness, and (d) capitalized lease obligations to
the extent allowed by the other provisions of this Agreement.
8.2 Liens. Create or suffer to exist any Lien upon any of its
Property now owned or hereafter acquired, or acquire any Property upon any
conditional sale or other title retention device or arrangement or any
purchase money security agreement; or in any manner directly or indirectly
sell, assign, pledge or otherwise transfer any of its Accounts or General
Intangibles; provided, however, that any Obligor may create or suffer to exist
Permitted Liens.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agent in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (but not increases
of such obligations after the Effective Date), and (c) those liabilities
permitted under Section 8.1 hereof.
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8.4 Mergers, Consolidations and Dispositions of Assets. In any
single transaction or series of transactions, directly or indirectly: (a)
liquidate or dissolve (provided that Subsidiaries of Borrower which are not
parties to any Security Agreement or Mortgage may be liquidated or dissolved);
(b) be a party to any merger or consolidation unless and so long as (i) no
Default or Event of Default has occurred that is then continuing, (ii)
immediately thereafter and giving effect thereto, no event will occur and be
continuing which constitutes a Default, (iii) an Obligor is the surviving
Person; (iv) the surviving Person ratifies and assumes each Loan Document to
which any party to such merger was a party, and (v) Agent is given at least 30
days' prior notice of such merger or consolidation; (c) sell, convey or lease
all or any substantial part of its assets, except for sales of Property in the
ordinary course of business and except for sales not exceeding, for the period
from the date hereof through December 31, 1997 or for any subsequent fiscal
year, $15,000,000; provided, however, that, unless the Majority Lenders shall
have otherwise consented in writing, the net proceeds realized from assets
sales permitted under this exception (other than sales of Property in the
ordinary course of business) must (x) if the assets sold secure Advance Loans,
be immediately applied to the payment of such Advance Loans (with such
payments to be credited pro rata to all of the installments required to be
paid on such Advance Loans) and (y) if the assets sold do not secure any
Advance Loans or if the assets sold secure the Revolving Loans, within two
hundred seventy (270) days after the applicable sale, either (I) be used to
make a prepayment on all of the Advance Loans pro rata based on their
outstanding principal balances (with such payments to be credited pro rata to
all of the installments required to be paid on such Advance Loans) or (II) be
applied to a portion of the closing costs in respect of an acquisition
permitted under the terms hereof (provided, however, that no assets securing
the Revolving Loans may be sold if, after giving effect to such sale, less
than 100 restaurants shall remain as Collateral for the Revolving Loans and
provided further, however, that at least 60 of such remaining units must be
located outside the State of New York); (d) enter into any sale/leaseback
transaction unless (x) such sale/leaseback transaction does not violate the
Senior Notes Documentation and (y) the Majority Lenders shall otherwise
consent in writing and except for sale/leaseback transactions with respect to
the sites described on Exhibit K hereto (so long as, after giving effect to
such sale/leaseback, at least 100 restaurants shall remain as Collateral for
the Revolving Loans), the Agent, for the benefit of the Lenders, shall be
granted a lien (concurrently with the applicable sale/leaseback transaction
unless the Majority Lenders shall otherwise consent in writing) on the
resulting leasehold interests through the inclusion of such leasehold
interests in an Acquisition Package (with the acquisition costs of the
underlying fee title to be used in calculating the amount of the applicable
Advance Loan Tranche); provided, however, that, unless the Majority Lenders
shall have otherwise consented in writing, the net proceeds realized from
asset sales permitted under this exception must be applied or used in the same
manner as provided in Section 8.4(c), or (e) except for Liens in favor of
Agent, pledge, transfer or otherwise dispose of any equity interest in any
Obligor or any Indebtedness of any Obligor or issue or permit any other
Obligor (other than Carrols Holdings) to issue any additional equity interest.
Nothing in this Agreement or any of the other Loan Documents shall prohibit
any Obligor from selling obsolete equipment or from replacing used equipment
in the ordinary course of business.
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8.5 Redemption, Dividends and Distributions. At any time: (a)
redeem, retire or otherwise acquire, directly or indirectly, any equity
interest in any Obligor or (b) make any distributions of any Property or cash
to the owner of any of the equity interests in any Obligor other than
Permitted Dividends.
8.6 Nature of Business. Change the nature of its business or enter
into any business which is substantially different from the business in which
it is presently engaged. The primary business of each Obligor (other than
Carrols Holdings) shall at all times be the direct or indirect ownership and
operation of restaurants under Burger King franchises.
8.7 Transactions with Related Parties. Enter into any transaction
or agreement with any officer, director or holder of any equity interest in
any Obligor (or any Affiliate of any such Person) unless the same is upon
terms substantially similar to those obtainable from wholly unrelated sources
(to the best knowledge of the executive officers of the applicable Obligor or
Affiliate, after making reasonable inquiry of the personnel and records of the
applicable Obligor or Affiliate). Performance under the present terms of the
Senior Notes Documentation, the Purchase Agreements and the Lease Agreements
(without amendment except as agreed to in writing by Agent) shall not cause a
Default hereunder.
8.8 Loans and Investments. Make any loan, advance, extension of
credit or capital contribution to, or make or have any Investment in, any
Person, or make any commitment to make any such extension of credit or
Investment, except (a) Permitted Investments and (b) normal and reasonable
advances in the ordinary course of business to officers and employees.
8.9 Subsidiaries. Form, create or acquire any Subsidiary except
for Non-Recourse Subsidiaries and other Subsidiaries approved by the Majority
Lenders in writing.
8.10 Key Agreements. Terminate or agree to the termination of any
Key Agreement or amend, modify or obtain or grant a waiver of any provision of
any of the Key Agreements if such action would reasonably be expected to have
a material adverse effect on the Properties, liabilities, condition (financial
or otherwise), business or operations of any Obligor. Borrower will not accept
or permit any assignment to any Obligor of the leasehold interest under any of
the Underlying Lease Agreements without the express prior written consent of
Agent. Any refinancing of the Senior Notes shall require the prior written
consent of Agent and the Majority Lenders, which consent will not be withheld
so long as (i) the refinancing shall be upon terms no less favorable to the
Obligors and to the Lenders than those set forth in the existing terms of the
Senior Notes Documentation (without amendment except as agreed to in writing
by Agent), (ii) no Default or Event of Default shall have occurred and be
continuing (or would result from such refinancing) and (iii) such refinancing
shall permit all of the Obligations to be secured by all of the real Property
and material personal Property owned by each Obligor (other than Carrols
Holdings), other than the Excluded Assets and by all of the issued and
outstanding equity interests in and to Borrower and shall permit Carrols
Holdings and each Subsidiary of Borrower to execute and deliver to Agent a
guaranty, in Proper Form, whereby payment of all of the Obligations is
guaranteed.
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8.11 Organizational Documents. Amend, modify, restate or supplement
any of its Organizational Documents if such action would reasonably be
expected to materially and adversely affect any Collateral, Loan or Obligation
or the abilities of Borrower to perform its Obligations under any Loan
Document, unless such action shall be consented to in writing by Agent.
8.12 Certificate of Title Property. Borrower will not permit the
aggregate value (determined on the greater of book or market value) of
Property owned by any Obligor (other than Carrols Holdings) which is subject
to certificate of title laws to exceed $250,000 unless the Majority Lenders
shall have otherwise consented in writing.
8.13 Unfunded Liabilities. Incur any Unfunded Liabilities after
the Effective Date or allow any Unfunded Liabilities in excess of $500,000, in
the aggregate, to arise or exist.
8.14 Acquisitions of Assets. Acquire any real Property or any
material personal Property after the Effective Date unless the following
conditions precedent shall have been satisfied:
(a) No Default or Event of Default shall have occurred and
be continuing (or would result from the closing of the applicable
acquisition, and Agent shall have received adequate information
relating to the applicable acquisition to provide confirmation of
this condition.
(b) If the aggregate purchase price of the applicable
acquisition equals $40,000,000 or more, all of the acquisitions
comprising such acquisition shall require the prior written approval
of the Majority Lenders (Lenders agree that they shall respond to any
request for such approval within thirty (30) days after receipt of
such request in writing accompanied by adequate information relating
to all such acquisitions in order to evaluate their projected impact.
If any Lender shall fail to respond to such a request within such
thirty (30) day period, the applicable Lender shall be deemed to have
given its consent to all of such acquisitions).
(c) If Borrower or any other Obligor (other than Carrols
Holdings) shall have acquired any real Property or material personal
Property without having obtained any Advance Loans to finance the
purchase thereof, Borrower shall give written notice to Agent
concurrently with such acquisition. Such written notice shall
indicate the acquisition date of the applicable Property. At any time
after 225 days after such acquisition date but prior to the
expiration of the 270 Day Period commencing on such acquisition date,
the Majority Lenders may, by written notice to Borrower, require that
Borrower borrow Advance Loans in connection with such acquisition and
satisfy all conditions precedent to such Advance Loans prior to the
expiration of such 270 Day Period. The amount of the applicable
Advance Loan Tranche shall be (i) if the aggregate costs related to
such acquisition are less than $13,333,334, the lesser of 75% of such
aggregate costs and the Advance Loan Commitments remaining unused or
(ii) if the aggregate costs related to such acquisition are
$13,333,334 or more, (A) the lesser of $10,000,000 and the Advance
Loan Commitments remaining
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unused or (B) such greater amount as Borrower may specify (not to
exceed the lesser of 75% of such aggregate costs and the Advance Loan
Commitments remaining unused). The sites identified on Exhibit K
hereto under the heading "October 29, 1996 Purchase of Real Estate"
shall be subject to the provisions of Section 8.4(d) hereof and this
Section 8.14(c).
(d) Unless the Majority Lenders shall have given their prior
written consent, no Obligor other than Borrower and other than
Carrols Holdings (whose acquisitions are not restricted by this
Section) may acquire any real Property or any material personal
Property pursuant to this Section.
8.15 Prepayment of Heller Financial. Borrower may not prepay any
of the term loan Indebtedness currently owing to Heller Financial, Inc. or
refinance the revolving loan facility currently owing to Heller Financial,
Inc. unless all such Indebtedness is paid in full (in consideration of the
assignment of such Indebtedness to Agent and Lenders) and the Liens securing
such Indebtedness shall have been assigned to Agent.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then Agent shall, at the
direction of the Majority Lenders, do any or all of the following: (1) without
notice to Borrower or any other Person, declare the Revolving Loan Commitments
and Advance Loan Commitments terminated (whereupon the Revolving Loan
Commitments and Advance Loan Commitments shall be terminated) and/or
accelerate the Revolving Loan Termination Date and/or the Advance Loan
Termination Date to a date as early as the date of termination of the
Revolving Loan Commitments or the Advance Loan Commitments, as the case may
be; (2) terminate any Letter of Credit allowing for such termination, by
sending a notice of termination as provided therein and require Borrower to
provide Cover for outstanding Letters of Credit; (3) declare the principal
amount then outstanding of and the unpaid accrued interest on the Loans and
Reimbursement Obligations and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents to be forthwith
due and payable, whereupon such amounts shall be and become immediately due
and payable, without notice (including, without limitation, notice of
acceleration and notice of intent to accelerate), presentment, demand, protest
or other formalities of any kind, all of which are hereby expressly waived by
Borrower; provided that in the case of the occurrence of an Event of Default
with respect to any Obligor referred to in clause (f), (g) or (h) of this
Section 9.1, the Revolving Loan Commitments and Advance Loan Commitments shall
be automatically terminated and the principal amount then outstanding of and
unpaid accrued interest on the Loans and the Reimbursement Obligations and all
fees and all other amounts payable hereunder, under the Notes and under the
other Loan Documents shall be and become automatically and immediately due and
payable, without notice (including, without limitation, notice of acceleration
and notice of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by Borrower,
and (4) exercise any or all other rights and remedies available to Agent or
any of the Lenders under the Loan Documents, at law or in equity:
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(a) Payments - (i) any Obligor shall fail to make any
payment or required prepayment of any installment of principal on the
Loans or any Reimbursement Obligation payable under the Notes, this
Agreement or the other Loan Documents when due or (ii) any Obligor
fails to make any payment or required prepayment of interest with
respect to the Loans, any Reimbursement Obligation or any other fee
or amount under the Notes, this Agreement or the other Loan Documents
when due and such failure to pay continues unremedied for a period of
five days; or
(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Indebtedness
having an outstanding principal amount of at least $1,000,000 (other
than the Loans and Reimbursement Obligations) and such default shall
continue beyond any applicable period of grace; or any event or
condition shall occur which results in the acceleration of the
maturity of any such Indebtedness or enables (or, with the giving of
notice or lapse of time or both, would enable) the holder of any such
Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof and such event or condition shall not
be cured within any applicable period of grace; or
(c) Representations and Warranties - any representation or
warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished
or made by any Obligor to Agent or the Lenders in connection herewith
or therewith shall prove to have been incorrect, false or misleading
in any material respect as of the date thereof or as of the date as
of which the facts therein set forth were stated or certified or
deemed stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in the
due observance or performance of any of the covenants or agreements
contained in Section 7.3 hereof, (ii) default shall be made in the
due observance or performance of any of the covenants or agreements
contained in Sections 7.2, 7.4, 7.7 or 7.8 hereof and, in each case,
such default continues unremedied for a period of 20 days after (x)
notice thereof is given by Agent to Borrower or (y) such default
otherwise becomes known to any executive officer of Borrower,
whichever is earlier, or (iii) default is made in the due observance
or performance of any of the other covenants and agreements contained
in Section 7 hereof or any other affirmative covenant of any Obligor
contained in this Agreement or any other Loan Document and such
default continues unremedied for a period of 30 days after (x) notice
thereof is given by Agent to Borrower or (y) such default otherwise
becomes known to any executive officer of Borrower, whichever is
earlier; or
(e) Negative Covenants - default is made in the due
observance or performance by Borrower of any of the other covenants
or agreements contained in Section 8 of this Agreement or of any
other negative covenant of any Obligor contained in this Agreement or
any other Loan Document; or
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(f) Involuntary Bankruptcy or Receivership Proceedings - a
receiver, conservator, liquidator or trustee of any Obligor or of any
of its Property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction, and such decree
or order remains in effect for more than 60 days; or any Obligor is
adjudicated bankrupt or insolvent; or any of such Person's Property
is sequestered by court order and such order remains in effect for
more than 60 days; or a petition is filed against any Obligor under
any state or federal bankruptcy, reorganization, arrangement,
insolvency, readjustment or debt, dissolution, liquidation or
receivership law or any jurisdiction, whether now or hereafter in
effect, and is not dismissed within 60 days after such filing; or
(g) Voluntary Petitions or Consents - any Obligor commences
a voluntary case or other proceeding or order seeking liquidation,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or other relief with respect to itself or
its debts or other liabilities under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its Property, or
consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or fails generally to, or cannot,
pay its debts generally as they become due or takes any corporate
action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its debts
generally as they become due, or consents to the appointment of a
receiver, trustee, or liquidator of such Obligor or of all or any
substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment
or judgments for the payment of money exceeding, in the aggregate,
$1,000,000 (exclusive of amounts covered by insurance) is rendered by
any court or other governmental body against any Obligor and such
Obligor does not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof
within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document for any
reason ceases to create a valid and perfected Lien of the first
priority (subject to the Permitted Liens), required thereby on any of
the Collateral purported to be covered thereby and securing that
portion of the Obligations which is therein designated as being
secured, or any Obligor (or any other Person who may have granted or
purported to grant such Lien) will so state in writing or, after the
creation thereof as herein provided, Agent shall cease to have a
first priority Lien upon all of the equity interests of Borrower
securing all of the Revolving Loan Obligations (and such other
Obligations as may be required by this Agreement); or
(k) Concealment - any Obligor shall have concealed, removed,
or permitted to be concealed or removed, any part of its Property,
with intent to hinder, delay or defraud its
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creditors or any of them, or shall have made any transfer of its
Property to or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid; or
(l) Ownership Change or Encumbrance - any Person other than
Carrols Holdings shall own any equity interest in Borrower or any
Person other than Agent or Heller Financial, Inc. shall acquire any
Lien on any of the equity interests in Borrower; the executive
management (vice president or more senior) of Borrower, Atlantic
Restaurants, Inc., Madison Dearborn Capital Partners, L.P. and
Madison Dearborn Capital Partners II, L.P., and/or one or more of
their Affiliates, shall cease to own (and control the voting rights
in respect of), in the aggregate, at least 67% of the equity
interests in Carrols Holdings at all times prior to the closing of
any initial public offering by Borrower and 51% at all times
thereafter; or any Person other than Borrower shall own any equity
interest in any Subsidiary of Borrower (other than a Non-Recourse
Subsidiary or to the extent otherwise expressly permitted in writing
by the Majority Lenders) or any Person shall acquire any Lien on
Borrower's interest in and to the equity interest in any Subsidiary
of Borrower (other than a Non-Recourse Subsidiary or to the extent
otherwise expressly permitted in writing by the Majority Lenders); or
(m) Uninsured Loss - any Obligor shall be the subject of any
uninsured or unindemnified casualty losses exceeding, in the
aggregate, $500,000 in any fiscal year.
(n) Failure to Effect Refinancing - Borrower shall fail to
refinance the term and revolving loan Indebtedness currently owing to
Heller Financial, Inc. by May 15, 1997.
9.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lenders is hereby authorized at any
time and from time to time, without notice to any Obligor (any such notice
being expressly waived by Borrower and the other Obligors), to setoff and
apply any and all deposits (general or special, time or demand, provisional or
final (but excluding the funds held in accounts clearly designated as escrow
or trust accounts held by Borrower or any other Obligor for the benefit of
Persons which are not Affiliates of any Obligor, whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds
or Property at any time held, and other Indebtedness at any time owing by such
Lender to or for the credit or the account of Borrower or any other Obligor
against any and all of the Obligations irrespective of whether or not such
Lender or Agent will have made any demand under this Agreement, the Notes or
any other Loan Document. Should the right of any Lender to realize funds in
any manner set forth hereinabove be challenged and any application of such
funds be reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to Borrower pro rata in accordance with their Revolving
Loan Commitments. Each Lender agrees to promptly notify Borrower and Agent
after any such setoff and application, provided that the failure to give such
notice will not affect the validity of such setoff and application. The rights
of Agent and the Lenders under this Section are in addition to other rights
and remedies (including without limitation other rights of setoff) which Agent
or the Lenders may have. This Section is subject to the terms and provisions
of Sections 4.5 and 11.7 hereof.
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9.3 Collateral Account. Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by Agent or the
Majority Lenders (through Agent), pay to Agent an amount in immediately
available funds equal to the then aggregate amount available for drawings
under all Letters of Credit issued for the account of Borrower, which funds
shall be held by Agent as Cover.
9.4 Preservation of Security for Unmatured Reimbursement
Obligations. In the event that, following (i) the occurrence of an Event of
Default and the exercise of any rights available to Agent or any Lender under
the Loan Documents, and (ii) payment in full of the principal amount then
outstanding of and the accrued interest on the Loans and Reimbursement
Obligations and fees and all other amounts payable hereunder and under the
Notes and all other amounts secured by the Security Documents, any Letters of
Credit shall remain outstanding and undrawn upon, Agent shall be entitled to
hold (and Borrower and each other Obligor hereby grants and conveys to Agent a
security interest in and to) all cash or other Property ("Proceeds of
Remedies") realized or arising out of the exercise of any rights available
under the Loan Documents, at law or in equity, including, without limitation,
the proceeds of any foreclosure, as collateral for the payment of any amounts
due or to become due under or in respect of such Letters of Credit. Such
Proceeds of Remedies shall be held for the ratable benefit of the Lenders. The
rights, titles, benefits, privileges, duties and obligations of Agent with
respect thereto shall be governed by the terms and provisions of this
Agreement and, to the extent not inconsistent with this Agreement, the
applicable Security Documents. Agent may, but shall have no obligation to,
invest any such Proceeds of Remedies in such manner as Agent, in the exercise
of its sole discretion, deems appropriate. Such Proceeds of Remedies shall be
applied to Reimbursement Obligations arising in respect of any such Letters of
Credit and/or the payment of any Lender's obligations under any such Letter of
Credit when such Letter of Credit is drawn upon. Nothing in this Section shall
cause or permit an increase in the maximum amount of the Revolving Loan
Obligations permitted to be outstanding from time to time under this
Agreement.
9.5 Remedies Cumulative. No remedy, right or power conferred upon
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10. Agent.
10.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent hereunder, under
the Letters of Credit and under the other Loan Documents with such powers as
are specifically delegated to Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. Any Loan
Documents executed in favor of Agent shall be held by Agent for the ratable
benefit of the Lenders. Agent ("Agent" as used in this Section 10 shall
include reference to its Affiliates and its own and its Affiliates' respective
officers, shareholders, directors, employees and agents) (a) shall not have
any duties or
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responsibilities except those expressly set forth in this Agreement, the
Letters of Credit, and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender; (b) shall not be responsible to any Lender for any recitals,
statements, representations or warranties contained in this Agreement, the
Letters of Credit or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under,
this Agreement, the Letters of Credit or any other Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, execution,
filing, registration, collectibility, recording, perfection, existence or
sufficiency of this Agreement, the Letters of Credit, or any other Loan
Document or any other document referred to or provided for herein or therein
or any Property covered thereby or for any failure by any Obligor or any other
Person to perform any of its obligations hereunder or thereunder, and shall
not have any duty to inquire into or pass upon any of the foregoing matters;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under the Letters of Credit or any other Loan
Document except to the extent requested by the Majority Lenders; (d) shall not
be responsible for any mistake of law or fact or any action taken or omitted
to be taken by it hereunder or under the Letters or Credit or any other Loan
Document or any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, including, without
limitation, pursuant to its own negligence, except for its own gross
negligence or willful misconduct; (e) shall not be bound by or obliged to
recognize any agreement among or between Borrower and any Lender to which
Agent is not a party, regardless of whether Agent has knowledge of the
existence of any such agreement or the terms and provisions thereof; (f) shall
not be charged with notice or knowledge of any fact or information not herein
set out or provided to Agent in accordance with the terms of this Agreement or
any other Loan Document; (g) shall not be responsible for any delay, error,
omission or default of any mail, telegraph, cable or wireless agency or
operator, and (h) shall not be responsible for the acts or edicts of any
Governmental Authority. Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care. Without in any way
limiting any of the foregoing, each Lender acknowledges that Agent shall have
no greater responsibility in the operation of the Letters of Credit than is
specified in the Uniform Customs and Practice for Documentary Credits (1993
Revision, International Chamber of Commerce Publication No. 500). In any
foreclosure proceeding concerning any Collateral, each holder of an Obligation
if bidding for its own account or for its own account and the accounts of
other Lenders is prohibited from including in the amount of its bid an amount
to be applied as a credit against the Obligations held by it or the
Obligations held by the other Lenders; instead, such holder must bid in cash
only. However, in any such foreclosure proceeding, Agent may (but shall not be
obligated to) submit a bid for all Lenders (including itself) in the form of a
credit against the Obligations, and Agent or its designee may (but shall not
be obligated to) accept title to such collateral for and on behalf of all
Lenders.
10.2 Reliance. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (which may be counsel
for Borrower), independent accountants and other experts selected by Agent.
Agent shall not be required in any way to
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determine the identity or authority of any Person delivering or executing the
same. As to any matters not expressly provided for by this Agreement, the
Letters of Credit, or any other Loan Document, Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. Pursuant to instructions of the Majority Lenders, Agent shall have
the authority to execute releases of the Security Documents on behalf of the
Lenders without the joinder of any Lender. If any order, writ, judgment or
decree shall be made or entered by any court affecting the rights, duties and
obligations of Agent under this Agreement or any other Loan Document, then and
in any of such events Agent is authorized, in its sole discretion, to rely
upon and comply with such order, writ, judgment or decree which it is advised
by legal counsel of its own choosing is binding upon it under the terms of
this Agreement, the relevant Loan Document or otherwise; and if Agent complies
with any such order, writ, judgment or decree, then it shall not be liable to
any Lender or to any other Person by reason of such compliance even though
such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
10.3 Defaults. Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or
interest on Loans or Reimbursement Obligations) unless Agent has received
notice from a Lender or Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that Agent receives such a
Notice of Default, Agent shall give prompt notice thereof to the Lenders (and
shall give each Lender prompt notice of each such non-payment). Agent shall
(subject to Section 10.7 hereof) take such action with respect to such Notice
of Default as shall be directed by the Majority Lenders and within its rights
under the Loan Documents and at law or in equity, provided that, unless and
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, permitted
hereby with respect to such Notice of Default as it shall deem advisable in
the best interests of the Lenders and within its rights under the Loan
Documents, at law or in equity.
10.4 Material Written Notices. In the event that Agent receives
any written notice of a material nature from the Borrower or any Obligor under
the Loan Documents, Agent shall promptly inform each of the Lenders thereof.
10.5 Rights as a Lender. With respect to its Revolving Loan
Commitments and Advance Loan Commitments and the Loans made and Letter of
Credit Liabilities, TCB in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting in its agency capacity, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include Agent in its
individual capacity. Agent may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any kind
of banking, trust, letter of credit, agency or other business with Borrower
(and any of its Affiliates) as if it were not acting as Agent, and Agent may
accept fees and other consideration from Borrower (in addition to the fees
heretofore agreed to between Borrower
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and Agent) for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
10.6 Indemnification. The Lenders agree to indemnify Agent (to the
extent not reimbursed under Section 2.2(c), Section 11.3 or Section 11.4
hereof, but without limiting the obligations of Borrower under said Sections
2.2(c), 11.3 and 11.4), ratably in accordance with the sum of the Lenders'
respective Revolving Loan Commitments, Advance Loan Commitments and Advance
Loans, for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY INDEMNIFIED PARTIES, which may be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of this
Agreement, the Letters of Credit or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which Borrower is obligated to pay under Sections 2.2(c), 11.3 and
11.4 hereof, interest, penalties, attorneys' fees and amounts paid in
settlement, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified. The
obligations of the Lenders under this Section 10.6 shall survive the
termination of this Agreement and the repayment of the Obligations.
10.7 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has received current financial information with respect to Borrower
and each other Obligor that it has, independently and without reliance on
Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis of Borrower and each
other Obligor and decision to enter into this Agreement and that it will,
independently and without reliance upon Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any of the other Loan Documents. Agent shall not be
required to keep itself informed as to the performance or observance by any
Obligor of this Agreement, the Letters of Credit or any of the other Loan
Documents or any other document referred to or provided for herein or therein
or to inspect the properties or books of any Obligor. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by Agent hereunder, under the Letters of Credit or the other
Loan Documents, Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of any Obligor (or any of their affiliates) which may
come into the possession of Agent.
10.8 Failure to Act. Except for action expressly required of Agent
hereunder, under the Letters of Credit or under the other Loan Documents,
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
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satisfaction by the Lenders of their indemnification obligations under Section
10.6 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign at any
time by giving notice thereof to the Lenders and Borrower, and Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that Agent shall continue as Agent until such time as any successor shall have
accepted appointment as Agent hereunder. Upon any such resignation or removal,
(i) the Majority Lenders without the consent of Borrower shall have the right
to appoint a successor Agent so long as such successor Agent is also a Lender
at the time of such appointment and (ii) the Majority Lenders shall have the
right to appoint a successor Agent that is not a Lender at the time of such
appointment so long as Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent. Any successor Agent shall be a bank
which has an office in the United States and a combined capital and surplus of
at least $250,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder and under any other Loan Documents. Such successor Agent
shall promptly specify by notice to Borrower its Principal Office referred to
in Section 3.1 and Section 4 hereof. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 10 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
Agent. The relationship between the Lenders, on the one hand, and Agent, on
the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Loan Documents shall be construed to
constitute Agent as trustee or other fiduciary for any Lender or to impose on
Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.
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11. Miscellaneous
11.1 Waiver. No waiver of any Default or Event of Default shall be
a waiver of any other Default or Event of Default. No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided in the Loan Documents are cumulative and not exclusive of
any remedies provided by law or in equity.
11.2 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy (confirmed by mail), cable or other writing and telexed, telecopied,
telegraphed, cabled, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof
(or provided for in an Assignment and Acceptance); or, as to any party hereto,
at such other address as shall be designated by such party in a notice (given
in accordance with this Section) (i) as to Borrower, to Agent, (ii) as to
Agent, to Borrower and to each Lender, and (iii) as to any Lender, to Borrower
and Agent. Except as otherwise provided in this Agreement, all such notices or
communications shall be deemed to have been duly given when (i) transmitted by
telex or telecopier or delivered to the telegraph or cable office, (ii)
personally delivered (iii) one Business Day after deposit with an overnight
mail or delivery service, postage prepaid or (iv) three Business Days' after
deposit in a receptacle maintained by the United States Postal Service,
postage prepaid, registered or certified mail, return receipt requested, in
each case given or addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Letter of Credit ever issued, Borrower shall pay or reimburse within 10 days
after written demand (a) Agent for paying the reasonable fees and expenses of
legal counsel to Agent, together with the reasonable fees and expenses of each
local counsel to Agent, in connection with the preparation, negotiation,
execution and delivery of this Agreement (including the exhibits and schedules
hereto), the Security Documents and the other Loan Documents and the making of
the Loans and the issuance of Letters of Credit hereunder, and any
modification, supplement or waiver of any of the terms of this Agreement, the
Letters of Credit or any other Loan Document; (b) Agent for any lien search
fees, collateral audit fees, appraisal fees, survey fees, environmental study
fees, and title insurance costs and premiums; (c) Agent for reasonable
out-of-pocket expenses incurred in connection with the preparation,
documentation, administration and syndication (with reimbursable syndication
expenses not to exceed $10,000) of the Loans or any of the Loan Documents
(including, without limitation, the advertising, marketing, printing,
publicity, duplicating, mailing and similar expenses) of the Loans and Letter
of Credit Liabilities; (d) Agent for paying all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, any Letter of Credit or any
other Loan Document or any other document referred to herein or therein; (e)
Agent for paying all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any security interest
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contemplated by this Agreement, the Title Insurance Policies, any Security
Document or any document referred to herein or therein, and (f) following the
occurrence and during the continuation of an Event of Default, any Lender or
Agent for paying all amounts reasonably expended, advanced or incurred by such
Lender or Agent to satisfy any obligation of any Obligor under this Agreement or
any other Loan Document, to protect the Collateral, to collect the Obligations
or to enforce, protect, preserve or defend the rights of the Lenders or Agent
under this Agreement or any other Loan Document, including, without limitation,
fees and expenses incurred in connection with such Lender's or Agent's
participation as a member of a creditor's committee in a case commenced under
the Bankruptcy Code or other similar law, fees and expenses incurred in
connection with lifting the automatic stay prescribed in Section 362 of the
Bankruptcy Code and fees and expenses incurred in connection with any action
pursuant to Section 1129 of the Bankruptcy Code and all other customary
out-of-pocket expenses incurred by such Lender or Agent in connection with such
matters, together with interest thereon at the Past Due Rate on each such amount
until the date of reimbursement to such Lender or Agent.
11.4 Indemnification. Borrower shall indemnify each of Agent, the
Lenders, and each affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become
subject, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF
ANY INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims or
damages arise out of or result from any (i) actual or proposed use by Borrower
of the proceeds of any extension of credit (whether a Loan or a Letter of
Credit) by any Lender hereunder; (ii) breach by any Obligor of this Agreement
or any other Loan Document; (iii) violation by any Obligor of any Legal
Requirement; (iv) investigation, litigation or other proceeding relating to
any of the foregoing, and Borrower shall reimburse Agent, each Lender, and
each Affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any reasonable expenses (including reasonable legal
fees) incurred in connection with any such investigation or proceeding, or (v)
taxes (excluding income taxes and franchise taxes) payable or ruled payable by
any Governmental Authority in respect of the Obligations or any Loan Document,
together with interest and penalties, if any; provided, however, that Borrower
shall not have any obligations pursuant to this Section with respect to any
losses, liabilities, claims, damages or expenses incurred by the Person
seeking indemnification by reason of the gross negligence or willful
misconduct of that Person or with respect to any disputes between or among any
and all of Agent, Lenders and Issuers. Nothing in this Section is intended to
limit the obligations of Borrower under any other provision of this Agreement.
Agent and each Lender, respectively, shall indemnify Borrower and hold
Borrower harmless from and against the gross negligence or willful misconduct
of Agent or such Lender, as the case may be.
11.5 Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any event be
effective against Borrower unless the same shall be agreed or consented to in
writing by Borrower. No amendment, modification or waiver of any provision of
this Agreement, the Notes or any other Loan Document, nor any consent to any
departure by Borrower therefrom, shall in any event be effective against the
Lenders unless the same
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shall be agreed or consented to in writing by the Majority Lenders, and each
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, that no amendment,
modification, waiver or consent shall, unless in writing and signed by each
Lender affected thereby, do any of the following: (a) increase any Revolving
Loan Commitment or Advance Loan Commitment of any of the Lenders (or reinstate
any termination or reduction of the Revolving Loan Commitments or Advance Loan
Commitments) or subject any of the Lenders to any additional obligations; (b)
reduce the principal of, or interest on, any Loan, Reimbursement Obligation or
fee hereunder; (c) postpone or extend the Revolving Loan Maturity Date, the
Advance Loan Maturity Date, the Revolving Loan Termination Date, the Advance
Loan Termination Date, the Revolving Loan Availability Period, the Advance
Loan Availability Period or any scheduled date fixed for any payment of
principal of, or interest on, any Loan, Reimbursement Obligation, fee or other
sum to be paid hereunder or waive any Event of Default described in Section
9.1(a) hereof; (d) change the percentage of any of the Revolving Loan
Commitments or Advance Loan Commitments or of the aggregate unpaid principal
amount of any of the Loans and Letter of Credit Liabilities, or the percentage
of Lenders, which shall be required for the Lenders or any of them to take any
action under this Agreement; (e) change any provision contained in Sections
2.2(c), 3.2(b)(2), 7.10, 11.3 or 11.4 hereof or this Section 11.5; (f) release
any Person from liability under a Guaranty or release all or substantially all
of the security for the Obligations or release Collateral (exclusive of
Collateral with respect to which Agent is obligated to provide a release
pursuant to this Agreement or any of the other Loan Documents or by law) in
any one (1) calendar year ascribed an aggregate value on the most recent
financial statements of Borrower delivered to Agent in excess of $1,000,000,
or (g) modify the provisions of Sections 4.1(b) or 4.2 hereof regarding pro
rata application of amounts after an Event of Default shall have occurred and
be continuing. Notwithstanding anything in this Section 11.5 to the contrary,
no amendment, modification, waiver or consent shall be made with respect to
Section 10 without the consent of Agent to the extent it affects Agent, as
Agent.
11.6 Successors and Assigns.
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(a) This Agreement shall be binding upon and inure to the benefit
of Borrower, Agent and the Lenders and their respective successors and
assigns; provided, however, that Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of all
of the Lenders, and any such assignment or transfer without such consent shall
be null and void. Each Lender may sell participations to any Person in all or
part of any Loan, or all or part of its Notes, Revolving Loan Commitments,
Advance Loan Commitments or interests in Letters of Credit, in which event,
without limiting the foregoing, the provisions of the Loan Documents shall
inure to the benefit of each purchaser of a participation; provided, however,
the pro rata treatment of payments, as described in Section 4.2 hereof, shall
be determined as if such Lender had not sold such participation. Any Lender
that sells one or more participations to any Person shall not be relieved by
virtue of such participation from any of its obligations to Borrower under
this Agreement relating to the Loans. In the event any Lender shall sell any
participation, such Lender shall retain the sole right and responsibility to
enforce the obligations of Borrower relating to the Loans, including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement other than amendments, modifications or waivers
with respect to (i) any fees payable hereunder to the Lenders, (ii) the amount
of principal or the rate of interest payable on, or the dates fixed for the
scheduled repayment of principal of, the Loans and (iii) the release of the
Liens on all or substantially all of the Collateral.
(b) Each Lender may assign to one or more Lenders or any other
Person all or a portion of its interests, rights and obligations under this
Agreement; provided, however, that (i) the aggregate amount of the Revolving
Loan Commitments, the Advance Loan Commitments and the Advance Loans of the
assigning Lender subject to each such assignment shall in no event be less
than $5,000,000; (ii) other than in the case of an assignment to another
Lender (that is, at the time of the assignment, a party hereto) or to an
Affiliate of such Lender or to a Federal Reserve Bank, Agent and, so long as
no Event of Default shall have occurred and be continuing, Borrower must each
give its prior written consent, which consents shall not be unreasonably
withheld, and (iii) the parties to each such assignment shall execute and
deliver to Agent, for its acceptance an Assignment and Acceptance in the form
of Exhibit F hereto (each an "Assignment and Acceptance") with blanks
appropriately completed, together with any Note or Notes subject to such
assignment and a processing and recording fee of $3,000 paid by the assignee
(for which Borrower will have no liability). Upon such execution, delivery and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (B) the Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, 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's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto except in respect of provisions of this Agreement which survive
payment of the Obligations and termination of the Commitments). Notwithstanding
anything contained in this Agreement to the contrary, any Lender may at any
time assign all or any portion of its rights under this Agreement and the
Notes issued to it as collateral to a Federal Reserve Bank; provided that no
such assignment shall release such Lender from any of its obligations
hereunder.
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(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor 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 of the other Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant thereto; (ii) such Lender
assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrower or the performance or
observance by Borrower of any of its obligations under this Agreement or any
of the other Loan Documents or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to
in Section 6.2 hereof 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
without reliance upon Agent, such Lender assignor or any other Lender 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 and the other Loan Documents; (v) such assignee appoints
and authorizes Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all obligations that by the terms of
this Agreement and the other Loan Documents are required to be performed by it
as a Lender.
(d) The entries in the records of Agent as to each Assignment and
Acceptance delivered to it and the names and addresses of the Lenders and the
Revolving Loan Commitments and Advance Loan Commitments of, and principal
amount of the Loans owing to, each Lender from time to time shall be
conclusive, in the absence of manifest error, and Borrower, Agent and the
Lenders may treat each Person the name of which is recorded in the books and
records of Agent as a Lender hereunder for all purposes of this Agreement and
the other Loan Documents.
(e) Upon Agent's receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee thereunder, together with any Note or
Notes subject to such assignment and the written consent to such assignment
(to the extent consent is required), Agent shall, if such Assignment and
Acceptance has been completed with blanks appropriately filled, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein
in its records and (iii) give prompt notice thereof to Borrower. Within five
Business Days after receipt of notice, Borrower, at its own expense, shall
execute and deliver to Agent in exchange for the surrendered Notes new Notes
to the order of such assignee in an amount equal to the Revolving Loan
Commitments and the Advance Loans (or any of them) assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained
Revolving Loan Commitments and Advance Loans (or any of
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them) hereunder, new Notes to the order of the assigning Lender in an amount
equal to the Revolving Loan Commitment and the Advance Loans (or any of them)
retained by it hereunder. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the respective Note. Thereafter,
such surrendered Notes shall be marked renewed and substituted and the
originals thereof delivered to Borrower (with copies, certified by Borrower as
true, correct and complete, to be retained by Agent).
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Borrower furnished to such Lender by
or on behalf of Borrower.
11.7 Limitation of Interest. Borrower and the Lenders intend to
strictly comply with all applicable federal and New York laws, including
applicable usury laws (or the usury laws of any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of
New York). Accordingly, the provisions of this Section 11.7 shall govern and
control over every other provision of this Agreement or any other Loan
Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other
than the use, forbearance or detention of money and not as interest, and (b)
all interest at any time contracted for, reserved, charged or received shall
be amortized, prorated, allocated and spread, in equal parts during the full
term of the Obligations. In no event shall Borrower or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve,
receive or retain, (a) any interest in excess of the maximum amount of
nonusurious interest permitted under the laws of the State of New York or the
applicable laws (if any) of the United States or of any other jurisdiction, or
(b) total interest in excess of the amount which such Lender could lawfully
have contracted for, reserved, received, retained or charged had the interest
been calculated for the full term of the Obligations at the Ceiling Rate. The
daily interest rates to be used in calculating interest at the Ceiling Rate
shall be determined by dividing the applicable Ceiling Rate per annum by the
number of days in the calendar year for which such calculation is being made.
None of the terms and provisions contained in this Agreement or in any other
Loan Document (including, without limitation, Section 9.1 hereof) which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 11.7, or be construed to create a contract to pay
for the use, forbearance or detention of money at an interest rate in excess
of the Ceiling Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or
by reason of any required or permitted prepayment, and if for that (or any
other) reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Ceiling Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
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acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of Borrower's obligations
to such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
11.8 Survival. The obligations of Borrower under Sections 2.2(c),
2.2(d), 7.10, 11.3 and 11.4 hereof and all other obligations of Borrower in
any other Loan Document (to the extent stated therein), the obligations of
each Issuer under the last sentence of Section 2.2(b)(iii) and the obligations
of the Lenders under Section 10.5 and 11.7 hereof, shall, notwithstanding
anything herein to the contrary, survive the repayment of the Loans and
Reimbursement Obligations and the termination of the Revolving Loan
Commitments, the Advance Loan Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF NEW YORK AND THE UNITED STATES OF AMERICA
FROM TIME TO TIME IN EFFECT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of any Loan Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions of such Loan
Document shall not be affected or impaired thereby.
11.13 Tax Forms. Each Lender which is organized under the laws of
a jurisdiction outside the United States shall, on the day of the initial
borrowing from each such Lender hereunder and from time to time thereafter if
requested by Borrower or Agent, provide Agent and Borrower with the forms
prescribed by the Internal Revenue Service of the United States certifying as
to such Lender's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to such
Lender hereunder or other documents satisfactory to such Lender, Borrower and
Agent indicating that all payments to be made to such Lender hereunder are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an
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applicable tax treaty. Unless Borrower and Agent shall have received such
forms or such documents indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, Borrower or Agent shall withhold taxes from such
payments at the applicable statutory rate.
11.14 Conflicts Between This Agreement and the Other Loan Documents.
In the event of any conflict between the terms of this Agreement and the terms
of any of the other Loan Documents, the terms of this Agreement shall control.
11.15 Jury Waiver. BORROWER, AGENT AND LENDERS EACH WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
11.16 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 3.3(c) or 7.10 notwithstanding:
(1) Borrower shall not be required to pay to any Lender
reimbursement with regard to any costs or expenses described in such
Sections, unless such Lender notifies Borrower of such costs or
expenses within 90 days after the date paid or incurred;
(2) none of the Lenders shall be permitted to pass through
to Borrower charges and costs under such Sections on a discriminatory
basis (i.e., which are not also passed through by such Lender to
other customers of such Lender similarly situated where such customer
is subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to Borrower any
material charge or cost under such Sections or elects to terminate
the availability of LIBOR Borrowings for any material period of time,
Borrower may, within 60 days after the date of such event and so long
as no Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination Borrower shall (i) if Agent and
each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender
through such date of termination or (ii) have arranged for another
financial institution approved by Agent (such approval not to be
unreasonably withheld) as of such date, to become a substitute Lender
for all purposes under this Agreement in the manner provided in
Section 11.6; provided further that, prior to substitution for any
Lender, Borrower shall have given written notice to Agent of such
intention and the Lenders shall have the option, but no obligation,
for a period of 60 days after receipt of such notice, to increase
their Revolving Loan Commitments and Advance Loan Commitments in
order to replace the affected Lender in lieu of such substitution.
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11.17 Amendment and Restatement; Renewal Notes. This Agreement
amends and restates in its entirety that certain Loan Agreement dated as of
March 27, 1997 executed by and among Borrower, Texas Commerce Bank National
Association, as Agent, and certain financial institutions therein set forth.
The Revolving Notes have been given in renewal, extension and modification of
the revolving credit facility previously provided to Borrower by Heller
Financial, Inc., the Advance Loan Notes evidencing the $5,000,000 Advance Loan
Tranche made concurrently herewith have been given in renewal, extension and
modification of a term loan previously made to Borrower by Heller Financial,
Inc. and the Advance Loan Notes evidencing the $7,700,000 Advance Loan Tranche
made concurrently herewith have been given in renewal, extension and
modification of a term loan previously made to Borrower by Texas Commerce Bank
National Association.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the Effective Date.
CARROLS CORPORATION,
a Delaware corporation
By: /s/ Joseph A. Zirkman
---------------------------------
Name: Joseph A. Zirkman
-------------------------------
Title: Vice President & Secretary
------------------------------
Address for Notices:
968 James Street
Syracuse, New York 13203
Attention: Alan Vituli
Telecopy No.: (315) 425-8874
75
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent and as a Lender
By: /s/ Michael J. Costello
-----------------------------------
Michael J. Costello, Vice President
Address for Notices:
Revolving Loan Commitment: 712 Main Street
Houston, Texas 77002
$4,440,789.48 Attention: Manager, Franchise and Trademark
Finance Division
Telecopy No.: (713) 216-6710
Advance Loan Commitment:
$22,559,210.53
76
HELLER FINANCIAL, INC.,
as Documentation Agent and as a Lender
By: /s/ K. Craig Gallehugh
---------------------------------
Name: K. Craig Gallehugh
-------------------------------
Title: Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 500 W. Monroe Street
Chicago, Illinois 60661
$4,111,842.11 Attention: Portfolio Manager
Telecopy No.: (312) 441-7367
Advance Loan Commitment:
$20,888,157.89
77
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Co-Agent and as a Lender
By: /s/ Jorge Gonzalez
---------------------------------
Name: Jorge Gonzalez
-------------------------------
Title: Senior Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 301 South College St.
Floor DC-5
$4,111,842.11 Charlotte, North Carolina 28288-0737
Attention: Bragg Comer
Telecopy No.: (704) 374-3300
Advance Loan Commitment:
$20,888,157.89
78
SUNTRUST BANK, ATLANTA
By: /s/ Kristina L. Anderson
---------------------------------
Name: Kristina L. Anderson
-------------------------------
Title: Vice President
------------------------------
By: /s/ Candace J. Cole
---------------------------------
Name: Candace J. Cole
-------------------------------
Title: Banking Officer
------------------------------
Address for Notices:
Revolving Loan Commitment: 25 Park Place, N.E, Mail Code 124
Atlanta, Georgia 30303
$3,289,473.68 Attention: Ms. Candace Cole
Telecopy No.: (404) 588-8505
Advance Loan Commitment:
$16,710,526.32
79
THE NORTHERN TRUST COMPANY
By: /s/ Arthur J. Fogel
---------------------------------
Name: Arthur J. Fogel
-------------------------------
Title: Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 50 S. LaSalle Street B-2
Chicago, Illinois 60675
$2,467,105.26 Attention: Art Fogel
Telecopy No.: (312) 444-7028
Advance Loan Commitment:
$12,532,894.74
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COMERICA BANK
By: /s/ Chris Georvassilis
---------------------------------
Name: Chris Georvassilis
-------------------------------
Title: Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 500 Woodward Ave., 9th Fl., MS 3281
Detroit, Michigan 48226
$2,467,105.26 Attention: Chris Georvassilis
Telecopy No.: (313) 222-3330
Advance Loan Commitment:
$12,532,894.74
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BANK OF SCOTLAND
By: /s/ Annie Chin Tat
---------------------------------
Name: Annie Chin Tat
-------------------------------
Title: Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 565 Fifth Avenue, 5th Floor
New York, New York 10017
$2,467,105.26 Attention: Ms. Catherine Oniffrey
Advance Loan Commitment: with a copy to:
$12,532,894.74 Ms. Janna Blanter
1200 Smith Street
1750 Citicorp Center
Houston, Texas 77002
Telecopy No.: (713) 651-9714
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Tom Colwell
---------------------------------
Name: Tom Colwell
-------------------------------
Title: Vice President
------------------------------
Address for Notices:
Revolving Loan Commitment: 345 Park Ave., 29th Floor
New York, New York 10154
$1,644,736.84 Attention: Tom Colwell
Telecopy No.: (212) 409-3737
Advance Loan Commitment:
$8,355,263.16
83