LOAN AGREEMENT
($50,000,000 TERM LOAN FACILITY
AND
$100,000,000 REVOLVING LOAN FACILITY)
dated as of February 12, 1999
AMONG
CARROLS CORPORATION,
as Borrower,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent and as a Lender,
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Co-Agent and as a Lender,
NATIONSBANK, N.A.,
as Co-Agent and as a Lender,
SUNTRUST BANK, ATLANTA,
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 ............................................. 24
2. Commitments and Loans ............................................... 24
2.1 Loans ..................................................... 24
2.2 Letters of Credit ......................................... 24
2.3 Terminations or Reductions of Commitments ................. 28
2.4 Commitment Fees ........................................... 28
2.5 Several Obligations ....................................... 29
2.6 Notes ..................................................... 29
2.7 Use of Proceeds ........................................... 29
3. Borrowings, Payments, Prepayments and Interest Options .............. 30
3.1 Borrowings ................................................ 30
3.2 Prepayments ............................................... 30
3.3 Interest Options .......................................... 32
4. Payments: Pro Rata Treatment: Computations. Etc ..................... 37
4.1 Payments .................................................. 37
4.2 Pro Rata Treatment ........................................ 38
4.3 Certain Actions, Notices, Etc. ............................ 39
4.4 Non-Receipt of Funds by Agent ............................. 40
4.5 Sharing of Payments, Etc. ................................. 40
5. Conditions Precedent ................................................ 41
5.1 Initial Loans and Letters of Credit ....................... 41
5.2 All Loans and Letters of Credit ........................... 43
6. Representations and Warranties ...................................... 43
6.1 Organization .............................................. 43
6.2 Financial Statements ...................................... 44
6.3 Enforceable Obligations; Authorization .................... 44
6.4 Other Debt ................................................ 44
6.5 Litigation ................................................ 45
6.6 Title ..................................................... 45
6.7 Taxes ..................................................... 45
6.8 Regulations T, U and X .................................... 45
6.9 Subsidiaries .............................................. 45
6.10 No Untrue or Misleading Statements ........................ 45
6.11 ERISA ..................................................... 45
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; Property of
Excluded Subsidiaries ................................. 47
6.19 Collateral Covered ........................................ 47
7. Affirmative Covenants ............................................... 47
7.1 Taxes, Existence, Regulations, Property, Etc. ............. 47
7.2 Financial Statements and Information ...................... 48
7.3 Financial Tests ........................................... 48
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 Year 2000 ................................................. 52
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; Excluded Subsidiaries ...... 56
8.13 Unfunded Liabilities ...................................... 56
8.14 Acquisitions of Assets .................................... 56
ii
8.15 Subordinated Indebtedness ................................ 57
9. Defaults ........................................................... 57
9.1 Events of Default ........................................ 57
9.2 Right of Setoff .......................................... 60
9.3 Collateral Account ....................................... 60
9.4 Preservation of Security for Unmatured
Reimbursement Obligations ............................. 60
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 .......................................... 63
10.7 Non-Reliance on Agent and Other Lenders .................. 64
10.8 Failure to Act ........................................... 64
10.9 Resignation or Removal of Agent .......................... 64
10.10 No Partnership ........................................... 65
10.11 Co-Agents ................................................ 65
11. Miscellaneous ....................................................... 65
11.1 Waiver ................................................... 65
11.2 Notices .................................................. 65
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 ................................... 70
11.8 Survival ................................................. 71
11.9 Captions ................................................. 71
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 ........................................ 72
11.15 Jury Waiver .............................................. 73
11.16 Limitation on Charges: Substitute Lenders;
Non-Discrimination .................................... 73
11.17 Amendment and Restatement; Renewal Notes ................. 73
iii
EXHIBITS
A -- Request for Extension of Credit
B -- Rate Designation Notice
C -- Term Note
D -- Revolving Note
E -- Assignment and Acceptance
F -- Compliance Certificate
iv
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of February 12, 1999 (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"), MANUFACTURERS AND
TRADERS TRUST COMPANY, as Co-Agent, NATIONSBANK, N.A., as Co-Agent, SUNTRUST
BANK, ATLANTA, as Co-Agent, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
("Chase Texas"), 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.
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.
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 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
2
(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 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 of any of
the foregoing.
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.
3
Ceiling Rate means, on any day, with respect to any Person, 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 1D establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly
rate ceiling" (as defined in ss. 303 of the Texas Finance Code) for that day.
Agent may from time to time, as to current and future balances, implement any
other ceiling under the Texas Finance Code or Chapter 1D by notice to Borrower,
if and to the extent permitted by the Texas Finance Code or Chapter ID. 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 1D means Chapter 1D of Title 79, Texas Rev. Civ. Stats. 1925, as
amended.
Co-Agent means Manufacturers and Traders Trust Company, NationsBank, N.A.
and SunTrust Bank, Atlanta, in their respective capacities as co-agents
hereunder.
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.
Commitment Fee Percentage means (i) on any day prior to April 1, 1999,
0.375% and (ii) on and after April 1, 1999, the applicable per annum percentage
set forth at the appropriate intersection in the table shown below, based on the
Total 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 Commitment Fee Percentage is increased as a result of the reported
Total 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
Commitment Fee Percentage is decreased as a result of the reported Total 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):
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Total Debt to Commitment
EBITDA Ratio Fee Percentage
------------ --------------
Greater than or equal to
3.50 0.375
Less than 3.50 0.250
Compliance Certificate shall have the meaning given to it in Section 7.2
hereof.
Contribution Agreement shall mean that certain Contribution Agreement dated
concurrently herewith by and among Borrower, Carrols Holdings and the current
Subsidiaries of Borrower, as the same may be amended, modified, supplemented and
restated--and joined in pursuant to a joinder agreement--from time to time.
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)
5
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.
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.
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, state and
foreign income tax expense.
Effective Date shall have the meaning ascribed to that term in the first
paragraph of this Agreement.
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.
6
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 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), federal, state and
foreign income taxes actually paid, Investments of the nature described in
clause (e) of the definition of "Permitted Investments" made by Borrower and its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) during such
period and unfinanced
7
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.
Excluded Assets means (i) leasehold estates with respect to which BKC is
the lessor, (ii) the real property interest in and to leasehold estates situated
in shopping malls, (iii) those leasehold estates in respect of which the Lease
Agreement requires consent of the lessor/landlord to a collateral assignment and
such lessor/landlord has refused to grant such consent notwithstanding the
commercially reasonable efforts by Borrower to obtain such consent, (iv) assets
owned by the Excluded Subsidiaries and (v) such other Property acquired after
the date hereof as the Majority Lenders may from time to time agree shall be
included in "Excluded Assets".
Excluded Subsidiaries means 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. Borrower may at any time cause any of the above listed
entities to no longer be characterized as an "Excluded Subsidiary" by satisfying
the conditions set forth in Section 8.9 hereof as if such entity were a newly
acquired Subsidiary.
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 all Property with respect to which Borrower or any
of its Subsidiaries owns fee simple title.
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, state
and foreign 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 actually paid by Borrower for such
12-month period.
8
Franchise Agreements means all of the franchise agreements to which
Borrower or any of its Subsidiaries is a party as franchisee, 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 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, (i) the Guaranties dated concurrently
herewith executed by Carrols Holdings and by each of the current Subsidiaries of
Borrower (other than Non-Recourse Subsidiaries) in favor of Agent, for the
benefit of Lenders, and (ii) 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".
9
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 or in escrow 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.
Interest Payment Dates means (a) for Base Rate Borrowings, March 31, 1999
and the last day of each March, June, September and December thereafter prior to
the Revolving Loan Maturity Date or the Term Loan Maturity Date, as the case may
be, and the Revolving Loan Maturity Date or the Term 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 Term 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 three (3)
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
10
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 a Term Loan shall ever extend beyond the Term 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.
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, any
document or paper evidencing, securing or otherwise relating to any Subordinated
Indebtedness, the Underlying Lease Agreements, the Purchase Agreements and the
Material Title Documents.
Lease Agreements means all of the lease agreements to which Borrower or any
of its Subsidiaries is a party as lessee or tenant, as any of the same may from
time to time be amended, modified, supplemented or restated. Except for the
Excluded Assets, 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,
11
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 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
12
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 Contribution
Agreement, 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 at any time while Loans are outstanding, Lenders having greater
than 66-2/3% of the aggregate amount of Term Loans outstanding plus Revolving
Loan Commitments outstanding; provided that if all Revolving Loan Commitments
have terminated, the Majority Lenders shall be Lenders having greater than
66-2/3% of the aggregate amount of all Loans outstanding.
Margin Percentage means (i) on any day prior to April 1, 1999, 0.5 0% with
respect to Base Rate Borrowings and 2.00% with respect to LIBOR Borrowings and
(ii) on and after April 1, 1999, the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the Total
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 Total
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 Total 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):
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Total Debt to LIBOR Borrowings Base Rate Borrowings
EBITDA Ratio Margin Percentage Margin Percentage
- ------------ ----------------- -----------------
Greater than or equal to
5.00 2.25 0.75
Greater than or equal to
4.00 but less than 5.00 2.00 0.50
Greater than or equal to
3.50 but less than 4.00 1.75 0.25
Greater than or equal to
3.00 but less than 3.50 1.50 0.00
Greater than or equal to
2.50 but less than 3.00 1.25 0.00
Less than 2.50 1.00 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 Revolving Loan Available Amount means, at any date, an amount equal
to the aggregate of the Revolving Loan Commitments.
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 Subsidiary of Borrower) 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.
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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 Guaranty, Security
Agreement or Mortgage.
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.
15
Permitted Dividends means dividends or distributions by a Subsidiary of
Borrower to Borrower or to another Subsidiary of Borrower which is an Obligor
and, so long as no Default shall have occurred and be continuing (or would
result from the payment of the applicable dividend), (a) dividends by Borrower
to Carrols Holdings for the sole purpose of funding stock repurchases described
in clause (d) of the definition of "Permitted Investments" set forth in this
Section 1.1 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 the lesser of (x) 50% of
such preceding fiscal year's Excess Cash Flow which may be distributed to
Carrols Holdings or (y) the maximum amount permitted to be distributed at such
time under the present terms of the documents evidencing the Subordinated
Indebtedness under those certain Senior Subordinated Notes due 2008 in the
aggregate principal amount of $170,000.000 issued by Borrower on or about
November 24, 1998 (without amendment except as agreed to in writing by the
Majority Lenders). Notwithstanding anything to the contrary set forth herein,
the aggregate of Permitted Dividends of the nature described in clause (b) of
this definition and Investments of the nature described in clause (e) of the
definition of "Permitted Investments" paid or made, as the case may be, by
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during any fiscal year may not exceed 50% of the preceding fiscal
year's Excess Cash Flow.
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) so long as no Default shall have occurred and be continuing (or would result
from the closing of the applicable repurchase), repurchases of stock of Carrols
Holdings (including rights, options or warrants to acquire such stock) from
employees of Carrols Holdings or any of its Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, in an aggregate amount not to exceed $1,000,000 in any fiscal year;
provided, however, that amounts not expended in any fiscal year may be expended
in succeeding fiscal years so long as no more than $3,000,000 is so expended in
any fiscal year; (e) 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 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, and (f) Investments by Borrower or any of
its Subsidiaries in Borrower or any of its Subsidiaries, including Investments
in Persons which after giving effect thereto will become a wholly-owned
Subsidiary of Borrower (subject to compliance with the other provisions of this
Agreement) so long as any Borrowed Money Indebtedness of any
16
Obligor to any other Obligor shall be subordinated to the Obligations in a
manner reasonably acceptable to Agent. Notwithstanding anything to the contrary
set forth herein, the aggregate of Permitted Dividends of the nature described
in clause (b) of the definition of "Permitted Dividends" and Investments of the
nature described in clause (e) of this definition paid or made, as the case may
be, by Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during any fiscal year may not exceed 50% of the preceding fiscal
year's Excess Cash Flow.
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(1) 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; (1) Liens in favor of unaffiliated third parties securing
purchase money or acquisition and/or development Indebtedness (or Indebtedness
incurred to refinance acquisition
17
and/or development costs of a restaurant so long as the proceeds of such
refinancing are included in the calculation of Excess Cash Flow for the
applicable period--in which event the Agent shall release the Liens of the
Mortgages covering such restaurant) permitted under Section 8.1(e) hereof
incurred after the Effective Date and covering assets of restaurants acquired or
developed by the Borrower or its Subsidiaries after the Effective Date,
provided, however, that (1) the Liens securing such Indebtedness may not cover
any Property other than the Property being acquired or developed and (2) such
Indebtedness may not exceed 100% of the fair market value of the property and
equipment acquired or developed at the time of acquisition or development; (m)
pre-existing Liens securing preexisting Borrowed Money Indebtedness permitted
under Section 8.1(f) hereof covering Property of Subsidiaries or businesses
acquired after the Effective Date (provided, however, that no such Liens were
created and no such Borrowed Money Indebtedness was incurred at the instigation
of Borrower in contemplation of the acquisition of such Subsidiary), and (n)
extensions, renewals and replacements of Liens referred to in clauses (a)
through (m) 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.
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.
Pollo Subsidiaries means Pollo Franchise, Inc., a Florida corporation, and
Pollo Operations, Inc., a Florida corporation.
Prime Rate means, on any day, the prime rate for that day as determined
from time to time by Chase Texas. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate or a favored rate, and Chase
Texas, Agent and each Lender disclaims any statement, representation or warranty
to the contrary. Chase Texas, 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.
18
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 or other 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.
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 B.
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
19
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.
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 (or if the Revolving Loan
Commitments have terminated, such Lender's outstanding Revolving Loans) and the
denominator of which is the aggregate of the Revolving Loan Commitments of all
Lenders (or if the Revolving Loan Commitments have terminated, the aggregate
amount of all Revolving Loans).
Revolving Loan Maturity Date means the maturity of the Revolving Notes,
December 31, 2003. Upon written request from Borrower at any time after July 31,
2003 but prior to September
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30, 2003, 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 D 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 Subsidiary of
Borrower or other applicable Person) in favor of Agent covering (i) all of the
issued and outstanding equity interests in and to Borrower and each Subsidiary
of Borrower (other than Excluded Subsidiaries and Non-Recourse Subsidiaries) and
(ii) all of the material real and personal Property (other than Excluded Assets)
of Borrower and its Subsidiaries (other than Non-Recourse Subsidiaries), as the
same may from time to time be amended, modified, restated or supplemented. The
term "Security Agreements" shall include the Trademark Security Agreements.
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 Debt to EBITDA Ratio means, as of any day, the ratio of (a) Debt
(other than Subordinated Indebtedness) 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 Property or business during
21
such 12-month period shall be included in EBITDA as if such acquisition occurred
on the first day of such period.
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.
Subordinated Indebtedness means all Indebtedness of Borrower and its
Subsidiaries which has been subordinated on terms and conditions satisfactory to
the Majority Lenders, in their sole discretion, to the Obligations, whether now
existing or hereafter incurred. Indebtedness shall not be considered as
"Subordinated Indebtedness" unless and until Agent shall have received copies of
the documentation evidencing or relating to such Indebtedness together with a
subordination agreement, in Proper Form, duly executed by the holder or holders
of such Indebtedness and evidencing the terms and conditions of subordination
required by the Majority Lenders. The term "Subordinated Indebtedness" shall
include Indebtedness under those certain Senior Subordinated Notes due 2008 in
the aggregate principal amount of $170,000,000 issued by Borrower on or about
November 24, 1998 and any Indebtedness issued in exchange therefor which is
governed by subordination provisions substantially identical to those governing
such Senior Subordinated Notes.
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).
Term Loan means a Loan made pursuant to Section 2.1(a) hereof
Term Loan Lender means each Lender with any outstanding Term Loans.
Term Loan Maturity Date means December 31, 2003.
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Term Notes means the Notes of Borrower evidencing the Term Loans, in the
form of Exhibit C hereto.
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 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.
Total 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 Property
or business during such 12-month period shall be included in EBITDA as if such
acquisition occurred on the first day of such period.
Trademark Security Agreements shall mean, collectively, (i) that certain
Trademark Security Agreement dated concurrently herewith executed by Borrower
and Agent and (ii) all additional trademark security agreements executed as
security for the Obligations and all related recordation form cover sheets and
any and all amendments, modifications, renewals, extensions and supplements
thereof or thereto from time to time.
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.
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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 and
5.2 hereof), to make Loans as follows:
(a) Term Loans. On February 12, 1999, each Term Loan Lender shall make a
loan to Borrower in the amount set forth opposite such Term Loan Lender's name
on the signature pages hereof under the caption "Term Loans".
(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 pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code,
that Chapter 346 (which relates to open-end line of credit revolving loan
accounts) shall not apply to this Agreement, the Notes or any Obligation and
that neither the Notes nor any Obligation shall be governed by Chapter 346 or
subject to its provisions in any manner whatsoever. 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) Chase Texas agrees to issue such
Letters of Credit. Upon the date
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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 Revolving Loan 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. Chase Texas 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:
(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 Revolving Loan 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
25
is made aftet 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 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
26
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 indenmifies 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) 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
27
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).
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.
(b) Optional. Borrower shall have the right to terminate or reduce the
unused portion of the Revolving 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 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 February 12, 1999 to
and including the Revolving Loan Termination Date at a rate per annum equal to
the Commitment Fee Percentage. 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) All past due fees payable under this Section shall bear interest at the
Past Due Rate.
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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 at any time
outstanding if as a result the total Revolving Loan Obligations to such Lender
shall exceed the lesser of (1) such Lender's Revolving Loan Commitment
Percentage of all Revolving Loan Obligations and (2) such Lender's Revolving
Loan Commitment Percentage of the Maximum Revolving Loan Available Amount and
(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.
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 D 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 Term Loan made
by each Lender shall be evidenced by a single Term Note of Borrower in
substantially the form of Exhibit C hereto payable to the order of such Lender
in a principal amount equal to the outstanding principal balance of the Term
Loan made by such Lender, and otherwise duly completed. The promissory notes
described in this Section are each, 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 Loans shall be used to refinance
existing Indebtedness of Borrower, to finance permitted acquisitions by Borrower
and its Subsidiaries and new store development by Borrower and its Subsidiaries,
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.
29
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.
(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 Term Loans shall be applied ratably (based on outstanding
principal balances) to all Term Notes and shall be applied to scheduled
principal installments ratably over the remaining payments.
(b) Mandatorv 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
30
such amount deposited with Agent shall be released by Agent to
Borrower; provided, however, that, in the event that within 365 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 Term 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 365th day. Such prepayment
shall be applied to the Term Notes 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 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, 1999), Borrower shall make a prepayment
on the Term Loans in an amount equal to (i) Excess Cash Flow for such
fiscal year times 50% less (ii) optional prepayments made on the Term 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 Term Notes (applied ratably (based on outstanding principal balances)
to all Term Notes and applied to scheduled principal installments ratably
over the remaining payments).
(c) Term Loan Amortization. The principal of the Term Notes shall be due
and payable in quarterly installments, each due on a Quarterly Date, beginning
on March 31, 1999, equal to the amount set forth in the following table opposite
the applicable payment (allocated among the Term Loan Lenders pro rata in
accordance with the unpaid principal balances of their respective Term Notes):
31
Payment Payment Amount
------- --------------
first through fourth $ 750,000
fifth through eighth $1,000,000
ninth through twelfth $1,250,000
thirteenth through sixteenth $1,500,000
seventeenth through nineteeth $1,750,000
On the Term Loan Maturity Date, the entire unpaid principal balance of each Term
Note and all accrued and unpaid interest on the unpaid principal balance of each
Term 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 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
32
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 Term 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.
(ii) No more than twelve (12) LIBOR Borrowings shall be in effect with
respect to the Loans 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 the Term Notes shall apply to
all of the Term Notes 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.
33
(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
34
of the applicable Eurodollar Rate), special deposit requirement or
similar 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 reasonably 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
35
(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 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.
36
(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 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 payment (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.
37
(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 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 Term Loans,
38
ratably from the Term Loan Lenders in accordance with the amounts set forth
opposite their signature lines hereto under the heading "Term Loans" 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
Loan Commitments; (c) each payment by Borrower of principal of or interest on
the Term 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 Term Loans or
Revolving Loans, as the case may be, held by the Lenders; (d) each payment by
Borrower of principal of or interest on the Term 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 Term Notes, regardless of any
attempted contrary designation by Borrower), and (e) 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 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 5
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
39
Optional prepayment of
Term Loan 5
Each such notice of termination or reduction shall specify the amount of the
applicable Revolving 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
40
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.
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.
41
(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 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 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
Obligations upon all of the issued and outstanding equity interests in and to
Borrower and each of its Subsidiaries, 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 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.
42
(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.
(m) 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 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.
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
43
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 1997 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 1998 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 (and disclosed to
Lenders in writing prior to the Effective Date).
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.
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.
44
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 T, 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 T, 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, the Excluded Subsidiaries and the Pollo
Subsidiaries.
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
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 in all material respects,
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
45
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. 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 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
46
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: Property of Excluded Subsidiaries. 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 The aggregate value (based on the greater of book or market
value) of the Property owned by the Excluded Subsidiaries is equal to or less
than $1,000,000 on the date hereof
6.19 Collateral Covered. As of the Effective Date, the Collateral covered
by the Security Documents constitutes substantially all material real and
personal Property (other than Excluded Assets) owned by the Borrower and its
Subsidiaries (other than Non-Recourse Subsidiaries).
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:
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
47
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, 1998, 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 annual statement prepared as of December
31, 1998, a compliance certificate ("Compliance Certificate") in the form of
Exhibit F 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.
7.3 Financial Tests. Borrower will have and maintain:
(a) Debt Service Coverage Ratio - a Debt Service Coverage Ratio of not
less than 1.25 to 1.00 at all times.
(b) Senior Debt to EBITDA Ratio - a Senior Debt to EBITDA Ratio of not
greater than (1) 3.50 to 1.00 at all times during the period commencing on
the date hereof through and including December 31, 1999; (2) 3.00 to 1.00
at all times during the period commencing on January 1,2000 through and
including December 31, 2000; (3) 2.50 to 1.00
48
at all times during the period commencing on January 1, 2001 through and
including December 31, 2001, and (4) 2.00 to 1.00 at all times thereafter.
(c) Total Debt to EBITDA Ratio - a Total Debt to EBITDA Ratio of not
greater than (1) 5.50 to 1.00 at all times during the period commencing on
the date hereof through and including December 31, 1999; (2) 5.25 to 1.00
at all times during the period commencing on January 1,2000 through and
including December 31, 2000; (3) 5.00 to 1.00 at all times during the
period commencing on January 1, 2001 through and including December 31,
2001, (4) 4.50 to 1.00 at all times during the period commencing on January
1, 2002 through and including December 31, 2002, and (5) 4.00 to 1.00 at
all times thereafter.
(d) 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 or any Lender
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 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
49
manner without thirty (30) days' prior written notice to Agent. Wherever
applicable, such insurance shall name Agent as loss payee and/or mortgagee
insured.
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 $2,500,000 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 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.
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 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
50
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 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
51
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 (I) 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, 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 (or additional BKC
Consents), 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.
7.13 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) each Obligors's computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which any Obligor's systems interface) and
the testing of all such systems and equipment will be completed in all material
respects by September 30, 1999. The cost to Obligors of such reprogramming and
testing and of reasonably foreseeable consequences of year 2000 to Obligors
(including, without limitation, reprogramming errors and failure of others'
systems or equipment) will not result in an Event of Default or a material
adverse effect on the business, condition (financial or otherwise), operations
or Properties of any Obligor. Except for such of the reprogramming referred to
in the
52
preceding sentence as may be necessary, the computer and management systems of
Obligors are and, with ordinary course upgrading and maintenance, will continue
for the term of this Agreement to be, sufficient to permit Obligors to conduct
their business without a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor.
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; (d) Subordinated
Indebtedness; (e) Borrowed Money Indebtedness incurred by Borrower for the
acquisition and/or development of restaurants acquired or developed by Borrower
or any of its Subsidiaries after the Effective Date and pre-existing
Indebtedness (excluding any Indebtedness incurred at the instigation of Borrower
in contemplation of the acquisition of such Subsidiary) of any Subsidiary or
business acquired after the Effective Date in an aggregate amount not to exceed,
at any one time outstanding, $20,000,000; (f) Borrowed Money Indebtedness of
Borrower or any of its Subsidiaries to Borrower or any of its Subsidiaries that
is a Guarantor so long as such Borrowed Money Indebtedness shall be subordinated
to the Obligations in a manner acceptable to Agent and the Majority Lenders, and
(g) 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 sale/leaseback transactions, sales of Property in the
ordinary course of business, sales to other Obligors and other sales
not exceeding, for any 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 or sales to other Obligors) must, within two hundred seventy
(270) days after the applicable sale, either (I) be used to make a
prepayment on all of the Term 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 Term
Loans) or (II) be applied to repayment of Revolving Loan Obligations
or applied to a portion of the closing costs in respect of an
acquisition permitted under the terms hereof or otherwise reinvested
in the business of Borrower and its Subsidiaries in a manner
acceptable to Agent;
(d) enter into any sale/leaseback transaction unless 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 securing the Obligations (or such portion thereof as the
Majority Lenders may require); 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
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prohibit any Obligor from selling obsolete equipment or from replacing
used equipment in the ordinary course of business.
8.5 Redemption. Dividends and Distributions. At any time: (a) make any
distributions of any Property or cash to the owner of any of the equity
interests in any Obligor other than Permitted Dividends or (b) redeem, retire or
otherwise acquire, directly or indirectly, any equity interest in any Obligor,
other than to the extent included in the definition of "Permitted Investments"
set forth in Section 1.1 hereof.
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 and other than the Pollo Subsidiaries) shall at all times be the direct
or indirect ownership and operation of restaurants under Burger King franchises.
The primary business of the Pollo Subsidiaries shall at all times be the direct
or indirect ownership, operation or franchise of restaurants. Borrower agrees
that at least 75% of the restaurants owned and operated by Borrower, directly or
indirectly through Subsidiaries, will at all times be 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 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 except that Borrower or any of its Subsidiaries
may form, create or acquire a wholly-owned Subsidiary so long as (a) immediately
thereafter and giving effect thereto, no event will occur and be continuing
which constitutes a Default; (b) such Subsidiary (and, where applicable,
Borrower) shall execute and deliver a Guaranty and such Security Documents as
the Agent may reasonably require to effectuate the provisions of this Agreement
regarding Collateral to be covered by the Security Documents, and (c) Agent is
given at least 30 days' prior notice of such formation, creation or acquisition.
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
55
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.
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 or any other Obligor 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; Excluded Subsidiaries. Borrower will
not permit (i) 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 or (ii) the aggregate
value (determined on the greater of book or market value) of the Property owned
by the Excluded Subsidiaries to exceed $1,000,000, in each case unless the
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) The Total Debt to EBITDA Ratio, after giving effect to the closing
of the applicable acquisition, would not exceed 5.00 to 1.00, and Agent
shall have received adequate information relating to the applicable
acquisition to provide confirmation of this condition.
(c) If the aggregate purchase price of the applicable acquisition
equals $50,000,000 or more, 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 such acquisition in order to evaluate its 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 such acquisition).
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8.15 Subordinated Indebtedness. Except as expressly permitted in writing by
the Majority Lenders, Borrower will not amend, modify or obtain or grant a
waiver of any provision of any document or instrument evidencing any
Subordinated Indebtedness or purchase, redeem, retire or otherwise acquire for
value, deposit any monies with any Person with respect to or make any payment or
prepayment of the principal of or any other amount owing in respect of, any
Subordinated Indebtedness.
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 terminated
(whereupon the Revolving Loan Commitments shall be terminated) and/or accelerate
the Revolving Loan Termination Date to a date as early as the date of
termination of the Revolving Loan Commitments; (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 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:
(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
57
(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 $2,500,000 (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
(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,
58
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, $2,500,000
(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 Agent shall cease to have a first priority Lien upon all of the
equity interests of Borrower and each of its Subsidiaries securing all of
the Obligations; 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 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 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,
59
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 or Carrols Holdings 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).
9.2 Right of Setoff. Upon the occurrence and during the continuance of any
Event of Default, each Lender 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
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
60
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
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
61
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 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
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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
the Loans made and Letter of Credit Liabilities, Chase Texas 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 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 and Term 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
63
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 and 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 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
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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.
10.11 Co-Agents. The Co-Agents, in their capacity as such, shall have no
rights, powers, duties, obligations or liabilities under this Agreement or any
of the other Loan Documents, but to the extent that for any reason any Person
makes a claim against a Co-Agent in its capacity as Co-Agent and not as a Lender
the indemnification provisions in Section 10.6 shall apply to such Co-Agent.
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
65
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 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 ss. 362 of the Bankruptcy Code and fees and expenses incurred
in connection with any action pursuant to ss. 1129 of the Bankruptcy Code and
all other customary out-
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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
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 of
any of the Lenders (or reinstate any termination or reduction of the Revolving
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 or other sum to be paid hereunder; (c) postpone or extend the Revolving
Loan Maturity Date, the Term Loan Maturity Date, the Revolving Loan Termination
Date, the Revolving 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
67
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 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), 7.10, 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 and no amendment, modification, waiver or consent shall be made
with respect to Section 10.11 without the consent of each Co-Agent.
11.6 Successors and Assigns.
(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 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 ~ 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 and the Term Loans of the assigning Lender subject to each such
assignment shall not (unless the Agent shall otherwise consent) be less than the
lesser of $5,000,000 or the assignor Lender's entire remaining interest
hereunder; (ii) other than in the case
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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 E 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, without the consent
of Agent or Borrower, at any time assign all or any portion of its rights under
this Agreement and the Notes issued to it as collateral (i) to a Federal Reserve
Bank or (ii) if such Lender is a "fund" which purchase loans in the ordinary
course of its business, to secure such Lender's indebtedness; provided that no
such assignment shall release such Lender from any of its obligations hereunder.
(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
69
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 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 Term 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 Term Loans
(or any of them) hereunder, new Notes to the order of the assigning Lender in an
amount equal to the Revolving Loan Commitment and the Term 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
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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
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 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.
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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 applicable tax treaty or, if such Lender is not a "bank" within the meaning
of Section 881(a)(3)(A) of the Code and intends to claim exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest," a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Lender delivers a Form W-8, a
certificate representing that such Lender is not a "bank" for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Lender
claiming complete exemption from, or a reduced rate of; United States
withholding tax on payments of interest by the Borrower under this Agreement and
the other Loan Documents. 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.
72
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 in order to
replace the affected Lender in lieu of such substitution.
11.17 Amendment and Restatement; Renewal Notes. This Agreement amends and
restates in its entirety that certain Loan Agreement dated as of May 12, 1997
executed by and among Borrower, Chase Bank of Texas, National Association
(formerly known as 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 pursuant to such Loan Agreement and the Term
Loan Notes have
73
been given in renewal, extension and modification of the term loans previously
made to Borrower pursuant to such Loan Agreement.
[BALANCE OF PAGE LEFT BLANK INTENTIONALLY]
74
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, Vice Pres. & Sec'y
---------------------------------------
Title:
---------------------------------------
Address for Notices:
968 James Street
Syracuse, New York 13203
Attention: Mr. Alan Vituli
Telecopy No.: (315) 425-8874
75
CHASE BANK OF TEXAS, 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
$20,000,000 Attention: Manager, Franchise and Trademark
Finance Division
Telecopy No.: (713) 216-6710
Term Loan:
$10,000,000
76
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Co-Agent and as a Lender
By: /s/ MICHELE J. MARTIN
---------------------------------------
Name: Michele J. Martin
---------------------------------------
Title: Vice President
---------------------------------------
Address for Notices:
Revolving Loan Commitment: 101 South Salina Street
Syracuse, New York 13202
$20,000,000 Attention: Ms. Michele Martin
Telecopy No.: (315) 424-6777
Term Loan:
$10,000,000
77
NATIONSBANK, N.A.,
as Co-Agent and as a Lender
By: /s/ WILLIAM W. TUCKER
---------------------------------------
Name: William W. Tucker
---------------------------------------
Title: Senior Vice President
---------------------------------------
Address for Notices:
Revolving Loan Commitment: 600 Peachtree St.
19th Floor
$20,000,000 Atlanta, Georgia 30308
Attention: Mr. William Tucker
Telecopy No.: (404) 607-4075
Term Loan:
$10,000,000
78
SUNTRUST BANK, ATLANTA,
as Co-Agent and as a Lender
By: /s/ J. SCOTT DEVINEY
---------------------------------------
Name: J. Scott Deviney
---------------------------------------
Title: Assistant Vice President
---------------------------------------
By: /s/ WILLEM HATTINK
---------------------------------------
Name: Willem Hattink
---------------------------------------
Title: Managing Director
---------------------------------------
Address for Notices:
25 Park Place, 25th Floor
Revolving Loan Commitment: Center 128
Atlanta, Georgia 30303
$20,000,000 Attention: Mr. Scott Deviney
Telecopy No.: (404) 724-3716
Term Loan:
$10,000,000
79
THE NORTHERN TRUST COMPANY
By: /s/ ARTHUR J. FOGEL
---------------------------------------
Name: Arthur J. Fogel
---------------------------------------
Title: VP
---------------------------------------
Address for Notices:
Revolving Loan Commitment: 50 S. LaSalle Street B-2
Chicago, Illinois 60675
$13,333,333.33 Attention: Mr. Art Fogel
Telecopy No.: (312) 444-7028
Term Loan:
$6,666,666.67
80
COMERICA BANK
By: /s/ DAVID W. SHIREY
---------------------------------------
Name: David W. Shirey
---------------------------------------
Title: Assistant Vice President
---------------------------------------
Address for Notices:
Revolving Loan Commitment: 500 Woodward Ave., MC 3230
Detroit, Michigan 48226
$6,666,666.67 Attention: Mr. David Shirey
Telecopy No.: (313) 222-3330
Term Loan:
$3,333,333.33
81
[LETTERHEAD OF THE BORROWER]
REQUEST FOR EXTENSION OF CREDIT
____________, 199
Chase Bank of Texas, National
Association, as Agent
712 Main Street
Houston, Texas 77002
Attention: Manager, Franchise and Trademark Finance Division
Gentlemen:
The undersigned hereby certifies that he is the ____________________ of
CARROLS CORPORATION, a Delaware corporation (the "Company"), and that as such he
is authorized to execute this Request for Extension of Credit (the "Request") on
behalf of the Company pursuant to the Loan Agreement (as it may be amended,
supplemented or restated from time to time, the "Agreement") dated as of
February _____, 1999, by and among the Company, Chase Bank of Texas, National
Association, as Agent, and the Lenders therein named. The (check one) [_]
Revolving Loan [] Letter of Credit being requested hereby is to be in the amount
set forth in (b) below and is requested to be made on ______________, which is a
Business Day. The undersigned further certifies, represents and warrants that to
his knowledge, after due inquiry (each capitalized term used herein having the
same meaning given to it in the Agreement unless otherwise specified herein):
(a) As of the date hereof:
(1) The aggregate outstanding amount of Revolving
Loan Obligations is: $__________
(2) The Letter of Credit Liabilities as of the
date hereof, before giving effect to the
Letter of Credit, if any, requested hereby,
is: $__________
EXHIBIT A
to Loan Agreement
1
(3) The aggregate unused Revolving Loan
Commitments of all Lenders [$100,000,000
minus the amount in (a)(1) above], if
positive, is: $__________
(b) If and only if the aggregate unused Revolving Loan Commitments of all
Lenders is positive, the Company hereby requests under this Request a
Revolving Loan or Letter of Credit (as indicated above) in the amount
of $_____________ (which is no more than the aggregate unused
Revolving Loan Commitments of all Lenders).
(c) If a Letter of Credit is requested hereby, it should be issued for the
benefit of ____________________________________ and should have an
expiration date of _____________________ (which date is no later than
one year from the proposed date of issuance) and any special language
to be incorporated into such Letter of Credit is attached hereto. The
sum of the face amount of the requested Letter of Credit plus the
Letter of Credit Liabilities as the date hereof as specified in item 2
above does not exceed $5,000,000.
(d) The representations and warranties made in each Loan Document are true
and correct in all material respects on and as of the time of delivery
hereof, with the same force and effect as if made on and as of the
time of delivery hereof.
(e) No material adverse change in the assets, liabilities, financial
condition, business or affairs of the Company or any of the other
Obligors has occurred.
(f) No Default or Event of Default has occurred and is continuing.
(g) To the best knowledge of the undersigned, if the financial covenants
under Section 7.3 of the Agreement were required to be calculated and
satisfied as of the date of the borrowing or issuance requested
hereby, the Company would be in compliance with such covenants.
Thank you for your attention to this matter.
Very truly yours,
_________________________________
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT A
to Loan Agreement
2
RATE DESIGNATION NOTICE
CARROLS CORPORATION, Chase Bank of Texas, National Association, as Agent,
and certain financial institutions executed and delivered that certain Loan
Agreement (as amended, supplemented and restated, the "Loan Agreement") dated as
of February _____, 1999. Any term used herein and not otherwise defined herein
shall have the meaning herein ascribed to it in the Loan Agreement. In
accordance with the Loan Agreement, Borrower hereby notifies Agent of the
exercise of an Interest Option.
A. Type of Loan The Loans with respect to which this Rate Designation Notice
is being given are (check one):
[_] Term Loans
[_] Revolving Loans
B. Current borrowings
1. Interest Options now in effect: _____________
2. Amounts: $__________
3. Expiration of current Interest Periods, if applicable:
C. Proposed election
1. Total Amount: $___________
2. Date Interest Option is to be effective: _______________
3. Interest Option to be applicable (check one):
[_] Base Rate
[_] Eurodollar Rate
4. Interest Period: ____ [months] [days] (if available and if applicable)
EXHIBIT B
1
Borrower represents and warrants that the Interest Option and Interest
Period selected above comply with all provisions of the Interest Rate Agreement
and that there exists no Event of Default or any event which, with the passage
of time, the giving of notice or both, would be an Event of Default.
Date: _______________
CARROLS CORPORATION,
a Delaware corporation
By:
Name:_________________
Title:________________
EXHIBIT B
2
TERM NOTE
Houston, Texas
$__________ ___________, 199_
FOR VALUE RECEIVED, CARROLS CORPORATION (together with its permitted
successors, herein called "Maker"), a Delaware corporation, promises to pay to
the order of _____________________________ ("Payee"), at the principal office of
Chase Bank of Texas, National Association, a national banking association, 712
Main Street, Houston, Harris County, Texas 77002, in immediately available finds
and in lawful money of the United States of America, the principal sum
of____________________________ Dollars ($ (or the unpaid balance of all
principal advanced against this note, if that amount is less), together with
interest on the unpaid principal balance of this note from time to time
outstanding at the rate or rates provided in that certain Loan Agreement (as
amended, supplemented, restated or replaced from time to time, the "Loan
Agreement") dated as of February _____, 1999 among Maker, certain signatory
banks named therein (including the Payee) and Chase Bank of Texas, National
Association, as Agent; provided, that for the full term of this note the
interest rate produced by the aggregate of all sums paid or agreed to be paid to
the holder of this note for the use, forbearance or detention of the debt
evidenced hereby (including, but not limited to, all interest on this note at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate.
Any term defined in the Loan Agreement which is used in this note and which is
not otherwise defined in this note shall have the meaning ascribed to it in the
Loan Agreement.
1. Loan Agreement; Advances; Security. This note has been issued pursuant
to the terms of the Loan Agreement, and is one of the Term Notes referred to in
the Loan Agreement. Advances against this note by Payee or any other holder
hereof shall be governed by the terms and provisions of the Loan Agreement.
Reference is hereby made to the Loan Agreement for all purposes. Payee is
entitled to the benefits of and security provided for in the Loan Agreement. The
unpaid principal balance of this note at any time shall be the total of all
amounts lent or advanced against this note less the amount of all payments or
permitted prepayments made on this note and by or for the account of Maker. All
loans and advances and all payments and permitted prepayments made hereon may be
endorsed by the holder of this note on a schedule which may be attached hereto
(and thereby made a part hereof for all purposes) or otherwise recorded in the
holder's records; provided, that any failure to make notation of (a) any advance
shall not cancel, limit or otherwise affect Maker's obligations or any holder's
rights with respect to that advance, or (b) any payment or permitted prepayment
of principal shall not cancel, limit or otherwise affect Maker's entitlement to
credit for that payment as of the date received by the holder.
EXHIBIT C
to Loan Agreement
-1-
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of this
note shall be due and payable on the Interest Payment Dates.
(b) The principal of this note shall be due and payable in quarterly
installments as provided in Section 3.2(c) of the Loan Agreement.
(c) All payments hereon made pursuant to this Paragraph shall be applied
first to accrued interest, the balance to principal.
(d) If any payment provided for in this note shall become due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day (unless the result of such extension of time would be to extend the
date for such payment into another calendar month or beyond the Advance Loan
Maturity Date, and in either such event such payment shall be made on the
Business Day immediately preceding the day on which such payment would otherwise
have been due), and such extension (or reduction) of time shall in such case be
included in the computation of interest on this note.
(e) The Loan Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision to the
contrary contained in this note or any of the other Loan Documents, it is
expressly provided that in no case or event shall the aggregate of (i) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (ii) the aggregate of any other amounts accrued or paid pursuant to
this note or any of the other Loan Documents, which under applicable laws are or
may be deemed to constitute interest upon the indebtedness evidenced by this
note from the date hereof, ever exceed the Ceiling Rate. In this connection,
Maker and Payee stipulate and agree that it is their common and overriding
intent to contract in strict compliance with applicable federal and New York
usury laws (and the usury laws of any other jurisdiction whose usury laws are
deemed to apply to this note or any of the other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of New
York). In furtherance thereof none of the terms of this note or any of the other
Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Ceiling Rate. Maker or other parties now or hereafter becoming
liable for payment of the indebtedness evidenced by this note shall never be
liable for interest in excess of the Ceiling Rate. If, for any reason whatever,
the interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, the holder of this note shall credit against the
principal of this note (or, if such indebtedness shall have been paid in full,
shall refund to the payor of such interest) such portion of said interest as
shall be
EXHIBIT C
to Loan Agreement
-2-
necessary to cause the interest paid on this note to produce a rate equal to the
Ceiling Rate. All sums paid or agreed to be paid to the holder of this note for
the use, forbearance or detention of the indebtedness evidenced hereby shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of this note, so that the
interest rate is uniform throughout the full term of this note. The provisions
of this Paragraph shall control all agreements, whether now or hereafter
existing and whether written or oral, between Maker and Payee.
4. Default. The Loan Agreement provides for the acceleration of the
maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any, that notice
of default is expressly required herein or in any of the other Loan Documents,
Maker and any and all co-makers, endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and
notice of acceleration, notice of protest and notice of dishonor), demand,
presentment for payment, protest, diligence in collecting and the filing of suit
for the purpose of fixing liability and consent that the time of payment hereof
may be extended and re-extended from time to time without notice to any of them.
Each such person agrees that his, her or its liability on or with respect to
this note shall not be affected by any release of or change in any guaranty or
security at any time existing or by any failure to perfect or to maintain
perfection of any lien against or security interest in any such security or the
partial or complete unenforceability of any guaranty or other surety obligation,
in each case in whole or in part, with or without notice and before or after
maturity.
6. Paragraph Headings. Paragraph headings appearing in this note are for
convenient reference only and shall not be used to interpret or limit the
meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE
TO NEW YORK'S PRINCIPLES OF CONFLICTS OF LAW) AND THE UNITED STATES OF AMERICA
FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and agreements
contained herein shall be binding upon, and shall inure to the benefit of, the
respective legal representatives, heirs, successors and assigns of Maker and
Payee.
9. Records of Payments. The records of Payee shall be prima facie evidence
of the amounts owing on this note.
EXHIBIT C
to Loan Agreement
-3-
10. Severability. If any provision of this note is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this note shall not be
affected thereby, and this note shall be liberally construed so as to carry out
the intent of the parties to it.
11. Business Loans. Maker warrants and represents to Payee and all other
holders of this note that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter lD of Title 79, Texas Rev. Civ. Stats. 1925, as amended.
CARROLS CORPORATION,
a Delaware corporation
By:___________________
Name:_________________
Title:________________
EXHIBIT C
to Loan Agreement
-4-
REVOLVING NOTE
Houston, Texas
$_______ __________,199_
FOR VALUE RECEIVED, CARROLS CORPORATION (together with its permitted
successors, herein called "Maker"), a Delaware corporation, promises to pay to
the order ___________________________________ ("Payee"), at the principal office
of Chase Bank of Texas, National Association, a national banking association,
712 Main Street, Houston, Harris County. Texas 77002, in immediately available
funds and in lawful money of the United States of America, the principal sum of
_____________________________ Dollars ($______ (or the unpaid balance of all
principal advanced against this note, if that amount is less), together with
interest on the unpaid principal balance of this note from time to time
outstanding at the rate or rates provided in that certain Loan Agreement (as
amended, supplemented, restated or replaced from time to time, the "Loan
Agreement") dated as of February _____, 1999 among Maker, certain signatory
banks named therein (including the Payee) and Chase Bank of Texas, National
Association, as Agent; provided, that for the full term of this note the
interest rate produced by the aggregate of all sums paid or agreed to be paid to
the holder of this note for the use, forbearance or detention of the debt
evidenced hereby (including, but not limited to, all interest on this note at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate.
Any term defined in the Loan Agreement which is used in this note and which is
not otherwise defined in this note shall have the meaning ascribed to it in the
Loan Agreement.
1. Loan Agreement; Advances; Security. This note has been issued pursuant
to the terms of the Loan Agreement, and is one of the Revolving Notes referred
to in the Loan Agreement. Advances against this note by Payee or any other
holder hereof shall be governed by the terms and provisions of the Loan
Agreement. Reference is hereby made to the Loan Agreement for all purposes.
Payee is entitled to the benefits of and security provided for in the Loan
Agreement. The unpaid principal balance of this note at any time shall be the
total of all amounts lent or advanced against this note less the amount of all
payments or permitted prepayments made on this note and by or for the account of
Maker. All loans and advances and all payments and permitted prepayments made
hereon may be endorsed by the holder of this note on a schedule which may be
attached hereto (and thereby made a part hereof for all purposes) or otherwise
recorded in the holder's records; provided, that any failure to make notation of
(a) any advance shall not cancel, limit or otherwise affect Maker's obligations
or any holder's rights with respect to-that advance, or (b) any payment or
permitted prepayment of principal shall not cancel, limit or otherwise affect
Maker's entitlement to credit for that payment as of the date received by the
holder.
EXHIBIT D
to Loan Agreement
-1-
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of this
note shall be due and payable on the Interest Payment Dates.
(b) On the Revolving Loan Maturity Date, the entire unpaid principal
balance of this note and all accrued and unpaid interest on the unpaid principal
balance of this note shall be finally due and payable.
(c) All payments hereon made pursuant to this Paragraph shall be applied
first to accrued interest, the balance to principal.
(d) If any payment provided for in this note shall become due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day (unless the result of such extension of time would be to extend the
date for such payment into another calendar month or beyond the Revolving Loan
Maturity Date, and in either such event such payment shall be made on the
Business Day immediately preceding the day on which such payment would otherwise
have been due), and such extension (or reduction) of time shall in such case be
included in the computation of interest on this note.
(e) The Loan Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision to the
contrary contained in this note or any of the other Loan Documents, it is
expressly provided that in no case or event shall the aggregate of (i) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (ii) the aggregate of any other amounts accrued or paid pursuant to
this note or any of the other Loan Documents, which under applicable laws are or
may be deemed to constitute interest upon the indebtedness evidenced by this
note from the date hereof, ever exceed the Ceiling Rate. In this connection,
Maker and Payee stipulate and agree that it is their common and overriding
intent to contract in strict compliance with applicable federal and New York
usury laws (and the usury laws of any other jurisdiction whose usury laws are
deemed to apply to this note or any of the other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of New
York). In furtherance thereof, none of the terms of this note or any of the
other Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Ceiling Rate. Maker or other parties now or hereafter becoming
liable for payment of the indebtedness evidenced by this note shall never be
liable for interest in excess of the Ceiling Rate. If, for any reason whatever,
the interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, the holder of this note shall credit against the
principal of this note (or, if such indebtedness shall have
EXHIBIT D
to Loan Agreement
-2-
been paid in full, shall refund to the payor of such interest) such portion of
said interest as shall be necessary to cause the interest paid on this note to
produce a rate equal to the Ceiling Rate. All sums paid or agreed to be paid to
the holder of this note for the use, forbearance or detention of the
indebtedness evidenced hereby shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread in equal parts throughout the full
term of this note, so that the interest rate is uniform throughout the full term
of this note. The provisions of this Paragraph shall control all agreements,
whether now or hereafter existing and whether written or oral, between Maker and
Payee.
4. Default. The Loan Agreement provides for the acceleration of the
maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any, that notice
of default is expressly required herein or in any of the other Loan Documents,
Maker and any and all co-makers, endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and
notice of acceleration, notice of protest and notice of dishonor), demand,
presentment for payment, protest, diligence in collecting and the filing of suit
for the purpose of fixing liability and consent that the time of payment hereof
may be extended and re-extended from time to time without notice to any of them.
Each such person agrees that his, her or its liability on or with respect to
this note shall not be affected by any release of or change in any guaranty or
security at any time existing or by any failure to perfect or to maintain
perfection of any lien against or security interest in any such security or the
partial or complete unenforceability of any guaranty or other surety obligation,
in each case in whole or in part, with or without notice and before or after
maturity.
6. Paragraph Headings. Paragraph headings appearing in this note are for
convenient reference only and shall not be used to interpret or limit the
meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE
TO NEW YORK'S PRINCIPLES OF CONFLICTS OF LAW) AND THE UNITED STATES OF AMERICA
FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and agreements
contained herein shall be binding upon, and shall inure to the benefit of, the
respective legal representatives, heirs, successors and assigns of Maker and
Payee.
9. Records of Payments. The records of Payee shall be prima facie evidence
of the amounts owing on this note.
EXHIBIT D
to Loan Agreement
-3-
10. Severability. If any provision of this note is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this note shall not be
affected thereby, and this note shall be liberally construed so as to carry out
the intent of the parties to it.
11. Revolving Loan. Subject to the terms and provisions of the Loan
Agreement, Maker may use all or any part of the credit provided to be evidenced
by this note at any time before the Revolving Loan Maturity Date. Maker may
borrow, repay and reborrow hereunder, and except as set forth in the Loan
Agreement there is no limitation on the number of advances made hereunder. Maker
and Payee agree pursuant to Chapter 346 ("Chapter 346") of the Texas Finance
Code, that Chapter 346 (which relates to open-end line of credit revolving loan
accounts) shall not apply to this note or any Revolving Loan Obligation
hereunder and that neither this note nor any Revolving Loan Obligation hereunder
shall be governed by Chapter 346 or subject to its provisions in any manner
whatsoever.
12. Business Loans. Maker warrants and represents to Payee and all other
holders of this note that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter ID of Title 79, Texas Rev. Civ. Stats. 1925, as amended.
CARROLS CORPORATION,
a Delaware corporation
By:___________________
Name:_________________
Title:________________
EXHIBIT D
to Loan Agreement
-4-
ASSIGNMENT AND ACCEPTANCE
Dated: ________________
Reference is made to the Loan Agreement dated as of February ______, 1999
(as restated, amended, modified, supplemented and in effect from time to time,
the "Loan Agreement"), among Carrols Corporation, a Delaware corporation (the
"Company"), the Lenders named therein, and Chase Bank of Texas, National
Association, as Agent (the "Agent"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Loan
Agreement. This Assignment and Acceptance, between the Assignor (as defined and
set forth on Schedule I hereto and made a part hereof) and the Assignee (as
defined and set forth on Schedule I hereto and made a part hereof) is dated as
of the Effective Date (as set forth on Schedule I hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided interest (the "Assigned Interest") in and to all
the Assignor's rights and obligations under the Loan Agreement respecting those,
and only those, credit facilities contained in the Loan Agreement as are set
forth on Schedule I (collectively, the "Assigned Facilities," individually, an
"Assigned Facility"), in a principal amount for each Assigned Facility as set
forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or its Subsidiaries or the performance or observance by the
Company or its Subsidiaries of any of its respective obligations under the Loan
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto; and (iii) attaches the Note(s) held by it evidencing the
Assigned Facility or Facilities, as the case may be, and requests that the Agent
exchange such Note(s) for a new Note or Notes payable to the Assignor (if the
Assignor has retained any interest in the Assigned Facility or Facilities) and a
new Note or Notes payable to the Assignee in the respective amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
EXHIBIT E
to Loan Agreement
-1-
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Loan Agreement, together with copies of the financial statements
referred to in Section 6.2 thereof, or if later, the most recent financial
statements delivered pursuant to Section 7.2 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will, independently and without reliance upon the Agent,
the 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 the Loan Agreement; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Agreement as are delegated to the Agent by the terms
thereof together with such powers as are reasonably incidental thereto; (v)
agrees that it will be bound by the provisions of the Loan Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Loan Agreement are required to be performed by it as a Lender; (vi) if the
Assignee is organized under the laws of a jurisdiction outside the United
States, attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Loan Agreement or such other documents as are necessary to indicate that all
such payments are subject to such tax at a rate reduced by an applicable tax
treaty, and (vii) has supplied the information requested on the administrative
questionnaire attached hereto as Exhibit A.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and the Company and recording by the
Agent pursuant to Section 11.6 of the Loan Agreement, effective as of the
Effective Date (which Effective Date shall, unless otherwise agreed to by the
Agent, be at least five Business Days after the execution of this Assignment and
Acceptance).
5. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee,
whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date by
the Agent or with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (i) the Assignee shall be a party to
the Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement.
EXHIBIT E
to Loan Agreement
-2-
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
EXHIBIT E
to Loan Agreement
-3-
Schedule I to Assignment and Acceptance
Legal Name of Assignor: ____________________________
Legal Name of Assignee: _________________________________________
Effective Date of Assignment: __________________________
Percentage Assigned of Each
Facility (to at least 8
Principal decimals) (Shown as a
Amount (or, percentage of aggregate
with respect original principal amount
to Letters [or, with respect to Letters
Assigned of Credit, face Credit, face amount]
Facilities amount) Assigned of all Lenders)
---------- ---------------- -----------------------------
Term Loans: $________ _____%
Revolving Loan
Commitments: $________ _____%
Revolving Loans: $________ _____%
Letter of Credit
participation interests $________ _____%
- -------------------
as Assignor
By:__________________
Name:________________
Title:_______________
EXHIBIT E
to Loan Agreement
-1-
- -------------------
as Assignee
By:__________________
Name:________________
Title:_______________
CARROLS CORPORATION,
a Delaware corporation
By:__________________
Name:________________
Title:_______________
EXHIBIT E
to Loan Agreement
-2-
Accepted:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Agent
By:__________________
Name:________________
Title:_______________
EXHIBIT E
to Loan Agreement
-3-
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the _______________________ of
CARROLS CORPORATION, a Delaware corporation (the "Borrower"), and that as such
he is authorized to execute this certificate on behalf of the Borrower pursuant
to the Loan Agreement (the "Agreement") dated as of February _____, 1999, by and
among the Borrower, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Agent, a
national banking association, and the lenders therein named; and that a review
of the Borrower and the other Obligors has been made under his supervision with
a view to determining whether the Borrower and the other Obligors have fulfilled
all of their respective obligations under the Agreement, the Notes and the other
Loan Documents; and on behalf of the Borrower further certifies, represents and
warrants that to his knowledge, after due inquiry (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified):
(a) The Borrower and the other Obligors have fulfilled, in all material
respects, their respective obligations under the Agreement, the Notes and the
other Loan Documents.
(b) The representations and warranties made in each Loan Document are true
and correct in all material respects on and as of the time of delivery hereof,
with the same force and effect as if made on and as of the time of delivery
hereof.
(c) The financial statements delivered to the Agent concurrently with this
Compliance Certificate have been prepared in accordance with GAAP consistently
followed throughout the period indicated and fairly present the financial
condition and results of operations of the applicable Persons as at the end of,
and for, the period indicated (subject, in the case of Quarterly Financial
Statements and monthly statements of income and cash flow, to normal changes
resulting from year-end adjustments).
(d) No Default or Event of Default has occurred and is continuing. In this
regard, the compliance with the provisions of Section 7.3 is as follows (the
calculations of these ratios are set forth on the attached Schedule I):
(i) Section 7.3(a) -- Debt Service Coverage Ratio
Actual Required
------ --------
____to l.00 l.25 to 1.00
EXHIBIT F
1
(ii) Section 7.3(b) -- Senior Debt to EBITDA Ratio
Actual Required
------ --------
____to l.00 ____ to 1.00
(iii) Section 7.3(c) -- Total Debt to EBITDA Ratio
Actual Required
------ --------
____to l.00 ____ to 1.00
(iii) Section 7.3(c) -- Fixed Charge Coverage Ratio
Actual Required
------ --------
____to l.00 1.10 to 1.00
(e) No material adverse change in the assets, liabilities, financial
condition, business or affairs of the Borrower or any of the other Obligors has
occurred since the Effective Date.
DATED as of_________________
---------------------------------
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT F
2